Kotler Chapters Summary

Marketing Management
By Philip, Kevin Lane Keller, Abraham Koshy, Mithileshwar Jha
SUMMARY by
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Chapter
Understanding Marketing
Management
Marketing is an essential art and science that is engaged in a vast number of activities
by both persons and organizations. It has become an increasingly vital ingredient in the
success of a business. Good marketing is the result of careful planning and execution.
There are two sides to marketing the formulated side and the creative side. It is
important to lay the foundation in marketing concepts, tools, frameworks and issues of
Social
Definition of
Marketing
the formulated side while at the same time instil the real creativity and passion for
marketing, as we shall come to see in this chapter.
Marketing is increasingly becoming an important function in all organizations to ensure

that demand for a product or service persists along with customer retention.
Marketing is a
Scope of Marketing
societal process by
which individuals
A good marketer must be able to answer the following questions:
and groups obtain
What is Marketing?
what they need and

want through
The formal definition of marketing is, Marketing is an organizational function and a set
creating, offering
of processes for creating, communicating and delivering value to customers and for
and freely
managing customer relationship in ways that benefit the organization and its
exchanging
products and
stakeholders.
What is Marketed?
services of value
with others.
Some of the common entities that are marketed are goods, services, events,
experiences, persons, places, properties, organizations, information and ideas.
Chapter 1 - Understanding Marketing Management

Who Markets?
A marketer is someone who seeks a response, attention, purchase, vote, donation etc
The five key
from another party called the prospect. Marketing managers are responsible for demand
functions of a
Eight demand states are possible:
Negative demand
marketing
Nonexistent demand
Latent demand
manager or
Declining demand
Irregular demand
CMO are:
Full demand
Overfull demand
Unwholesome demand
management.
Strengthening
the brand
The key customer markets are consumer markets, business markets, global markets,
non-profit and governmental markets.
Measuring
marketing
effectiveness
Core Marketing Concepts:
Driving new
product
development
based on
customer needs
complex needs such as for belonging. i.e. I am hungry.
customer
marketing
Demands - human wants backed by buying power. i.e. I have money to buy this
meal.
Target Markets are the market segments identified by the marketer which
present the greatest opportunity.
insights
Utilizing new
Wants - form that a human need takes as shaped by culture and individual
personality i.e. I want a hamburger, French fries, and a soft drink.
Gathering
meaningful
Needs - state of felt deprivation for basic items such as food and clothing and
Value Proposition is a set of benefits that companies offer to customers to

satisfy their needs. The intangible value proposition is made physical by as
offering. A brand is an offering from a known source.
Value reflects the sum of the perceived tangible intangible benefits and costs to
customers. Satisfaction reflects a persons judgements of a products perceived
technology
performance.
To reach a target market a marketer uses different marketing channels like

communication channels, distribution channels and service channels.
Supply chain is a longer channel stretching from raw materials to components

to final products that are carried to final buyers.
Chapter 1 - Understanding Marketing Management

Company orientation towards Marketplaces:
The major marketing philosophies are:
New
Marketing
The Production Concept

o
Consumers favor products that are available and highly affordable.
Improve production and distribution.
Product Concept
o
innovative features.
Realities:
Selling Concept
o
Marketing Concept
o
Some of the major
Societal Marketing Concept

o
Focuses on needs/ wants of target markets & delivering superior value.
Holistic Marketing Concept

o
network
Based on the development, design and implementation of marketing

programs, processes and activities that recognize their breadth and
information
technology,
Focuses on needs/ wants of target markets & delivering satisfaction better

than competitors.
marketers have to
deal with today are
Consumers will buy products only if the company promotes/ sells these
products.
societal forces that
Consumers favor products that offer the most quality, performance, and
interdependencies.
Relationship Marketing
o
globalization,
Aims to build mutually satisfying long-term relationships with key

constituents in order to earn and retain their business.
deregulation,
privatization,
heightened
Marketing Management Tasks:
competition,
industry
convergence,
consumer
The following are the most important marketing management tasks:
Developing Marketing Strategies and Plans
Capturing Marketing Insights
Connecting with Customers
resistance, retail
Building Strong Brands
transformation and
Shaping the Marketing Offerings
disintermediation.
Delivering Value
Communicating Value
Creating Long-Term Growth
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SUMMARY by
Chapter
Developing Marketing
Strategies And Plans
In this chapter, mainly the following points have been discussed
How does marketing affect customer value?
How is strategic planning carried out at different levels of the organization?
What does a marketing plan include?
Developing the right marketing strategy over time, through discipline and a creative
Supply
thought process can go a long way in the marketing management process. Firms must
constantly strive to improve every aspect of their strategy and the plans to guide the
Chain
Many companies
today outsource less
critical resources if
marketing process.
The Value Delivery Process

In the new view of business processes, marketing is viewed at the beginning of the
planning stage. A smart competitor must design and deliver products for well-defined
they can obtain
micro-markets and cater to their specific wants, perceptions and preferences. The Value
better quality or
Creation and Delivery Sequence can be divided into two segments of marketing:
lower cost. Also,
Strategic Marketing and Tactical Marketing.
many companies
partner with specific
suppliers and
distributors to
create a superior
value delivery
network, also
Core Competencies
known as Supply
Core Competency refers to areas of special technical and production expertise, whereas
Chain.
distinctive capability describes excellence in broader business processes. Market-driven

organizations generally excel in three distinctive capabilities: market sensing, customer
linking and channel bonding.
Chapter 2 - Developing Marketing Strategies And Plans

