Introduction to Marketing

Marketing is the key to success in today's business world. Learn about the
history, concepts, research, and future of marketing.

by Jojo Joy N
History of Marketing
Industrial Revolution
The rise of mass production and
transportation led to the growth of
modern marketing practices.
1 Ancient Times
Marketing dates back thousands of
years to when merchants would
2 display their goods in open-air
markets.
3 Digital Age
The advent of the internet and social
media revolutionized marketing,
allowing for targeted advertising
and personalized experiences.
 The beginnings
 In business, there are several different ways to approach selling products or services. These
approaches are known as marketing concepts. Let's take a closer look at five of the most
common marketing concepts:

 First, there's the Exchange concept. This approach is all about making the sale, and it's often used by
department stores and online marketplaces. If you're looking to boost your bottom line, this is the concept
for you.

 Next up is the Production concept. This approach focuses on creating high-quality products at a low cost.
It's all about being efficient and effective, and it's often used by factories and assembly lines.

 If you're looking to innovate, the Product concept is for you. Companies that use this approach
invest heavily in research and development to create cutting-edge products that stand out from
the competition. Think Apple and Tesla. (Read Marketing Myopia)
 For those of you who love a good challenge, the Sales concept is all about aggressive selling
techniques. Companies that use this approach are focused on closing deals and meeting sales
quotas. Car dealerships and door-to-door salespeople are classic examples of this approach.

 And finally, there's the Marketing concept. This approach takes a customer-centric approach to
selling, prioritizing understanding customers' needs and creating products that meet those needs.
Amazon and Netflix are two examples of companies that use this approach to great effect.
 The beginnings

 Needs, Wants, Desire and Specific Goal

 Marketing vs Sales

Different Utilities
 Place utility
The increased usefulness created by marketing through making a
product available at the place consumers want.
 Possession utility
The increased usefulness created by marketing through making it
possible for a consumer to own, use, and consume a product. It is
also called ownership utility.
 Time utility
The increased satisfaction created by marketing through making
products available at the time consumers want them
 Form utility
The creation of form utility includes all activities used to change the appearance or composition of a
product with the intent of making it more attractive to potential and actual users.
 Types of Decision Processes
Subcontracted

Legalistic Problem solving

Variety seeking Heuristics

Picking Habit
Consumer

Casual Industrial Habit

Reciprocity Heuristics

Legalistic Problem solving

Quasi resolution
Basic Marketing Concepts
Target Market Unique Selling Proposition

Identifying your ideal customers and Highlighting what makes your product or
tailoring your marketing efforts to their service stand out from the competition.
needs and preferences.

Brand Positioning Marketing Mix

Creating a distinct image and perception of The combination of product, price, place,
your brand in the minds of consumers. and promotion to achieve marketing
objectives.
Strategic Planning – A precursor to marketing plan (Vision, Mission, Strategy & Tactic)

1. Future – the long-term dynamics of the firm

2. Growth – direction, extent , pace and timing.
3. Environment fit. (Product market scope)
4. The basket of businesses (ABC – HUL)
5. Strategy
• Competitive Advantage
• Integration/ Synergy

• CA is preceded by – Internal appraisal of the firm

• O-T
• Assessment of the strength and weaknesses of the firm in the different
functions/areas
• Appraisal of the the status/health of the individual businesses of the firm
• Assessment of the firm’s competitive advantage and core competencies
(CK & GH) - TSMC
The concept of SBU (Strategic Business Unit)
1. Smoothens planning by grouping a firm’s businesses/products into a manageable number
of strategically related groups and then take up each group for planning.
2. Therefore an SBU is a group pf related businesses that can be treated as a unified entity
for the purpose of strategic planning

SBU’s attributes includes:

a. All related products – related from the standpoint of function- should fall under one
SBU
b. Each SBU is separate business from a strategic planning perspective
c. Distinct Mission, Objectives, Competition and Strategy
d. Normally endowed with a CEO with p&l responsibility.

Eg: P& G (Home, Health & Beauty Care, Oral care, Baby care and Feminine care)

Nestle - Beverages (Nescafe), Confectionery (Kitkat), Nutrition (Infant nutrition plus Boost
et.al), prepared dishes and cooking aids SBU (Maggi) and Petcare SBU (Purina, Friskies)
Analytical Models used in appraising business

1. BCG
2. GE
3. Ansoff Grid
 The creation of the growth share matrix was a collaborative effort. BCG’s Alan Zakon—who would go on to become the firm’s CEO—first
sketched it and then refined it together with his colleagues. BCG’s founder, Bruce Henderson, popularized the concept in his essay The
Product Portfolio, in 1970.

 At the height of its success, the growth share matrix was used by about half of all Fortune 500 companies; today, it is still central in business
school teachings on business strategy.

How Does the Growth Share Matrix Work?

The growth share matrix was built on the logic that market leadership results in sustainable superior returns. Ultimately, the market leader obtains
a self-reinforcing cost advantage that competitors find difficult to replicate. These high growth rates then signal which markets have the most
growth potential.

