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INTRODUCTION TO MARKETING

MBA
MODULE 1

RIDDHI TAMBI
What is Marketing…??
Selling?
Advertising?
Promotions?
Making products available in stores?
Maintaining inventories?

All of the above, plus much more!

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Marketing = ?

Marketing is the process of planning and executing the


conception, pricing, promotion, and distribution of ideas,
goods, services to create exchanges that satisfy
individual and organizational goals
American Marketing Association

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Marketing = ?

Marketing management is the art and science of


choosing target markets and getting, keeping, and
growing customers through creating, delivering, and
communicating superior customer value.

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Simple Marketing System
Communication

Goods/services
Industry Market
(a collection (a collection
of sellers) of Buyers)
Money

Information 7
Scope – What do we market

 Goods
 Services
 Events
 Experiences
 Personalities
 Place
 Organizations
 Properties
 Information
 Ideas and concepts

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Goods: The bulk of most countries production and marketing efforts and include
physical goods such as
cars, fridges and TVs.

Services: As economies evolve, activities also become focused on the production of


services such as airlines, hotels, car rental firms and bankers.

Events: Time-based events such as trade shows, the theatre and global events such as
the world sporting events.

Experiences: Organisations create, stage and market experiences e.g. Walt Disney’s
Magic Kingdom which is experiential marketing.

People: Celebrity marketing is a major business in which high profile celebrities such
as actors, musicians
and sports stars are used to endorse products or services.
Places: Cities and provinces are marketed to attract tourists, business and new
residents. Think of Las
Vegas, a city in the middle of a desert, how was that marketed?

Properties: Ownership rights of physical property (buildings and land) or


financial (stocks and bonds).

Organisations: Building a brand creates value. Organisations strive to build a


strong image in the minds of their targeted customers creating a corporate
identity.

Information: Marketing of information through text books, virtual sources,


magazines e.g. schools and universities to data organisations

Ideas:
Difference Between - Sales & Marketing ?

Sales
trying to get the customer to want what the
company produces

Marketing
trying to get the company produce what the
customer wants

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Core Concepts of Marketing

Based on :
 Needs, Wants, Desires / demand

 Products, Utility, Value & Satisfaction


 Exchange, Transactions & Relationships
 Markets, Marketing & Marketers.

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Core Concepts of Marketing

Needs, wants Utility, Value &


Products
demands Satisfaction

Marketing & Xchange, Transaction


Markets
Marketers Relationships

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Core Concepts of Marketing

 Need – food ( is a must )


 Want – Pizza, Burger, French fry's ( translation of a need
as per our experience )
 Demand – Burger ( translation of a want as per our
willingness and ability to buy )
 Desire – Have a Burger in a five star hotel

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In order to understand Marketing let us begin with the
Marketing Triangle

Customers

Company Competition

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Who is a Customer ??

CUSTOMER IS . . . . .
Anyone who is in the market looking at a product / service for attention,
acquisition, use or consumption that satisfies a want or a need

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Customer –

CUSTOMER has needs, wants, demands and


desires
Understanding these needs is starting point of the
entire marketing
These needs, wants …… arise within a framework
or an ecosystem
Understanding both the needs and the ecosystem is
the starting point of a long term relationship

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How Do Consumers Choose Among
Products & Services?

Value - the value or benefits the customers gain from


using the product versus the cost of obtaining the
product.
Satisfaction - Based on a comparison of performance
and expectations.
 Performance > Expectations => Satisfaction
 Performance < Expectations => Dissatisfaction

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Customers - Problem Solution

As a priority , we must bring to our customers


“WHAT THEY NEED”
We must be in a position to UNDERSTAND their
problems
Or in a new situation to give them a chance to AVOID
the problems

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Customer looks for Value
Value = Benefit / Cost
Benefit = Functional Benefit + Emotional
Benefit
Cost = Monetary Cost + Time Cost +
Energy Cost + Psychic Cost

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Definition of Market

The term market is defined as a place where the parties meet and exchange
their goods, services and information for consideration. The purchase and
sale of commodities between parties are known as the transaction. The two
parties engaged in an exchange are buyer and seller. The transaction can
proceed, either directly or through intermediaries like agents or institutions.