A firm must coordinate all the department activities to conduct its core business
processes, through cross-functional teams
Holistic
Marketing
Market-sensing process
New-offering realization process
Customer Acquisition process
Customer Relationship Management Process
Fulfillment Management Process
Holistic marketing
Value Chain
orientation means,
integrating the
The value chain is a tool which is used for identifying ways to create more customer
value exploration,
value. There are 9 strategically relevant activities 5 primary and 4 support.
value creation and

value delivery
activities with the
purpose of building
long-term,
mutually satisfying
relationships and
Strategic Planning
co-prosperity
among key
Companies need to focus on the customer and organize to respond effectively to their
stakeholders. It
changing needs, to be known as master marketers. The marketing plan is the central
helps manage a
instrument for directing and coordinating the marketing effort. The marketing plan
superior value
operates at two levels: strategic and tactical.
chain that delivers
The strategic marketing plan lays out the target markets and the value
proposition the firm will offer, based on an analysis of the best market
a high level of
product quality,
opportunities.
The tactical marketing plan specifies the marketing tactics, including product
service and speed,
features, promotion, merchandising, pricing, sales channels and service.
in addition to
expanding
Corporate Headquarters
customer share,
building customer
loyalty and
capturing customer
lifetime value.
All corporate headquarters undertake four planning activities
Defining the corporate mission
Establishing strategic business units
Assigning resources to each Strategic Business Unit
Assessing growth opportunities
Innovation in marketing is critical. Senior management should identify and encourage

fresh ideas from a youth perspective, from people new to the field and organization, to
gain an understanding and a new approach to marketing.
Chapter 2 - Developing Marketing Strategies And Plans

Mission Statement
The best Mission Statement reflects a vision, an almost impossible dream that provides
a direction for the company for the next 10 or 20 years. A good mission statement
focuses on limited number of goals, links the companys policies and values and gives a
Strategic
long term view. It is as short, relevant and meaningful as possible.
Business Unit
A Strategic
Business Unit Strategic Planning
Business Unit is a
single business (or
a collection of
similar businesses)
that can be
planned
separately from
the rest of the
The Business Unit Strategic Planning process consists of the following steps
1. The Business Mission: Each business unit needs to define its specific mission
within the broader company mission.
2. SWOT Analysis: The overall analysis of a companys Strengths, Weaknesses,
Opportunities and Threats is called SWOT analysis. It is a way of monitoring the
external and internal marketing environment.
To evaluate opportunities, companies can use Market Opportunity Analysis.
3. Goal Formulation: Developing specific goals for a short term is known as Goal
company. By
Formulation. They are specific with respect to magnitude and time. Goals must
identifying the
be consistent and realistic and could be a mix of various objectives.
companys SBUs, it
is easy to develop
4. Strategy Formulation: Strategy is a game plan for achieving the goals. It consists
of a Marketing Strategy, Technology Strategy and a Sourcing Strategy.
5. Program Formulation: The unit must plan programs in accordance with its goals
separate strategies
and strategy and thus work upon the various departments, to strengthen them
and assign
and integrate all of them together.
appropriate
funding.
6. Implementation: Even a great marketing strategy can be sabotaged by a poor

implementation. It must coordinate its tasks to implement its plan properly.
These tasks must be in line with the interests of the stakeholders as well.
7. Feedback and Control: The key to organizational health is willingness to
examine the changing environment and adopt new goals and behaviors. In the
rapidly changing market environment, even large organizations which are
subject to inertia can be changed through strong leadership.
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SUMMARY by
Chapter
Capturing Marketing insights

and Spotting Market Trends
To provide insight into an inspiration for marketing decision making, companies must
possess comprehensive, up-to-date information about macro trends as well as micro
trends particular to their business. This chapter deals with various modes of obtaining
MIS
this information and also looks into the major macroeconomic forces that affect
marketing decisions.
(Marketing
Information
System)
Consists of people,
equipment and
MIS (Marketing Information System)

MIS can provide data e.g. Swiss eat most chocolates, Greeks eat most cheese. It relies
on internal company records, marketing intelligence activities and Market Research.
MIS provides information on market happenings and changes in environment. Purposes
of MIS have been noted below.
procedures, to
gather, sort,
analyze, evaluate
activities and listening to customer comments.
and distribute
needed, timely and
Train the sales force for intelligence gathering by observing competitors

Motivate retailers and distributors to pass intelligence. E.g. mystery shoppers to
identify customer treatment and possible flaws.
Network externally using competitors annual reports, talking with their
accurate
retailers, distributors and employees, attending shareholder meetings. It should
information to
be done ethically and legally.
marketers.
Use government sources (Census, NSSO reports) or purchase data from outside
suppliers (AC-Nielsen, etc)
Create a panel of largest, sophisticated and important customers for feedback.
Use online forums, sites offering customer and expert reviews, Customer
compliant sites,
Chapter 3 - Capturing Marketing insights and Spotting Market

