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MARKETING 101 S O U M YA S A R K A R IIM RANCHI

Marketing Basics - Soumya Sarkar

Marketing Basics - Soumya Sarkar

Marketing Basics - Soumya Sarkar

WHAT IS MARKETING? 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 Basics - Soumya Sarkar

MARKETING MANAGEMENT The art and science of choosing target markets and getting, keeping, and growing customers through creating, delivering, and communicating superior customer value

Marketing Basics - Soumya Sarkar

MARKETING SPECTRUM What can be marketed? O Products O Services O People O Places

O Events O Ideas O Causes

Marketing Basics - Soumya Sarkar

Marketing Basics - Soumya Sarkar

Marketing Basics - Soumya Sarkar

Marketing Basics - Soumya Sarkar

EVOLUTION OF MARKETING • Economic activity – Production and movement of goods from producer to consumer – Use of branding marks – cattle – Advertisement - 1704 • Information

• Promotion not needed

• Production orientation – Customers sought for the products manufactured – Little or no emphasis on customers – Keep the plants loaded Marketing Basics - Soumya Sarkar

EVOLUTION OF MARKETING CONTD. • Sales orientation – Sales volume focus – Sell what the plants manufacture – Advertising/promotional schemes

• Customer orientation – Customer is central – Product development process looked from customer perspective – Appearance of consumer goods – branding/marketing

Marketing Basics - Soumya Sarkar

EVOLUTION OF MARKETING CONTD. • Market orientation – All activities aimed at customer – CEO is the driver

• Relationship orientation – Creation and maintenance of relationships with customers and suppliers – Value-addition – Augmentation of product with services

Marketing Basics - Soumya Sarkar

PRODUCT VS. MARKET ORIENTATION Company

Product Definition

Market Definition

Railways

We run trains

We move people and goods

Xerox

We make copying equipment

We help improve office productivity

BPCL

We sell petrol and diesel

We supply energy

Paramount Pictures

We make movies

We market entertainment

Blue Star

We make air conditioners

We control climate at homes and offices

Marketing Basics - Soumya Sarkar

INTERNAL MARKETING Task of hiring, training, and motivating able employees

to serve customers well

Marketing Basics - Soumya Sarkar

NEW TRENDS • Societal marketing: preserving/enhancing the consumers’/society’s well-being – Green marketing – Sustainable marketing

• Cause-related marketing: promoting social issues • CSR

• Ethical marketing

Marketing Basics - Soumya Sarkar

TYPES OF MARKETS • Based on physicality – Retail markets – Internet: e-commerce • Based on regularity – Markets/malls

– Ad-hoc auctions – Garage sales • Based on products – Consumer goods – consumer markets – Intermediate goods – business markets Marketing Basics - Soumya Sarkar

TYPES OF MARKETS CONTD. • Based on resources

– Labour – Foreign exchange – Shares – Commodities – Real estate

• Others – Artificial markets – created out of legislation or derivatives – Illegal markets

Marketing Basics - Soumya Sarkar

Marketing Basics - Soumya Sarkar

CONSUMER MARKET • End-user

• Individuals and/or households • Potential/active buyers of products or services

• Consumer products – directly fulfill the desires of consumers; not intended to be used in the manufacture of other products

Marketing Basics - Soumya Sarkar

Marketing Basics - Soumya Sarkar

BUSINESS MARKET • Manufacturers, intermediaries, wholesalers • Business customers – Business-to-business (B2B) • Geographical proximity

• Derived demand • Buying centre-based purchasing

Marketing Basics - Soumya Sarkar

CUSTOMER VALUE • Customer Perceived Value (CPV) = Perceived benefits – Perceived costs • Perception matters - management Functional benefits

Purchase price

Brand benefits

Other costs

Marketing Basics - Soumya Sarkar

Other benefits

CPV

VALUE CREATION AND DELIVERY Assessing market opportunities and customer value Choosing the value

