MARKETING MANAGEMENT

Prepared by A.Veeramani

29.01.2015

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The Marketing concept emerged in 1950s.
 What is marketing? Simply put, marketing is managing profitable customer
relationships.
 Marketing is to create value for customers and capture value from customers in return.
o Capture value means create profits and customer equity)
 This process consists 5 steps.
o Understand market, needs and wants creating value for
o Design a customer driven marketing strategy customers
o Integrated marketing program
o Build profitable relationship and create customer delight
o Capture value from customers to create profit and customer equity. Capturing
value.
 Capturing value from customer involves:
o Capture value from customers to create profits and customer equity.
o Create satisfied loyal customers
o Create customer life time value
o Increase share of market and share of customers.
 Marketing is converting people's needs into profitable company opportunities
 Marketing means human activity that takes place in relation to markets.
 Marketing means working with markets to actualize potential exchanges for the
purpose of satisfying human needs and wants.
 Marketing is about identifying and meeting human and social needs.
 Marketing is the management process responsible for identifying, anticipating and
satisfying customer requirements profitably. - Chartered Institute of Marketing, UK
definition.
 Marketing is the activity, set of institutions, and processes for creating,
communicating, delivering and exchanging offerings that have value for customers,
clients, partners and society at large. American Management Association. ( new
definition).
 Today’s marketing = is satisfying customer needs in a socially responsible and ethical
manner.
 Marketing management = art and science of choosing target markets and building
profitable relationship with them.
 Market partitioning – Identification of hierarchy of attributes that guide customer
decision making.
o E.g. car – which country’s car is decided by customer first, then which company,
then which model, then which price range and so on.
 Segmentation = dividing the market into different segments.
o Dividing a market into well defined slices.
o Describing
o A market segment consists of a group of customers who share a similar set of
needs and wants.
o Geographic, demographic, psychographic, etc.
o How segmentation is done – There is no single way.
o For consumer marketing –
 Geographic-divide into different geo units like nations, regions, states,
cities.
 Demographic – divide based on demographic variables like age, gender,
family size, life cycle, income, occupation, education, generation,
nationality.
 Psychographic – divide into social class, life style, personality
characteristics.
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  Behavioural – divide into consumers knowledge, attitudes, uses or
responses to product.
o For business marketing –
 By business demographics ( industry, company size)
 Operating characteristics
 Dealers vs actual users
 Govt. agencies
 How companies identify attractive markets/segments to choose a marketing strategy.
o First evaluate each segments’ size and growth opportunities and decide any one
of the 4 target marketing strategies.
 Target Marketing-
o Selecting
o Go after the selected segment. Serving the selected segment.
 What are the 4 Target Marketing strategies.
o Undifferentiated (Mass) Marketing – mass producing, mass distributing and
mass promoting the same product in same way to all customers.
o Differentiated Marketing – developing different market offers for several
segments.
o Concentrated Marketing – (Niche ) focusing on one or a few market segments
only.
o Micro Marketing- Includes local marketing and individual marketing by tailoring
products and marketing programs to suit the tastes of specific individuals and
locations.
 Positioning =arranging for a product to occupy a clear and desirable place relative to
competing products in the minds of target consumers.
o Act of designing company’s product and image in the minds of customers to
occupy distinctive place.
o Effective positioning begins with differentiation.
 How companies differentiate and position their product.
o Once company decides which segment to enter, it must then decide on its
differentiation and positioning strategy.
o This involves 3 steps.
 Identification of a set of possible differentiations that create competitive
advantage.
 Choosing advantages on which to build a position
 Selecting an overall positioning strategy.
o The brands’ full positioning is called its value proposition – the full mix of
benefits on which the brand is positioned.
 Value proposition = is the set of benefits or values it promises to deliver to consumers to
satisfy their needs.
o Value proposition – a set of benefits that satisfy customer needs ( tangible &
intangible)
o A statement that clearly identifies what advantages a customer will receive by
purchasing a particular product in exchange for money.
o how a firm will create differentiated value for targeted segments and what
positions it wants to occupy in those segments.
o Cluster of benefits the company promises to deliver more than the core benefit.
o Value = a ratio between what the customer gets and what he gives.
Benefits Functional benefits + Emotional benefits
o Value = --------- = --------------------------------------------------------------------------
Costs Monetary costs +time cost + Energy costs + psychic costs

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 Winning value propositions:
o Companies can select one of the 5 winning value propositions to position their
products.
 1. More for more:- providing superior quality product and service to
cover higher cost.
 2.More for same :- providing comparable quality product at same price to
attack competitor’s more for more strategy.
 3. The same for less :- offer the same product at discounted price
 4. Less for much less:- providing products that offer less and costs less.
E.g. Hotels with pools, an attached restaurant may be considered by
some travelers as unnecessary and prefer to not pay.
 5. More for less:- best product or service at lowest prices.
 Customer Value –
o unique combination of benefits received by customers that includes quality, low
price, convenience, on time delivery before and after sales service.
o Difference between value gained by owning and using a product and cost of
obtaining the product.
 Marketing Strategy = is a series of integrated actions leading to a sustainable
competitive advantage.
 Competitive Advantage –
o A company’s ability to perform in one or more ways that competitors can not
match or duplicate.
o Competitive advantage is an advantage over competitors gained by offering
greater customer value, either by having lower prices or providing more benefits
that justify higher prices.
o A buyer buys a product because of its value for him
o The value is sometimes real or sometimes perceived.
o Competitive advantage can be on any of the following factors:
 Related to price
 Related to quality and image
 Related to packing
 Related to distribution mix
 Related to communication mix.
o Competitive advantage can be achieved through implementation of the
following managerial systems;
 Just-in-time (JIT)
 Management by objectives ( MBO)
 Business process re-engineering ( BPR)
 Total quality management ( TQM)
 Learning organization
 Theory of constraints
 What is marketed.
o Marketers market 10 main types of entities.
 Goods
 Services
 Events – Olympic, world cup.
 Experiences – Mt. Everest, Water theme park
 Persons – musicians, celebrities
 Places
 Property
 Organization
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  Information
 Ideas
 Who is a marketer = someone who seeks a response – purchase,, attention from
another.
 Marketers are responsible for demand management:
o They must identify the causes of demand state and determine marketing plan
and strategy to shift demand to a more desirable state on the following types of
8 states of demand.
 Negative demand – customers dislike and avoid
 Non-existent demand – unaware or uninterested
 Latent demand – existing product not satisfying need
 Declining demand - less frequent purchase
 Irregular demand – seasonal
 Full demand – adequately purchasing
 Overfull demand - more demand
 Unwholesome demand – consumers buying products with characteristics
of undesirable social consequences.
 Director/Chief Marketing Officer is responsible for
o Planning and leadership to marketing dept.
o Assume overall responsibility for developing annual marketing plan, Marketing
research, etc.
o Prepare new product marketing plan for launching.
o Establish a system of reports and communication
o Responsible for performance appraisal
o Assist CEO in pricing policies
o Develop marketing strategy for new and existing products
o Manage social media and Public Relations.

 Marketing Audit = A systematic, comprehensive, independent, periodic examination of a

company’s marketing environment, objectives, strategies, activities with a view to
identify problem areas and opportunities and recommending plan of action to improve
company’s marketing performance.
 Need = is a state of felt deprivation.
o Need pre-exist marketers ( marketers do not create needs) - Marketers suggest
to consumers - marketers try to influence demand
 Wants = anything that will satisfy a need.
 Demand = wants for specific products that are backed up by an ability and willingness
to buy them.
 Market –
o a set of actual and potential buyers of a product/service.
o Economic definition – place where buyers and sellers meet
o Marketing definition – the set of actual & potential buyers of a product.
 Market place = is physical store for shopping
 Market space – is digital where one goes shopping on the internet
 Meta market – a cluster of complementary products and services closely related in the
minds of consumers but by diverse industries.
o E.g. automobile – new, used cars, insurance, spare parts, mechanics, magazines,
sites in the internet.
 Meta-mediaries – those who assist a consumer by engaging many parts of the meta
market.
 Satisfaction = a person’s judgment of a product’s perceived performance in relation to
expectations.
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 Competition –
o Includes all actual & potential rival offerings and substitutes a buyer might
consider.
o Four types/levels of completion;
 Brand competition – other companies that offer similar products/services
to the same customers at similar prices – e.g. cars of same size
 Industry competition – company sees its all companies that make
products similar – e.g. all cars – high end to low end.
 Form competition – company sees its competitors as those who make
same product or services – e.g. cars, two=-wheelers, three wheelers.
 Generic competition – company sees its competitors as all companies
compete for rupees. E.g. car manufacturer seeing white goods producers
as competitors.
 Brand = an offering from a known source.
 Product is anything that can be offered to someone to satisfy a need or want such as on
of 10 basic offerings .
 A marketers job is to sell the benefits or services built into physical products rather than
just describe their features.
 Radical Marketing = Instead of spending on Marketing research, advt and operating
large marketing depts., stretch limited resources on living close to their customers, form
buyers club, use creative public relations and focus on delivering quality products to win
customer loyalty.
 Responsive marketing = defining existing clear need and offer an affordable solution (
washing machines and microwave ovens)
o Responsive Marketing = finds a stated need and fills it
 Anticipative marketing = recognize an emergent latent demand or need and comes out
with an affordable solution ( dish washer)
o Anticipative Marketing = looks ahead to the needs that customers may have in
the near future.
 Marketing warfare ( Ries & Trout)= marketing is a war and customer oriented
philosophy is inadequate rather firms would do better by becoming competitor
oriented.
o Like a football game, to with the game, the team must overpower the other side.
 Need shaped marketing = offering and introducing a new product that nobody asked for
and could not even conceive ( sony Walkman) – do not serve market – create market.
 Odd –Even Pricing = Setting prices in Rs. & Ps. Under an even number.
 Neuro Marketing = Brain research on the effect of marketing stimuli.
o Using techniques from neuro-science that monitors brain activity to better gauge
consumer responses to marketing.
o Use of EEG ( ElectroEncephaloGraphy) technology to correlate brand activity
with physiological cues such as skin temperature or eye movement and gauge
how people react to advertisements.
 Laddering = a series of increasingly more specific “ WHY” questions to get insight and
motivations.
 Entrepreneurial Marketing = Started by individuals who visualize the opportunity and
knock on every door and succeed.
 Formulated Marketing = As small companies achieve success, they move towards
formulated marketing.
 Intrepreneurial Marketing = Those companies who get stuck in formulated marketing
need to start living with their customers & visualize new ways to add value to their
customers lives. Go out of office.

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 Symbiotic Marketing/ Horizontal Marketing System= 2 or more unrelated companies put
together resources to exploit an emerging marketing opportunity.
 Transaction Marketing = is part of larger idea called relationship marketing.
o Relationship marketing aims to build long term mutually satisfying relations with
key parties – customers, suppliers, distributors.
 Tactical Marketing = developing product features, prices and distribution, utilizing sales
force in an effective manner.
 Creative Marketing = discovers and produces solutions that customers did not ask for
but for which customers respond enthusiastically. i.e., create the market and don’t
serve the market.
 Integrated Marketing = all the depts. of a company working together to serve the
customer interest at two levels.
o Marketing functions – sales force, advt, work together.
o Marketing must be embraced by other dept. and this involves internal and
external marketing.
o Internal Marketing = task of hiring, training and motivating able employees who
want to serve customers well. Company to employees.
o External Marketing = marketing directed at people outside the company.
Company to customers.
o Interactive marketing = employees to customers.
 Micro marketing = tailoring products and marketing programs to suit the tastes of
specific individuals and locations.
 Local Marketing = tailoring brands and promotions to the needs and wants of local
customer segments – cities, specific stores.
 Individual marketing = tailoring products and marketing programs to the needs and
preferences of individual customers.
o Also called one-to-one marketing or customized marketing.
 Consumer Generated Marketing
o Consumers playing an increasing role in shaping their own brand experiences.
o Consumers are asked for new product ideas.
o They are asked to play an active role in shaping advertisements.
 What is shopper Marketing = In-store promotions and advertising to extend brand
equity
o To encourage favorable in-store purchase decisions.
o It recognizes retail store itself as an important marketing medium.
 What is enlightened Marketing –
o A marketing philosophy holding that a company’s marketing should support the
best long run performance of the marketing system.
o It is based on 5 principles.
 Consumer oriented marketing
 Innovative marketing
 Value marketing
 Sense of mission marketing
 Societal marketing
 What is sustainable Marketing;
o Socially and environmentally responsible marketing that meets the present
needs of customers and businesses while also preserving or enhancing the ability
of future generations to meet their needs.
o A sustainable company is a firm who create value for customers through socially,
ethically and environmentally responsible actions.
o Business actions towards sustainable marketing:- for the long run 5 sustainable
marketing principles are available.
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  1. Consumer oriented marketing- company should view and organize its
marketing activities from the consumer’s point of view.
 It should work hard, sense, serve and satisfy the needs of a
defined group of customers both now and in future.
 2. Customer value marketing – company should put all resources into
customer value building marketing investments.
 One shot sales promotion, cosmetic packaging changes are to be
reviewed and focus should be on improving the value customers
receive from the product.
 3. Innovative marketing- company continuously should seek real product
and marketing improvements.
 A company that ignores this will loose customers.
 4. Sense-of-Mission marketing – company should define its mission broad
social terms rather than narrow product terms.
 5. Societal marketing – company makes decisions by considering
consumer wants, company requirements, consumer’s long run interests
and society’s long run interests.
 Holistic Marketing –
o is development, design and implementation of marketing programs, processes
and activities that recognize the breadth and interdependencies of to-day’s
marketing environment.
o The four key dimensions of holistic marketing are
 Internal marketing – everyone in the organization embraces marketing
principles.
 Integrated marketing – ensure all means of creating, delivering and
communicating values are employed and carried out.
 Relationship marketing – multifaceted relationships with customers,
channel members.
 Performance marketing – triple bottom line approach( 3Ps – People,
Planet & profit – social, environmental & financial)
 Relationship Marketing = build mutually satisfying long term relationship with key
stakeholders in order to earn and retain business.
 Integrated Marketing = devise marketing activities and assemble marketing programs to
create, communicate and deliver value for customers.
 Internal Marketing = an element of holistic marketing – is the task of hiring, training and
motivating employees to serve customers well. i.e., everyone should embrace
marketing.
 Performance Marketing = requires understanding financial and non-financial returns to
business and society from marketing activities.