The matrix reveals two factors that companies should consider when deciding where to invest—company competitiveness, and market
attractiveness—with relative market share and growth rate as the underlying drivers of these factors.

Each of the four quadrants represents a specific combination of relative market share, and growth:

1. Low Growth, High Share. Companies should milk these “cash cows” for cash to reinvest.
2. High Growth, High Share. Companies should significantly invest in these “stars” as they have high future potential.
3. High Growth, Low Share. Companies should invest in or discard these “question marks,” depending on their chances of becoming stars.
4. Low Share, Low Growth. Companies should liquidate, divest, or reposition these “pets.”

As can be seen, product value depends entirely on whether or not a company is able to obtain a leading share of its market before growth slows.
All products will eventually become either cash cows or pets. Pets are unnecessary; they are evidence of failure to either obtain a leadership
position or to get out and cut the losses.
GE – McKinsey Model

The GE Matrix is a strategic framework that helps multi-business

corporations manage portfolios and prioritize investments across
products and SBUs (Strategic Business Units).

The GE Matrix looks at two factors: the competitive strength of an

SBU and the attractiveness of the market in which it operates.

Based on where the SBU sits within the 3x3 GE Matrix, portfolio
managers can quickly answer three strategic questions:

1. How to allocate capital throughout the organization’s portfolio

of companies?
2. What products or additional SBUs are needed in their
portfolio?
3. Which SBUs should be divested?
Invest/Grow (Green)
SBUs in these blocks have a mixture of solid
business performance and an attractive industry.
They are primed for growth and should be
allocated resources and capital.
Selectivity/Earnings (Orange)

SBUs that fall within these blocks aren’t performing optimally

or operate in an unattractive industry. These business units
require a more conservative approach to either growth or
divestment strategies.
Harvest/Divest (Red)

If an SBU is mapped in the red blocks, this indicates that a

divestment/harvest strategy should be taken. Generally, this means
that a business should be closed, further investment should be
withheld, or the company should be run for cash.
How To Use GE Matrix?

1. Determine the industry attractiveness of each SBU

Calculate the market attractiveness in which each SBU operates. Remember, this is a subjective estimate based on your understanding of the SBUs industry or sector.
Score the SBUs industry by looking at factors like:
•Market size
•Industry profitability
•Market growth potential
•Industry segmentation
•Market profitability
•Differentiation
•Market growth rate
•Level of competition

Important note: The scale you use to score SBU strength and industry attractiveness will depend on your needs. Most businesses use a 1-10 scorecard, but you may want
to use a different range when assigning values.

2. Determine the competitive strength of each SBU

You’ll then repeat this process for each company in your portfolio. Look at the strength of the business unit and its competitive position in the market.
Factors you can consider when working out the strength of a business unit:
•Sustainable competitive advantages (use VRIO analysis)
•Brand equity
•Customer loyalty
•Market share
•Internal competencies
•Strength of the value chain (use value chain analysis)
•Production capacity
•Product lines
•Pricing and cash flows
•Profit margin compared to competitors

Important note: Different factors have different levels of importance. When calculating industry attractiveness and business strength scores, you’ll
need to weigh numerous factors to reflect this.
Important note: Different factors have different levels of importance. When calculating industry attractiveness and business strength scores, you’ll
need to weigh numerous factors to reflect this.

3. Plot the information on the GE Matrix

Next, plot the values for each strategic business unit on your Matrix. Use the market attractiveness score to plot your Y-axis position and the
business strength score to plot your X-axis position.
The location of each SBU on the 3x3 chart will indicate whether the company should grow, hold, or harvest specific business units.

4. Identify the future direction of each SBU

The GE Matrix only provides a view of the current state of SBUs in a portfolio and doesn’t account for other variables that may impact a business's
viability.
This means that teams that use the GE Matrix must analyze business units in more detail to understand all strategic implications.
Using different strategic analysis tools, such as SWOT analysis, Porter’s 5 Forces, or PESTEL analysis, could help you analyze internal and
external environmental factors. This will also help you to identify potential risks in the future.

5. Choose where to invest and focus your attention

Once you have a picture of your portfolio mapped out on the GE Matrix, you’ll still need to answer some critical questions before making decisions
about SBUs.
For example, how much money should you put into a specific business unit? Does investing in these SBUs align with your long-term strategy?
Which parts of a particular SBU should you invest in?
As Michael Porter, the father of the modern business strategy, says, “The essence of strategy is choosing what not to do”.
At this point, you should clearly understand what your organization will focus on. This will help your organization to stay on the right track and
prevent wasting resources on misaligned efforts.

6. Turn insights into results

With a clear idea of direction and new priorities, you should take those insights and turn them into an actionable strategic plan.
Ansoff Grid
• The Ansoff Matrix, often called the Product/Market Expansion Grid, is a two-by-two framework used by management teams and the
analyst community to help plan and evaluate growth initiatives. In particular, the tool helps stakeholders conceptualize the level of risk
associated with different growth strategies.