Designing value Delivering value Communicating value

Growing and sustaining value Marketing Basics - Soumya Sarkar

Value Chain

Tool for identification of ways to create more customer value every firm is a synthesis of primary and support activities in order to design, produce, market, deliver, and support its product Marketing Basics - Soumya Sarkar

MANAGING CPV • Increase benefits – Add new features – Improve accessibility

• Reduce costs – Reduce price – Increase efficiency

• Combination of both the above

Marketing Basics - Soumya Sarkar

UTILITY • Value that marketers hope consumers would attach to their products/services • Consumers decide on value • Need – necessity to meet an urgent requirement • Want – desire for something not too essential • Demand – financial capacity to buy what a person wants

Marketing Basics - Soumya Sarkar

HIERARCHY OF NEEDS • Stated need – explicitly expressed • Real need – actually needed product/service • Unstated need – assumed to be fulfilled

• Delight need – unspoken additional needs • Secret need – some deep-lying desire, may not be related to the stated need

Marketing Basics - Soumya Sarkar

DEMAND • Negative • Nonexistent • Latent

• Declining • Irregular • Unwholesome • Full

Marketing Basics - Soumya Sarkar

RELATIONSHIP MARKETING Customers

Employees

Marketing Partners

Financial Community

Marketing Basics - Soumya Sarkar

RELATIONSHIP MARKETING • Orientation on part of the firm to develop relationships • Commitment • Elements – Trust – Communication – Personalisation

– Customisation

Marketing Basics - Soumya Sarkar

CRM • Activities used to establish, develop and maintain profitable customer relationships • External – Connecting to the customers – Technology – data capture

• Internal – Management of information – Technology – data mining

Marketing Basics - Soumya Sarkar

LOYALTY PROGRAMMES • Future rewards – Frequent flyer miles – Jet Privilege – Cash back – ICICI Bank credit cards – Points – Crossword bookstore – Fuel – Indianoil

• Cash discounts on purchases – Pantaloons Green Card

• Coalition programmes – Payback

Marketing Basics - Soumya Sarkar

CONSUMER BEHAVIOUR • Activities directly involved in obtaining, consuming and disposing of products/services • Including the decision processes that precede and follow these actions

Marketing Basics - Soumya Sarkar

THEORY & REALITY PROBLEM RECOGNITION

INFORMATION SEARCH

EVALUATION OF ALTERNATIVES PURCHASE

POSTPURCHASE EVALUATION/ BEHAVIORS

Theory Complications

Marketing Basics - Soumya Sarkar

Marketing Basics - Soumya Sarkar

Information gatherer Influencer Decider Purchaser User

Over time

Products Services Ideas Activities

By

Acquisition Usage Disposition

Offering

What? Why? How? When? Where? How much/often?

Consumption

Totality of decisions

SUMMARY Hours Days Weeks Months Years

CONSUMER PSYCHOLOGY • Motivation – energetic, ready and willing to engage in a goalrelevant behaviour – Needs – Perceived risks

Marketing Basics - Soumya Sarkar

PERCEPTION • Sensing a marketing stimulus – Visual – size, shape, colour – Audio – music, noise – Touch – Taste, smell

• Perceptual organisation – Figure and ground – Closure – Grouping

Marketing Basics - Soumya Sarkar

FIGURE & GROUND

Marketing Basics - Soumya Sarkar

GROUPING

Marketing Basics - Soumya Sarkar

ATTITUDES • Overall evaluation that expresses liking/disliking for a product/person • Functions – Guide thoughts – cognitive – Influence feelings – affective – Affect behaviours – conative

• Consumer effort – High – cars, insurance

– Low – toothpaste, magazines

Marketing Basics - Soumya Sarkar

AGE & LIFE STAGE • Chronological age • Cognitive age • Age cohorts - Group of people born at roughly the same time in the same place/country – experienced the same major economic, political and social upheaval • In India – Midnight’s children (Rushdie)

– Liberalisation children – Pre-Independence generation – Midway children or Rajiv Gandhi age cohort (Bijapurkar) Marketing Basics - Soumya Sarkar