 Modern Marketing Concepts:

o Green Marketing / Ecological Marketing = consists of all activities designed to
generate and facilitate marketing with minimal detrimental impact on the
natural environment.
 Green products = produced through green technology that caused no
environmental hazards. i.e., Recyclable, reusable, bio-degradable.
o Mobile Marketing = use of mobile medium as a communication between a brand
user.
o SMS Marketing = marketing through SMS
o MMS marketing = marketing through mobile with image, text, audios,, videos.
o Online marketing = blog, web, social media and e.amil

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 o Buzz marketing = words of mouth marketing – oral communication interaction
among the users. Word of mouth creates a buzz.
o Tele marketing – selling, promoting or soliciting a product / service by telephone.
It is a direct marketing.
o Relationship marketing – company seeks to build long term relationships with its
customers by providing consistent satisfaction. i.e., customers are long term
assets that must be valued.
o Cross-Cultural marketing = is a strategic process of marketing among consumers
whose culture differs from that of the marketers own culture (Pizza in India).
o Cooptition =
 Competitor alliance - Firms should cooperate with competitors to secure
their future in the new world order.
 The new mantra for success in the modern business environment
is cooptition. The word is a combination of cooperation and competition:
it is a scenario where business rivals continue to compete in some areas,
but cooperate in others. Cooptition is often driven by several factors.
 These include: E.g. In mid 1990s, when Reebok entered India it did not
open any shop. Reebok only took some space in showcase of Bata’s shop.
Reebok shoes were for rich customers.
 Marketing Network = consists of the company and its supporting stakeholders like
customers, employees, suppliers, distributors, academicians, scientists at university.
 Supply Chain/Value Delivery System = describes longer channel stretching from raw
material to finished products carried to final buyers.
o Connecting with partners
 What is a market opportunity = an area of buyer need in which a company can perform
profitably.
 Robert Lauterborn suggested that sellers “4 P”s correspond to customers “4 Cs”.
 4 Ps 4 Cs.
 Product Customer solution
 Price Customer cost
 Place Convenience
 Promotion Communication
o Booms & Bitner extended the traditional 4 Ps to 7 Ps. They are 4 ps +People,
process and Physical evidence.
 Marketing myopia - a tendency to focus nearsightedly on the product rather than
farsightedly on the customer need. (Theodore Levitt article - Marketing myopia - 1960)
o Opposite is Hyperopia – Kotler coined this word – means better vision of distant
issues or farsightedness.
 Marketing management Orientations/ philosophy concept:
o Modern marketing trends are :
 New economy
 Knowledge economy
 New products, firms every now and then
 Marketing is getting re-defined
 Previous marketing strategies are replaced with new.
o Modern marketing traces through various concepts like production era, product
era, and so on.
o While designing strategies for marketing, what philosophy or orientation should
guide these marketing strategies. There are 5 concepts under which
organizations design and carry out their marketing strategies: They are

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 o Production concept – 1920s - consumers will favour products that are widely
available at low cost and therefore, company should focus or concentrate on
achieving high production efficiency and wide distribution coverage.
 What is production = is the process of using resources (people and
machines) to convert inputs into outputs.
o Selling concept – 1920-1950 - consumers if left alone, will ordinarily not buy
enough of the company's products and therefore the company must undertake
an aggressive selling or large scale selling and promotion effort.
 The selling concept takes an inside-out perspective – starts with factory,
focuses on existing products, calls for heavy selling and promotion to
obtain sales.
o Product concept – 1950-1960- consumers will favour products that offer the
most quality, performance and features and therefore company should focus on
making good products and improving them over time.
o Marketing concept- 1960 onwards - It challenged all the above concepts and it’s
orientation is that the key to achieving organisational goals consists in
determining the needs and wants of target markets and delivering the desired
satisfactions more effectively and efficiently than the competitors.
 The marketing concept takes an outside-in perspective. Starts with well
defined market, focuses on customer needs, integrates all marketing
activities and this will yield profits by creating lasting relationship with
right customers.
 Marketing concept or orientation or era rests on 4 pillars –
o target market
o customer needs
o integrated marketing
o profitability
o Societal Marketing Concept: Also known as cause related marketing. Marketing
decisions should consider customer’s wants, the company’s requirements,
consumer’s long term interests, society’s long run interests and calls for
sustainable marketing and environmentally responsible marketing.
 In an age of environmental deterioration, shortage of resources,
population growth, hunger and poverty, society’s well being is taken
care.
 This concept hold that the organization’s task is to determine the needs,
wants and interests of target markets and deliver the desired
satisfactions effectively and efficiently than competitors in a way that
preserves or enhances the customer and the society’s well being.
 Customers today:
o The increasingly informed customers expect companies to
 Do more than connect with them
 More than satisfying them
 Even more than delighting them
 Expect companies to listen and respond
 Marketing today ( modern)
o Search engine – open information explosion.
 anyone could publish anything effectively for free. SEs made it findable
by everyone.
o Social media – open communication explosion-
 we became connected to each other through social networks, able to
constantly share information across and multitude of virtual communities
o Customer experience – buyer can learn about sellers.
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  Not just from sellers but also through colleagues, friends.
 Today people visit websites not only for information but with functional
applications.
 All the above have elevated Marketing to the top of organisation’s
pyramid
 What is customer driven marketing strategy.
o Segmentation
o Target marketing
o Differentiation
o Positioning &
o Adoption of marketing orientation
o Designing integrated marketing mix and strategies
 Customer Relationship Management (CRM):
o CRM is an integrated approach to identifying, acquiring and maintaining
customers.
o It identifies different types of customers.
o CRM is a customer data management activity.
o It deals with acquiring, keeping and growing customers.
o is the overall process of building and maintaining profitable customer
relationships by delivering superior customer value and satisfaction.
o Is the process of carefully managing detailed information about individual
customers and carefully managing customer touch points to maximize customer
loyalty.
o Touch points are customer purchase, service, support calls, website visits,
surveys and every contact between company and customer. E.g hotels – touch
points are reservations, check-in, check-out, room service, restaurant, bar, etc.
o CRM Strategies
 To produce high customer equity
 Not only acquiring profitable customers but also build long relationship
and grow.
 Different customers require different relationship and have right
relationship with right customers to create value.
 Involve all marketing partners inside and outside.
o As per research during 1989:
 Attracting a new customer can cost 5 times as much as pleasing an
existing one and it might cost 16 times as much to bring the new
customer to the same level of profitability as that of the lost customer.
o The benefits of CRM;
 Builds a database of customers
 Provides enough details so that company can offer the client the
products/services that matches customers.
 Contains past purchases
 Helps marketing dept to identify and target best customers, manage
campaigns, discover qualified leads.
 Helps in optimizing profitability, revenue and customer satisfaction.
 Helps in cross selling, up selling and down selling.
 Cross-Selling = To get the customer to spend more money by
adding more products from other categories than the product
being purchased.
 Up-Selling= To get the customer to spend more money, buy a
more expensive model of the same type of product, or with
additional feature like add-on warranty.
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  Down-Selling = Just to get a customer – when a customer decides
not to buy since costly or cannot afford to buy, offer him a
cheaper product or suggesting cheaper alternatives thus to get a
customer. It is reversal of up-selling.

 What are the marketing management functions:

o Marketing analysis
o Marketing planning- (situation analysis, objectives, strategies, actions and
controls)
o Implementation &
o Control
 Marketing Environment = actors and forces outside marketing that affect marketing
management’s ability to build and maintain successful relationship with target
customers.
 Micro environment = the actors close to the company that affect its ability to serve its
customers.
o The company
o All internal depts..
o Suppliers
o Marketing intermediaries
o Customer markets
o Competitors
o Publics
 Macro environment = the larger societal forces that affect the micro environment
o Demographic
o Economic
o Natural
o Technological
o Political
o Cultural forces.
 Economic environment= economic factors that affect consumer purchasing power and
spending patterns.
 Natural environment = natural resources that are needed as inputs by marketers or that
are affected by marketing activities.
 Technological environment = forces that create new technologies, creating new product
and market opportunities.
 Political environment = laws, govt agencies, NGOs that influence and limit various
organization and individuals in a given society.
 Cultural environment = Institutions and other forces that affect society’s basic values,
perceptions, preferences and behaviours.
 Ethnographic Research = An observational research that involves sending trained
observers to watch and interact with consumers in their natural environment.
 Webnography Research = observing consumers in a natural context on the internet.
 Subliminal Advertising = Also called sub-conscious stimuli messaging which uses subtle
imagery, sounds, contents to attempt to influence the sub-conscious mind into making
purchases.
o E.g. addition of quick flashes of images shown on a movie or TV just before the
show.
 Corporate Strategy = the reason for its existence ( mission and the business it is in)
o The overall objectives and the means to achieve.
 Corporate planning = is the organisation’s overall planning system and consists;
o Strategic planning –
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  Takes holistic view of the organization
 Develops overall objects
 Sr. management responsibility
o Operational planning –
 Deals with deployment of resources
 Develops tactics
 Functional manager’s responsibility
 Products’ position = the way the product is defined by consumers on important
attributes – the place the product occupies consumer’s minds relative to competing
products.
o Since products are made in factories. But
o Brands happen in the minds of consumers.
 Quality = freedom from defects.
o The characteristics of a product or service that bear on its ability to satisfy stated
and implied customer needs.
 TQM= An approach in which all of the company’s people are involved in constantly
improving the quality of products, services and business processes.
 Product line = group of products that are closely related because they function in a
similar manner ( several shoes, apparels)
 Product line length = no. of items in the product line
 Product mix= consists of all the product lines and items
o E.g. Colgate’s product mix consists 4 lines – oral care, personal care, home care
& pet nutrition.
o MIS – Marketing Information System consists of people, equipments and
procedures to gather, sort, analyse, evaluate, and distribute needed, timely and
accurate information to marketing decision makers.
o There are 3 sources of information.
 Internal company records-
 Marketing intelligence system – is a set of procedures and sources used
by managers to obtain everyday information about developments in the
marketing environment.
 Systematic collection and analysis of publicly available
information about competitors and development in the marketing
environment.
 Information analysis – refining raw data through statistical
methods.
 Data Smog- torrent of information, but all relevant information
still not available.
 Marketing research – is the systematic design, collection, analysis and
reporting of data and findings relevant to specific marketing situation
facing the company.
 What is MDSS-
o Marketing Decision Support System is a coordinated collection of data, systems,
tools and techniques with supporting software and hardware by which an
organization gathers and interprets relevant information from business and
environment and turns it into a basis for marketing action.
o MDSS is an ongoing, future oriented structure designed to generate, process,
store and retrieve information to aid decision making in an organisation’s
marketing program.
o It involves problem solving technology composed of people, knowledge,
software, and hardware wired into the sales management process.

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 o Marketing and Sales software programs that assist in marketing research,
segmentation, pricing, advertising budget, etc are available.
 They are
 BRANDAID
 CALLPLAN
 DETAILER
 GEOLINE
 MEDIAC
 PROMOTER
 What is Brand Equity: -
o The intangible value that accrues to a company as a result of its successful
efforts to establish a strong brand.
o Brand Equity is the value of a company’s name and reputation.
o It is the difference between a company’s total worth and the book value of its
assets.
o Psychological value that a brand holds in the market place. ( A composite of
brand awareness, brand quality, brand association and brand loyalty measures.
o The value of a brand, based on the extent to which it has high brand loyalty,
name awareness, perceived quality, strong brand associations, & other assets
such as patents, trademarks & channel relationships.
o It is the added value endowed on product or service
o The differential effect that knowing the brand name has on customer response
to the product and its marketing.
o It means the value of the brand in the market place. It consists 2 dimensions
 Brand awareness
 Brand image
o A powerful brand has high brand equity and brand exists in the heads of
consumers.
o Products are created in the factory but brands are created in the mind of
consumers.
o A brand is what people say about you when you are not present.
o Brand Equity is the measure of the brand’s ability to capture consumer
preference and loyalty.
o Measuring brand equity is difficult. E.g. Coca-Cola - $ 84 billion, Microsoft-$57
billion
o Brand Equity brings credibility and it aids launching new products.
o The fundamental asset underlying BE is customer equity – the set of loyal
customers – extending loyal customer life time value.
 Customer lifetime value = the value of purchases a customer would make over a
lifetime of patronage.
o E.g. one customer buys Rs. 1 crore every year assuming for 20 years means Rs.
20 crore = the customer lifetime value)

 Customer Equity = the total combined customer lifetime values of all of the company’s
current and potential customers.
o The value of potential future revenue generated by a company’s customers in a
lifetime.
o E.g. If a firm has current 10 customers and each buys worth Rs. 1 crore every
year, thus annual is Rs. 10 crore and assuming for 20 years 20x10=200 crores +
potential customers
o The sum of lifetime values of all customers for a brand or product.
o It is a measure of the future value of the company’s customer base.
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 o The total combined customer lifetime values of all of the company’s customers.
o It suggest the future.
 Customer Perceived Value :
o Customer’s evaluation of the difference between all the benefits and all the
costs of a product relative to those of competing offers. (The customers act on
this perceived value only). E.g. if a customer believes that a branded shirt should
cost Rs. 1000/- and he sees it for sale of Rs. 400/- he is more likely to buy.
o It is the difference between the prospective customers evaluation of all the
benefits and all the costs of a product.
 Total customer benefits is the perceived monetary value of the bundle of
economic, functional, psychological benefits customers expect from a
product, service, people and image.
 Total customer cost is the perceived bundle of costs customers expect to
incur in evaluating, obtaining, using and disposing of a product including
monetary, time, energy and psychological costs.

 Customer Value
o It is the actual amount of benefit a customer will get from a product relative to
its cost.
o This is post purchase action.
o Experience – memorable and takes place in the minds of individual consumer.
 What is a product and its three levels.
o A product is anything that can be offered to a market for attention, acquisition,
use or consumption that might satisfy a want or need.
o Each product or service can be viewed on 3 levels.
 Core customer value:- consists of the core problem solving benefits that
consumers seek when they buy a product.
 Actual product:- exists around the core and includes the quality level,
features, design, brand name, and packaging.
 Augmented product:- is the actual product plus the various services and
benefits offered with it – warranty, free delivery, installation and AMC.
 SBU = means of retaining the vitality of the entrepreneurial spirit by giving high degree
of responsibility and autonomy in decision making.
 Warranty = formal statement of expected product performance
o Formal promise for tangible things like parts of machine conforms to a standard
and the same will be ( only ) replaced. E.g. Mixi’s motor only.
 Quality = No defects. Closely related to satisfaction
 Guarantee = assurances that the product can be returned if its performance is
unsatisfactory.
o Formal promise like a contract that if performance is below par, the goods will
be repaired, replaced or money refunded.
o Producer stands as a guarantor.
 What is consumer market.
o Consumer market consists of all individuals and households who buy or acquire
goods and service for personal consumption.
o The model of consumer buyer behavior is stimuli-response model
 Marketing stimuli ( 4 Ps)
 Other major forces( economic, tech, political, cultural) entering the
consumers black box and produce certain responses, produce observable
buyer responses such as product choice, brand choice, purchase timing &
purchase amount.

