Marketing

Marketing

A management process responsible for• identifying• anticipating• satisfying

customer requirements ‘profitably’

Consumer Behaviour Model

Basics• Consumer Focus• Satisfying consumer needs (Maslow’s Model)

– Basic (Level 1 and 2)– Social Acceptance (Level 3)– Social Envy (Level 4)

The Core of Marketing• Need

– Felt when there is a conflict between desired state and the current state e.g. thirst, bath

• Want– Manifestation of a need– Specific, man-made, e.g. juice, water

• Desire– Strong expression of a want e.g. owning a Harley

Davidson or a Ferrari

Mind your Ps• The Base 4

The 7Ps of Services/B2B Marketing

Communication Channel

• TV• Radio – Maximum penetration• Print• Internet• Mobile• Social networks (word of mouth)

ATL/BTLAbove The Line• Promotional activities carried out through conventional forms of mass

media– Television– Radio – Print– Billboards

Below The Line• Non-media advertising• Flex/banners at Points of PurchaseThrough The Line (Combination of both)

Consumer Behaviour• Different buying behaviour in different situations• Marketing strategy based on consumer behaviour• Impulsive

• Picking (Lays, Bingo, Biscuits)• Unplanned• Low-involvement Products

• Variety Seeking • Switching

Consumer Behaviour• Brand Loyal Purchasing

• Levis Jeans• Van Heusen shirts• Raymond Suits

• Problem Solving • Crocin, D-Cold, Burnol, Dettol

• Purposive • B2B, industrial marketing, high involvement products

STP – The Essence• Segmentation (Homogeneity of needs)

– Geographic (N, S, E, W)– Demographic (age, gender, income)– Psychographic (traits, values, lifestyles)

• Thinkers, Achievers, Strivers, Experiencers

– Behavioral (benefit-seeking, loyal, usage rates)

Differentiable (through different marketing mix)Measurable (in terms of size and profitability)Accessible (e.g. IT services in N/E regions?)Actionable (product can be customized to serve)

Demographic Segmentation• SEC - Socio-economic Class (Demographic)Urban SEC System (SEC A1, A2, B, C,D) • Based on occupation and education of the

head of the household

Rural SEC (R1 to R4) System • Based on the education of the head of the

household and the type of housing

• Targeting– Assess segment attractiveness– Market growth, competition, channel attractiveness

• Positioning– Conveying the message of differentiation– Creating Points of Parity and Points of Difference– E.g. Low price, high quality, low calorie, refined etc.– Positioning of Nirma (low price), Surf Excel Matic (high-

quality), Rolls Royce (premium), Harley Davidson (iconic American)

PESTLE Framework• Used in SWOT analysis for strategic planning, marketing

planning, product development– Political

• Tax laws, trade tariffs, trade restrictions– Economic

• Growth rate, interest rates, inflation– Social

• Health consciousness, attitudes, acceptance– Technological– Legal– Environmental

Porter’s 5 Forces Model

The Mother of all 2X2s

BCG Matrix ExplainedApplications

– Brand marketing, Product management– Strategic management, Portfolio Planning

• Cash Cows– Low growth and "mature" market– To be "milked" continuously with as little

investment as possible– E.g. Dettol antiseptic, ITC Cigarettes

• Dogs– Low growth, low market share– Should be hived off or divested e.g. ITC Infotech

• Question Marks (Problem Child)– High growth, low market share– Analyze carefully in order to determine whether they are worth

the investment required to grow market share e.g. Fiama De Wills, Vivel, Sunfeast

• Rising Stars– Invest: High growth, high market share– Hotels and Agri-business for ITC Group

• Limitations– Linkage between market share and profitability is

questionable– A low market share product may actually be very

profitable and vice versa

Ansoff Growth Matrix

e.g. Dettol tried to promote its disinfectant as a medical antiseptic as well as a household cleaning product (market development)ITC Bingo chips (product development)Virgin Group (diversification)

The Product Life Cycle

A product has a limited life during which it poses different challenges – these have to be managed

• Introduction Phase (Innovators)– Costs high (promotion and marketing)– Sales volume low– No/little competition– Demand has to be created

• Growth Phase (Early Adopters)– Reduced costs due to economies of scale– Sales volume increases significantly– Competition increases with few new players in establishing market– Maximize market share

• Maturity Phase (Majority)– Costs are very low– Sales volume peaks– Increase in competitive offerings– Prices tend to drop due to the proliferation of

competing products– brand differentiation, feature diversification– Industrial profits go down

• Saturation and Decline Phase (Laggards)– Costs become counter-optimal– Sales volume decline or stabilize– Prices, profitability diminish– Profits through cost cutting– Focus on production/distribution efficiency rather

than increased sales

Sales and Distribution

Sales and Distribution N/w

Statistics• HUL

– 4,000 stockists– 6.3 million retailers– Entire urban population + 250 million rural consumers

• Marico– 1,000 distributors– 2,500 stockists– 1.6 million retailers– 18 million Indian households

Sales Objectives

• ‘Place’ of the Marketing Mix• Target-driven (push strategy)• Making the product available at the right

place, right time and right quantity

Other Segmentation Models

Marketing Warfare

• Defensive– Only the market leader should consider – Best defensive strategy is the courage to attack

yourself– Blocking strong competitive moves– E.g. Colgate Dental Cream – Market leader –

consistently defensive positioning v/s Close-up, Pepsodent

– Built up defenses on all price points and varieties

• Attack– Usually practiced by challenger(s) to the market leader– Attack a weakness in the leader’s position– Car rental firm Avis attacked market leader Hertz with

purely offensive strategies.– Avis talked of being perfect because of the number two tag– Burger King claims its burgers are bigger and taste better

than McDonald's– ‘Have It Your Way’ Campaign attacks McDonald's

‘inflexible’ consistent production line

Flanking• Practiced by the other smaller players• Flanking move played in uncontested territory• Tactical surprise is the key• Pursuit (follow-up) is equally important• Types

– Geographical– Segmented

• Nirma’s exclusive foray in the low-price segments

Guerilla• Usually implemented by firms who are smaller

in market position/resource base than the firm they attack

• Find a segment of the market small enough to defend

• No matter how successful you become, never act like the leader

• Be prepared to leave at a moment's notice• Babool, Chandrika, Medimix

Marketing Myopia• Be customer-oriented rather than product-oriented• Hollywood

– Faced an increased competition from television– Business of “entertainment” rather than “movie-making”

• Cadbury’s– Business of spreading joy (rather than chocolate making)

• Coca-Cola– Business of quenching thirst– Drops of Joy positioning

India FMCG SnapshotCompany Sales Revenue YoY (%) QoQ (%)

Colgate Palmolive

4076 16.2 4.2

Dabur 6040 16.0 -0.4Godrej Consumer

3616 26.3 33.0

HUL 42157 21.1 11.1ITC 38997 18.4 -0.9Marico 6009 28.1 28.5Nestle 10356 23.5 -5.1Tata Tea 11356 12.3 -3.6