Trends
Internal Company Records
Order to Payment cycle - Customer places order for goods -> Sales team sends
invoice to various departments -> Sales team back orders out of stock items ->
Suppliers send goods and sales team pays suppliers -> Sales team delivers order and
receives payment. Purpose is to minimize number and duration of cycles.
Sales Information System - Keeping constant track of sales, customers, etc. It can
help in identifying trends.
Database / Data warehousing / Data Mining - Separate databases are there for
products, salespersons and customers. Purpose is to analyze (mine) data using
Analyzing the
statistical methods and discover trends.
Macro
Environment
Fad
Major Macro Environmental Forces

Demographic
16.7% of World population in India; Male to Female ratio of 933:1000
Unpredictable,
Population Age mix : median age of 23.8 years, 34% b/w 12 and 25yrs, 24% b/w 25 and
short-lived, without
34 years
any economic or
Literacy level: 65.38% literate, 75.8% males and 54.16% females, 76% literacy between
social significance
15-24yrs age group, 64.5% literacy between 25-34yrs age group.
Trend Sequence of events

that have
Economic
Purchasing Power depends on income, savings, prices, credit availability. Indias GDP is
momentum and
$1.2 trillion, per capital income of $3100
durability, reveals
Income distribution: 77.7% of urban households have income up to Rs3000/month while
the future.
only 2.1% have income more than Rs 10,000/month.
Megatrend
Categories of Indian consumers: Destitute ( less than Rs16,000 annually, inactive

participants in market exchange), Aspirants ( Rs 16,000 to Rs22,000, new entrants in
Large social and
consumption system), Climbers, (Rs 22,000 to Rs 45,000, have desire and willingness to
economic influence,
buy but has limited cash), Consuming Class ( Rs 45, 000 to Rs 2,15,000, majority have
slow in formation
money and are willing to pay), Rich ( more than Rs 2,15 000, have money and own a
but has lasting

effect.
variety of products).
Trend shows increasing % of Consumers and Climbers while a decreasing % of Destitute
and Aspirants.
Social-Cultural
Society shapes beliefs, values, demands, and requirements. It affects dress codes, food
habits, brand preferences. Trend shows an increasing role of children on purchasing
decisions e.g. bicycles, computers, wrist watches, shoes and other FMCG goods.
Chapter 3 - Capturing Marketing insights and Spotting Market

Trends
Natural
Deterioration of environment is a significant concern e.g. Greenhouse Effect, Ozone
layer and fossil fuel depletion. Government concerns in this aspect are Euro-2
emissions norms and CNG.
Although majority feels necessity of environmental friendly products, they do not buy
because
(a) Perception of green good being of inferior quality and (b) Perception that good does
not contribute majorly to the environment.
Corporate Environmentalism is recognizing the importance of environmental issues
What is the
affecting the firm and integrating those in its strategic plans is fast gaining ground. E.g.
Focus on Non-renewable sources like Jatropha oil, Pollution Control Systems like
difference
landfills, recycling centers and focus on CNG initiatives.
between a
Fad and a
Technological
Four major trends are
Trend?
(a) Accelerated Pace of Change: e.g. Apple selling 23.5 million in 2006
A fad becomes a
telecommunication, Robotics, aid vaccines, contraceptive pills.
trend when it
(c) Varying R & D Budget: e.g. Increasing R & D in Pharmaceutical companies like Cipla,
affects a large
number of people,
(b) Unlimited Opportunities for Innovation e.g. Developments in Bio-tech,
Dr. Reddys, and Ranbaxy

(d) Increasing regulation of technological change e.g. Drugs and cosmetic act, control
on clinical trial, standard for drugs.
has functional
value, has lesser
number of
Political and Legal
substitutes, and has
Two major trends are
other trends
promoting it.
(a) Increase in business legislation: to protect companies from unfair competition, to

protect consumers from unfair business practices, to protect society from unbridled
business behavior and to charge businesses with social costs created by their products
or processes
(b) Growth of special interest groups and improvements like the Consumer Protection
Act.
SUMMARY by
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Chapter
Conducting Marketing Research

and Forecasting Demand
Why Marketing Research?

Successful Marketing Managers need timely, accurate and actionable information about
consumers, competition and their brands to assess past performance, plan future
activities and take strategic decisions leading to successful product launch or increase
growth of a brand.
What is
Marketing
What are the major steps of Marketing Research

Process?
Step 1 : Define the problem, the decision alternative and the research objective
Research?
Systematic Design,
Step 2 : Develop the research plan
collection, analysis
and reporting of
data and findings
Step 3 : Collect the information
relevant to a
specific marketing
situation facing the
Step 4 : Analyze the information
company.
Step 5 : Present the findings
Step 6 : Make the decision
Chapter 4 - Conducting Marketing Research and Forecasting