There are numerous buyers and sellers in a market; that plays a significant role
in fixing prices of goods and services. The buyers decide the demand,
whereas sellers determine the supply. It is a set up where trade is easily
concluded, and resources are allocated, among different members of the
society.
Definition of Marketer
A person whose duties include the identification of the
goods and services desired by a set of consumers, as
well as the marketing of those goods and services on
behalf of a company.
MARKETING
MANAGEMENT
MODULE –II

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Marketing Environment
According to Philip Kotler, marketing environment refers
to “external factors and forces that affect the
company’s ability to develop and maintain successful
transactions and relationships with its target
customers”.

The marketing environment represents a mix between the


internal and external forces which surround an
organization and have an impact upon it, especially
their ability to build and maintain
successful relationships with target customers.

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Marketing Environment
All the actors and forces influencing the company’s
ability to transact business effectively with it’s
target market.

Includes:
Microenvironment - forces close to the company
that affect its ability to serve its customers.
Macro environment - larger societal forces that
affect the whole microenvironment.
The Marketing Environment

Demographic

Company
Cultural Economic

Publics Suppliers
Company
Competitors
Customers
Political Natural
Intermediaries

Technological
The Microenvironment

Company

Publics Forces Affecting a Suppliers


Company’s Ability to
Serve
Customers
Competitors Intermediaries
Customers
The Company’s
Microenvironment

Company’s Internal Environment- functional areas such


as top management, finance, and manufacturing, etc.

Suppliers - provide the resources needed to produce


goods and services.

Marketing Intermediaries - help the company to


promote, sell, and distribute its goods to final buyers.
The Company’s
Microenvironment

Customers - five types of markets that purchase a


company’s goods and services.

Competitors - those who serve a target market with


similar products and services.

Publics - any group that perceives itself having an


interest in a company’s ability to achieve its
objectives.
Customer Markets

International Consumer
Markets Markets

Company
Government Business
Markets Markets

Reseller
Markets
The Macroenvironment

Demographic

Cultural Forces that Shape Economic


Opportunities
and Pose Threats
to a Company
Political Natural
Technological
The Company’s
Macroenvironment

Demographic - monitors population in terms of age,


sex, race, occupation, location and other statistics.

Economic - factors that affect consumer buying


power and patterns.

Natural - natural resources needed as inputs by


marketers or that are affected by marketing
activities.
Key U.S. Demographic Trends

Changing Age Structure


Population is getting older

Changing Family Structure


Marrying later, fewer children,
working women, and nonfamily households

Geographic Shifts
Moving to the Sunbelt and suburbs (MSA’s)

Increased Education
Increased college attendance
and white-collar workers

Growing Ethnic and Racial Diversity


73% Caucasian, 12% African-American,
10% Hispanic & 3.4% Asian
Economic Environment

Economic Changes
Development Key in Income
Economic
Concerns for
Marketers

Changes
in Consumer
Spending
Patterns
Natural Environment
More Government
Intervention

Factors
Affecting
Higher Pollution the Shortages of
Levels Natural Raw Material
Environment

Increased Costs
of Energy
The Company’s
Macroenvironment

Technological - forces that create new product


and market opportunities.

Political - laws, agencies and groups that


influence or limit marketing actions.

Cultural - forces that affect a society’s basic


values, perceptions, preferences, and behaviors.
Technological Environment
Rapid Pace of High R & D
Change Budgets

Issues in the Technological


Environment

Focus on Minor Increased


Improvements Regulation
Political Environment

Increased Changing
Legislation Key Enforcement
Trends in the
Political
Environment

Greater
Concern for
Ethics
Cultural Environment

Of
Oneself
Of Of
the Universe Views Others
That Express
Of Values Of
Nature Organizations

Of
Society
Responding to the
Marketing Environment

Environmental Management Perspective


– Taking a proactive approach to managing the
microenvironment and the
macroenvironment to affect changes that are
favorable for the company. How? Hire
lobbyists , run “advertorials”, file law suits
and complaints, and form agreements.
Definition of 'Marketing Mix'
Definition: The marketing mix refers to the set of
actions, or tactics, that a company uses to
promote its brand or product in the market. The
4Ps make up a typical marketing mix - Price,
Product, Promotion and Place. However,
nowadays, the marketing mix increasingly
includes several other Ps like Packaging,
Positioning, People and even Politics as vital mix
elements.
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Marketing Mix & 4 p’s