• The matrix was developed by applied mathematician and business manager H. Igor Ansoff and was published in the Harvard Business
Review in 1957. The Ansoff Matrix is often used in conjunction with other business and industry analysis tools, such as the PESTEL, SWOT,
and Porter’s 5 Forces frameworks, to support more robust assessments of drivers of business growth.

• Caveat – A business firm can seek growth through Intensification, Integration and Diversification

Each box of the Matrix corresponds to a

specific growth strategy. They are:

1.Market Penetration – The concept of

increasing sales of existing products into
an existing market
2.Market Development – Focuses on
selling existing products into new markets
3.Product Development – Focuses on
introducing new products to
an existing market
4.Diversification – The concept of
entering a new market with
altogether new products
Value Chain Analysis
Rather than looking at departments or accounting cost types, Porter's Value Chain focuses on systems, and how inputs are changed
into the outputs purchased by consumers. Using this viewpoint, Porter described a chain of activities common to all businesses, and
he divided them into primary and support activities, as shown below.
Primary Activities

Primary activities relate directly to the physical creation, sale, maintenance and support of a product or service. They consist of the
following:

•Inbound logistics. These are all the processes related to receiving, storing, and distributing inputs internally. Your supplier
relationships are a key factor in creating value here.

•Operations. These are the transformation activities that change inputs into outputs that are sold to customers. Here, your
operational systems create value.

•Outbound logistics. These activities deliver your product or service to your customer. These are things like collection, storage,
and distribution systems, and they may be internal or external to your organization.

•Marketing and sales. These are the processes you use to persuade clients to purchase from you instead of your competitors. The
benefits you offer, and how well you communicate them, are sources of value here.

•Service. These are the activities related to maintaining the value of your product or service to your customers, once it's been
purchased.
Support Activities

These activities support the primary functions above. In our diagram, the dotted lines show that each support, or secondary, activity can
play a role in each primary activity. For example, procurement supports operations with certain activities, but it also supports marketing
and sales with other activities.

•Procurement (purchasing). This is what the organization does to get the resources it needs to operate. This includes finding vendors
and negotiating the best prices.

•Human resource management. This is how well a company recruits, hires, trains, motivates, rewards, and retains its workers. People
are a significant source of value, so businesses can create a clear advantage with good HR practices.

•Technological development. These activities relate to managing and processing information, as well as protecting a company's
knowledge base. Minimizing information technology costs, staying current with technological advances, and maintaining technical
excellence are sources of value creation.

•Infrastructure. These are a company's support systems, and the functions that allow it to maintain daily operations. Accounting, legal,
administrative, and general management are examples of necessary infrastructure that businesses can use to their advantage.

Companies use these primary and support activities as "building blocks" to create a valuable product or service.
 Marketing Plan
Creating a marketing plan involves outlining the strategies and tactics that your business will use to promote its products or
services. A comprehensive marketing plan typically includes an analysis of the market, target audience, competition, and a
detailed outline of the marketing mix (product, price, place, and promotion). Here's a general guide to help you create a
marketing plan:

1. Executive Summary:
Provide a brief overview of your marketing plan, including your business goals, target audience, and key strategies.

2. Situation Analysis:

• Market Analysis: Describe the overall market, industry trends, and potential for growth.
• SWOT Analysis: Identify your business's strengths, weaknesses, opportunities, and threats.
• Competitor Analysis: Analyze your competitors' strengths and weaknesses.

3. Target Market:
Define your ideal customers. Consider demographics, psychographics, and behavior to create detailed buyer
personas.

4. Unique Selling Proposition (USP):

Clearly state what sets your product or service apart from the competition.

5. Marketing Objectives:
Set specific, measurable, achievable, relevant, and time-bound (SMART) objectives. Examples include increasing
sales by a certain percentage or expanding market share.
6. Marketing Strategies:

• Product Strategy: Define your product or service and its unique features.
• Pricing Strategy: Determine your pricing approach.
• Distribution (Place) Strategy: Outline how you will make your product or service available to customers.
• Promotion Strategy: Detail how you will promote your product or service (advertising, public relations, sales promotions, etc.).

7. Action Plan:
Create a detailed plan of the specific activities that will be undertaken to achieve your marketing objectives. Include timelines,
responsibilities, and budget considerations.

8. Budget:
Allocate a budget for each marketing activity. Consider costs for advertising, promotions, events, and any other marketing
initiatives.

9. Monitoring and Measurement:

Define key performance indicators (KPIs) to track the success of your marketing efforts. This could include metrics like sales, website
traffic, conversion rates, and social media engagement.

10. Implementation Timeline:

Create a timeline outlining when each marketing activity will be implemented. This helps ensure that tasks are completed on
schedule.

11. Contingency Plan:

Outline a plan for addressing unforeseen challenges or changes in the market.

