Marketing

Marketing
A management process responsible for
• identifying
• anticipating
• satisfying
customer requirements ‘profitably’ 
 Consumer Behaviour Model
Marketing Stimuli (Mix)
Product Place Price Promotion

Other Stimuli
Political Economic Social Technological

Consumer State of Being

Social Cultural Economic

Consumer State of Mind

Motivation Perception Learning Memory

Purchase Decision Process

Evaluation of
Problem Recognition Information Search Purchase decision
Consideration Set

Purchase Behaviour Payment

Product Purchase
Brand Choice Dealer Choice Timing Terms
Choice Amount
 Basics
• Consumer Focus
• Satisfying consumer needs (Maslow’s 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
 Mind your Ps
• The Base 4
• The basic value proposition
Product • Can be a product or service

• Consideration given by the consumer

Price • Includes strategies like offers, discounts

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

• Communicating the value proposition and benefits offered by the

Promoti product or service to the consumer
on • Branding, PR, advertising, exhibitions, sales promotions
The 7Ps of Services/B2B Marketing
• 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
Physical • Pamphlets, testimonials, brochures

• Process followed during delivery of service

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

• The people in the organization who interface with the consumer

• Perception of service quality directly depends on the customer service
People 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
Porter’s 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

Aspirers
Customizin
g products Smaller Project
& services stock Shakti,
for the keeping Swasthya Deprived (Bottom of
lesser units (SKU) Chetna Pyramid)
privileged
 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 leader’s 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
• Nirma’s 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 “movie-
making”
• Cadbury’s
– Business of spreading joy (rather than chocolate
making)
• Coca-Cola
– Business of quenching thirst
– Drops of Joy positioning
 India FMCG Snapshot
Company Sales Revenue YoY (%) QoQ (%)

Colgate 4076 16.2 4.2

Palmolive
Dabur 6040 16.0 -0.4
Godrej 3616 26.3 33.0
Consumer
HUL 42157 21.1 11.1
ITC 38997 18.4 -0.9
Marico 6009 28.1 28.5
Nestle 10356 23.5 -5.1
Tata Tea 11356 12.3 -3.6