15
 What is consumer behavior = the study of how individuals, groups, organizations select,
buy, use and dispose of goods, ideas, services, or experiences to satisfy their needs and
wants.
 Types of buying decision behavior.
o Buying behavior varies for different products.
 Complex buying behavior- highly involved in a purchase for significant
differences among brands.
 Dissonance reducing behavior – occurs when they see little difference
among brands.
 Habitual buying behavior – occurs under conditions of low involvement
purchases.
 Variety seeking buying behavior – occurs when low involvement but
significant brand differences.
o Stages of buying behavior.
 Need / problem recognition
 Information search – total brands available, awareness of products,
products considered, choices, decisions.
 Evaluation of alternatives
 Purchase decisions
 Post purchase behavior
 What is a business market and differences with consumer market:
o Business market comprises all organization that buy goods and services for use in
the production of other products and services for selling to others at a profit.
o Consists fewer but larger buyers
o Derived demand & more inelastic
o More professional buyers
o Complex buying situations and formalized.
 The factors influencing business buying behavior are
o Business buyers make decision on 3 buying situations.
 Straight rebuy
 Modified rebuy
 New tasks
o The decision making unit also known as Buying Centre consists many
actors/roles
 User
 Influencer
 Decider
 Gate keeper
 Approver
 buyer
 Customer Satisfaction :
o A person’s feelings of pleasure resulting from comparing a product’s
performance to expectations.
o The extent to which a product’s perceived performance matches a buyers
expectations.
 If performance falls short of expectations – dissatisfied
 If performance matches expectations – satisfied
 If performance exceeds expectations – delighted
 Customer managed relationship:
o Marketing relationship in which customers empowered by today’s new digital
technologies interact with companies and with each other to shape their
relationship with brands.
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 o Companies can no longer rely on marketing by intrusion.
o Companies must practice marketing by attraction.
o Therefore involving customers rather than interrupting them.
 Classification of customers according to their potential profitability in order to manage
relationships.
o Strangers – show low potential profitability and little projected loyalty.
 Do not invest anything in them can be the strategy.
o Butterflies – potentially profitable but not loyal ( short).
 Strategy can be to convert them into loyal customers and also enjoy that
moment.
 Create a satisfying and profitable transactions and capture max. business.
o True friends – both profitable and loyal.
 Strategy can be to make continuous relationship investments to delight
these customers.
 Nurture, retain and grow them.
 Convert true friends into true believers.
o Barnacles- highly loyal but not very profitable.
 They are problematic customers.
 Strategy can be if they cannot be profitable, fire them.
 Business portfolio = the collection of businesses and products that make up the
company.
 Analysis of current business portfolio.
o Identify the key businesses that make up the company called SBUs.
o A Strategic Business Unit (SBU) can be a division, a product line or a single
product or brand.
o Portfolio analysis involves two dimensions;
 1. The attractiveness of the SBU’s market
 2. The strength of the SBU’s position in the market.
o Best known portfolio planning method is BCG matrix.
 Image = the way public perceives the company or its products.
 Loyalty = deeply held commitment to rebuy or repatronise a preferred product in
future.
 Marketing strategy = an action plan to create customer value and achieve profitable
customer relationships.
 Differentiation = the act of designing a set of meaningful differences to distinguish the
company’s offerings from competitors’ offerings.
o Product differentiations are
 Form – size, shape, etc e.g. tablet- size, dosage, coating, action time.
 Feature – supplements the basic function – ask customers for additional
features.
 Performance quality – find out rivals’ performance levels
 Conformance quality – to meet the promised specifications
 Durability – expected life
 Reliability –premium for high reliability
 Reparability – easy to repair – ease of fixing when it malfunctions. Can an
user himself fix.
 Style – motorcycles, etc
 Design – pleasant to look
 Marketing Mix= a set of tactical marketing tools ( 4Ps or 7 Ps)
 Marketing Mix Modeling – to estimate causal relationship and measure how marketing
activity affects outcomes.

17
 o It analyses data from a variety of sources such as company sales data, price,
media spending and to understand the effects of specific marketing activities.
E.g. which advt budget is wasted, useful, etc.
 Marketing Metrics = to assess marketing effects.
o A set of measures that helps to quantify, compare and interpret the marketing
performances. E.G- pilot of aircraft – while take-off, he looks at certain things,
while taxing, he looks at some others and while landing look at other things –
knowing when to pay attention to which metrics.
 Marketing opportunity - is an attractive arena for company marketing action in which
the particular company would enjoy competitive advantage.
 Marketing Dashboard=Meaningful sets of marketing performance measures in a single
display used to monitor strategic marketing performance ( like automobile dashboards).
o It is a structured way to disseminate the insights gleaned from marketing metrics
and marketing mix modeling ( Car, flight dash boards)
 Marketing Control = Measuring and evaluating the results of marketing strategies and
taking corrective actions to ensure objectives are achieved.
 Competitive Marketing Intelligence:
o It is the systematic collection and analysis of publicly available information about
consumers, competitors, and developments in the market place.
o It helps improving strategic decisions by understanding consumer environment,
assessing and tracking competitors actions and view of opportunities and
threats.
 Marketing Research = the systematic design, collection, analysis and reporting of data
relevant to a specific marketing situation facing an organization.

 Strategic planning
o is the managerial process of developing and maintaining a viable fit between
the organisation's objectives and resources and its environmental opportunities.
o The process of developing and maintaining a strategic fit between the
organisation’s goals and capabilities and its changing marketing opportunities.
 Strategic planning process starts with mission - objectives and goals - company portfolio
plan - business plan- .
o Mission – to define a firm’s mission, the firm must address Peter F Drucker’s
questions.
 What is our business
 Who is our customer
 What is the value to the customer
 What will our business be
 What should our business be
o These simple questions but – most difficult to answer
o A good mission statement has 5 characteristics
 They focus on a limited no. of goals.
 They stress company’s major policies and values
 They define major competitive spheres within which the firm will
operate.
 They take a long term view
 They are short, memorable and meaningful.
o Mission is the path to achieve that vision.
 The mission statement describes the overall purpose of the organization.
 A statement of the organisation’s purpose.
 An organization exists to accomplish something and this purpose should
be clearly stated
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  A sound mission begins with questions like what is our business, who is
the customer, what consumers will value, what should our business be.
 It should be market oriented and defined in terms of satisfying basic
customer needs.
 Avoid – we make and sell chemicals, etc.
o Vision - Vision is what you foresee your company wanted to be .
 Vision statement includes vivid description of the organization as it
effectively carries out its operations.
 Theodore Levitt argued that a business must be viewed as a customer satisfying process
and not as goods producing process.

MARKETING STRATEGIC PLANNING:

o Tomorrow's winning products must be researched, tested, developed and
introduced before today's winners become obsolete.
o To manage its future every company needs a business strategy and a marketing
strategy. The business strategy guides the corporate mission, financial and
operational planning, its search for new products, technologies, and market
targets.
o The marketing strategy takes the business strategy as given, then focuses on
matching products to markets.

 It consists 7 segments.
o Marketing mission – define specific mission specific to Marketing
o SWOT analysis
o Goal formulation – specific objectives and time frame.
o Strategy formulation – goals indicate what a business unit wants to achieve.
 Strategy describes the game plan to achieve those goals.
 Marketing strategy formulation – there are many strategies. According to
Porter 3 generic strategies.
 Overall cost leadership
 Differentiation
 Focus.
o Program formulation – if technological leadership, strengthen R&D, training sales
force, developing advertisement, etc
o Implementation
o Feedback and control.

BCG GROWTH / SHARE MATRIX.

The leading management consulting firm developed and popularised an approach known as
growth-share matrix.

o The matrix is divided into 4 cells each indicating a different type of business.
 Question Mark: - They operate in high growth markets but have low
relative market share. Most businesses start of as a ? mark and company
tries to enter a high growth market where market leader already is there.
Question mark needs a lot of cash to keep adding plant, and machinery,
personnel, etc.
 Stars: - If a company is successful with a question mark, it becomes a
star. A star is the market leader in a high growth market and it does not

19
 mean that star provides a lot of cash. They will become future cash cow
and still it needs cash to fight competition.
 Cash Cows:- When a market's annual growth rate falls to less than 10%,
the former star becomes a cash cow if it still has the largest relative
market share. It produces a lot of cash for the company and it is market
leader. cash cow is used to support the stars, question marks and dogs.
 Dogs:- Dogs describe company's businesses that have weak market
shares in low growth markets. They typically generate low profits and
losses although they may generate some cash.
o Based on the above analysis, the company is to determine what objective to be
adopted / pursued for each SBU.
 Build : - Objective is to increase the SBU's market share even foregoing
short term earnings to achieve this objective. Building is appropriate for
question marks whose shares have to grow if they are to become stars.
 Hold :- Objective is to preserve the SBU's market share. This is
appropriate for strong cash cows.
 Harvest:- Objective is to increase SBU's short term cash flow. This is
appropriate for weak cash cows and also for question marks and dogs.
 Divest:- Objective is to sell or liquidate the business because resources
can be better used elsewhere. This is appropriate for dogs and question
marks that are acting as a drag on profits.

MARKETING MANAGEMENT PROCESS:

o This consists of analysing market opportunities, researching and selecting target
markets, developing market strategies, planning market tactics, and
implementing and controlling the marketing efforts.
o Marketing strategy is the marketing logic by which the business unit expects to
achieve its marketing objectives. It consists of marketing decisions on marketing
expenses, marketing mix, etc.
 MARKETING MIX is the mixture of controllable marketing variables that the firm uses to
pursue the sought level of sales in the target market.
o There are dozens of marketing mix elements authored by many.
o E-Jerome McCarthy - Basic Marketing, A Managerial Approach- 1960 -
popularised a four factor classification of these variables called the Four Ps.
product, price, place & promotion.
 Marketing Environment - ( Non- Controllable) consists of the actors and forces external
to the marketing management function of the firm.
 Micro environment - immediate environment - company, suppliers, market
intermediaries, customers, competitors, and public.
 Macro environment - larger societal forces - physical, economic, tech, political and legal,
socio-cultural.
 Consumer Market - consists of all individuals and households who buy or acquire goods
and services for personal consumption.
 Lifestyle - person's pattern of living in the world as expressed in the persons' activities,
interests and opinion.
 Personality - persons' distinguishing psychological characteristics that lead to relatively
consistent and enduring responses to his / her own environment.
 A person's buying choices are influenced by four major or psychological factors.
1. Motivation
2. Perception
3. Learning
4. Beliefs and attitudes
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 Motivation - A person has many needs - some are from physiological states of tension (
hunger, thirst) and other needs are psychogenic and they arise from psychological
states if tension ( recognition, esteem, belonging).
o A need becomes a motive when it is aroused.
o A motive is a need that will press / direct a person to seek satisfaction of the
need and satisfying the need reduces the felt tension.
 Freud ( Sigmund) Theory of Motivation:
o Freud assumes that real psychological forces shaping people's behaviour are
largely unconscious.
o Freud sees the person as repressing any urges in the process of growing up and
accepting social rules. These urges are never eliminated or perfectly controlled
and they emerge in dreams, in slips of the tongue. Thus according to him, a
person does not fully understand his or her motivational mainsprings.
 Maslows Theory of Motivation:
o Abrahm Maslow - theory was ( Hieracrchy of needs)
 Physiological needs (hunger, thirst)
 Safety needs ( security, protection)
 Social needs ( sense of belonging, love)
 Esteem needs ( self actualisation, recognition, status)
 Herzberg Theory of Motivation:
o Frederick Herzberg developed a two factor theory of motivation which
distinguishes ( factors that cause dissatisfactions ) & satisfiers.

 Perception:
o A motivated person is ready to act based on his perception . All of us apprehend
a stimulus object through sensations i.e., flows of information through 5 senses.
sight, hearing, smell, touch and taste.
o Perception is the process by which an individual selects, organises, and
interprets information inputs to create a meaningful picture of the world.
o People can emerge with different perceptions of the same stimulus object
because of 3 perceptual processes.
 Selective exposure :- people are exposed to a tremendous amount of
stimuli every day. people are more likely to notice stimuli that relate a
current need. people are more likely to notice stimuli that they
anticipate.
 Selective distortion:- the tendency of people to twist information into
personal meanings.
 Selective retention:- people tend to retain information that supports
their attitudes and beliefs.
o Therefore marketers have to work hard to get their messages.
 Learning:-
o When people act they learn. Learning is changes in an individual's behaviour
arising from experience. Most human behaviour is learned.
 Beliefs and Attitudes:-
o Through acting and learning, people acquire their beliefs and attitudes.
o Belief is a descriptive thought a person holds about something.
o Attitude is a person's enduring favorable or unfavorable cognitive evaluations,
emotional feelings and actions, tendencies toward some object or idea.

 RESEARCHING THE BUYING DECISION PROCESS:

o Marketers can identify the above through
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  1. Introspective method - introspect about their own probable behavior
 2. Retrospective method - interview a small no. of recent purchasers and
asking them to recall the events leading to the purchase of the product.
 3. Prospective - find some consumers who are contemplating buying a
product and ask them to think out loud.
 4.Prescriptive - ask a group of consumers to describe the ideal way for
people to go about buying product.
o Stages in Buying Decision Process:
 1.Problem recognition - need triggered, and problem is recognised based
on some reason.
 2.Information search - an aroused consumer uses information to arrive at
a set of final brand choices.
 3.Purchase decision - leads to form preferences among brands and forms
intention.
 4.Post purchase behaviour - will experience (after purchase) some level
of satisfaction or dissatisfaction.
o The buyers' satisfaction (S) is a function of the closeness between the
consumers' product expectations (E) and the product's perceived performance
(P)That is S=f (E,P).
 If the product matches expectations, the consumer is satisfied,
 If it exceeds then the consumer is highly satisfied and vice versa.

 ORGANISATIONAL BUYING :
o Webster and Wind define " Organisational buying as the decision making
process by which formal organisations establish the need for purchased products
and services and identify, evaluate and choose among the alternative brands and
suppliers.
o Characteristics of Industrial Market:
 Fewer buyers
 Professional buying
 Larger buyers
 Direct purchasing
 Derived demand
 Reciprocity
 Inelastic demand
o Types of Buying Situations: - Buy Classes.
 Robinson and Wind and others(1967) distinguish 3 types of buying
situations which they call buy classes.
 At one extreme is the straight rebuy, at the other is the new task.
 Straight Rebuy:- Purchase dept. reorders on a routine basis from
existing suppliers.
 Modified Rebuy:- Buyer modifies product specifications, prices,
terms, suppliers.
 New Task:- Buying for a first time.
 System Buying :- Buyers prefer to buy a whole solution to their
problem and not make all the separate decisions involved
(Turnkey) - originated from Govt. for buying major weapons and
communication system.
o Webster & Wind call the DMU of a buying organisation the " buying center"
defined as all those individuals and groups who participate in the purchasing
decision making process.