12. Review and Evaluation:

Regularly review and evaluate the effectiveness of your marketing plan. Make adjustments as needed to improve performance.
Remember that a marketing plan is a dynamic document that should be revisited and revised regularly to adapt to changes in the market and
the business environment. Additionally, consider leveraging digital marketing channels such as social media, content marketing, and online
advertising to reach a wider audience.
SWOT Analysis

SWOT (strengths, weaknesses, opportunities,

and threats) analysis is a method for identifying
and analyzing internal strengths and
weaknesses and external opportunities and
threats that shape current and future
operations and help develop strategic goals.
SWOT analyses are not limited to companies.
Individuals can also use SWOT analysis to
engage in constructive introspection and form
personal improvement goals.
 Formulation of MARKETING STRATEGY

Combination of STP and MM

Segmentation

The first step of the STP marketing model is the segmentation stage. The
main goal here is to create various customer segments based on specific
criteria and traits that you choose. The four main types of
audience segmentation include:

Geographic segmentation: Diving your audience based on country, region,

state, province, etc.
Demographic segmentation: Dividing your audience based on age,
gender, education level, occupation, gender, etc.
Behavioral segmentation: Dividing your audience based on how they
interact with your business: What they buy, how often they buy, what they
browse, etc.
Psychographic segmentation: Dividing your audience based on “who”
your potential customer is: Lifestyle, hobbies, activities, opinions, etc.
 Targeting
Step two of the STP marketing model is targeting. Your main goal here is to look
at the segments you have created before and determine which of those
segments are most likely to generate desired conversions (depending on your
marketing campaign, those can range from product sales to micro conversions
like email signups).
Your ideal segment is one that is actively growing, has high profitability, and has
a low cost of acquisition:
Size: Consider how large your segment is as well as its future growth potential.
Profitability: Consider which of your segments are willing to spend the most
money on your product or service. Determine the lifetime value of customers in
each segment and compare.
Reachability: Consider how easy or difficult it will be for you to reach each
segment with your marketing efforts. Consider customer acquisition costs
(CACs) for each segment. Higher CAC means lower profitability.
Positioning
The final step in this framework is positioning, which allows you to set your product or
services apart from the competition in the minds of your target audience. There are a
lot of businesses that do something similar to you, so you need to find what it is that
makes you stand out.
All the different factors that you considered in the first two steps should have made it
easy for you to identify your niche. There are three positioning factors that can help you
gain a competitive edge:
Symbolic positioning: Enhance the self-image, belongingness, or even ego of your
customers. The luxury car industry is a great example of this – they serve the same
purpose as any other car but they also boost their customer’s self-esteem and image.
Functional positioning: Solve your customer’s problem and provide them with genuine
benefits.
Experiential positioning: Focus on the emotional connection that your customers have
with your product, service, or brand.
The most successful product positioning is a combination of all three factors. One way to
visualize this is by creating a perceptual map for your industry. Focus on what is
important for your customers and see where you and your competitors land on the map.
Perceptual map, also known as a market map,
is a diagram that represents customers’
perceptions of specific features of items,
products, or brands. Market researchers and
businesses use perceptual maps to
understand how their customer base views
the relative positioning of other products or
brands within a larger ecosystem. Perceptual
maps can also aid in identifying market gaps,
exploring acquisition possibilities, monitoring
trends, finding potential partners, or clarifying
perceptual issues with a specific product.
 Marketing Mix - James Culliton (popularised b Neil H Borden) – as a mixer of ingredients

Marketing Mix is a term coined by James
Culliton, who in 1948 described the role of the
marketing manager as a "mixer of ingredients"
because he mixes together the 4Ps of product,
price, promotion and place.
In the 1960s, the American marketeer, E. Jerome
McCarthy, provided a framework by means of the
marketing mix: the 4 P's.

Everything we want to sell will need a slightly

different mix of these ingredients, depending on
the type of product, the target audience and the
market.
MM is tool for playing the ‘value’ game. Marketer’s provide value to customer by each of this dimensions.

Product – Product design , features, brand name, models, style, appearance

product quality
Warranty
Package : design, material, size , appearance and labelling
Service : Pres-sales and after sales-service, service standards, service charges

Place - Distribution channels, Channel design, type of intermediaries, location of outlets, channel embers remuneration, dealer-
principal relations et.al
Physical distribution – transportation, warehousing, inventory levels, order processing et.al

Price – pricing policies, margins, discounts and rebates

Terms of delivery, payment terms, credit terms and installment facilities, resale price maintenance

Promotion – Personal selling : Selling expertise, size of the sales force, quality of the sales force
Advertising : Media mix, programmes
Sales promotion: Gifts, price-offs, coupons, contest, publicity and PR
The Consumer Research
“It is a capital mistake to theorise before one has data”

Sir Arthur Conan Doyle

Research on Agatha Christie
HarperCollins found sales of Agatha Christie
novels declining in 1985

•Quantitative & qualitative research commissioned

•Readers liked “niceness” of the crimes,

but covers were gruesome and bloody

•Result: new cover designs commissioned

and in the first year sales rose 40%
Market Research vs Marketing Research
(strictly speaking...)