Step 1:
Achieve clarity on the content, the scope of market research and what all decisions are
to be made on the basis of research.
Step 2:
Secondary
Primary Data ccan be collected through following:
Data:
Already existing
somewhere which
was collected for
some other
purpose
Primary
Data:
Freshly gathered
data for research
only. Expensive to
collect.
Research Methods
Observational
Observational Research: Observing
consumers, informal interviews, using
tools from anthropology to provide
deeper understanding of consumers.
Focus
Focus Group Research: A meeting of a
group of people who represent potential
customers or important actors for
research discussing issues relevant to
research
Survey
Survey Research: Companies undertake
descriptive research to learn about
peoples beliefs, preferences and
satisfaction.
Behavioral
Behavioral Data: Customers actual
purchases do not match their
statements made in surveys always
hence certain techniques help in
exposing these discrepancies
Experimental
Experimental Research: This captures
cause and effect relationship in
observed findings.
Research Tools
Questionnaires:
Questionnaires: A set of questions
soliciting responses that is of relevance
to market situation. They can be either
open-ended
ended or closed-ended.
closed
Qualitative
Qualitative Measures: Relatively
unstructured measurement approach
for exploring consumers responses
Technological
Technological Devices: devices like skin
sensors brain wave scanners to
capture consumers response.
Sampling
Sampling Plan: A plan addressing
questions like whom all to survey, how
many people to survey, how should we
select people for survey.
Contact
Contact Methods: Mail Questionnaire,
Telephone Interview, Personal
Interview, Online Interview.
Step 3:
Data collection is one of the most expensive, time
time-taking
taking and most error prone phase of
market research as it entirely depends on availability, honesty and consistency of
respondents. However technology has eased the problem to a great extent.
Step 4:
This is the process to extract findings by tabulating the data and developing frequency
distributions
stributions in hope of discovering additional findings.
Step 5:
The researcher presents finding relevant to the major marketing decisions facing
management
management.
Chapter 4 - Conducting Marketing Research and Forecasting
Types of
Step 6:
Market
confidence in the findings, managers decide to use it
Potential
Market research is just a tool to provide insight to the managers. Depending on their
Barriers to Marketing Research
Narrow approach to Marketing Research
Uneven Caliber of researchers
Poor framing of problem
Set of consumers who
Late and occasionally erroneous findings
profess a sufficient
Personality & presentational differences
market
level of interest in a
market offer.
Available
Measuring Marketing Productivity

To assess the efficiency and effectiveness of marketing of marketing activities there are
Marketing metrics to assess marketing effects
Marketing mix modeling to estimate casual relationships and measure how

marketing activity affect outcomes
market
from these two approaches within the organizations

have interest income
Marketing Dashboard are a structured way to disseminate the insights gleaned
Types of Demand
and access to a
Market Demand
particular offer.
It 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
Target market
Company Demand
The part of the
company marketing effort in a given time period
qualified available
market the company
decides to pursue.
It is the companys estimated share of the market demand at alternative levels of
Current Demand
It is the demand that companies attempt to determine by measuring total

market potential, area market potential industry sales and market share
Future Demand
Penetrated
market
It is the demand that companies determine by surveying buyers intentions,

solicit their sales forces input, gather expert opinions, analze past sales or
engage in market testing mathematical models, advanced statistical techniques
and computerized data collection procedures

are buying the
To estimate current demand companies attempt to determine total market potential,
company's product.
area market potential industry sales and market share

To estimate future demand companies survey buyers intentions solicit their sales
forces input, gather expert opinions, analyze past sales or engage in market testing
mathematical models, advanced statistical techniques and computerized data collection
procedures are essential to all types of demand and sales forecasting.
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SUMMARY by
Chapter
Creating Customer Value,

Satisfaction and Loyalty
In the face of increasing competition, companies today face their toughest test of
survival. Moving from a product-to-sales philosophy to a holistic marketing philosophy,
however, may provide a better chance of outperforming competition. And at the
cornerstone of this philosophy are strong customer relations.
Customer
This chapter discusses the importance and various methods of creating customer value
and sustaining customer loyalty. As customers have become more informed and
Perceived
Value:
educated than ever, organisations have started to adopt business models where the
customer is at the top.
Total Customer Benefit

Customer
It is the perceived monetary value of the bundle of economic, functional, and
Perceived Value: It
psychological benefits customers expect from a given market offering because of the
is the difference
products, services, personnel and image involved.
between the
prospective
Total Customer Cost
customers
It is the perceived bundle of costs customers expect to incur in evaluating, obtaining,
evaluation of all the
using, and disposing of the given market offering, including monetary, time, energy, and
psychological costs.
benefits and all the

costs of an offering,
and the perceived
alternatives.
Very often, a customer value analysis is undertaken by managers to better understand

the companys strengths and weaknesses in comparison with competition. It follows the
pattern below
1. Identify the major attributes and benefits that customers value.
2. Assess the quantitative importance of the different attributes and benefits.
Chapter 5 - Creating Customer Value, Satisfaction and Loyalty

