Marketing

Management
 What is Marketing
Module 4 Strategy?
Session 1 4P’s of Marketing
 As discussed in the previous “
modules, marketing involves
creating value to satisfy

“ needs and wants. To create

this value, marketers have to
make several decisions.
Decisions made by marketers
Suppose you want to launch a soft
drink brand. What are the various
decisions that you will have to
make?
 WHAT ARE THE DECISIONS MADE BY MARKETERS?

Defining the Product

01 What kind of a soft drink would it be? Cola-
based or non cola? What would be the flavour?

Understanding the Price

Would you sell it at the same price as the
02 competitors? Or would you sell at more, or less?

Determining Distribution
Where would it be available? Local grocery shops,
03 vending machines, restaurants, hotels? All of the above?

Communicating Its Value

How would you reach out to your
04 consumers? Through ads or word of mouth,
or some other form of media?
DECISIONS ARE NEVER STRAIGHTFORWARD…
What influences them and why?

Let’s take a pause and think about

some factors!
FACTORS AFFECTING MARKETING DECISIONS

Controllable
Factors
These are the factors that can
be controlled by the company,
for instance, whether to pack
the soft drinks in plastic or
glass bottles.
Uncontrollable
Factors
These are factors that are
beyond the control of the
firm and stem from the
macro environment, for
instance, changes in legal
or political policies.
 Since we have already “
covered the
uncontrollable factors

“
when you learnt about
PESTEL, let us focus on the
controllable factors.
CONTROLLABLE FACTORS

Controllable factors are

those that can be shaped
“
and reshaped by

“ marketers to achieve
desired marketing results.
Segment 2 What is Product?
WHAT ARE THE DECISIONS MADE BY MARKETERS?

What is the Product?

What kind of a soft drink
“
would it be? Cola-based

“ or non cola? What would

be the flavour?
 WHAT IS A PRODUCT?

“ A product means goods or services, or

“anything of value”, that is offered to the
market for sale.
“
 FEATURES OF A PRODUCT

Attributes

01
A product doesn’t just have physical
attributes; it also has other benefits
that it offers to the customers.

Types of Attributes

Example 02 A product has both tangible and

intangible attributes.

03
Imagine you go to buy a car; are you
just buying a few nuts and bolts?
No!
You are buying the convenience of
travel (Tangible) or the status
symbol that comes with owning a car
(Intangible).
 Products are, thus, also a “
bundle of utilities, and
they are purchased

“
because they have the
ability to satisfy a set of
needs and wants.
 A PRODUCT IS A BUNDLE OF UTILITIES
01
Functional Utility
○ This is the function that the
product is supposed to
perform.
○ For example, when you buy a
motorcycle, it provides the the
functional benefit of transport.
02
Psychological Utility
○ This relates to the motivation for
buying the product.
○ For example, you buy a branded
motorcycle that would satisfy your
esteem needs.
03
Social Utility
○ The benefit of belongingness or
acceptance that comes with
owning a product.
○ For example, Harley Davidson, as a
brand cashes in on this a lot. The
owners belong to a community of
motorcyclists.
 Now that you know what “
a product means, the next
question is how does a

“
product change with a
change in the marketing
strategy.
 LEVELS OF A PRODUCT
Potential Product
This is with respect to what the product
5 can transform to in the future. Here,
companies try to find ways to differentiate
Expected Product their offering and stand out.
These are the attributes that the Augmented Product
3 consumer generally expects while
making a purchase.
This level is where the magic
happens and marketers try to
4
For example, when you go to a exceed the customers’ expectations.
hotel, you expect to get clean For example, free upgrades.
towels, sheets, a clean room, etc.

Core Product Basic Product

This is the product that the At this level, the marketer must
1 consumer is buying. For build a product around the core 2
example, when you check benefit. For example, hotels
into a hotel, you buy rest, translate the rest into a product by
relaxation and sleep as your providing beds, mattresses, etc.
core product.
Your video here
(Please cover the
entire box)
 Now that you have
understood what a
“
product is, let’s take a

“ look at the other

controllable factors.
Segment 3 What is Price?
WHAT DO YOU THINK ABOUT THE PRICE PLANS BELOW?
WHAT IS PRICE?

Price is the money

that consumers pay
“
“
to satisfy their needs
or wants.
Now, what are the various factors
that affect price?
 WHAT AFFECTS PRICING?

Product Cost Utility and Demand Competition Regulations Pricing Objectives

Price of the product The utility that the Cost provides the Certain items, such The objective with
would depend upon product holds for the lower limit for setting as life-saving drugs, which the offering is
the amount of consumer is also a the price and utility have prices set and made also impacts
money that was valuable factor in provides the higher regularised by the the price of the
spent on making it. setting the price. limit. The actual price government and the product.
lies somewhere in law.
between, and
depends on what
your competitors will
charge.
 HOW DO YOU SELECT YOUR PRICING OBJECTIVE?

01 02 03 04
Maximise
Maximise Maximise
Survival Market
Current Profit Market Share
Skimming

05 06

Product Quality Other

Leadership Objectives
 HOW DO YOU SELECT A PRICING METHOD?
Auction Pricing
In this case, a group of buyers bid for the
5 product. These can be ascending,
descending and sealed-bid auctions.
Perceived Value Pricing
Here, price is set by the Going Rate
3 organisation depending upon the
value that the customers perceive
Here, prices are set based on the
existing prices of similar products in
4
for the product. the market.

Markup Pricing Target Return Pricing

Here, the organisation In this case, the organisation
1 decides a set markup that it decides a target return that it 2
wants to earn and adds that wants to achieve and sets the
to the cost to decide the price based on that target.
price.