Market Research:
Researching the immediate competitive environment of the
marketplace, including customers, competitors, suppliers, distributors and
retailers
Marketing Research:
Includes all the above plus:
- companies and their strategies for products and markets
- the wider environment within which the firm
operates (e.g.
political, social, etc)
Market(ing) Research: Definition

The systematic design, collection, analysis and reporting of data and

findings relevant to a specific marketing situation facing the
organisation
Top 10 market research activities
Market Measurement 18%
New Product development/concept testing 14%
Ad or brand awareness monitoring/tracking 13%
Customer Satisfaction (inc Mystery Shopping) 10%
Usage and Attitude Studies 7%
Media Research & evaluation 6%
Advertising developing and pre-testing 5%
Social Surveys for central/local government 4%
Brand/corporate reputation 4%
Omnibus Studies 3%

Source: BMRA
Market Research Budgets

1 - 2% of company sales = total budget

of this:

50% - 80% 20% - 50%

in-house externally
85% of Fortune 500 1. Syndicated - service
companies have research firms
internal departments
2. Custom research firms
3. Specialty research firms
 External Market Research Firms
Types
1. Syndicated - service research
firms
2. Custom market research firms
3. Specialty line research firms
Description
Data gathered periodically from
customers and distribution channels and
then sold to clients (e.g. A.C. Nielson)
Hired to carry out specific research
projects for clients. The firm conducts the
survey and the results are the property of
one client only (e.g. Research
International)
Firms providing a specialised service to
other market research firms, e.g. a firm
selling field interviewing services (e.g.
Continental Research)
Why Conduct Market Research in New Product
Development?

- The product must appeal to the customer (however widely

defined)
- Timely market research can help you mould the product to the
consumer’s need/wants
- Market research tend to point out successes and failures before
products are launched “for real”
- As a result, it can save you money and time
 Coca Cola Failure: Chronology

May 1985 Old Coke withdrawn

New Coke introduced
July Old Coke reintroduced as Coke Classic
Coca Cola Failure: Background and Research

- Early 80s, share losses to Pepsi

- New Product research carried out
• $4m cost
• 200,000 taste tests
• 60% of consumers preferred it in blind tests
- BUT research was narrowly defined
• considered taste not emotions
• dropping Old Coke not mentioned
U.S. Reaction to Old Coke’s Return

Political Senator David Prior of Arkansas on the

Senate Floor:
“A very meaningful moment in the history
of America, this shows that some national
institutions cannot be changed”
Media ABC interrupted its soap opera, General
Hospital on Wednesday afternoon to
break the news

Economic Coca Cola’s share price rose to its

highest level in 12 years
 Limited Use of Market Research

“Formal market analyses continue to be useful for extending product lines, but they
are often misleading when applied to radical innovations. Market studies predicted
that Intel’s microprocessor would never sell more than 10% as many units as there
were minicomputers, and that Sony’s transistor radios and miniature TV sets would
fail in the marketplace.

At the same time, many essential failures such as Ford’s Edsel and supersonic
transport were studied and planned exhaustively on paper, but lost contact with the
customers’ real needs.
Source: James Brian Quinn
New Market Research

Traditional
Traditional Reliance on lead customers
Market
MarketResearch
Research

• interactive development

• increasingly popular (3M)

• Better for true innovations

Maruti
• “Commenting on the change in the tagline, Shashank Srivastava, chief general
manager, marketing, Maruti Suzuki said, "Our new tagline comes from the
changing consumer mindset, both demographically and psycho-graphically. We
saw people becoming less brand loyal and more brand conscious. Our old tagline
gave us the notion of being reliable and trustworthy, which we think has become
essential in any case. Now the Indian market has matured, where things like the
product being good and reliable is a hygiene factor and not a differentiator. Our
new tagline, 'Way of life', is the tagline we use globally through which we look to
become a part of our consumers life.”
• http://www.youtube.com/watch?v=QDlGnKul6KE
Measurements in Consumer
Behavior
Attitude Scales
• Asked to agree or disagree with a statement
Likert scales • Easy to prepare & interpret
• Simple for consumers

Semantic • Includes bipolar adjectives

• Relatively easy to construct and administer
differential scales

Behavior • Measures likelihood consumers will act a certain way

• Easy to construct and administer
intention scales

• Items ranked in order of preference in terms of some

Rank-order scales criteria

71
Example of Likert Scale

Neither
Strongly Agree nor Strongly
Disagree Agree
Disagree Disagree Agree
The celebrity
endorser is
trustworthy.
The celebrity
endorser is
unattractive.
The celebrity
endorser is an
expert on the
product.
The celebrity
endorser is not
knowledgeable
about the product.
Semantic-differential Scale
• Anchored by a set of bipolar adjectives or phrases

• Particularly useful in corporate, brand and product-image studies.

Example of an Itemized Rating Scale: Semantic-Differential
Scale

CELEBRITY ENDORSER
Not
: : : : : : Trustworthy
Trustworthy

Attractive : : : : : : Unattractive

Expert : : : : : : Not Expert

Not
Knowledgeable : : : : : : Knowledgeable
Behavioral Intention Scale
• Measures the likelihood that consumers will act in a certain way in the
future

• Example:
• How likely are you going to continue using Bank X’s online banking for the
next six months? (7 as most likely, and 1 as least likely)
Rank Order Scale
• Subjects are asked to rank items such as products in
order of preference.