Marketing Basics - Soumya Sarkar

Marketing Basics - Soumya Sarkar

REFERENCE GROUPS • People whose values are shared by consumers, and whose opinions are valued

• Direct / indirect influence on consumer thoughts • Expertise & trustworthiness • Types used in marketing – Celebrities – Expert – “Common man” – Executive/employee

Marketing Basics - Soumya Sarkar

SOCIAL CLASS • Characteristics that distinguish certain members of a society from others – Wealth – Vocation – Education – Power – Residence – Ancestry

• SEC classification

Marketing Basics - Soumya Sarkar

IMPORTANCE OF SOCIAL CLASS • Upper class – Invest & save more

– Use product characteristics (not price) as indicators of quality

• Middle class – Look towards upper class for social behaviour guidance - upward mobility

• Working class – Increased presence of women, esp. in service sector

– Shop in mass merchandising outlets

Marketing Basics - Soumya Sarkar

SOCIAL SYMBOLS • Conspicuous consumption – Keep up with the respected members of that class – Trade up

– Wastages - encyclopedia

• Materialism • Status symbols – Judging others – Fraudulent symbols Marketing Basics - Soumya Sarkar

Marketing Basics - Soumya Sarkar

GENDER ROLES • Social expectations of appropriate attitudes and behaviours from the genders

• Evolve and change over time • Gender identity • Media stereotyping

Marketing Basics - Soumya Sarkar

FAMILY • First influencers • Normative behaviour and distinct roles • Family structure changing over time – Joint  nuclear  single parent  DINKs  live-in  same sex

• Role of spouses • Role of children – Princess syndrome

Marketing Basics - Soumya Sarkar

SEGMENTS

Mass marketing

Customisation

Segments

Marketing Basics - Soumya Sarkar

SEGMENTATION • Allows businesses to look at several different groups instead of one mass market • Identifies groups that have similar market responses • A segment should be – Homogeneous – As diverse as possible from other segments – Having a critical mass

– Having core similarities of attitude, behaviour, and economics – Robust and replicable

Marketing Basics - Soumya Sarkar

SEGMENTATION BASE - CONSUMER • Group of characteristics used to assign segment members – Demographic – Psychographic • Lifestyle

• Class • Personality

– Behavioural • Attitudes • Usage • Life events Marketing Basics - Soumya Sarkar

SEGMENTATION BASE - BUSINESS • Demographic • Geographic • Benefits – Service support – Financing/credit terms

• Operating characteristics

• Purchasing approach • Situational factors – Size of order – Urgency Marketing Basics - Soumya Sarkar

TARGETING • Evaluation and selection of the most viable segment to enter • Selection criteria – Attractiveness

– Size and growth potential – Brand objectives – Resources to form basis for competition

Marketing Basics - Soumya Sarkar

TARGETING APPROACHES • Undifferentiated – Market as a whole – Focus on similarities – than on differences

• Differentiated – Unique product/service tailored for each segment

• Niche – Serving a small but well-defined segment – Limited resources or exclusive products

Marketing Basics - Soumya Sarkar

POSITIONING • Placement of a product/service offering in the mind of the target consumer • Development of marketing programmes to meet the requirements • Types – Functional – Symbolic – Experiential

Marketing Basics - Soumya Sarkar

POSITIONING TOOLS • USP – Expression of the uniqueness of the brand in a succinct manner – Commitment that others cannot match/imitate • Value proposition – Entire set of benefits that differentiate the brand

– Unique – Specifically relevant to the target

Marketing Basics - Soumya Sarkar

SELECTING A POSITION

• Deliver a valued benefit to the target

• Be distinctive vis-à-vis the competition • Offer a superior benefit that can be communicated easily • Difficult for others to copy • Affordable to the target • Provide required revenues/profits to the brand Marketing Basics - Soumya Sarkar

THANK YOU!! Marketing Basics - Soumya Sarkar