Trends
3. Assess the companys and competitors performances on the different customer
values on each attribute and benefit.
4. Assess how customers in a specific segment rate the companys performance
against a major competitor on an individual attribute or benefit basis.
5. Monitor customer values over time as the economy, technology, and features
change.
Total
Customer profitability
Customer
A profitable customer is one that over time yields a revenue stream that is significantly
Satisfaction:
It is the measure of
greater than that companys cost stream for attracting, selling and servicing that
customer.
a customers
150-20 Rule
feelings of pleasure
or disappointment
The 20% most profitable customers generate as much as 150% of the profits of the
company; the 20% least profitable customers lose 100% of the profits.
that results from
Measuring customer profitability lies in the concept of Customer Lifetime Value (CLV).
comparing a
CLV describes the net present value of the future stream of profits expected over the
products perceived
customers lifetime purchases. CLV calculations are generally used by marketers to
performance to
develop a long-term perspective.
their expectations.
Satisfaction is
usually measured
Customer Relationship Management (CRM)

It is the process of carefully managing detailed information about individual customers
and all occasions where a customer encounters a brand/product to maximise customer
with the help of
loyalty.
customer surveys.
CRM can be conducted using the following 4 steps
The two major

factors involved in
customer
satisfaction are
complaint handling
and product/service
quality.
1. Identify your prospects and customers.

2. Differentiate customers in terms of their needs and their value to your
company.
3. Interact with individual customers to improve your knowledge about their
needs and to build stronger relationships.
4. Customize products, services, and messages to each customer.
The value of the customer base can be increased by improved by measures such as
reducing the rate of customer defection, increasing the longevity of the customer
relationship, making low-profit customers more profitable or terminating them, etc.
Chapter 5 - Creating Customer Value, Satisfaction and Loyalty

Trends
Building Customer Loyalty
It involves the following procedures
1. Interacting with customers
2. Developing loyalty programs
3. Personalising marketing
4. Creating institutional ties
Database marketing
It is the process of building, maintaining and using customer databases and other
databases to contact, transact and build customer relationships.
Customer Database
It contains customers past purchases, past volumes, past prices and profits; buyers
personal details, status of current contacts, the companys share of the buyers
business, competitive suppliers, etc.
Datamining
Through datamining, marketers can extract information about individuals, trends, etc.
from the customer database. It uses techniques such as cluster analysis, predictive
modelling, etc.
Disadvantages of Datamining and CRM

1. Building and maintaining a database requires huge amounts of investment in
terms of computer hardware.
2. Convincing employees to be customer oriented than using traditional methods.
3. Customer attitudes about privacy of personal data.
Probability of error of CRM methods or assumptions made thereof.
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SUMMARY by
Chapter
Analyzing Consumer Markets

Since marketing starts from the customer, it is of primary importance to understand the
psyche of the customers and their buying motives. This chapter talks about the various
behavioural patterns that govern the decision making process of a customer. A
marketer needs to understand these factors affecting the customers purchase
decisions so as to design an appropriate marketing strategy.
Factors affecting Consumer Buying

Behaviour
1. Cultural Factors
a. Culture - Frames traditions, values, perceptions, preferences. E.g. Child
learning from family & surroundings.
b. Sub-culture - Provides more specific identification and socialization. Include
nationalities, religions, racial groups and geographic regions.
c. Social Class Homogeneous and enduring divisions in a society which are
hierarchically ordered. Members share similar tastes and behaviour.
2. Social Factors
a. Reference Groups Have direct or indirect influence on persons attitude
and behaviour. Primary groups: regular interaction, e.g. family, friends,
neighbours. Secondary groups: religious, professional, trade union groups.
Aspirational Groups: ones that a person hopes to join. Dissociative groups:
whose values or behaviour and individual rejects.
b. Family Family of orientation: parents and siblings. Acquires orientation
towards religion, politics and economics, sense of personal ambition, self
worth and love. Family of procreation: spouse and children. More direct
influence on buying behaviour.
c. Roles and Status Role consists of activities a person is expected to
perform. Each role carries a status. Marketers must be aware of the status
symbol of each product.
Chapter 6 - Analyzing Consumer Markets

3. Personal Factors
a. Age and Stage in the Life Cycle Tastes are age related. Markets should also
consider critical life events or transitions.
b. Occupation and Economic Circumstances Economic Circumstances like
spendable income, savings, assets, debts, borrowing power etc affect
consumption patterns.
c. Personality and Self Concept Personality, set of distinguishing
characteristics that influence his/her buying behaviour. Consumers match
brand personality with their ideal self concept instead of their actual self
concept.
d. Lifestyle and Values
4. Psychological Factors
a. Motivation: Freuds theory of id, ego and super ego; Maslows need
hierarchy theory; Herzbergs two factor model.
b. Perception: Process by which we select, organize and interpret information
inputs. In marketing, perceptions are more important than reality.
c. Learning Induces changes in behaviour arising from experience. Marketers
can build demand by associating the product with positive drives.
d. Memory Short term and long term memory. Build brand knowledge and
brand recall as node in memory.
Problem
Recogniton
Information
Search
Evaluation of
Alternatives
Purchase
Decision
Postpurchase
Behaviour
The Buying Decision Process
Problem Recognition - Customer recognises a need triggered by internal or

external stimuli. Marketers need to identify circumstances that trigger needs.
Information Search - Two levels of involvement Heightened attention when

person becomes more receptive to information about the product. At next level
consumer may enter into active information search, looking for reading
material, phoning friends etc.
Evaluation of Alternatives - Factors influencing a particular choice over the

other include attitudes, beliefs and expectancy value.
Purchase Decision - Between purchase intention and purchase decision, 2

intervening factors come into play- Attitudes of others and Unanticipated
situational factors. Marketers should understand that these factors provoke risk
and should provide information to reduce it.
Post purchase Behaviour - Marketers must monitor postpurchase satisfaction,

postpurchase actions, and postpurchase product uses.
Chapter 6 - Analyzing Consumer Markets