• We rank the following beverage brand in terms of

your preference
• Coca Cola
• Pepsi Cola
• Sprite
• Thumbs Up
Customer Satisfaction Measurement
• Customer Satisfaction
Surveys
• Analysis of
Expectations versus
Experience
• Mystery Shoppers
• Customer Complaint
Analysis

78
 • Example.

• E.g. A sample of size 3 is to be drawn from the population

of 10 students who graduated with a Finance and
Development degree.
1. How many different samples of size 3 are possible
(number of possible samples)?
2. What is the probability of any given sample of size 3
being selected (probability of selecting each sample)?
3. What is the probability of any given individual being
selected?
Market Research

Data Collection Market Segmentation Data Analysis

Gathering information about Dividing the market into Interpreting and evaluating
customers, competitors, and distinct groups based on research findings to assess
market trends to make demographics, market opportunities and
informed business decisions. psychographics, and behavior. develop effective strategies.
Consumer Behavior
1 Psychological Factors 2 Social Influences

Understanding how individual Exploring the impact of

perceptions, motivations, and family, culture, reference
attitudes influence consumer groups, and social media on
decision-making. consumer behavior.

3 Purchase Decision Process

Examining the stages consumers go through when making a purchase,

from problem recognition to post-purchase evaluation.
Understanding Buying Behavior
 Consumer Benefits
• “People do not buy products or services, they buy
benefits”

• We make purchases not for the products themselves, but

for the problems they solve or the opportunities they
offer.

• Viewed from this perspective it is easy to see why

consumers have so many choices
• Consumers seek different benefits.
• E.g: An athlete – brand sport watch – perfect time keeping and works under water
is looking for something very different from the person who receives an inscribed
watch as an anniversary gift – purpose remains the same but the benefits offered
differs widely

• A Business executive - laundry service

• A senior citizen trying to buy a new car
http://www.youtube.com/watch?v=KRbzJ0L1Zn8

In each of these cases, the benefits delivered, not the functions performed, are what
the consumer buys.
Consumer Benefits and Total Product Concept (e.g. Laptop)

•Customers typically do not seek a single benefit

Psychological Ring
but a bundle of benefits-tangible &intangible

•This broader view of goods and services as a

Accessory Ring sum of their benefits is called Total Product
Concept

•For a technophile , the core may be a priority

Basic Core and for an upstart MBA it may be Psychological
ring

•Time aspect is important as buying situations

differ
T

E
Segmentation Across Cultures by
Young and Rubican (intermarket segmentation)
• Resigned – Tends to be older, is rigid, strict authoritarian and
oriented to the past. Brand choices stress economy, familiarity
and communication with the segment is best centered on
expert opinion and simple messages..
• Struggler – Limited resources and capabilities, disorganized
and alienated fro the main stream society. Brand choices are
centered on sensation and escape.
• Mainstreamer – Members are conventional, conforming,
passive and avoids all risks; represents majority views. Focus is
on well known and value oriented brands and communication
with the brand should be emotionally warm and reassuring
• Aspirer – Tends to be younger, may be in entry level white
collar profession; oriented to status value and external value
possession, appearance, image and fashion. Brand choices are
trendy, fun ad unique.

• Succeeder – Confident and accomplished but is all about

control, may be an executive or top level management. Brand
choices are based on prestige, reward and caring for oneself.

• Explorer – Adrenalin junkies who love breaking rules, seeking

out the unconventional and being impulsive. Brands of this
segment are innovative and daring
Consumer Benefits and Product positioning
• Product positioning is the means through which the marketers seek
the right fit between product and desired benefits and the way in
which they are perceived by the customers
• Positioning on Benefits, Characteristic or Image
E.g. L’Oreal hair colour products vs. Godrej Hair colour
Brand Personality – ( A frame work of human traits that consumers
attach to products and services when they position the latter in the
marketplace against other product or services; also called as brand
image)
Sincerity (Hallmark Cards), Excitement (MTV), Competence (The
Wall Street Journal), Sophistication (LV), and Ruggedness (Nike
Tennis Shoes)
 Personality
• Dual influence of heredity and early childhood
experience
• Others stressed broader social and environmental
influences and the fact that personalities develop
continuously over time.
• Some view personality as a definite whole and others
focus on specific traits

Inner psychological characteristics that both determine

and reflect how a person responds to his/her
environment
The nature of personality
• 1) Personality reflects individual differences.
• Many individuals may be similar in terms of a single
personality characteristic but not in terms of others.
• E.g. Ethnocentrism ( Amul ), Bajaj

http://www.youtube.com/watch?v=fy-eimsdIsw&feature=fvst
http://www.youtube.com/watch?v=ZuNXyWU4NAs
• 2) Personality is Consistent and Enduring
• An individual’s personality tends to be both consistent and
enduring
• Although marketers cannot change consumer’s
personalities to conform to their products, if they know
which personality characteristics influences specific
consumer responses, they can attempt to appeal to the
relevant trait inherent in their target group of consumers.