22
 o Buying center includes user, approver, influencers, buyers, deciders,
gatekeepers.
o Major Influences on Industrial Buyers:
o Industrial buyers are subject to many influences when they make their buying
decisions.
 Some marketers assume economic i.e., lowest price, best product, most
service.
 Some marketers ( based on study in 10 large companies) - corporate
decision makers remain human after they enter office. They respond to
image, they buy from companies which they feel close. they favour
suppliers who show them respect and personal consideration and who do
extra things for them.
o Webster & Wind classify four major group of major influences.
 Environmental - level of demand, economic outlook, cost of money,
political and regulatory requirements, competitive development.
 Organisational - objectives, policies, procedures, system, structure
 Interpersonal - authority, status, empathy, persuasiveness
 Individual - age, income, education, job position, personality and risk
attitudes.
o Buying Decisions of Industrial Buyers:
 Industrial buyers do not buy goods and services for personal
consumption or utility. They buy things to make money or to reduce
operating costs or to satisfy a social or legal obligation.
o Robinson & others have identified 8 stages of IBP and called them as buy phases.
o All 8 stages apply to a new task and some of them to other 2 types of buying
situation. This model is called the buy grid framework.
Sl.No. Description Buy classes
New Task Modified Task Straight Rebuy
1 Problem recognition Y May be N
2 General need description Y May be N
3 Product specification Y Y Y
4 Supplier search Y May be N
5 Proposal solicitation Y May be N
6 Supplier selection Y May be N
7 Order routine specification Y May be N
8 Performance review Y Y Y
o Problem recognition:- A value analysis engineering team will be put to work on
the problem.
 Value Analysis: - General Electric pioneered in the late 1940’s.
 Value analysis is an approach to cost reduction in which
components are carefully studied to determine if they can be re-
designed or standardized or made by cheaper methods of
production.
 A team will examine the high cost components in a given product.
 The high cost components in a given product usually 20% of the
parts account for 80% of the costs.
 The team will look for product components that are overdesigned
in that they will last longer than the product.
 The major questions that are raised in Value Analysis:
o Does the use of the item contribute value?
o Is its cost proportionate to its usefulness?

23
 o Does it need all its features?
o Is there anything better for its intended use?
o Can a usable part be made by a lower cost method?
o Can a standard product be found that will be usable?
o Is the produce made on proper tooling, considering the
quantities that are used?
o Do material, labour, overhead and profit total its cost?
o Will another dependable supplier provide it for less?
o Is anyone buying it for less?
 Then the team decides on the optimal product characteristics
 Supplier Selection:
 The buying centre reviews the proposal and move towards
supplier selection by vendor analysis. The buying centre will draw
up a desired supplier attributes.
 Typically the following can be attributes.
o Prompt delivery
o Product quality
o Credit
o Price and so on.
o A supplier evaluation model can be used
Attributes/Rating Scale Unacceptable Poor Fair Good Excellent
0 1 2 3 4
Financial strength X
Tech & Prod. Capability X
Product reliability X
Delivery reliability X
Service reliability X
Total score ( 4+2+4+2+2=16/5=3.2

 Market Share Strategies

o Market share strategies are summarized by Schnars as follows:
o 1. Gaining Share
 A. When
 In growth markets.
 When a new product shows potential
 When an acquisition is under performing.
 When a competitor is unwilling to fight back.
 When a competitor is unable to fight back.
 Avoid share battles against entrenched competitors.
 Avoid share battles in commodity markets.
 Avoid price competition.
 B. How
 Lowering prices
 Increasing promotion.
 New product introductions
 Improving product quality.
 Move up-market.
 Move down-market.
o 2. Holding Share
 A. When
24
  When holding a dominant market share.
 B. How
 Cost and price-cutting.
 Price cutting in the attacker's major market.
 Heavy promotional spending.
 Perpetual innovation.
 Signaling commitment.
o 3. Harvesting
 A. When
 Market is declining.
 You hold low market share
 B. How
 Cut marketing expenditures.
 Reduce service.
 Drop small customers.
 Trim product line.
 Cut research and development.
 Reduce plant and equipment.
 Substitute cheaper materials.
 Raise prices.
o 4. Divestment
 A. When
 Poor market position.
 A poor fit with the firm's other products.

 MARKETING INFORMATION SYSTEM:

o MIS: gather, sort, analyse, evaluate and distribute pertinent timely and accurate
information for use by Marketing decision makers to improve market planning,
implementation and control.
o Marketing Intelligence System: is a set of procedures and sources used by
executives to obtain their everyday information about pertinent developments
in the marketing environment

MARKETING RESEARCH:
 The systematic design, collection, analysis and reporting of data and findings relevant to
a specific marketing situation facing companies.
o The process is  define problem objective information source collect
information analyse  present.
o Questionnaire:
 Open end question:-
 Allows respondents to answer in their own words and reveal how people
think.
 A question that respondent can answer in unlimited no. of ways.
1. Completely unstructured – (what is your opinion on X?)
2. Word association – (what is the first word that comes to your mind
when you hear the following: Air India, Jet Airways?)
3. Sentence completion- ( When I choose airlines, I consider ………….)
4. Story completion – ( part story is given)
5. Picture completion – ( two picture and one statement given & other
to be filled up)

25
 6. Thematic Apperception Test ( TAT) – Picture is presented and story
about picture is to be written.
 Closed end question:- specifies all the possible answers and provide
answers that are easy to interpret and tabulate.
1. Dichotomous – with two possible choices ( yes/no)
2. Multiple choice- with 3 or more choices
3. Likert scale – A statement with which the amount of agreement or
disagreement ( strongly agree/disagree, agree/disagree, neither
agree/disagree)
4. Semantic differential – A scale connecting two bipolar words and
respondents selects the point that represents the direction and
intensity of their feelings ( e.g., Indian Airlines)
Large - - - - - X - - - - - - -- - - - - - -- - -Small
Capable - - - -- - - - - - -X - - - - - - - - - Incapable
Modern - - - - - -X - - - - - - - - -- - - - - -Old fashioned
5. Importance scale – That rates the importance of some attribute from
not at all important to extremely important.
Airline food service to me is
Extremely Very somewhat Not very Not at all
important imp imp imp imp
1 2 3 4 5
6. Rating scale – That rates some attributes from poor to excellent.
Excellent(1) very good(2) good(3) fair (4) poor (5)
6. Intention to buy scale: A scale that describes respondent’s intention
to buy.
Definitely buy, probably buy, not sure, probably not buy, definitely not
buy.
 Sampling plan:- 3 decisions
 A sample is a portion of a larger group.
 Population = all the people within a group ( such as country, a region or
group of buyers)
 Population is also referred as “ Universe”.
 Sampling frame = the list of people from which sample is selected: - It can
be such electoral register, customer list, telephone directory.
 The sample frame should be comprehensive and up-to-date.
 Sampling point = the place where the interviews are carried out.
 Sampling errors = Although there is an attempt to minimize the
differences between the results from a sample survey and that of total
population some error will be there.
 The sampling error in most market research is quoted within confidence
limits which are normally 95%.
 The margin of error OR confidence interval is the plus or minus figure
that represents the accuracy of the reported results.
 Confidence Level = how confident we are of the result. It is expressed as
% of times that different samples would produce this result.
 The 95% confidence level means that if 20 different samples were drawn,
19 times of out of 20, the results would fall in this +or – confidence
interval.
 A 99% confidence level would mean that 99 out of 100 times the result
would fall in to the stated + or – confidence level.
 A 95% confidence level is most commonly used.

26
 
Larger sample size generally produce more accurate picture of the true
characteristics of the population of 100000, the confidence level is + or –
3.08 %. However, if the population is 1000000, the confidence interval
widens to only + or – 3.1%.
 Sampling unit – i.e., who is to be surveyed
 Sample size – how many people should be surveyed
 Sampling procedure – how should the respondents be choosen. There
are two.
 Probability sample:- (3)
a) Simple random sample:- every member of the population has
a known and equal chance of selection.
b) Stratified random sample:- the population is divided into
mutually exclusive groups ( such as age groups) and random
samples are drawn from each group
c) Cluster (area) sample- the population is divided into mutually
exclusive groups and researcher draws a sample of group to
interview.
 Non-probability sample: - (3)
a) Convenience sample – select the easiest population members
from which to obtain information.
b) Judgment sample – researchers judgment to select population
members who are good prospects for accurate information
c) Quota sample- researcher finds and interviews a prescribed
no. of people in each of several categories.
 MARKET MEASUREMENT AND FORECAST:
o Level of market definition.
100% total population
100% potential market

10% potential market 40% available market

20% qualified market

10% served market

5% penetrated market

o Market Demand for a product is the total volume that would be bought by a
defined customer group in a defined geographical area in a defined time period
in a defined marketing environment under a defined marketing program.
o Sales Forecast is the expected level of company sales based on a chosen
marketing plan and on assumed marketing environment.
 Mass Marketing –Seller mass produces, mass distributes and mass promotes one
product to all buyers.
 Product differentiated marketing—Seller produces 2 or more products that exhibit
different features styles, quality, size and so on designed to offer variety to buyers.
 Target marketing—Seller distinguishes among many market segments, selects one or
more of these segments and develops products and marketing mixes tailored to each
segment.
 Today mass marketing / mass market are undergoing de-masification.
 Target marketing involves 3 steps
1. Market segmentation - the act of dividing a market into distinct groups of buyers
who might require separate products.

27
 2. Market targeting – the act of evaluating and selecting one or more of the market
segments to enter.
3. Product positioning – the act of formulating a competitive positioning for the
product and a detailed marketing mix.
 Industrial buyers can be segmented geographically and by several behaviouristic
variables, benefits sought, user status, usage rate, loyalty status, attitudes, end use.
 Marketing strategy is the basic approach that the business unit will use to achieve its
objectives.+

NEW PRODUCT DEVELOPMENT:

 The development of original products, product improvements, modifications, new
brands through acquisitions or firms own product development efforts.
o To be successful in new product development, a customer centered new product
is required than company’s R& D centered new product.
o New products - - original products, product improvements, product
modifications and new brands that the firm develop through its own R&D
efforts.
o There are 8 stages of NEW PRODUCT DEVELOPMENT
 1. Idea Generation – the systematic search for new product ideas.
 The sources are internal and external
 Crowd-sourcing- It is inviting broad communities of people –
customers, employees, independent scientists and researchers
and even public into new product innovation process.
 2. Idea Screening – screening new product ideas to spot good ideas and
drop poor ones as soon as possible.
 3. Concept development and testing – An attractive idea must be
developed into a product concept.
 Product concept is a detailed version of the new product idea
stated in meaningful consumer terms.
 Concept testing is testing new product concepts with a group of
target consumers to find out if the concepts have strong
consumer appeal.
 4. Marketing strategy development –
 Designing an initial marketing strategy for a new product based
on the product concept.
 The marketing strategy consists of 3 parts.
o First it describes the target market, planned value
proposition, sales, market share, profit and goals.
o Second, it outlines the product’s planned price,
distribution and marketing budget.
o Third, it describes planned long run sales, profit goals,
marketing mix strategy.
 5. Business analysis – involves a review of the sales, costs, profit
projection for a new product to find out whether these factors satisfy the
company’s objectives.
 6. Product development- developing the product concept into a physical
product to ensure that the product idea can be turned into a workable
market offering.
 7. Market Testing – the new product and its proposed marketing program
are introduced into realistic market settings.
 8. Commercialization- introducing the new product into the market-
when, where, how are decided at this stage.
28
 o The Marketing concept suggest that customer’s needs and wants are the logical
places to start in the search for new product ideas.
o A product idea is an idea for a possible product that the company can see itself
offering to the market.
o A product concept is an elaborated version of the idea expressed in meaningful
consumer terms.
o A product image is the particular picture that consumers acquire of an actual or
potential product.

THE CONSUMER ADOPTION PROCESS.

 Adopters of new products have been observed to move through the following 5 stages.
o Awareness
o Interest
o Evaluation
o Trial
o Adoption
 Everett M. Rogers – Diffusion of Innovations – 1962

o 2.5 % - Innovators – who are venturesome

o 13.5% - Early Adopters – who are guided by respect/opinion leaders
o 34% - Early majority – who are deliberate, before average person adopts
o 34% - Late majority – who are skeptical
o 16% - Laggards – who are tradition bound

PRODUCT LIFE CYCLE & MARETING STRATEGIES IN DIFFERENT STAGES:

 The PLC is an attempt to recognize distinct stages assuming
1. Products have a limited life
2. Sales may not be steady
3. Profit may change
o The course of a product’s sales and profits over its lifetime.
o A product’s sales potential and profitability will change over time.
o PLC typically divided into 4 stages. One more stage can be added.
o It is normally “S” shaped curve.

29
 o Product development –
 begins when the company finds and develops new product idea –
sales zero and investments mounts.
o Introduction –
 A period of slow sales growth and no profits because of heavy
expenses in the initial stage.
o Growth –
 A period of rapid market acceptance and substantial profit
improvement
o Maturity –
 A period of slow down in sales growth because all potential buyers
accepted product.
o Decline –
 The period when sales show a strong downward drift and profit
erode.
o Some authors include additional stage “ COMPETITIVE TURBULANCE”
between growth and maturity.
 Style = is a basic and distinctive mode of expression in a field of human endeavor.
 Fashion = is a currently accepted or popular style in a given field.
 Fads =are fashions that come quickly into the public eye are adopted with great zeal,
peak early and decline very fast.
 INTERNATIONAL PRODUCT LIFE CYCLE –
o This allows companies to extend the life of their products by taking them
abroad.
o It also means that foreign companies will eventually learn to make the same
products and bring them into the domestic market.
 First - Export strength – i.e., innovation launched in local success and
starts export
 Second – Foreign production starts- i.e., foreign manufacturers are
familiar and start to produce for their market.
 Third – Foreign production becomes competitive in export markets –
i.e., by now foreign manufacturers gain production experience with
lower cost and start export.
 Fourth – Import competition begins – i.e., foreign manufacturers start
exporting to same country who launched the product.
o INTRODUCTION STAGE:
 Product is distributed - takes time to fill the dealer pipelines- product
will linger for many years before they reach rapid growth.