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Extended Marketing Mix
Booms and Bitner
included three
additional 'Ps' to
accommodate trends
towards a service or
knowledge based
economy:
People
Process
Physical Evidence
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The Marketing Mix

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7Ps & 7Cs
The 7 Ps The 7 Cs
Organisation Facing Customer Facing

Product = Customer/ Consumer

Price = Cost
Place = Convenience
Promotion = Communication
People = Caring
Processes = Co-ordinated
Physical Evidence = Confirmation 49
PRICE
PRICE
A product is only worth what customers are
prepared to pay for it. The price also needs to be
competitive, but this does not necessarily mean
the cheapest; the small business may be able to
compete with larger rivals by adding extra
services or details that will offer customers
better value for money. Your pricing must also
provide a profit. It is the only element of the
marketing mix that generate revenue,
everything else represents a cost.
Different parts of Pricing

Price Skimming – An approach under which a


producer sets a high price for a new high-end
product (such as an expensive perfumes) or a
uniquely differentiated technical product. Its
objective is to obtain maximum revenue from the
market before substitutes products appear. After
that is accomplished, the producer can lower the
price drastically to capture the low-end buyers
and to thwart the copycat competitors.
Different parts of Pricing

Penetration pricing - A marketing strategy used by


firms to attract customers to a new product or
service. Penetration pricing is the practice of
offering a low price for a new product or service
during its initial offering in order to attract
customers away from competitors. The reasoning
behind this marketing strategy is that customers
will buy and become aware of the new product
due to its lower price in the marketplace relative
to rivals.
Different parts of Pric

Psychological pricing- Setting prices according to


the psychographics of the aimed-at market
segment.
Cost-plus pricing- One method used by businesses
to determine how to price goods and services.
This type of pricing includes the variables costs
associated with the goods, as well as a portion of
the fixed costs of operating the business.
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Pricing Strategy

Importance of:
knowing the market
elasticity
keeping an eye
on rivals
PRODUCT
PRODUCT

A product is an item that is built or


produced to satisfy the needs of a
certain group of people. The product
can be intangible or tangible as it can
be in the form of services or goods.
A product has a certain life cycle that
includes the growth phase, the
maturity phase, and the sales decline
phase. It is important for marketers
to reinvent their products to stimulate
more demand once it reaches the
sales decline phase
PRODUCT

The perfect product must provide value for the


customer. This value is in the eye of the beholder,
we must give our customer what they want, not
what we think they want.
A product does not have to be tangible, an
insurance policy can be a product.
You need a system in place to regularly check what
your customers think about your product, your
supporting services.
product
Methods used to improve/differentiate
the product and increase sales or target sales more
effectively to gain
a competitive advantage e.g.
 Extension strategies
 Specialised versions
 New editions
 Improvements – real or otherwise!
 Changed packaging
 Technology, etc.
Promotion
PROMOTION

Promotion is the way a company communicates


what it does and what it can offer customers. It
includes activities such as branding, advertising ,
PR, corporate identity, sales management, special
offers and exhibitions. Promotion must gain
attention, be appealing, tell a consistent message
and above all else give the customer a reason to
choose your product rather than someone else’s.
PROMOTION

1. Advertising - The activity or profession of


producing information for promoting the sale of
commercial products or services.
2. Branding - An identifying symbol, words, or
mark that distinguishes a product or company
from its competitors. Usually brands are
registered (trademarked) with a regulatory
authority and so cannot be used freely by other
parties. For many products and companies,
branding is an essential part of marketing.
PROMOTION

Endorsement - A written or public statement by a


celebrity, business or professional group extolling
the virtues of a product and recommending the
use of the product to the public. A product
endorsement from an authoritative figure is a key
element in business advertising and marketing
campaigns.
Competitive advantage – promotion differentiate
your product with your competitors. And provide
edge in business.
PLACE
PLACE