• E.g. Rolex – “A crown for every achievement”

http://www.youtube.com/watch?v=I4kczB1DjjI
• 3) Personality can Change
• Under certain circumstances, personalities change –
marriage, birth of a child, death of parents, change of job
et.al
• Can be abrupt or gradual (“She is more mature, and now she is
willing to listen to points of view other than those she agrees with” – an
aunt about her niece)
• Even personality stereotypes may change over time -
Women over the 50 yrs has increasingly more masculine and
men relatively the same but inclining to be feminine)(E.g.
Sudha Murthy, Kiran Bedi)
• E.g. Indian Army and Scooty Streak
http://www.youtube.com/watch?v=ZlnesiouUK4
http://www.youtube.com/watch?v=NsG3sinE-CQ
Theories of Personality
• Freudian Theory – built on the premise that unconscious needs
or drives, especially sexual and other biological drives are at the
heart of human motivation and personality.
• Id – a warehouse of primitive and impulsive drives. (for which
individuals seeks immediate satisfaction without concern for
specific means of satisfaction)
• Superego – individuals internal expression of society’s moral and
ethical code of conduct. Superego is a kind of break that restrains
the impulsive forces of the Id
• Ego – defined as the individual’s conscious control. Ego functions
as the balance between the impulsive Id and the socio-cultural
constraints of the superego
Id: Meeting Basic Needs
• The id is the most basic part of the personality, and wants instant gratification for our wants and
needs. If these needs or wants are not met, a person becomes tense or anxious.
• Sally was thirsty. Rather than waiting for the helper to refill her glass of water, she reached
across the table and drank from Mr. Smith’s water glass, much to his surprise.

Ego: Dealing with Reality

• The ego deals with reality, trying to meet the desires of the id in a way that is socially acceptable in
the world. This may mean delaying gratification, and helping to get rid of the tension the id feels if a
desire is not met right away. The ego recognizes that other people have needs and wants too, and
that being selfish is not always good for us in the long run.
• Sally was thirsty. However, she knew that her helper would be back soon to refill her water glass,
so she waited until then to get a drink, even though she really just wanted to drink from Mr.
Smith’s glass.

Superego: Adding Morals

• The superego develops last, and is based on morals and judgments about right and wrong. Even
though the superego and the ego may reach the same decision about something, the superego’s
reason for that decision is more based on moral values, while the ego’s decision is based more on
what others will think or what the consequences of an action could be.
• Sally knew that she could steal the supplies from work and no one would know about it.
However, she knew that stealing was wrong, so she decided not to take anything even though
she would probably never get caught.
• The brain is divided into symmetrical left and right hemispheres. Each
hemisphere is in charge of the opposite side of the body, so your right brain controls
your left hand. The right hemisphere also takes in sensory input from your left side
and vice versa.
• The brain is segmented into regions called lobes. Your lobes isolate your brain’s
functions to specific areas.
• The frontal lobe (front of the brain) controls your body movement, personality,
problem-solving, concentration, planning, emotional reactions, sense of smell, the
meaning of words, and general speech.
• Your parietal lobe (upper middle of the brain) controls your sense of touch and
pressure, sense of taste, and bodily awareness.
• The temporal lobe (middle of the brain) governs your sense of hearing, ability to
recognize others, emotions, and long-term memory.
• The occipital lobe (backside of the brain) controls the important sense of sight.
• The cerebellum (lower backside of the brain) governs fine motor control, balance,
and coordination.
• The limbic lobe (middle of the brain) controls emotions.
Freudian theory and “Product personality”
• Based on the premise that human drives are largely
unconscious and that consumers are primarily unaware of
the true reasons for buying what they buy.

• Consumers purchases or consumption situations as a

reflection and an extension of the consumers own
personality.

• In other words, researchers/marketers considers the

consumers appearance and possession’s – grooming,
clothing, jewelry – as reflection of the individual’s
personality
Snack foods and Personality traits
Snack Foods Personality traits
•Potato Chips •Ambitious, Successful, high achiever
•Cheese Curls •Conscientious, principled, Proper, high
integrity