30
 
In this stage, profits are negative or low because of low sales and
heavy distribution and promotion expenses.
 Much money is needed to attract distributors and fill the pipelines.
 Promotional expenses are at higher ratio to sales because of the need
for a high level of promotional effort .
 To inform potential customers of the new and unknown
product
 To induce trial of the product
 To secure distribution in retail outlets.
 There are only a few competitors and they produce basic versions of
the product since market is not ready for product refinements.
 The firm focus their selling on these buyers who are ready to buy
usually higher income group. Prices tend to be on high side because
costs are high and high margins are required to support the heavy
promotional expenses needed for growth.
 MARKETTING STRATEGIES IN THE INTRODUCTION STAGE:
o In launching a new product, marketing management can set a high or a low
level for each marketing variable such as price, promotion, distribution and
product quality.
o Considering only price and promotion, management can pursue one of the
four strategies.
o FOUR INTRODUCTORY MARKETING STRATEGIES

RAPID SKIMMING STRATEGY SLOW SKIMMING RAPID PENETRATION SLOW PENETRATION

Launching the new product
at a high price and a high
promotion level.
Eg. Apple iPhone, Consumer
electronics like TV, &
publishing industry.
Firm charges a high price in
order to recover as much
gross profit per unit as
possible
Heavy spending on
promotion to convince the
market of the product’s
merits even at the high
price level.
High promotion acts to
accelerate the rate of
STRATEGY
Launching the new
product at a high price
and low promotion. Eg.
Mercedes Benz new
models, Many industrial
products, laser
technology,
petrochemicals,
renewable energy
sources.
Purpose of the high price
is to recover as much
gross profit per unit as
possible
Low level of promotion
keeps marketing
expenses down
This combination is
expected to skim a lot of
31
STRATEGY STRATEGY
Launching the new Launching the new
product at a low price product at a low price
and spending heavily on and a low level of
high promotion. E.g, promotion. E.g. Maruti
Nirma, T-series, mobile Suzuki.
service providers giving Cheaper two wheelers
SIm cards at throw away from a well known
prices to attract more company
customers.
This strategy promises to The low price will
bring about the fastest encourage rapid product
market penetration and acceptance
the largest market share
This strategy makes sense The company believes
when that market demand is
highly price elastic but
1.The market is large minimally promotion
elastic
2. The market is unaware This strategy makes
of the product sense when
market penetration.
This strategy makes sense
under following
assumptions:
1.A large part of the
potential market is unaware
of the product
2. Those who become
aware are eager to have the
product and able to pay the
asking price
3. Firm faces potential
competition and wants to
build up brand preferences.
profit from the market
This strategy makes sense 3.Most of the buyers are 1.The market is price
when price sensitive sensitive
1.The market is limited in
size. 4.There is a strong 2. There is some
2.Most of the market is potential competition potential competition
aware of the product
3.Buyers are willing to 5.Company’s unit
pay a high price manufacturing costs fall
4.Potential competition is with the scale of
not imminent production and
accumulated
manufacturing
experience

 MARKETTING STRATEGIES IN THE GROWTH STAGE:

o The firm should improve product quality and adds new product features and
models.
o It enters new market segments
o It enters new distribution channels.
o It lowers prices at the right time to attract the next layer of price sensitive
buyers.
 MARKETTING STRATEGIES IN THE MATURITY STAGE:
o At some point, a product’s rate of sales growth will slow down and relatively
product will reach maturity stage.
o Most products are in the maturity stage of the PLC and therefore most of
the marketing management deals with the mature product.
o Marketing Strategies :
 Market Modification - The company should seek to expand the
market for its brand by
 Convert non-users ( air freight from ground transportation)
 Enter new market segments ( baby foods to adult)
 Win competitors’ customers
 More frequent use
 More usage per occasion
 New & more varied uses
 Product modification – Modify product’s characteristic to attract new
users and more usage from current users.
 Quality improvement
 Feature improvement
 Style improvement
 Marketing mix modification – modify the following
 Price – Review and change the price, credit, discount, freight,
transportation.
 Distribution – More product support & display – more outlets.
 Advertisement – Review and increase advt, timing, frequency.
 Sales promotion – Rebate, warranty, gifts.
 MARKETTING STRATEGIES IN THE MATURITY STAGE:
 Identify weak products and take decisions
 Determine marketing strategy
 The drop decision
 MARKET EVOLUTION:
o PLC focuses on particular product.
o Market evolves through 5 stages.
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  Market Crystallization stage:- Before market materializes, it exists as a
latent market. A latent market consists of people who share a similar
need or want for something that does not yet exist and a company
realize this and starts marketing a product or service.
 Market Expansion stage:- One firm us already there and a second firm
enters with the same product in the same market.
 Market Fragmentation stage:- Market splits into finer and finer
fragments because each competitor will invade into others.
 Market Reconsolidation stage:- Suddenly a firm introduces the same
product with a valid or innovative feature and that market will
reconsolidate.
 Market Termination stage:- Old firm of product ends with a new form
of the same product that meets consumer needs in a superior way.

PRICING:
 What is pricing – Price is the amount of money charged for a product.
 Major pricing strategies – 3.
o Customer value based pricing- setting price based on buyer’s perceptions of
value rather than on cost.
o Cost based pricing- setting prices base on costs for producing, distributing
and selling product plus a fair rate of return for effort and risk.
o Competition based pricing – setting prices based on competitors’ strategies,
prices, costs and market offerings.

MARKETING STRATEGIES FOR LEADER, CHALLENGER, FOLLOWER & NICHER

 Michel Porter in his competitive strategy distinguished 4 generic strategies that
companies could follow, 3 winning strategies and 1 losing one.
o Companies could enjoy a high rate of return if they achieved cost leadership,
high product differentiation or market focusing.
o They would show only average or below average returns if they pursued a
middle of the road strategy of doing a little of everything but nothing
particularly well.
 Strategies for Leader:
 Expand the total market by
o New users
o New uses
o More usage
 Protect market share by
o continuous innovation, quality
o market broadening, multi brands, heavy advt,
aggressive sales force.
o Marketing HYPEROPIA ( opposite of MARKETING MYOPIA) – a condition
where vision is better for distant than near objects.
 Expanding market share
 Strategies for Challenger:
 A market challenger must first define its strategic objective.
 The military principle of objective “ holds that every military
operation must be directed toward a clearly defined, decisive
and attainable objective.
 The strategic objective of most market challenger is to
increase their market shares.
 It could attack market leader
33
  It could attack firms of its own size that are not doing their job
and are underfinanced.
 It could attack small, niche and local firms.
 Price discount strategy, cheaper goods strategy, prestige
goods strategy, cost reduction strategy, etc.
 Strategies for Followers:
 They must know how to hold current customers and win a fair
share of new customers.
 They should keep their cost of production low and offer
product and superior services to their target customers.
 Strategies for Nichers:
 They are also called market specialists, threshold firms,
foothold firm.
 These firm try to find one or more market niches that are safe
and profitable.
 Nichemanship is specialization and the firm has to specialize
along market, customer, product or marketing mix.

MARKETING STRATEGIES DURING PERIODS OF SHORTAGES, INFLATION & RECESSION

o During Shortages:
 Some industries experience over demand and they cannot supply all
their customer needs.
 When short supply position exists for many industries, it is a shortage
economy.
 Too many companies were taking actions that ran counter to the
marketing concept
a. Raising prices to the maximum
b. Cutting customer supplies in an arbitrary fashion
c. Reducing advt.
d. Dismissing sales representative
e. Marketing men are replaced by order takers.
o Marketing strategies during shortages:
 Two most common responses to shortages are both shortsighted.
 Aggressive De-marketing Response:
1. Raises the prices
2. Cut product quality
3. Eliminate weaker customers
4. No credit
5. Cut advt.
 Marketing as usual approach:
1. Produce same products
2. Sell to same customers
3. Raise the prices
 During shortages, cut off weak customers and increase supplies to
important customers and that will increase loyalty.
 CUSTOMER MIX- As a rule, a small % of the company’s customers
account for a large % of its sales ( The so called 80 : 20 rule)
 Non forgivers – Who expect special treatment during
shortage. If they do not get they will switch and will not
forget – Therefore this segment needs to be taken care.
 Tolerants – Who are greatful and they will tolerate

34
 PRICING: Raise prices – while raising prices consider 3 parties concern
– govt, competitors & customers.
 DISTRIBUTION: Cut weak channels.
 ADVT & SALES PROMOTION: Reduce all
o Marketing strategies DURING INFLATION:
 Inflation is an economic climate in which the general price level
reflecting prices of raw material and final products rises faster than a
few % annually.
 Economists say too much money chasing too few goods.
 MARKETING STRATEGIES:
 Customer Mix --- Will have to pass on some price increases to
customers – so review major market and customers and try to raise
prices.
o Marketing strategies during RECESSION:
 Recession is a period of slowed down economic growth, marked by a
decline in orders, a rise in inventories, a low utilization of capacity,
and a rise in employment.

INTERNATIONAL MARKETING:
The following are the steps / process involved in international marketing.
1. Appraising international marketing environment ( economic, political, legal, cultural,
etc)
2. Deciding whether to go abroad ( one country, two or across the globe)
3. Deciding which market to enter ( estimate demand, sales potential, profit, ROI)
4. Deciding how to enter the market ( exports, indirect export or direct, JV, investment,
franchise)
5. Deciding on the market ( what marketing mix –product ( standardized or
differentiated ) promotion, price and distribution)
6. Deciding on the marketing organization ( export dept. international division or
multinational organization)

PRODUCT, BRAND, PACKAGING AND SERVICE DECISIONS:

o Product= anything that can be offered to a market for attention, acquisition,
use or consumption that might satisfy a want or need.
o Marketer’s job is to uncover the needs hiding under every product and to sell
benefits not features.
o Every product is really the packaging of a problem solving service.
o Product mix = (Product assortment) = is the set of all products and items that
a particular seller makes available to the buyers.
o Product classification:-
 3 groups according to durability or tangibility
 Non-durable – consumed in one or few uses ( soaps, beer,
salt)
 Durable goods – normally survive many uses ( fridge, cloths,
TV)
 Services – are activities, benefits or satisfactions that are
offered for sale ( hair cut, repair, etc)
 Consumer goods classification –
 Convenience goods – goods that the consumer usually
purchases frequently, immediately with minimum effort (
soaps, newspaper, tobacco)
o Staple goods ( tooth paste)
35
 o Impulse goods ( magazines)
o Emergency goods ( umbrella)
 Shopping goods- in the process of selection and purchase,
compare quality, price and style ( car, furniture, etc)
 Specialty goods – goods with unique characteristics/brand
(fancy goods special cars, men’s suits).
 Unsought goods – does not think of buying but once aware of
the same, they buy ( smoke detector, food processor, LIC)
 Industrial goods classification
o Materials and parts – Goods that enter manufacturers
product and they are raw material and manufactured
material and partly - farm products & natural
products.
o Capital goods – goods that enter the finished product
partly.
o Supply and Services.
o Product width = How many different product lines the company carries (
detergents, tooth paste, coffee)
o Product length = Total no. of item in its product mix ( how many in
detergents, how many in tooth paste & how many in coffee)
o Brand = A name, term, symbol, or design, or combination intended to
identify the goods or services of a seller to differentiate those of
competitors.
o Brand Name = That part of a brand which can be vocalized – the utterable
o Brand Mark=That part of a brand which can be recognized but is not
utterable.
o Trade Mark = A brand or part of a brand that is given legal protection thus
protecting seller’s exclusive rights.
o Copy right=The exclusive legal right to reproduce, publish and sell the
matter.
o Packaging & Labeling :
 Packaging  the activities of designing and producing the container
or wrapper for a product.
 The container or wrapper is called package.
 The primary package is the product’s immediate container ( a bottle
holding lotion/oil)
 The secondary package is material that protects the primary package
& is discarded during use ( card board of a lotion)
o Service = A service is any activity or benefit that one party can offer to
another that is essentially intangible and does not result in the ownership of
anything.
 Characteristics :
1. Intangibility – they cannot be seen, tasted, felt, heard or
smelled till bought from service provider.
2. Inseparability – service is inseparable from its source whether
the source is a person or machine.
3. Variability – depend on who provides the service
4. Perishability – it cannot be stored.
 Services are –
 People based --- ( psychiatrists, singer)
 Equipment based – ( car wash, taxi, computer)

36
PRICING DECISIONS:
 Price is the only element in the marketing mix that products revenue and the other
elements represent cost.
o Major pricing decision
 selling price for first time
 modifying price to meet circumstances
 how to respond to price change
o Setting the price – When a firm develops a new product or introduces regular
product to new channel, a 6 step procedure is to be followed.
 Selecting the pricing objective:-
 whether profit – more price, sales revenue – medium, market
share-low
 Survival – to keep plant going and inventory turning over low
price for survival.
 Current profit maximization
 Market share leadership
 Product quality leadership
 Determining demand:-
 Each price the company charge will lead to a different level of
demand.
 Estimating costs :
 Fixed cost
 Variable cost
 Analysing competitors’ price and offers.
 Selecting a pricing method:--
 Cost plus pricing – is to add a standard markup to the cost of
the product
 Target profit pricing ( Break-even analysis) – The firm
determines the price that would produce the profit it is
seeking – target pricing uses break even analysis.
 Perceived value pricing- Product’s perceived value as per
buyer’s perception and not the seller’s cost.
 Going rate pricing- The firm bases largely on competitor’s
prices with less attention to costs.
 Sealed bid pricing – The firm who wants to win contract offers
the lowest price.
 Psychological pricing – Many consumers use price as an
indicator of quality.
 Prestige pricing – is effective with ego-sensitive produces –
sellers believe prices should end in odd no. Rs. 300 Vs. Rs.
299.99
 Geographical pricing- prices to distant customers – should it
be different or uniform price for all
 Zone pricing
 Promotional pricing – Temporarily price products below the
list price ( supermarkets offer few products at low prices to
attract customers)
 Discriminatory pricing- prices (differential) to accommodate
differences in customers i.e., customer basis, place basis, time
basis, use basis, payment terms basis, etc.

37
 Price discounts – cash discount, quantity discounts, seasonal
discounts.
 Selecting the final price
o Modifying the price:
 Initiating and responding to price changes –
 Initiating price cuts – in case excess capacity to liquidate stock
 Initiating price increases – cost of inflation, rising cost of raw
materials, over demand.

MARKETING CHANNEL DECISIONS.

 A channel distribution comprises a set of institutions which perform all activities to
move a product and its title from production to consumption.
o Why intermediaries ?
 Lack of financial resources for direct marketing
 Efficiency and expertise of middlemen is used.
 Risk taking
o Vertical marketing system – consists producer, wholesaler, and retailer acting
as a unified system. Either one owns and avoids conflicts.
o Horizontal marketing system – two or more companies to join together to
exploit an emerging marketing opportunity. This is also known as symbiotic
marketing.
o Retailing – includes all activities involved in selling goods or services directly
to final consumers for their personal non-business use.
o Whole selling – includes all activities involved in selling goods or services to
those who buy for resale or business use.
o Physical distribution – involves planning, implementing and controlling the
physical flows of materials and final goods from points of origin to points of
use to meet customer needs.
o COMMUNICATION AND PROMOTION MIX.
 Advertising – any paid form of non-personal presentation and
promotion of ideas, goods or services by an identified sponsor.
 Sales Promotion – Short term incentives to encourage purchase or
sale of a product or service.
 Publicity – Obtaining favorable presentation that is not paid for by the
sponsor. Securing editorial space in all media read, viewed or heard.
 Public Relations – building and maintaining good relations with
company’s various publics.
 Personal selling – oral presentation in a conversation with one or
more prospective purchasers ( prospecting, communicating, selling,
servicing, information gathering & allocating).
 Communication Process.
1. Sender – party sending message to another ( communicator)
2. Encoding – process of putting thought into symbolic form
3. Message – set of symbols sender transmits.
4. Media – communication channels.
5. Decoding – receiver assigns meaning to symbols
6. Receiver – party receiving message ( audience)
7. Response – set of reactions after receiving / exposure of message
8. Feedback – receiver’s response to sender
9. Noise – unplanned static or distortion during communication
process.
o Effective Communication:
38
 1. Identify the target audience
2. Determine the communication objectives
3. Design the message
4. Select the communication channels
5. Develop the total promotional budget
6. Decide on the promotion mix
7. Measure the promotion results
8. Manage and co-ordinate the total marketing communication process.