• The place where customers buy a product, and


the means of distributing your product to that
place, must be appropriate and convenient for the
customer. The product must be available in the
right place, at the right time and in the right
quantity, while keeping storage, inventory and
distribution costs to an acceptable level.
• Customer surveys have shown that delivery
performance is one of the most important
criteria when choosing a supplier.
PLACE

Retail - A business or person that sells goods to the


consumer, as opposed to a wholesaler or supplier,
who normally sell their goods to another
business. Or we can say that selling directly to
consumers.
Wholesaler - Person or firm that buys large quantity
of goods from various producers or vendors,
warehouses them, and resells to retailers.
Wholesalers who carry only non-competing
goods or lines are called distributors.
PLACE

Direct selling - Face to face presentation,


demonstration, and sale of products or services,
usually at the home or office of a prospect by the
independent direct sales representatives.
Employed by firms such as Avon, Mary Kay, and
Tupperware, direct selling differs from network
marketing in that it offers little or no incentives
for recruiting ever increasing number of sales
representatives.
PEOPLE
PEOPLE

People represent the business


 The image they present can be important
 First contact often human – what is the lasting image they
provide to the customer?
 Extent of training and knowledge
of the product/service concerned
 Mission statement – how relevant?
 Do staff represent the desired culture
of the business?
PROCESS
PROCESS

How do people consume services?


What processes do they have to go through to acquire the
services?
Where do they find the availability
of the service?
 Contact
 Reminders
 Registration
 Subscription
 Form filling
 Degree of technology
PHYSICAL EVIDENCE
PHYSICAL EVIDENCE

The ambience, mood or physical presentation of the


environment
 Smart/shabby?
 Trendy/retro/modern/old fashioned?
 Light/dark/bright/subdued?
 Romantic/chic/loud?
 Clean/dirty/unkempt/neat?
 Music?
 Smell?
Marketing
Information
System
Marketing Information System

• Marketing Information System (MIS) is


a permanent arrangement (system or
setup) for provision of regular
availability of relevant, reliable,
adequate, and timely information for
making marketing decisions.
Marketing Information System

Today’s marketing is dynamic, and manager has to undergo


necessary changes to cope with the pace of changing
marketing environment. Information is a basic input to know
what is happening and what is going to happen. Marion
Harper has rightly asserted: “To manage a business well is to
manage its future, and to manage the future well is to
manage the information.”

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Marketing
Information System
• Assess the information needs
(why the information is necessary, inf. Regarding to
external and internal market)
• Develop needed information
( observational survey , survey research, group interview,
personal contacts, questionnaire etc.)
• Analyze information
(evaluate the information properly)
• Distribute information
(to the, top level, managers, marketers )
Components of Marketing Information System MIS
The role of MIS is to identify (find out) what sort of information is required
by the marketing managers. It then collects and analyzes the information.
It supplies this information to the marketing manager at the right time. MIS
collects the information through its subsystems.
These subsystems are called components.
The four main components of Marketing Information System (MIS) are:
Internal Records,
Marketing Intelligence,
Marketing Research (MR), and
Marketing Decision Support System

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Internal records : The first component of MIS is ‘Internal Record’.
Marketing managers get lots of information from the internal-records of
the company. These records provide current information about sales,
costs, inventories, cash flows and account receivable and payable. Many
companies maintain their computerized internal records. Inside records
help marketing managers to gain faster access to reliable information

Marketing intelligence: The second component of MIS is ‘Marketing


Intelligence’. It collects information from external sources. It provides
information about current marketing-environment and changing
conditions in the market. This information can be easily gathered from
external sources like; magazines, trade journals, commercial press, so
on.