•Nuts •Easygoing, Empathetic, understanding,

Even tempered

•Popcorn •Takes Charge, Pitches in often, modest,

self-confident and not as show-off

•Tortilla Chips •Perfectionist, Punctual, Conservative,

Responsible

•Meat Snacks •Gregarious, Generous, Trustworthy, tends

to be overtly trusting

•Snack Crackers •Rational, Logical, Contemplative, Shy and

Prefers time alone

Source: What flavor is your personality? Discover who you are by looking at what you eat
by Alan Hirsch, MD (Napervillei, IL, Sourcebooks, 2001
 Neo-Freudian Personality Theory
• Contradicted the Freudian view of personality is primarily
driven by instinctual/sexual orientation
• Argued that social relationships are fundamental to the
formation and development of personality
• Alfred Adler – Style of life (human beings as seeking to
attain various rational goals and emphasized the individuals
efforts to overcome feelings of inferiority
• E.g.Coca Cola
http://www.youtube.com/watch?v=bMWd7AmlRzc
• Karen Horney – Individuals are in a constant urge to
conquer anxiety. She divide the personality into a)
Complaint Individuals –those who move towards
others(desire to be loved, wanted and appreciated),
• b) Aggressive individuals – those who move against
others(desire to excel and win admiration), c) Detached
individuals – those who move away from others- (desire
independence, self reliance, individualism and freedom
from obligations
• C – E.g. Bayer Aspirin – Brand - Habitual
• A – E.g. Old Spice deodorant – Sub contracted tending to
habitual
• D – E.g. Heavy tea drinkers and brand switchers. – Variety
Seeking
• Carl Jung – Analytical Psychology, Collective
unconsciousness, Archetypes
• E.g. Cadbury Bourneville
• http://www.youtube.com/watch?v=WOwwnoXS-f0
Brand Asset Valuator Archetypes
Brand Asset Valuator Archetype (continued)
Trait Theory
• Unlike the Freudian and Neo Freudian, Trait theory is quantitative and empirical
in nature - deals with construction of personality tests or inventories
• A trait is any distinguishable, relatively enduring way in which one individual
differs from another.
• The fundamental assumption is that we all share the same traits, but they are
expressed at different levels, resulting in different personalities.
• Researchers analyze market segments to ascertain the extent of influence of a
specific personality trait or combination of traits on the behavior of consumers in
that segment.
• For example, one study has shown that –caution- deliberateness – leads to high
level of risk perception and an attitude of unwillingness to try new products.
When targeting segments that display this particular personality trait, marketers
can develop campaigns effectively-communicate the benefits – helps consumers
to overcome resistance .
• Measures consumer innovativeness (how receptive a person to a new consumer
related experiences), consumer materialism (the degree of consumer’s
attachment to worldly possessions), consumer ethnocentrism (the consumer’s
likelihood to accept or reject foreign made products.
 Soup and soup Lover’s traits
Chicken Noodle Tomato Soup Vegetarian Soup Chili-Beef Soup New England Clam
Soup Lovers Lovers Lovers Lovers Chowder Lovers

Watch a lot of TV Passionate about reading Enjoy the outdoors Generally preferred by Most conservative
males

Have a great sense of Love pets Happy to try new things Are the most social of all Pride themselves to be
humour soup lovers Realistic and down to
earth

Are Loyal Like meeting people for Fancy restaurant dining Are the life of the party Occasionally cynical
coffee

Like Daytime talk shows No party animals Likely to be physically fit Love telling jokes

Most likely to go to Gardening is often a Watch sporting events

church favorite hobby and sitcoms in TV
Personality and understanding Consumer Behaviour
• Marketers are interested in understanding how personality
influences CB because that enables them to better understand
consumers and to segment and target those

• Consumer Innovators – those who are open to new ideas and to be

the first to try new product, service or practices
• Global Innovativeness – a personal trait that exists independent
of any context – A techno geek – I Pad buyer
• Domain specific innovativeness – a more narrowly defined
activity with in a specific domain or product category (E.g. E-
banking)
• Innovative Behaviour – a pattern of actions or response that
indicates the early acceptance of change and adoption of
innovations (E.g. DID, Midjourney– AI)
• Innovators may be helpful in identifying and targeting -
FMCG and consumer durables – use the product and
spread the word.
• Very conscious about not only the product but also the
service quality and promptness
• Innovations can be important consideration when brands
considers product extension (E.g. Colgate paste and
Toothbrush) and retailers consider introducing private
labels.
• Consumer Dogmatism
• Defined as a trait that measures the rigidity (degree of
openness) that individual display towards the unfamiliar and
toward information that is contrary to the established beliefs
• E.g. McDonalds – “Be open to new possibilities” – low CD
• E.g HSBC – “World’s Local Bank”
• http://www.youtube.com/watch?v=ALWwK7Vz4gY&feature=re
lated

• High CD – rigid, approaches unfamiliar with discomfort and

uncertainty (E.g. Reid & Taylor-Big B – authoritative figure,
Permission marketing – E.g. Ford Fiesta)
• Social Character
• Personality trait that ranges on a continuum from inner
directedness ( consumers tend to rely on their own inner values or
images or standards in evaluating new products and are generally
innovators. – looks for product features and personal benefits –
enabling them to use their own values and standards in evaluating
products) to other-directedness (seeks guidance from others and
goes for established products – prefers social acceptance and group
behaviour)
• E.g. Van Heusen, Peter England - “Honest Shirt”, Toyota Altis (“ the
only known cure for envy”) , Honda City New – “the race is within”
– ID
• E.g. Jagoo Re, FeviKwik – ID
• http://www.youtube.com/watch?v=qQSz7nnTUP4
• http://www.youtube.com/watch?v=0AyfnDrCLJ0&feature=related
Future of Marketing
Trend Description

Personalization Hyper-personalized marketing experiences

tailored to individual preferences and
behaviors.

Artificial Intelligence Machines analyzing vast amounts of data to

predict consumer behavior and automate
marketing tasks.

Virtual Reality Creating immersive and interactive brand

experiences that engage customers in new
ways.

Blockchain Ensuring transparency and security in

transactions, ad verification, and customer
data management.