Trends
Level of customer involvement
Involvement
Significant
Insignificant
Differences in Brands
High
Complex
Buying
Behaviour
Low
Variety Seeking
Dissonance
Reducing
Habitual
1. Complex Buying Behaviour: When a customer purchases something for the

first time.
2. Variety Seeking: Consumers will keep switching varieties just out of
boredom. Eg- Biscuits. Marketer should keep introducing new products and
display the product prominently.
3. Habitual: Buying the same thing out of habit and not out of loyalty.
Distribution network should be excellent in this case. Maintain consistency
in product and advertising.
4. Dissonance Reducing: In case of repeat purchase of same product.
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SUMMARY by
Chapter
Analyzing Business Markets

and Buyer Behavior
Business buyers purchase goods and services to achieve specific goals, such as making
money, reducing operating costs, and satisfying social or legal obligations. Therefore to
provide superior customer value to the business buyers this chapter familiarizes you
with the underlying dynamics and process of business buying.
Organizational buying
is the decisionmaking process by
Blanket contract establishes a long-term relationship in which the supplier promises to

resupply the buyer as needed at agreed-upon prices over a specified period. Because
the seller holds the stock, blanket contracts are sometimes called stockless purchase
plans.
Product value analysis is an approach to cost reduction in which components are
carefully studied to determine if they can be redesigned or standardized or made by
cheaper methods of production.
which
organizations
The Business Market versus the Consumer

Market
establish the need

for purchased
products and
consumer marketers.
services and
identify, evaluate,
and choose among
Fewer buyers: Business marketers normally deal with far fewer buyers than do
Larger buyers: Buyers for a few large firms do most of the purchasing in many
industries.
Close supplier customer relationship: Smaller customer base and importance of
alternative brands
larger customers, suppliers have to customize offerings to meet the needs of
and suppliers.
individual customers.
Geographically concentrated buyers
Derived demand: Demand for business goods is derived from demand for consumer
goods, so business marketers must monitor the buying patterns of ultimate
consumers.
Inelastic demand: Not much affected by price changes as producers cannot make
quick production changes.
Chapter 7 - Analyzing Business Markets and Buyer Behavior
Three types of
Business
Buying
Situations:
Straight rebuy:
Fluctuating demand: Demand for business products is more volatile than consumer
products.
Professional purchasing: Organizational purchasing policies and constraints are followed
Multiple buying influences: More people typically influence buying decisions
Multiple sales calls: Multiple sales calls to win most business orders, and the sales cycle
can take years.
Direct purchasing: Business buyers often buy directly from manufacturers rather than
intermediaries
Reciprocity: Business buyers often select suppliers who also buy from them.
Leasing: Many industrial buyers lease rather than buy heavy equipment to conserve
capital, get the latest products, receive better service, and gain tax advantages.
situation in which
the purchasing
The Buying Center
department
(Decision-making unit of a buying organization)
reorders on a
Seven roles in the purchase decision process:
routine basis (e.g.,
Initiators: People who request that something be purchased
office supplies, bulk
Users: use the product or service; often, users initiate the buying proposal and help
define product requirements.
chemicals).
Modified rebuy:
situation in which
Influencers: People who influence the buying decision, including technical personnel.
Deciders: Those who decide on product requirements or on suppliers.
Approvers: People who authorize the proposed actions of deciders or buyers.
Buyers: People who have formal authority to select the supplier and arrange the
purchase
the buyer wants to

modify product
members of the buying center
specifications,
prices, delivery
Major Influences on Business Buying
requirements, or
other terms.
Gatekeepers: People who have the power to prevent sellers or information from reaching
Environmental Factors
Attention to numerous economic factors, including interest rates and levels of production,
investment, and consumer spending. Business buyers also monitor technological, political-
New task:
regulatory, and competitive developments.
situation in which a
purchaser buys a
product or service
for the first time
Organizational Factors
Business marketers need to be aware of the following organizational trends in purchasing:
Purchasing department upgrading: Strategically positioned and highly
Cross-functional roles: strategic, technical, team-oriented, and involving more
(e.g., office
building, new
responsibility
Centralized purchasing: recentralized their purchasing, to gain more purchasing clout and
savings.
security system).
Decentralized purchasing of small-ticket items
Long-term contracts: Buyers are increasingly initiating long-term contracts
Internet purchasing: Low transaction and personnel costs reduce time between order and
delivery, purchasing companies moving towards internet purchasing.
Purchasing-performance evaluation & incentive systems and buyers professional
Chapter 7 - Analyzing Business Markets and Buyer Behavior
Major
Lean production: incorporates just-in-time (JIT) production, stricter quality control,

development frequent and reliable supply delivery, suppliers locating closer to
customers, computerized purchasing, and stable production schedules.
Influences on
Business Buying:
8 stages of PURCHASING PROCESS