 Guarantee - refers to the post sale performance- the manufacturer stands behind
the product like a guarantor to a loan. It is a formal promise, like a contract, that if
the performance is below par, the goods will be repaired or replaced or the money
refunded.
 Warranty - refers and relates to the sale of goods and says that it is of particular
standard ( conforms to standard) - it is a promise for tangible things like parts of
machine, motor( in juicer). and the motor will only be replaced.
 Duopoly- A market structure in which two producers of a commodity compete with
each other.
 Monopoly- A market situation in which a product that does not have close
substitutes is being produced and sold by a single seller.
 Monopsony-A market situation in which the product or service of several sellers is
sought by only one buyer.
 Oligopoly-- A market in which the market is dominated by a small no. of sellers or
large suppliers.
 GDP- The total of goods and services produced by a nation over a given period.
 GNP- The value of all final goods and services produced within a nation in a given
year, plus income earned by its citizens abroad, minus income earned by foreigners
from domestic production.
 VARIOUS NAMES OF GENERATIONS FOR MARKETING MANAGERS:
o Greatest Generation – 1901 – 1924
 Experience in world war in adulthood
 Silent generation
o Baby Boomers – 1946-1964 & 1965-1980
 Boom generation 1946-1964 – space exploration, first modern
counter culture.
 Baby busters – 1965-1980 – after world war II, a 14 year increase in
birth rate world wide and birth rates, a phenomenon commonly
referred to as baby boom
 They gave birth to generation X & Y.
o Generation X – 1975-1985- rise of mass media.
 MTV generation/boomerang generation
 Born and connected to pop culture
 Baby busters is term used ( also ) for generation X.
o Generation Y – 1978 – 1990 – rise of IT age
 Millennials, internet, war on terror.
o Generation Z – 1995-2007 - new silent generation
 Dot com, I-pad generation
 Digital, internet, google generation.
o Generation Alpha – This generation begins with 2010.
 Early education
 Studying longer
 Fewer sibilings
39
  Double income
o Cocooning = nesting . i.e. going out less with others and staying home more.
 What is a service
o A means of delivering value to customers by facilitating outcomes customers
want to achieve without the ownership of specific costs an risks.
o Services are characterized by 4 key characteristics.
 Intangible
 Inseparable
 Variable
 Perishable
 What is Marketing Logistics= Planning, implementation & controlling the physical
flow of materials, final goods and related information from points of origin to points
of consumption to meet customer requirements at a profit.
o Logistics does not mean trucks and warehouses.
 What is SCM = Managing upstream and downstream value added flow of materials,
final goods and related information among suppliers, the company, resellers and
final consumers.

PERSONAL SELLING
 Personal selling is personal presentations by the firm’s sales force for the purpose of
making sales and building customer relationship.
 A Sales Man’s job is to
o To sell
o To build and maintain relationship with customers
o To provide market intelligence to management.
 The seven steps of personal selling are
o Prospecting & Qualifying – identification of qualified potential customers.
o Pre-approach – learning as much as possible about a prospective customer
before making a sales call.
o Approach- meeting the customer for the first time
o Presentation – telling the value story to the buyer, showing how company’s
offer solves the customer’s problem.
o Handling objections- seeks out, clarifies and overcomes customer objections
to buying.
o Closing – asking customers for an order
o Follow-up – follow-up after the sale to ensure customer satisfaction and
repeat business.
 What is trade promotion= sales promotion tools used to persuade resellers to carry
a brand, give it shelf space, promote it in advertisement and push it to consumers.
 What is business promotions = sales promotion tools used to generate business
leads, stimulate purchases, reward customers and motivate sales people.
 Customer value analysis = determining what benefits target customers value and
how they rate the relative value of various competitor’s offers.
 What are the basic competitive strategies=-
o Porter suggested 3 winning strategies and 1 loosing strategy.
o Overall cost leadership- company works hard to achieve lowest production
costs and price than the competitors to win a large market share.
o Differentiation – company concentrates on creating a highly differentiated
or achieving superior performance in an important customer benefit area or
on product and marketing program to emerge as a leader in the industry. Use
of best components or raw materials.

40
 o Focus – company focuses its effort on serving a few market segments, know
them intimately rather than going after the whole market.
o Middle-of-the-road – company do not purse a clear strategy and do the
worst finally.
 Michael Treacy & Fred Wiersema suggested customer centered competitive
marketing strategies – three.
o Operational excellence – company provides superior value by leading its
industry in price and convenience.
 It reduces the cost and serve customers efficiently.
o Customer intimacy- company provides superior value by segmenting its
markets and tailoring its products to exactly match the needs of targeted
customers.
 It works closely with customers and empowers marketing people to
respond quickly to those customer needs.
o Product leadership – company provides superior value by offering
continuous stream of leading edge products.
 It aims to make its own and competing products obsolete by way of
introducing new products.
 What is Marketing Ethics:
o Look beyond what is legal and allowed.
o Develop standards based on personal integrity, corporate conscience and
long run consumer welfare.
 What are the criticisms of Marketing.
o Harming consumers through high prices
o Deceptive practices
o Unsafe products
o Planned obsolescence
o Poor service to disadvantaged customers
o False wants and materialism
o Marketing private goods at the expense of public goods.
o Cultural pollution.
 Policy = policies are bodies of rules established to guide managers in their decision
making.
o It prescribes the boundaries of the alternative course of action available
within a defined set of circumstances.
 Power = ability to cause or prevent an action, make things happen.

FACTORS INFLUENCING DEMAND FOR A PRODUCT

o Market potential
o Customer reaction
o Competitor reaction
o Marketing mix
o Trends in environment
 New Marketing Realities –
o Network information technology
o Globalization
o Deregulation
o Privatization
o Heightened competition
o Industry convergence
o Retail transformation
o Disintermediation
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 o Consumer buying power
o Consumer information
o Consumer participation
o Consumer resistance
 New company capabilities
o Use of internet as powerful information by company
o Use of internet as powerful sales channel
o Collection of information about market, customers, competitors
o Use of social media
o Fast and quick communication
o Mobile marketing
 10 commandments of Marketing;
o 1. Company segment the market, chooses best segment, develops a strong
position in choosen segment.
o 2. Company maps its customers’ needs, perception, preferences, behavior
and motivates the stakeholders to satisfy customers.
o 3. Company knows its competitors, their strengths and weaknesses.
o 4. Company builds partners out of its stakeholders and generously reward
them
o 5. Company develops systems for identifying opportunities, rank and choose
the best.
o 6. Company manages a marketing planning system for both long and short
term objectives
o 7. Company has strong control over its marketing mix.
o 8. Company builds strong brands.
o 9. Company builds marketing leadership and team spirit at various depts..
o 10.Company adds technology for competitive advantage.

UPDATION OF OLD 4 Ps:

 Old 4 Ps are not the whole story any more.
 The new 4 Ps apply to all disciplines of company.
o In a holistic marketing the 4 Ps are People, Processes, Program &
Performance.
o People – Employees are critical to Marketing success.
 Marketing will be good only good people are there in an organization
 Consumers are also people and company must understand their lives.
o Processes –All the creativity, discipline and structure brought to marketing
management.
 Avoid ad-hoc planning and decision making
o Program – All the firms’ consumer directed activities.
 It encompasses old 4 Ps.
o Performance – To capture the range of possible outcome measures that have
financial and non-financial implications.

VALUE CHAIN / VALUE CREATION:

 Task of marketing is to deliver customer value at a profit.
 In today’s economy with increasingly informed buyers with abundant choices, a
company can win only by fine tuning the value delivery process.
 Value creation in 3 steps
o Choosing value
o Providing value
o Communicating value
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  Porter’s Value chain is a tool for identifying ways to create more customer value.
o Michel Porter identified 9 strategic activities
o Five primary and four support activities
o Primary
 Inbound logistics
 Operations/converting material into final products
 Outbound logistics
 Marketing and sales
 Service
o Support
 Procurement
 Technological development
 HRM
 Firm infrastructure
o The firms’ task is to examine cost and performance in each value creating
activity and look for ways to improve it ( bench marking)

STRATEGIC PLANNING / GROWTH STRATEGY

 Strategic marketing is strategic management which integrates marketing with
other management functions.
 How a company wants to grow to the desired level from its existing level.
 Conduct a strategic planning gap analysis.

--------------------------------- Desired
Sales strategic planning gap
Existing

Years
 Three options are available and they are
o 1. Intensive Growth Strategy:
 Review and identification of opportunities for improving existing
business and to achieve further growth within the current company’s
current business.
 One useful framework for detecting new intensive growth
opportunities is a product-market-expansion grid. ( Ansoff)
 First is : Here the company first considers whether it could
gain market share with current products in the current
markets by encouraging current customers to buy more,
attracting competitor’s customers and convincing non-users
to buy using a market penetration strategy.
 Second is : Next, the company considers whether it can find
and develop new markets for its current products in a market
development strategy.
 Third is : Next, it considers whether it can develop new
products of potential interest to its current markets with a
new product development strategy.
 Fourth is : Then the company reviews the opportunities and
think of developing new products for new market in a
diversification strategy.
o 2. Integrative Growth strategy.

43
 Company can increase sales and profits through backward, forward,
horizontal integration within its industry.
 Acquire one or more of its suppliers (backward), acquire some whole
sellers or retailers (forward), acquire competitors (horizontal).
o 3. Diversification Growth Strategy.
 Makes sense when good opportunities exist outside the present
businesses and they are three strategies;
 1. Concentric Diversification Strategy: could seek new
products that have technological and marketing synergies
with existing product lines.
 2. Horizontal Diversification Strategy: search for new
products that appeal to its current customers but may be
technologically unrelated to current product lines.
 3. Conglomerate Diversification strategy: seek new
businesses that have no relationship to the company’s current
technology, products or markets.
 The company should have right mix of business strengths to succeed.
 The industry must be highly attractive
 It can produce unrelated new products.

CHECKLIST FOR PERFORMING SWOT ANALYSIS

 Marketing :
o Company reputation, market share, customer satisfaction, customer
retention, product quality, service quality, pricing effectiveness, distribution
and promotion effectiveness, geographical coverage.
 Finance:
o Cost or availability of capital, cash flow.
 Manufacturing:
o Facilities, economies of scale, capacity, able and dedicated work force, ability
to produce on time, technical skills.
 Organisation:
o Visionary leadership.

SOCIAL RESPONSIBILITY IN MARKETING

o Greater opportunity exists in the society provided the organization should be

visible and involved with the public since marketing operates as the public
face of an organization.
o Being socially responsible means, an organization shows concern for the
people and environment in which it transacts business.
o It also involves that these values are communicated and enforced by all in
the organization and with business partners i.e., suppliers and distribution
channel members.
o The organisation’s marketing efforts is to develop satisfying relationships
with customers that benefits both.

 Debi Kleiman, the president of MITX, has enumerated 10 roles of modern marketing;
o 1. Marketing * Advertising:
 Advertising still is important but marketing today is much more about
conversations and not messages.
 It is bringing customers with us.

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  Connect to emotions of customers, give customers a reason to
believe.
o 2. Participation is the 5th P of Marketing:
 Today the connected customers want to have a say, want their voice
to play a role.
 It is willingness to let customers in.
o 3. Always be listening.
 Online communities, Twitter, rating, and this lets customers to
suggest innovative ideas.
o 4. Talk is cheap (Media):
 Empower customers to talk to their friends about products and their
influence is far greater.
o 5. Me-Commerce is better than E.commerce.
 Create digital experiences and interactions
o 6. Think mobile first:
 Understand how the customer is experiencing your brand on the go.
o 7. Content is the King:
 Think about how our products fit into people lives and build a content
strategy around it.
o 8. Every employee is a brand manager.
o 9. Use technology to simplify and measure everything
o 10.Don’t be a lemming:
 Every bright shiny object that comes along will look good but don’t
get tempted. i.e., for most products you can not go online.

CHARACTERISTICS OF MODERN MARKETERS

 Modern marketing is created for responding to company’s needs and it is also
important that the marketers too become modern.
 Paul Christ enumerated 5 characteristics of modern marketers.
o 1. Basic Business Skills:
 Marketers are first and foremost and they need basic skills like
problem analysis, decision making, oral and written communication,
quantitative skills, working well with others.
o 2. Understand marketing impact:
 Marketers must know how their decisions will impact other areas of
the company and other business partners.
 Marketing decisions therefore are not made in isolation and their
decisions could be problems for others.
o 3. Technology Savvy: on 2 fronts:
 Today’s marketers must be skilled in using technology as part of their
everyday activities.
 Understand emerging technology and applications in order to spot
opportunities and threats.
o 4. Need for global perspective:
 Any company can conduct business on a global scale especially in the
net.
 A mere website will not guarantee success.
 Understand international trade, culture, etc.
o 5. Information seeker:
 Field of marketing is dynamic, changes occur quickly and seek
information.

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  The modern marketing is a new concept that represents the needs and value of
customers and society and not just corporate profits.
o The modern marketing challenges are;
 LPG
 Technical advancement
 Unified global markets
 Immense opportunities and threats
 Four Ps are to be redefined constantly.

MARKETING STRATEGIES / ADJUSTMENTS / CURRENT TRENDS

o Re-engineering
o Outsourcing
o E.commerce
o Bench marking
o Alliances
o Partner suppliers
o Market centered
o Global and local
o Decentralization
 Market current philosophies, trends, concepts and tools::
o Relationship marketing – focus more profitable customers
o Customer life time value – regular basis supply at lower price
o Customer share – cross selling ( get the customer to buy some other product
also while he purchase a main or one product) and upselling ( get the
customer to buy more expensive product than the base product)
o Target marketing
o Individualization
o Customer database – instead sales data to customer focused data,
preferences
o Integrated marketing communication.
o Channels as partners
o Every employee as a marketer.

IMPLEMENTATION OF MARKETING STRATEGY

 Strategy is only one if 7 elements according to McKinsey & Co.
o In 7 S framework for business success,
o Strategy,
o Structure
o Systems ( above three are hardware of success)
o Style
o Skill
o Staff
o Shared values ( These four are software for success)
 When these software elements are present, companies are more successful at
strategy implementation.
 Peter F Drucker pointed out that it is more important to do the right things
(effectiveness) than to do things right ( efficiency).
o The most successful companies excel at both.

 MARKETING PROCESS IN STRATEGIC BUSSINESS PLANNING

o There are two views of value delivery process.
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 o 1. Firms make something and then sells it.
 In this view, marketing takes place in the second half of the value
delivery process.
 This assumes that the company knows what to make and that the
market will buy to enable company make profits.
o 2. Firms place marketing at the beginning of the planning process.
 Instead of emphasizing making and selling, companies take 3 phase
value creation and delivery sequence.
 1. While choosing the value- marketing must do before
product exists – segment the market, select strategy, target
and value positioning.
 2. While providing value – product specifications, services,
target price, and then make and distribute the product.
 3. Communicating the value – sales promotion, advt, etc.
o The marketing process consists of
 Analyzing market opportunities
 Researching and selecting target markets
 Designing marketing strategies
 Planning marketing programs
 Organizing and implementing, controlling marketing efforts.

 A typical marketing plan has 8 sections.

 1. Executive summary and table of contents
 2. Current marketing situation
 3. Opportunity and issue analysis – SWOT & issue facing company or
product.
 4. Objectives ( financial and marketing)
 5. Marketing strategy
 6. Action programs
 7. Projected profit/loss statement
 8. Controls.

