Marketing Management

Basics
Framework for business
 “Marketing is the whole business seen
from the customer’s point of view”.

-Peter Drucker
Marketing Orientation occurs when everyone in
the organization is aware of :
• who the company's customers are
• what the company's customers want or need
• how the firm can satisfy those customer needs better
than its rivals
• how the firm can satisfy customer needs in a way that
generates the kind of profits that the company wants
to achieve
• Marketing orientation touches everyone.
Knowledge of basic marketing principles can
benefit anyone who's involved in the exchange
of ideas, products, or services.
Whether you're:
• a product manager or marketing professional in a
large corporation
• a production manager who directs the creation of
the product
• someone who's starting up a new business
• an employee of a non-for-profit or educational
institution
• part of a small, growing company
• Whatever your work situation, familiarity
with marketing basics can help you
contribute to your company's success.
• The process starts with understanding
customers.
• Marketing is a way of understanding and
satisfying the customer.
 Marketing

Creating

Communicating
Value

Delivering
Target
Customer
{ At Profit}
 Value
• Value= Benefits-Cost

• Opportunity= A Buyer-need that a company

has high probability to satisfy
• Value Proposition: Cluster of Benefits that
company promises to deliver
 Consumer Benefit Ladder
• To determine what value a product offers to
consumer
• Motivations to buy are driven by consumers’
Values
Environment Scanning
 The 5Cs Framework
Five major areas underlying marketing decision

Customer
Company
Collaborators
Competition
Context
Growth Strategies: Market expansion grid
 Competitor Analysis

• Analysis to identify threats, opportunities or

strategic uncertainties created by emerging or

potential competitor moves, weakness or

strengths.
 The Analysis
• Recognize the key competitors in the segment in
which company is active or would like to enter.
• Analyze the performance record of each of the
competitors
• Study how satisfied each competitor appears to
be with its performance
• Probe each marketer’s marketing strategy
• Analyze the current and future resources and
competencies of each of the competitor
• Predict the future marketing strategy of each
competitor.
Porters 5 Forces that shape Industry
Competition
 Consumer Behavior
• Cultural Factors
• Social Factors
• Personal Factors
• Perceived Risks
 Low Involvement Purchase
• Consumer does not consider the product
important to his/her belief system
• Does not strongly identify with the product
B2B Marketing
 What is B2B Marketing

Business-to-business (B2B) marketing is about the marketing

of goods and services to commercial enterprises, governments
and institutions,
➢ for incorporation (e.g. components)

➢ for consumption (e.g. processed materials, office supplies)

➢ for use (e.g. installation or equipment)

➢ or for resale
B2B and B2C
B2C B2B
B2C customer is the end consumer B2B context customer is an organization
an individual or household a company; producer, reseller, or an
Institution

Smaller Larger
Relationship is not much close Close relationship
Independent The demand for the input goods/services
is derived from end user demand

Informal / without any formal procedures Organizational buying is conducted in

etc professional way

Individual data is easily available Data is not available

Stages in the Buying Process: Buyphases
• Problem recognition
• General need description
• Product specification
• Supplier search
• Proposal solicitation
• Supplier selection
• Order-routine specification
• Performance review
The Buying Center

• Initiators • Approvers
• Users • Buyers
• Influencers • Gatekeepers
• Deciders
Buying Situation

Straight Rebuy

Modified Rebuy

New Task
Characteristics of Business Markets

• Fewer buyers • Multiple sales calls

• Close supplier-customer • Derived demand
relationships • Inelastic demand
• Professional purchasing • Fluctuating demand
• Many buying influences • Geographically
concentrated buyers
Segmentation
Segmentation
• Profiling customer groups based on shared characteristics such as
Demographics, Needs and Wants.
• Group customers with similar needs into customer segments and
then determine the characteristics of customers in those segments.
• Segmentation is a practice that seeks out the pieces of total market
that contains customers with identifiable characteristics (income, age,
personal interest, ethnic groups, special need etc.).
• “Customers could buy the
model T in any color they
wished as long as it was
black”
• “Any customer can have a
car painted in any color that
he wants so long as it is
black”

-Henry Ford
Why Segment??
• To create goods and services that are better tailored to the needs of
specific customers.
• Focus marketing resources more efficiently.
Market segments must be…
• Measurable
• Substantial: Coke C2 (20-40 Male)
• Accessible
• Differentiable: Must respond differently to different marketing
program.
• Actionable: Must be practical and Cost efficient
Market Segmentation
• Dividing up market into more-or-less homogenous
subsets for which it is possible to create different value
proposition
• The company finally decides which segments to serve
• Market Segmentation processes can be used during
Customer Portfolio Management for two purposes.
• To segment potential markets to identify which
customers to acquire
• To cluster current customer with a view to offering
differentiated value propositions supported by different
relationship management strategies
Market Segmentation Process
1. Identify the business you are in
2. Identify relevant segmentation variables
3. Analyze the market using these variables
4. Asses the value of the market segments
5. Select your target market to serve
1) Identify the Business you are in
• Benefit Competitors: Delivering the same benefit to
customers
• Product Competitors
• Geographic Competitors: Benefit and product
competitors operating in the same geographical
territory
2) Identify the segmentation variables
• Consumer markets can be clustered based on the shared
characteristics
User attributes Usage attributes
Demographic attributes: age, gender, Benefits sought, volume consumed, share of
occupational status, household size, marital category spend
status, household income, stage of family
life cycle, religion

Geographic attributes: City, State, Country,

Psychographic attributes: Lifestyle,

Personality
Identify the segmentation variables and analyze the market
(Business Markets)