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Marketing research : The third important component of MIS is ‘Marketing
Research’. MR is conducted to solve specific marketing problems of the
company. It collects data about the problem. This data is tabulated, analyzed
and conclusions are drawn. Then the recommendations are given for solving
the problem. Marketing research also provides information to the marketing
managers
Marketing decision support system : The fourth component of MIS is
‘Marketing Decision Support System’. These are the tools which help the
marketing managers to analyze data and to take better marketing decisions.
They include hardware, i.e. computer and software programs. Computer
helps the marketing manager to analyze the marketing information. It also
helps them to take better decisions. In fact, today marketing managers
cannot work without computers. There are many software programs, which
help the marketing manager to do market segmentation, price fixing,
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advertising budgets, etc.
Features of Marketing Information System

Continuous System
• Permanent and continuous system of collecting information

Basic Objective
• To provide the right information at the right time to the right
people to help them take right decisions

Computer-Based System
• Uses computer, so is up-to-date and accurate

Future-Oriented
• Provides information for solving future problems
Features of Marketing Information System
Used by all levels

• Used by all three levels of management

Sources

• Collects information from both internal and external sources

Collects Marketing Information

• Information about consumer competition, marketing environment,


etc.

Helps in Decision-Making

• Supplies up-to-date and accurate information that helps take quick


ROLE OF MARKETING INFORMATION SYSTEM IN DECISION-
MAKING

to improve the efficiency of a company’s operations


to collect information about the, needs of the consumers
to provide pertinent decision-making information to marketing
managers on regular basis
helps recognize trends and changes
analyzes marketing information and gathers it from sources inside and
out an organization
facilitates marketing planning and control
provides marketing intelligence for the organization

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FUNCTIONS OF MARKETING

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Market
Information
Packaging,
Market
labelling and
Planning
branding

Customer Exchange
Support Functions

FUNCTIONS
OF
MARKETING

Physical
Risk Taking
Distribution

Product
Standardization
Designing and
and Grading
development
Financing
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Market Information: To identify the needs, wants and demands of the consumers and then
analyzing the identified information to arrive at various decisions for the successful marketing of
a firm’s products and services is one of the most important functions of marketing.

Market Planning: The market planning function covers aspects of production levels, promotions
and other action programmes.

Exchange Functions: The buying and selling are the exchange functions of marketing. They
ensure that a firm’s offerings are available in sufficient quantities to meet customer demands. The
exchange functions are supported by advertising, personal selling and sales promotions.

Product Designing and development: The product design helps in making the product attractive
to the target market.

Physical Distribution: The physical distribution functions of marketing involve transporting and
storing. The transporting function involve moving products from their points of production to
locations convenient for purchasers and storing function involve the warehousing products until
needed for sale.

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Standardization and Grading: Standardization involves producing goods at predetermined
specifications. Standardization ensures that product offerings meet established quality and
quantity. It helps in achieving uniformity and consistency in the output product.

Financing : The financing functions of marketing involve providing credit for channel members
or consumers.

Risk Taking: Risk taking is one of the important marketing functions. Risk taking in marketing
refers to uncertainty about consumer purchases resulting from creation and marketing of goods
and services that consumers may purchase in future.

Packaging, labeling and branding: packaging involves designing package for the products,
labeling means putting information required / specified on a product’s covering.

Customer Support: Customer support is a very important function of marketing. It involves pre
sales counseling, after sales service, handling the customer complaints and adjustments, credit
services, maintenance services, technical services and consumer information.

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STRATEGIC MARKETING
PLANNING

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STRATEGIC MARKETING

Strategic marketing as seen as a process consisting of: analyzing


environmental, market competitive and business factors affecting
the corporation and its business units, identifying market
opportunities and threats and forecasting future trends in business
areas of interest for the enterprise , and participating in setting
objectives and formulating corporate and business unit strategies.
Selecting market target strategies for the product-markets in each
business unit, establishing marketing objectives as well as
developing , implementing and managing the marketing program
positioning strategies in order to meet market target needs.
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STRATEGIC MARKETING PLANNING PROCESS

•Identify objectives and determine mission


•Do business environmental scan-including trends and competition
•Devise strategy including SWOT budget, marketing, price and
distribution
•Implement strategy-put your plan into action
•Evaluate and modify- measure how close or far you are from objectives,
track what works and change accordingly.

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STEP 1

MISSION: Mission of an organization states the core values of a company’s future


business plans, services, customer services, community services, etc. For example, the
mission of ICI Pharmaceutical is to be a leading healthcare company worldwide.