 Six categories of new products.

o Booz, Allen & Hamilton has identified 6 categories of new products.
 New to the world products:- new that create a new market.( Palm
Pilot hand held organs)
 New product lines – new product that allow a company to enter an
established market for the first time. ( e.g. Fuji’s disks for Zip drives)
 Addition to existing product lines – new products that supplement a
company’s established product lines ( package size, flavor e.g.
Amazon. Com’s email greeting card)
 Improvements and revisions of existing products – new products that
provide improved performance or greater perceived values and
replace existing products. ( e.g. Microsoft office 2000, 2007)
 Repositioning – existing products that are targeted to new markets. (
e.g. Johnsons & Johnsons baby shampoo for adults and youths)
 Cost Reductions – new products that provide similar performance at
lower costs. ( e.g. Intel’s Celeron chips)
 Less than 10% of all new products are truly innovative and new to the world.
 A product idea is a possible product the company might offer to the market.
 A product concept is an elaborated version of the idea expressed in meaningful
consumer terms.
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  Quality Function Deployment (QFD):
o Takes the desired customer attributes generated by Marketing research and
turns them into a list of engineering attributes in new product development..
 Alpha Testing = means testing a product / prototype ( New) within the firm to see
how it performs in different applications.
 Beta Testing = means testing product or prototype with customers.

CUSTOMER VALUE HIERARCHY / PRODUCT LEVELS:

o The most fundamental level is core benefit that the customer is really buying.
E.g. hotel guest buying rest and sleep.
o Marketers have to turn the core benefits into a basic product. E.g. hotel
room includes a bed, bathroom and towel, etc.
o Marketers prepares an expected product, a set of attributes and conditions
that buyers normally expect when they buy a product. E.g hotel- a clean bed,
fresh towel, etc.
 Most hotels can meet this minimum expectations, the traveler will
settle for cheapest hotel and most convenient.
o Marketers prepare an augmented product that exceeds customer
expectations. E.g. a remote control TV, cable connection, fresh flowers,
complimentary items.
 Today’s competition essentially takes place at this level.
 This level is researched by marketers as to how a customer performs
the task of using, fixing and disposing the product.
o Theodre Levitt notes “ the new completion is not between what companies
produce in their factories, but between what they add to their factory output
in the form of packaging, services, advt, customer service, financing, delivery
arrangements, warehousing and other activities that customers value.
o Potential product level, encompasses all of the possible augmentations and
transformations a product might undergo in future. E.g. suites in a hotel with
all facilities.
 Core product
 Basic product
 Expected product
 Augmented product
 Potential product

 In Service Marketing :
 It requires external marketing, internal marketing and interactive marketing.
o External marketing – describes normal work to prepare, price, distribute and
promote the service to customers.
o Internal marketing – describes the work to train and motivate employees to
serve customers well.
o Interactive marketing – describes the employee’s skill in serving the client.
o The clients will judge the service in 2 ways.
 Technical quality – e.g was the surgery successful or not.
 Functional quality – e.g. did the doctor show concern and inspire
confidence.
 Service firm face 3 marketing tasks or strategies:
o 1. Increase competitive differentiation:
 Differentiated offer ( hotel with e.mail/fax/wi-fi)

48
 
Continuously introduce innovative offers as otherwise, competitors
follow.
 Delivery – innovative means of delivery of services.
o 2. Managing service quality:
 By delivering consistently higher quality service than that of its
competitors and by exceeding customer expectations.
 Identify gaps and rectify – five gaps are there.
 1. Gaps between expectations and management perception –
e.g. patients want better food.
 2. Gaps between management perception and service quality
specifications. E.g. hospitals correctly perceived fast service by
nurses and simply telling fast instead of specifying.
 3. Gaps between service quality specifications and service
delivery. – service people – poorly trained or incapable to
meet the standard.
 4. Gaps between service delivery and external
communications- e.g hospital brochure shows an attractive
modern room and patients finding the opposite.
 5. Gaps between perceived service and expected service- e.g.
physician may keep visiting the patient to show care, but the
patient may perceive as wrong.

 PRICING STRATEGIES.
 In setting a price, a firm mush follow 6 steps.
o 1. Selecting the price objective:
 While selecting price objective, a firm can pursue any of 5 major
objectives.
 1. Survival – applicable for short term, over capacity, intense
competition, changing consumer wants.
 2. Maximize current profit.
 3. Maximize market share
 4. Maximize market skimming
 5. Product quality leadership
o 2. Determining demand
 Each price will lead to different level of demand.
 The higher the price, lower the demand
 Normally demand and price are inversely related
 However, in prestige goods, sometimes, the demand curve slopes
upward because higher price signify better quality.
o 3. Estimating costs.
 Every firm should charge a price that covers its cost of production,
distribution and selling products and provides a fair ROI/return for its
efforts and risk.
o 4. Analysing competitors costs, prices & offers.
o 5. Selecting a pricing method.
 The 3 Cs
 Customer demand
 Competitor prices
 Costs functions are major elements in setting the price.
 There are 6 pricing methods.
 1. Mark up pricing- add a standard mark up to the product’s
cost. E.g construction companies do this.
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 o This price remains popular since seller can determine
cost easily.
o All the firms are using and prices tend to be similar
with minimum price competition
o It is fairer for both buyers and sellers.
 2.Target return pricing – the firm determines the price that
would yield its target rate of ROI.
o Many firms use this to achieve a 15-20 % ROI.
 3. Perceived value pricing- price fixed based on customers
perceived value.
o They see buyers perceptions of value and not the cost
as key for pricing and then use 4 Ps to build up
perceived value.
 4. Value pricing - A firm charges fairly a low price for high
quality offering.
o It is a matter of re-engineering ( like computers)
o E.G. everyday low pricing practiced by retail industry.
 5. Going rate pricing- The firm bases its price largely on
competitors prices.
o Smaller firms follow the leader and changes prices
whenever leader changes. E.G steel industry.
 6. Sealed bid pricing – competitive oriented pricing and each
firm competes to sell.
o 6. Selecting the Final Price-
 While selecting final price, company must consider additional factors
like psychological pricing, influence of other marketing mix and
company pricing policies.
 Adapting the final price:
 Firms do not fix a single price rather a pricing structure that reflects
variations in geographical demand and costs, discounts, payments,
etc.
 The price adaptation strategies are geographical pricing, discount
price, promotional pricing, discriminatory pricing and product mix
pricing.

 What is Marketing Environment.

o Marketing environment analysis is to facilitate the firm’s strategic response
to the environmental changes in order to sell its products.
o It can be divided into 2 – micro and macro.
o Micro – specific to the business and affect its working on short term.
 It is done through SWOT analysis.
 It is on consumer, competitors, company, public, market, suppliers,
intermediaries.
o Micro – that affects the working of all the firms in a broader way in long
term.
 It is done through PEST/PESTLE.

 What is Marketing Plan.

o A written document that acts as a guidebook of marketing activities for the
marketing manager.
o Marketing strategy/plan is a part of the overall company strategy/plan
o Strategic Business Unit (SBU) is a decentralized planning concept
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o It is a business document written for the purpose of describing the current
market position of a business and its marketing strategy for the period
covered by the marketing plan.
o Marketing plan usually have a life of 1 to 5 years.
o The purpose is to clearly show what steps will be undertaken to achieve
marketing objectives.
o The main parameters used to prepare marketing plan are;
 1. Executive summary.
 2. Challenge: brief description of product, product line, goals for each
product or line ( sales figures)
 3. Situation Analysis: Snap shot of company, customer base, market
at large and this analysis is divided into 6 sub sections: they are:
 1. Company Analysis- outlines company details, vision, goal
which helps to market the product, strengths, weakness,
company’s estimated share, short term and long term goals.
 2. Customer Analysis- estimate the size of customer base (like
how many people will potentially buy the product, etc), value
drivers, demographic profile, customer type, choices etc.
 3. Competitor Analysis- market position, strengths,
weaknesses, market share, etc.
 4. Collaborator analysis- people and companies that are key,
subsidiaries, distributors, suppliers, etc.
 5. Climate – PESTLE Analysis- political, legal environment
governing products, economic, social and cultural
environment, technological and other environments.
 6. SWOT Analysis – company’s internal strengths, weaknesses,
external opportunities for the company to take advantage and
threats to be avoided.
 4. Market Segmentation:
 Market segmentation is required to adjust 4 Ps.
 Segment to be me measurable, accessible in respect of
marketing mix.
 Description of that segment, wants and needs.
 Usage details of product by each segment.
 Advertisement strategies, price sensitivity of these segments.
 5. Alternative Marketing strategy:
 Document all considered alternative marketing strategies.
 These may include elimination of a product / line, changing
prices, etc.
 6. Selected Marketing Strategy:
 Define the strategy developed and proposed to be
implemented.
 Justify with reasons why it was selected.
 Cover 4 Ps.
o Product- brand name, quality, warranty, packaging, etc
o Price – list price, discount, payment terms, etc
o Place – distribution channels, channel motivation,
margins, criteria for evaluating dealer / distributors,
locations, logistics.
o Promotion – Advt, media, PR, promotional program,
projected results of promotional programs.

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  7. Short Term & Long Term Projections:
 This section should cover forecast of revenue and expenses,
break even analysis, changes, adjustments predicted for
future.
 8. Conclusions:
 Should include all specific nos., projected cost, revenue,
profits, etc.

MARKETING GLOSSARY:

 Added value = the increase in worth of a product or service as a result of a particular

activity.
 ATL = Above The Line = advertising for which a payment is made and for which
commission is paid to the agency.
 Advertorial = an advertisement designed to have the appearance of an editorial.
 Attitude = person’s favorable or unfavorable cognitive evaluations, feelings, actions,
tendencies.
 BTL= Below The Line = non-media advertising where no commission has been paid
to the advertisement agency.
 Business plan = a strategic document showing cash flow, forecasts and direction of
company.
 Break-even = the point at which revenue equals costs.
 Business strategy = the means by which a business works towards achieving its aims.
 Balanced score card = a technique allowing a company to monitor and manage
performance against defined objectives.
 Belief = descriptive thought of person.
 Budget = a summary of intended expenditures alongwith proposals for how to meet
them.
 Bench marking = is the process of identifying “ best practice” in relation to both
products and the processes by which those products are created and delivered.
 Business process = a series of logically related activities performed together to
produce a defined set of results.
 Consumer = individual who buys and uses a product or service.
 Customer = a person or company who purchases goods or services.
 Consumer behavior = the buying habits and patterns of consumers in the acquisition
and usage of goods or services.
 CSR= corporate social responsibility = is a management concept whereby companies
integrate social and environmental concerns in their business operations and
interactions with their stakeholders.
o A commitment by business to behave in an ethical, social and
environmentally responsible way and to have a positive impact on local and
global environment.
 Corporate strategy = the policies of a company with regard to its choice of
businesses and customer groups.
 CRM= customer relations management = the coherent management of contacts and
interactions with customers.
 Customer satisfaction = the provision of goods or services which fulfill the customers
expectations in terms of quality and service, in relation to price paid.
 Corporate governance = the system by which companies are directed and
controlled.
 DAGMAR = Defining Advertising Goals for Measured Advertising Response.
 Demand = is the desire for a product at that market price.
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 Duopoly = two producers of a commodity competing.
 E.marketing = marketing using electronic media
 ESP = Emotional Selling Preposition/ Proposition = an emotional or psychological
characteristic of a brand which attracts consumers.
 Five “M”s = man, machine, material, money and minutes.
 Ethical Marketing = application of marketing ethics in the marketing process.
 Mega marketing = activity required to manage elements of the firm’s external
environment ( Govt. & Media) and the marketing variables like PR & Power.
 Phishing – sending legitimate looking e.mails.
 Podcast – the broadcasting of multimedia files to iPods or other similar devices.
 Personality = person’s distinguishing psychological characteristics that lead to
relatively consistent responses to his own environment.
 RSS = Really Simple Syndication = software that allows electronic content to be sent
to websites.
 Re-Engineering = process for creating a competitive advantage in which the firm
reorganizes its operating and management functions, often resulting in modified,
combined, or eliminated jobs.
 Surrogate marketing = the practice of brand marketing to draw attention to another
product. E.g liquor makers advertising for their mineral waters.
 USP = unique selling proposition = the benefit that a product or service can deliver
to customers that is not offered by any competitor.
 Affiliate Marketing :
o Involves 4 different groups on the marketing effort (internet)
 Merchant is the company producing and selling product.
 Network is the outlet used to promote the affiliate link
 The publisher/affliate is the person who has website
 Customer doing purchasing
 This is being used by all websites - Incentives are provided
 Ambush Marketing:
o A marketing strategy wherein the advertiser associate themselves with a
particular even without paying any sponsorship fee ( major sports)
o Placing the advertisement using event to induce customers.
o Famous marketing strategist Jerry Welsh coined ambush mktg.
Agriculture Marketing:
o Covers marketing activities involved in moving agri products from farm to the
customer.
Alliance Marketing:
o Marketing activity undertaken by more than one entity jointly to promote
and sell a concept, product, service which benefits all
o Hotels, restaurants & air ticket booking websites use this.
Article Marketing:
o Business writes articles related to the industry they are in and distribute
them online. These free articles inform people about an important topic and
new clients will contact.
o Article in bio-box/Resource box - that will include references and contact
information so that the potential customers will contact and lead to new
business.
B2B Marketing:
o Marketing to other business who buy large quantities for their consumption
or for resale.
B2C Marketing: Marketing to all and involving different marketing techniques.

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  Blue Ocean Strategy : rather than competing within the confines of the existing
industry or trying to steal customers from rivals ( Red Ocean Strategy).
o It is developing uncontested market space that makes the competition
irrelevant.
o Competing in an overcrowded industries is no way to sustain high
performance. The real opportunity is to create blue oceans of uncontested
market.
o It is ( blue ocean) to create demand rather than fighting i.e., launch of
compeletely new industry / new product.

Cause Marketing: Involves co-operative efforts of a " for profit" business and a non-
profit organisation for mutual benefit.
Cloud Marketing:
o Any and all marketing efforts that take place on the internet AKA the cloud
provided as a service.
o It involves two steps/types.
 1. SEO - Search Engine Optimisation - Optimisation of websites for all
organic listings for which one does not pay. This is the section of a
SERP ( Serach Engine Results Page) that organically or naturally come
up when you search for specific term. So SEO is the art of getting the
appropriate page of your website to the top of search engines when
people are looking for your products/services.
 2.SEM - Search Engine Marketing - refers to the paid side of internet
marketing specifically paid per click advertising (PPC)

Communal Marketing:
o Practice that incorporates public involvement in the development of an
advertisement/marketing campaign.
o Inviting consumers to share their ideas or express their articulations of what
the brand means to them and the resulting consumer generated content is
then incorporated into campaign. Results in high level of publicity with
high relevence communities and these communities are critical for success as
80/20 rule.

Consumer Generated Mktg:

o Average people create advertisement for the companies like videos,
blogs, images mainly user generated.

Cross Media Marketing:

o A form of cross-promotion activities and the material can be
communicated by any mass media.