Stage 1: Problem Recognition
Someone in the company recognizes a problem or need that can be met by acquiring a good
Interpersonal Factors
Buying centers usually
or service. Internally, developing a new product, need for new equipment and materials or
to obtain lower prices or better quality. Externally, occur when a buyer gets new ideas at a
trade show, sees a suppliers ad, or is contacted by a sales representative offering a better
include several
product. Business marketers can stimulate problem recognition by direct mail,
participants with
telemarketing, effective Internet communications, and calling on prospects.
differing interests,
Stage 2: General Need Description
authority, status,
The buyer has to determine the needed items general characteristics and the required
quantity. In this stage, business marketers can assist buyers by describing how their products
empathy, and
would meet such needs.
persuasiveness.
Stage 3: Product Specification

Company assigns a product value analysis (PVA) to engineering team. By getting in early and
Individual Factors
Each buyer carries
influencing buyer specifications, a supplier can significantly increase its chances of being
chosen.
Stage 4: Supplier Search
personal motivations,
The supplier should get listed in online catalogs or services develop communications to reach
perceptions, and
buyers, and build a good reputation in the marketplace. After evaluating each company, the
preferences, as
buyer will end up with a short list of qualified suppliers
influenced by the
Stage 5: Proposal Solicitation
buyers age, income,
The buyer invites qualified suppliers to submit proposals. When the item is complex or
expensive, the buyer will require a detailed written proposal from each qualified supplier.
education, job position, After evaluating the proposals, the buyer will invite a few suppliers to make formal
personality, attitudes presentations.
toward risk, and
culture.
Stage 6: Supplier Selection

The buying center specifies desired supplier attributes (such as product reliability and service
reliability) and indicate their relative. A blanket contract may be established. The buyers
computer automatically sends an order to the seller when stock is needed, and the supplier
Cultural Factors
arranges delivery and billing according to the blanket contract.
Marketers carefully
Stage 7: Order-Routine Specification
study the culture and
The buyer negotiates the final order, listing the technical specifications, the quantity needed,
customs of each region

to better understand
the delivery schedule, and so on. In the case of MRO items, buyers are moving toward
blanket contracts rather than periodic purchase orders.
Stage 8: Performance Review
the cultural factors that The buyer periodically reviews the performance of the chosen supplier(s). Three methods
can affect buyers and
the buying
organization.
are used. The buyer may contact the end users and ask for their evaluations. Or the buyer
may rate the supplier on several criteria using a weighted score method. Or the buyer might
aggregate the cost of poor supplier performance to come up with adjusted costs of
purchase, including price.
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SUMMARY by
Chapter
Identifying Market Segments

and Targets
This chapter deals with one of the quintessential concepts of Marketing: STP i.e.
Segmentation, Target and Positioning. It explains different levels of Market Segmentation,
bases for Segmenting Consumer Markets, choosing target Markets & finally analyses the
various requirement for effective segmentation.
Mass
Marketing:
The seller engages
in mass
Steps in market segmenta

segmentation,
tion, targeting and
positioning
1. Market
Segmentation
Identify
Identify bases for segmenting the market
Develop
Develop segment profiles
2. Target Marketing
Develop
Develop measure of segment attractiveness
Select
Select target segments
3. Market Positioning
Develop
Develop positioning for target segments
Develop
Develop a marketing mix for each segment
production, mass
distribution and
mass promotion
of one product for
all buyers
Levels of Market Segmentation: Micromarketing

A. Segment marketing
marketing: Dividing a market into distinct groups with distinct needs,
characteristics, or wants who might require separate products or marketing mixes.
Segment Marketing offers key benefits over Mass Marketing as the company can
offer better design, price, disclose and also can fine-tune
fine
the marketing program to
better reflect competitors marketing.
B. Niche Marketing
Marketing: A niche is a more narrowly defined customer group seeking a
distinctive mix of benefits. Marketers usually define niches by dividing segments into
sub segments.
egments. For e.g. Ezee, the liquid detergent from Godrej is a fabric washing
product for woolen clothes.
Chapter 8 - Identifying Market Segments and Targets

C. Local Marketing: Target marketing that involves marketing programs tailored to the
needs and wants of local customer groups in trading areas, neighborhoods and even
individual stores is called as Local Marketing. E.g. Many Banks in Kerala have special
NRI Branches to cat
cater
er to the needs of customers whose relatives remit money from
abroad.
D. Individual Marketing: This is the ultimate level of marketing that leads to segments of
one, customized marketing or one
one-to-one
one marketing. Customerization empowers
customers to de
design
sign the product and service offering to their choice. For e.g. Asian
Paints retailers facilitate customers to mix and match colors of their choice from a
catalogue.
Bases for Segmenting Consumer Markets

A. Geographic Segmentation: Division of the Market into different geographical Units
such as nations, cities, states, regions, neighborhoods etc
Region: South India, Western Region, North, East
City: Class
Class-I cities, class-II cities, Metro cities etc
Rural, urban , semi urban areas
B. Demographic Segmentation: The market is divided on the basis of variables such as

age, family size, family life cycle, gender, income, occupation, education, religion etc.
Demographic variables are easy to measure and are directly associated with customer
needs and wants
FAMILY LIFE CYCLE STAGES