(Mission Statement of Nike)


‘To bring inspiration and innovation to every athlete in the world’
If you have a body, you are an athlete.

GOALS AND OBJECTIVES: These are specific targets or end results an organization
intends to accomplish. For example, quality and innovativeness, market penetration,
sales growth, market share growth, profitability enhancement, customer loyalty etc.
Essentially, the goals should be SMART (specific, measurable (in quality and quantity),
achievable, reliable and time specific).

(objectives of Nike)
To increase the 3-4% profitability in each of its product lines (i.e. increasing sales
growth
by 10% annually)
• To produce quality and low cost products
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STEP 2
Environment Analysis-Pest Analysis
Political:
There are worker rights and employee laws which affect the Nike’s internal procedures
It has positive government policies which support it in increasing their growth
prospects especially in US.
Nike can take help from government as well as from foreign countries which have
favourable relationship with Nike in making the products.

Economic:
Nike can be the way in creating new jobs when their higher growth in economy
Due to economic downturn consumers can be affected and it can reduce consumer
confidence towards products of Nike
There can be risk of currency, interest rate and exchange rates for Nike’s product
Increasing material prices and labor cost in production countries or outsourcing for
increasing the living standards can also affect Nike’s product sales

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Social:
Consumers are becoming more loyal towards the brand and becoming brand
conscious that can be advantageous for Nike
Changes in life style- health awareness, sport participation which is increasing the
demand of sport products
Increasing market share of female customers can also be opportunity for Nike
Technological:
New technology affects Nike because it incorporates it in its products.
Through technology it makes highly innovative products as shoe construction/
design
It can create mobile app and different facilities and website from which customers
can do online shopping through new digital trends.

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STEP 3

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MARKETING
MANAGEMENT
MODULE III

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CONTENT

Definition
Importance of Market Segmentation
Need for Market Segmentation
Requirements of Market Segments
Classification of Market Segmentation
Benefits of Market Segmentation
Conclusion
DEFINITION

“Market segmentation is the process of splitting


customers, or potential customers, in a market
into different groups, or segments”
Importance of Market Segmentation

Better matching of customer needs


Enhanced profits for business
Better opportunities for growth
Retain more customers
Target marketing communications
Gain share of the market segment
Need for Market Segmentation

Specialise
Difference
Relevance and Significance
Accessibility
Size

 Choosing a Segment
Benefits of market segmentation

More effective use of the marketing budget,


Clearer understanding of the needs and wants of selected
customer groups,
Easier creation of a place in the minds of potential
customers within target markets about the product,
Greater accuracy in selecting promotional vehicles and
techniques (e.g. advertising media, sales promotion
methods, geographic placement)
Classification of Market
Segmentation

A market can be segmented by various bases, and


industrial markets are segmented somewhat
differently from consumer markets, as described
below.
 Consumer Market Segmentation
 Business Market Segmentation
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Consumer Market
Segmentation
Geographic segmentation is based on regional variables such as
region, climate, population density, and population growth rate.
Demographic segmentation is based on variables such as age,
gender, ethnicity, education, occupation, income, and family
status.
Psychographic segmentation is based on variables such as
values, attitudes, and lifestyle.
Behavioral segmentation is based on variables such as usage rate
and patterns, price sensitivity, brand loyalty, and benefits
sought.
Business Market
Segmentation
 Geographic segmentation - based on regional variables
such as customer concentration, regional industrial
growth rate, and international macroeconomic factors.
 Customer type - based on factors such as the size of the
organization, its industry, position in the value chain, etc.
 Buyer behavior - based on factors such as loyalty to
suppliers, usage patterns, and order size.
Benefits of Market Segmentation

It helps to formulate marketing programs.


It helps to understand the complex behavior of consumers
Tastes & Preferences of consumers may be easily
determined.
It helps in locating the new markets
It helps marketing programs beneficial to consumers as
products are produced & sold according to their needs.
CONCLUSION

Marketing segmentation is an art, not a science.


It has a capacity of analyses the needs of the
consumers
Market segmentation identifies the requirements as
per customers/consumer requirements.
It has a target of reaching the Products & Services
for the particular group of consumers.

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