Cross Selling:
o The action of selling among established clients or selling an additional
product to an existing customers ( e.g, LIC)
 Customer Advocacy Mktg:This replaces the customer loyalty marketing - frequent flier
credit card incentives, etc.

Database Marketing: A form of direct marketing using databases of customers to

generate personlised communication to promote a product/service.
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Digital Marketing: Promotion of brands using all forms of digital advertising channels to
reach customers - TV, Radio, Internet, Mobile.

Direct Marketing: A sales promotion of communicating straight to customers.

mail marketing, telemarketing, direct selling.

Drip Marketing: Act of sending out scheduled targeted emails that are all co-ordianted to
a specific goal of client conversion.
o The sender uses a software that allows them to setup multiple emails at one
time and let them drip over time.

Diversity Marketing:An effort in communication with diverse publics to focus and to create
communication methods and mix appropriate to each of the diverse group.

Domestic Marketing; Marketing restricted to the political boundaries of a country.

Direct Mail Marketing: Activities of sending paper mail/email with promotions-junk mail.

Ethical Marketing:
o Application of marketing ethics in the marketing process.
o Marketing ethics refers to phiolosophical examination from a moral
standpoint, moral judgement, socially responsible manner for the culturally
sensitive business community - honest and factual representation of product
- child labour-working conditions - environmental problems - fair trade.

Evangelism Marketing:
o An advanced form of word or mouth marketing in which companies develop
customers who believe so strongly in a particular product that they freely try
to convince others to buy. - voluntary advocates.
o Evangelism - " bringing good news" and the marketing term justly draws
from the religious sense as consumers are literally driven by their beliefs in a
product which they preach in an attempt to convert others.

Global Marketing: Marketing on a world wide scale reconciling or taking commercial

advantage of global operational differences, similarities, and
opportunities in order to meet global objectives.

Guerrilla Marketing: Marketing in an unconventional system of promotions that relies

on time, energy and imagination.
 intercept consumers at unexpected places - public places,
streets.
 The term was coined by Jay Conrad Levinson in his book
"Guerrilla Marketing"

International Marketing: Marketing in more than one country.

Inbound Marketing: Focuses on having company found by customers. A person starts

out with a need to purchase a product and they go out and find it
( mainly search engine result)- ( pull marketing)

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Influence Marketing: Placing focus on specific key individual rather than on target
market and the individual wil have influence over potential
buyers.

Internet Marketing: Digital marketing/web marketing/online marketing/search

marketing/e.marketing - is marketing of products over the
internet.

Loyalty Marketing; Focussing on growing and retaining existing customers through

inventives.

Mega Marketing; Coined by Philip Kotler - Activity required to manage elements of

the firm's external environment ( Govt, Media, etc) and the
marketing variables - like public relations & power.

MLM Marketing: : Multi Level Marketing - Sales force is compensated not only for
sales they personally generate, but also for the sales of others
they recruit, creating a downline of distributions and a hierarchy
of multiple levels of compensation.
 Other terms are networking marketing, pyramid selling, referal
marketing. It is one among the type of direct selling.

Mobile Marketing: Reach consumers through their phones

Newletter Marketing; Newsletter and e,mail marketing are ways to promote company
through e.mails - with a group of contact with some intersting
information.
Niche Marketing: Concentrate on a niche than a larger market.

Online Marketing: Also referred as ' Internet Marketing" - any strategy that takes
place online. video advts, search engine mktg & e.mail mktg.

Offline Marketing: Includes all forms of marketing that are not done on the internet.
i.e, local advt in newspaper & TV

Outbound Marketing: Marketing efforts that are taken to introduce a product or service
to someone who is not looking for that product. (Push mktg)

Permission Marketing; Marketers obtain permission before advancing to the next step in
the purchaing process. Ask for permission to send mail ( Opposite
is Interuption Marketing)

Proximity Marketing: Locallised wireless distribution of advertising content associated

with a particular place. Transmission can be received by
individuals in that location - cellphone, bluetooth or WiFi/GPS

Reality Marketing: A form of permission marketing and blends many types of

interactive advertisment techniques into Reality television shows
format.

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Relationship Marketing: Finding, attracting and winning new clients, nurture and retain
those the company already has, entice former clients back into
fold, reduce the cost of marketing and client service.

Referral Marketing: Company's customers refer to new customers ( Also WOM)

Reverse Marketing; Market a product in a way that will cause the consumer to seek
the firm for that product.

Shopper Marketing: Understanding how are target consumers behave as shopeers in

different channels and formats and leveraging this intelligence to
the benefit of all stakeholders.

Tele Marketing: A form of direct marketing - reaching consumers by phone.

Undercover Marketing; Consumers do not realise that they are being marketed to.( a
subset of Guerrilla marketing)

Viral Marketing: The message of a marketer being spread quickly through various
social networks in order to increase brand awareness

MARKETING RESEARCH
 Marketing is a restless, changing and dynamic business activity.
 Research is a systematic and objective investigation of a subject or problem in order
to discover relevant information or principles.
 Marketing Research is the systematic and objective search for and analysis of
information relevant to the identification and solution of any problem in the field of
marketing.
 It is a systematic design, collection, analysis and reporting of data and findings
relevant to a specific marketing situation facing the company.
 MR is about collection of information
 The solution to most business problems can be found through marketing research.
 Fundamental research = seeks to extend the boundaries of knowledge and does not
solve immediate problem.
 Applied Research = gathers information to solve a specific problem.
 Marketing Research = focuses on 3 C ( customer, competitor and company)
 MR often focuses on understanding
o Customer - purchaser, consumer and influencer
o Company – product, design, promotion, pricing, placement, service, sales.
o Competitors
o Within the above 3 Cs, many types of marketing research can be conducted(
surveys) for
 Monitoring customers and markets
 Measuring awareness, attitudes and image
 Tracking product usage behavior
 Diagnosing immediate business problems
 Supporting strategy development
 Company, competitors – customer need for a new product.
 Research method = specific activities designed to generate data.

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 Research methodology = attitude and understanding of research and strategy
choosen to answer those research questions.
 Vox POP/populi = latin phrase – voice of the people. – A journalist asking few
questions to the people on the street.
 Factors influencing demand for a new product:
o Market potential = customer reaction + competitor’s reaction + company’s
marketing mix + trends in environment.

 Marketing Research Process: Five stages.

o 1. Define problem:
 It should not be too broad or too narrow.
 E.g. find out everything a passenger needs – it is too broad.
 E.g. find out if passengers will accept x amount as fare – narrow.
 While defining problem, consider how important to be the first and
how long it can be sustained.
 Management problem needs to be translated into research problem
and from research angle only solution comes.
 E.g. management problem “ sales are not growing” – while translating
this into a research problem, we may examine the expectations and
experiences of potential customers, first time buyers, repeat
purchases.
 We can determine poor sales is whether due to poor performance or
lack of desire, price is more, etc.
o 2. Develop Research Plan:
 Most efficient plan for getting needed information since it involves
cost.
 It involves decisions on data sources,
 research approach,
 sampling- population, sampling, size.
 contact methods.
 Data sources – primary and secondary.
 Using secondary first provide starting point – internet, existing data
bases.
 Research approaches: primary data can be collected in 5 ways.
 1. Observational research – observing the data on actors and
settings, ask our customers, competitor’s customers, buy and
use and observe.
 2. Focus group – a 10 people group is invited and a moderator
will discuss about a product, service, organization, etc –
engage free and easy discussion to generate more
information.
 3. Survey – undertake surveys to study behavior, satisfaction,
etc.
 4. Behavioural data – analyse and observe actual behavior of
customers at real purchase point.
Normally, High income group buy cheaper priced goods
and low income group buy expensive goods.
 5. Experimental research – to capture cause and effect
relationship.
o 3. Collect Information:
 This is the most expensive process.
 People may not be at home, not available over phone, busy.
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  Other people may refuse.
o 4. Analyse
o 5. Present the research report
o 6. Make decision

SALES FORECAST - ESTIMATING FUTURE DEMAND

 Sales forecast is a tool used for predicting future demand based on past demand
information.
 All sales forecasts are built on one of the three information bases.
o What people say:- surveying buyers’ intention, composite sales force
opinions, expert opinions.
o What people do:- putting the product into a test market to measure buyer
response.
o What people have done:- analyse records of past behavior or use time series
analysis and statistical demand analysis.
 Companies commonly prepare a macro economic forecast first ( inflation, interest
rates, unemployment, consumer spending and the end result is forecast of GDP).
 Then they prepare industry forecast and then the company sales forecast is
prepared.
 A forecast is a quantitative estimate about the likelihood of future events which is
developed on the basis of past and current information.
 A Sales forecast is a predicted turnover in a given period on an agreed marketing
plan.
 A Sales forecast is estimating sales in money terms and physical units for a specific
period of time.
 Sales forecast is the estimated rupee or unit sales for a specific future time period
based on a proposed marketing plan and on assumed market environment.
 Sales forecast is used for strategic planning, finance and accounting, marketing
(future sales, new products), production planning, operations and scheduling, etc.
 Forecasting the future is always a matter of probabilities, never of certainties.
o Today, industry sales, total company sales, industry product categories,
company product range and lines, individual products are the major
elements that must be taken into account when preparing a sales forecast.
o Preparation of Sales forecast involves 3 stages;
 1. Environmental forecast:- it involves projection of inflation,
unemployment, GDP, FDI, industry growth and other economic
activities.
 2. Industry forecast:- Environment forecast is then used for this and
industry forecast is made along with other indicators.
 3. Sales forecast:- the company finally prepares a sales forecast how
much market and sales volume can be achieved.
 8 steps for an effective forecasting:
o 1. Determine the use of forecast
o 2. Select the items/products that are to be forecasted
o 3. Determine the time horizon
o 4. Decide the people
o 5. Select the forecasting model
o 6. Gather data required
o 7. Validate the forecasting model
o 8. Make the forecast
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 o 9. Implement the results.
 Objectives of Sales Forecast:
o Setting and maintaining a production schedule.
o To determine quantity, labour, equipment, raw material
o Working capital
o Sales quota assignments
o Company’s business plans
 Types of forecasts:
o 1. Qualitative methods – subjective
 These methods are used to formulate forecasts for new products for
which there are no historical data.
 They emphasis predicting the future, rather than explaining the past.
 It predicts changes that can occur in sales patterns based on the
knowledge and experience of people.
o 2. Quantitative methods –mathematical

FORECASTING TECHNIQUES

Qualitative models Quantitative

models

Delphi method Time Series

methods Causal methods

Jury of
Executive Moving Average/ Regression
Opinion Weighted Average Analysis

Sales force
composite Trend
Projections
Multiple
Regression
Consumer Exponential
market survey Smoothing

QUALITATIVE METHODS:
 This method rely on the judgment of experts to translate qualitative information
into quantitative estimates. A widely used method.
o 1. Delphi method:
 To extract opinions of a group of experts with the help of a mail
survey.
 A questionnaire by mail is sent and ask for views.
 Responses received are summarized without disclosing identity and
sent back to experts along with a questionnaire meant to probe
further reasons for extreme views in the first round.
 One or two more round of the same is repeated till a reasonable
agreement emerges.
o 2. Jury of Executive opinion method:
 It involves soliciting the opinion of a group of managers on expected
future sales and combining them into a sales estimate.
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  It is a compromising forecast arrived at after deliberations.
 Even dealers, whole sellers, retailers can also be included.
o 3. Sales force survey:
 Sales force will forecast by taking into account the competitor’s price
changes.
o 4. Consumer Survey:
 It is based on how many existing customers will re-purchase next
year.
 How many new customers will purchase, etc.

QUANTITATIVE METHODS:
I. Time Series Methods:
o 1. Moving Average method:
 This forecast is made based on moving average.
 The forecast for the next period is equal to the average of the sales
for several preceding period.

Sum of demand in previous n periods

 Moving Average forecast = ------------------------------------------------
N
 There are two ways.
 a. Simple moving average:
E.g.
Months Actual 3 months avg. 5 months avg.
Jan 120 Avg. of Jan, Feb & Avg. of Nov, Dec,
Feb 90 Mar will be forecast Jan, Feb & Mar will
Mar 100 for Apr. be the forecast for
Apr 75 Apr.
May 110 Avg. of Feb, Mar &
Jun 50 Apr will be the
Jul 75 forecast for May
and so on
Aug 130
Sep 110
Oct 90
Nov 0

Same e.g.
Months Actual 3 months avg. 5 months avg.
Jan 120 - -
Feb 90 - -
Mar 100 - -
Apr 75 103.3 -
May 110 88.3 -
Jun 50 95 99
Jul 75 78.3 85
Aug 130 78.3 82
Sep 110 85 88
Oct 90 105 95
Nov 0 110 91

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o The forecast for Nov on 3 months basis MA3 = 130+110+90 = 110/3 = 110
o The forecast for Nov on 5 months basis MA5 = 50+75+130+110+90=455/5 =
91.

o B. Weighted Moving Average method:

 Adjust moving average method to more closely reflect data
fluctuations. The weights can be used to place more emphasis on
recent values.

 Weighted moving avg.

 = 𝑤𝑒𝑖𝑔𝑕𝑡 𝑓𝑜𝑟 𝑝𝑒𝑟𝑖𝑜𝑑 𝑛 ( 𝑑𝑒𝑚𝑎𝑛𝑑 𝑖𝑛 𝑝𝑒𝑟𝑖𝑜𝑑 𝑛)

------------------------------------------------------------------ 𝑤𝑒𝑖𝑔𝑕𝑡𝑠
e.g.
Months Weights Actual
Aug 17% 130
Sep 33% 110
Oct 50% 90

Nov forecast WMA3 = ( 0.17) ( 130) +(0.33) (110)+(0.50) (90)

-------------------------------------------------- = 103.40
1
o 2. Exponential Smoothing method:
 Forecasts are modified in the light of observed errors.
o 3. Trend projection method:
 Determining the trend of consumption by analyzing past consumption
statistics &
 Projecting future consumption by extrapolating the trend

o 1.Linear trend
o E.g
Month Actual
1 37
2 40
3 41
4 37
5 45
6 50

60
50 actual linear trend line
40
30
20
10
0
0 1 2 3 4 5 6 7

b. Linear regression formula.

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 CAUSAL METHODS:
o More analytical
o Seeks to develop forecast on the basis of cause-effect relationship specified
in a quantitative manner.
o Causal method ( Regression)
 It studies the relationship between two or more variables.
 Dependent variable (Y) depends on independent variable (X) using
regression analysis to forecast.
o Simple Trend Analysis:
 This year sales is = Rs. 100 crores.
 5% growth per year.
 Sales forecast will be Rs. 105 crores.
o Market Share Analysis:
 Current market share 8%
 Market forecast Rs. 100 crores
 Sales forecast Rs. 8 crores.
o Chain Ratio Method:
 Sales estimated by applying a series of factors to a measure of
aggregate demand.
 Sales forecast for marketing text book =
No. of college students X % of annually enrolled in Marketing course X
% of purchasing new book X expected market share
10000 x 0.7x 0.87 x 0.11= 669 books.

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