Business Market Segmentation

Criteria
Industry Classification Company, Govt. Body
Dispersion Geographical
Size Large/ medium/small scale
Account Status
Buying Process Open tender, bidding,
Centralized/decentralized
Propensity to switch Satisfied/Dissatisfied with the present
suppliers
Geography Country, region, location
Buying Style Risk Averse, Innovator
Major Segmentation Variables
B2C B2B
Geographic: Country, Region, City, Urban/Rural, Climate
Demographic Firmographic
Age, Income, Gender, Education, Religion Industry, Firm Size, Ownership
Psychographic Buying Approach
Lifestyle, Personality, Activities, Interests and Opinions Centralized, Decentralized, Policies, DMU
Behavioural Behavioural
Usage rate, loyalty, product knowledge, Purchase Volume, Purchase frequency, attitude towards risk,
occasion Urgency
Benefit Sought Benefit Sought
Convenience, Value, Safety, Status Price, Product, Quality, Service, Relationship
Bases for Segmentation
• WHO: Who are the customers???
Demographics, Media Habits, Lifestyle

• WHAT: What have the customers Done??

Loyalty, Usage, Profitability

• WHY: Why do the customers make the decisions they do?

Needs, Preferences, Decision process
3) Analyze the market (Business Markets)

Account Value
• Classification of customers based on their value
• Value is associated with some measure of sales revenue or volume
• Cost win and keep the customer must be included
4) Assess the value in a market segment and select which markets to
serve

• The potential value of the segmentation opportunities depends upon

1. How attractive is the opportunity?
2. How well placed is the company and its network to exploit the
opportunity?
Assess the value in a market segment and
select which markets to serve
Segment Attractiveness
Size of segment,
Segment growth rate,
price sensitivity of customers,
bargaining power of customers,
entry barriers,
barriers to exit, prospect of
new entrant, potential for
differentiation,
propensity for customer
switching
Company and network fit
Does the opportunity fit the
company’s objectives, mission,
vision and values?
Does the company and its
network possess the
operational, marketing,
technological, people and other
competencies, and liquidity to
exploit the opportunity?
Assess the value in a market segment and select
which markets to serve
• The companies need to identify attributes that indicate the
attractiveness of a market segment and competencies of the
company and its network.
Customer Life Time Value (LTV)
• A measure of customer’s profit generation for a company.
• Lifetime value is the present day value of all net margins earned from
a relationship with a customer, customer segment or cohort.
• Thus it can be estimated at the level of
❖ Individual customer
❖ Segment or cohort
5) Select your Target market to Serve
Basis for Targeting
• Number of Customers in the segment and their spending potential
• Ability to reach customers and cost of doing so
• Intensity of existing competition
• Level of customer satisfaction with competitors’ offerings
• Forecasted Growth
• Potential Profitability
• Barriers to entry
 Positioning
“Positioning is not what you do to the product, Positioning is what you
do to the mind of a prospect”
POSITIONING
• Positioning is act of designing a company’s offering and image to
occupy a distance place in the minds of target market.
• How you wish to be perceived.
• If you do not position a product customers will position the product
themselves with help of your competitors.
Awareness Consideration
Choice
Set Set

POP POD
Point of Difference
• Are attributes or benefits that consumers strongly associate with a
brand, positively evaluate and believe they could not find to the same
extent with a competitive brand.
Criteria determine whether a brand association
can truly function as POD:
1) Desirable to consumer: Relevant to consumer
2) Deliverable by the company: Must have the internal resources
commitment to feasibly and profitably create and maintain the
brand association in the minds of consumers.
3) Differentiating Competitors
Point of Parity(POP)
• Benefit associations that are not necessarily unique to the brand.
• These types of associations come in two basic forms
1) Category : Necessary but not sufficient

2) Competitive: Negate POD of Competitors

Positioning Statement
• The positioning statement is a short written document that lays out
how the marketer believes others should think, feel and relate to the
brand/product.
Positioning Statement
• For TARGET SEGMENT/Market the BRAND NAME is
FRAME OF REFERENCE/PRODUCT CATEGORY/COMPETITIVE
FRAMEWORK with

POINT OF DIFFERENCE because of REASON TO BELIEVE.

• Example:
• Among/For/To SNACKERS, SNICKERS is the brand of CHOCOLATE
CANDY BAR that SATISFIES YOUR HUNGER because it is PACKAGED
WITH PEANUTS.
Target Users

• User may be different from the person who purchases

• Both (User and Buyer) Participate
• To be attractive to both gate-keeper and users
• Where does one go to buy the product
Competitive Framework
• Who else competes in this spaces?
• What does your brand substitute or replace?
• Where is its volume coming from?
Reason to believe
• Adds credibility
• It could be formula, Ingredient, Design, Location, Endorsement,
Source.
Perceptual Mapping
• Perception of Consumers are key
• Maps produced based on Consumer Perception Data is Perceptual
Map.
• Young---------------------------------------------Mature
• Low Price----------------------------------------High Price
• Low Quality-------------------------------------High Quality
• Excellent Service---------------------------------Bad Service
• Variety------------------------------------------Low Variety
 POSITIONING Process
• Identify the competitors
• Determine how the competitors are perceived and evaluated.
• Determine competitor’s positions.
• Analyze the customers.
• Select the position.
• Monitor the position.
3 Cs of Positioning

Consumer Competitive Company

Analysis Analysis Analysis
• Relevant • Distinctive • Feasible
• Resonant • Defensible • Favorable
• Realistic • Durable • Faithful