BASICS OF

MARKETING

Team NJMnjm@nmims.org

September 6, 2010

Define Marketing

American Marketing Association: 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.

Marketing makes the journey of a product from its birthplace of factory to the hands of the consumer

It is a fascinating field involving decisions like knowing the needs of the consumer, how to communicate the benefits to the target audience and reaching the product in the hands of the consumer and then ensuring that the consumer comes back for more

B2B, B2C

Marketing vs Sales

Selling is the act of persuading or influencing a customer to buy (actually exchange something of value for) a product or service

The selling concept, instead of focusing on meeting consumer demand, tries to make consumer demand match the products it has produced

Sales takes the awareness marketing has created and sells to the people who now know not only about the product, but now want it

SELLING V/S MARKETING

SELLING MARKETING

STARTING POINT

MEANS

ENDS

PRODUCT

AGGRESSIVE SELLING & PROMOTION

PROFITS THROUGH SALES VOLUME

CUSTOMER NEEDS

SUPERFLUOUS SELLING

PROFITABILITY THROUGH CUSTOMER SATISFACTION

What can be sold

Services Events Experiences Persons Places Properties Organizations Information Ideas

What is a SBU

SBU – Strategic Business Unit

An SBU has three characteristics: (1) It is a single business or collection of related

businesses that can be planned separately from the rest of the company;

(2) it has its own set of competitors; and (3) it has a manager responsible for strategic

planning and profit performance who controls most of the factors affecting profit

4 Ps

4 Ps & 4 Cs

4 Ps•Product•Place•Price•Promotion

4 Cs•Customer Solution•Convenience•Customer Cost•Communication

7 Ps

•Product

•Place

•Price

•Promotion

•People

•Process

•Physical Evidence

Applicable on to service marketing

People: directly or indirectly involved in the consumption of a service

Process: Procedure, mechanisms and flow of activities by which services are consumed

Physical Evidence: The ability and environment in which the service is delivered.

Selecting the Media

Low Customization HIgh

One Way

Two Way

Single source of all these communication to bring consistency in the communication.

Integrated Marketing Communication

Television Advertisement good for awareness but not as powerful as Sales Promotion to generate Action.

Cost per Thousand (CPM)

Pass Along Readership

Web as a medium cannot be ignored.

Hyper Impulsivity: Due to closer conjunction of Desire, Transaction and Payment.

Event Marketing/Sponsorships

Cause Marketing

Unconventional Media

Novel Media

Customerservice

Packaging

Events,Trade shows

Sponsorships

POP

Advertising specialties

6 M’s for Communication Planning: Market Mission Message Media Money Measurement

STP

Segmentation A market segment consists of a large identifiable group within a

market, with similar wants, purchasing power, geographical location, buying attitudes, or buying habits

Geographic, Demographic, Psychographic, Behavioral Niche Marketing: A niche is a more narrowly defined group,

typically a small market whose needs are not being well served.

Target Market Marketers evaluate each segment to determine how many and

which ones to target and enter

Positioning Positioning is the act of designing the company’s offering and

image to occupy a distinctive place in the target market’s mind

The STDP Process

Identify markets with

unfulfilled needs

Discover segments on the basis of consumer

characteristics

Analyse segment

potential & finalise

segments to target

Differentiate product

offering from competitors

Create a distinctive

positioning in the minds of consumers

Segmentation

Mass marketing

Segment marketing

Reduces waste

Better understanding of segment environment

Best-fit strategies

Saves time & money

Easy to coordinate

Product Life Cycle

BCG Matrix

?: A question mark requires a lot of cash; company is spending money on plant, equipment, and personnel. Co has to think hard about whether to keep pouring money into this business.

Stars: Market leaders in a high-growth market. It does not necessarily produce positive cash flow; the company must still spend to keep up with the high market growth and fight off competition.

Cash cow: produces a lot of cash for the company (due to economies of scale and higher profit margins), paying the company’s bills and supporting its other businesses

Dogs: generate low profits or even losses

HOLD BUILD BUILD

Harvest HOLD BUILD

Harvest Harvest HOLD

GE Investment Priority System

Business Unit Position

Ind

ust

ry A

ttra

ctiv

enessLow Medium High

Hig

hM

ed

ium

Low

Threat of Substitute Products

Threat of New

Entrants

Threat of New Entrants

Rivalry Among Competing Firms

in Industry

Bargaining Power of Buyers

Bargaining Power of Suppliers

Porter’s Five Forces Model of Competition

Product Mix

The product mix of an individual company can be described in terms of width, length, depth, and consistency.

Width: how many different categories (tbr, tp, personal care)

Length (Line): total number of products

Depth: how many variants of each product are offered(dry, oily, normal / size / colours )

Consistency: how closely related the various product lines are in end use, production requirements, distribution channels, or some other way.

Product Mix

Line Extension

Multi Branding

Brand Extension

New Brand Development

Same Brand Name

New Brand Name

Same Product

Category

New ProductCategory

Ansoff’s Model

Branding

Brand: name, term, sign, symbol, or design, or a combination of these, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors

Brand Equity: Brand equity refers to the marketing effects or outcomes that accrue to a product with its brand name compared with those that would accrue if the same product did not have the brand name

The brand can add significant value when it is well recognized and has positive associations in the mind of the consumer. This concept is referred to as brand equity

Brand Strategy

Line extensions: existing brand name extended to new sizes or flavours in the existing product category

Brand extensions: brand names extended to new product categories

Multibrands/Flanker Brands: new brand names introduced in the same product category

New brands: new brand name for a new category product

Co-brands: brands bearing two or more well-known brand names

Distribution

Channel Partners/Intermediaries

Merchants: wholesalers and retailers—buy, take title to, and resell the merchandise.

Agents: brokers, manufacturers’ representatives and sales agents—search for customers and may negotiate on the producer’s behalf but do not take title to the goods

Facilitators: transportation companies, independent warehouses, banks, and advertising agencies—assist in the distribution process but neither take title to goods nor negotiate purchases or sales

Push vs Pull

A “pull” selling strategy is one that requires high spending on advertising and consumer promotion to build up consumer demand for a product

A “push” promotional strategy makes use of a company's sales force and trade promotion activities to create consumer demand for a product

In Push strategy the products has to be promoted by Producer to Wholesalers to Retailers to Consumer

Experiential/Buzz/Viral

Experiential Marketing is the art of creating an experience where the result is an emotional connection to a person, brand, product or idea

Viral Marketing use pre-existing social networks to produce increases in brand awareness or to achieve other marketing objectives (such as product sales) through self-replicating viral processes, analogous to the spread of pathological and computer viruses. Viral promotions may take the form of video clips, interactive Flash games, advergames, ebooks, brandable software, images, or even text messages.

Buzz Marketing is a viral marketing technique that attempts to make each encounter with a consumer appear to be a unique, spontaneous personal exchange of information

Misc

Mind vs Shelf

ATL Above the line is a type of advertising through media such as TV,

cinema, radio, print, banners and search engines to promote brands. This type of communication is conventional in nature and is considered impersonal to customers

BTL Below the Line uses less conventional methods than the usual

specific channels of advertising to promote products, services, etc. Price promotion, Coupons, Gift with purchases, also gifts

certificates, Competitions and prizes, Money refunds, Frequent user/loyalty incentives, Point-of-sale displays, Events

Horizontal vs Vertical Marketing

To Read

Advertising / PR

Market Research

Direct Marketing

Sales Promotions

Rural Marketing

CRM

Q&A

There's more than one answer to these questions…