Stage1: Bachelorhood
Stage2: Honeymooners
Stage3: Parenthood
Stage4:Post
Stage4:Post-ParentHood
Stage5: Solitary Survivor(SS)
Single,Focus
Single,Focus of expenditure on self
Young
Young married couple without kids,focus on building
home and relation
Full Nest-I,1
I,1 child less than 6 yrs old
Full Nest-II,youngest
II,youngest child under 6
Full Nest-III:
III: all adult children
Children
Children not living with parents
Empty Nest1 :Working
Empty
Empty Nest2: Not Working
One spouse dies
SS-I: Working
SS-II: Not Working
C. Psychographic Segmentation: Here buyers are divided into different groups on the
basis of psychological/personality traits, lifestyles or values.
Lifestyle: Culture-oriented,
oriented, sports oriented, outdoor oriented. Classification is
done on three parameters: AIO-Activities,
Activities, Interests and Opinions.
Personality: Compulsive, gregarious ,authoritarian ,ambitious
D. Behavioral segmentation: Buyers are divided on the basis of their knowledge of,
attitude toward, use of, or response to a product. The behavioral variables are as
follows:
Chapter 8 - Identifying Market Segments and Targets
Usage Rate: Light, Medium, Heavy
Loyalty Status: None, medium, strong, absolute
Readiness Stage: Unaware, aware, informed,

med, interested, desirous, intending to
buy
Attitude towards Product: Enthusiastic, positive, indifferent, negative, hostile
Requirements for Effective Segmentation
Evaluating and Selecting Market Segments

Five patterns of target market selection that can be followed are:
Single Segment Concentration

Concentration:: Concentrated Marketing where the firm gains a
strong knowledge of segments needs and acquires a strong market presence
Selective Specialization
Specialization:: a firm selects a number of segments. Each objectively
attractive and appropriate, there may be little or no synergy between the segments
segme
Product Specialization: The firm makes a certain product that it sells to several
different market segments.
Market Specialization: The firm concentrates on serving many needs of a particular

customer.
Full Market Coverage: The firm attempts to serve all

a customer groups with all
products they may need. E.g. Coca Cola (non
(non-alcoholic
alcoholic beverage segment), Microsoft
(Software Market) etc.
P = Product
M = Market
logo copy.tif
SUMMARY by
Chapter
Dealing with Competition

Building strong brands requires a keen understanding of competition. To effectively devise and
implement the best possible brand positioning strategies, companies must pay attention to
their competitors. Markets have become too competitive to just focus on the consumer alone.
Vertical Integration is to integrate backward or forward i.e. with suppliers and
Technological
costumers which often lowers costs and can manipulate prices and costs in different parts of
the value chain.
is the art of learning from companies that perform certain tasks

leapfrogging Benchmarking
better than other companies.
is a bypass strategy
practiced in high-tech
industries. The
challenger patiently
researches and
develops the next
technology and
launches an attack,
shifting the
Competitive Forces (Michael Porters 5 forces)

1. Threat of intense segment rivalry - segment is unattractive if it contains numerous, strong,
or aggressive competitors.
2. Threat of new entrants - segment's attractiveness varies with the height of its entry and exit
barriers. The most attractive segment has high entry barriers and low exit barriers.
3. Threat of substitute products - A segment is unattractive when there are actual or potential
substitutes for the product.
4. Threat of buyers' growing bargaining power - A segment is unattractive if buyers possess
strong or growing bargaining power.
5. Threat of suppliers' growing bargaining power - A segment is unattractive if the company's
suppliers are able to raise prices or reduce quantity supplied.
battleground to its
Identifying Competitors
territory, where it has Industry Concept

Number Of Sellers And Degree Of Differentiation
an advantage.
Entry, Mobility, And Exit Barriers

Cost Structure
Degree Of Vertical Integration
Degree Of Globalization
Marketing Concept
According to marketing approach, competitors are companies that satisfy the same customer
need. The market concept of competition reveals a broader set of actual and potential
competitors. By mapping the buyer's steps in obtaining and using the product a company's
direct and indirect competitors can be identified.
Chapter 9 - Dealing with Competition

Analyzing Competitors
Trends
Selecting
Competitors:
Strong versus Weak:
Weak require fewer
resources per share
Strategies: What strategies a company uses to enter/survive in the market?

Objectives: What are the objectives of the competitors and what drives its behavior?
Factors shaping a competitors objectives include size, history, current management,
and financial situation.
Strengths and Weaknesses: A company needs to gather information on each
competitor's strengths and weaknesses.
Three Important Variables for analyzing competitors

Share of market - The competitor's share of the target market.
Share of mind - The percentage of customers who named the competitor in
responding to the statement, "Name the first company that comes to mind in this
industry."
Share of heart - The percentage of customers who named the competitor in
responding to the statement, "Name the company from which you would prefer to buy
the product."
point gained. The firm

should also compete
Companies that make steady gains in mind share and heart share will inevitably make gains in
market share and profitability.
with strong
competitors to keep
up with the best.
Close versus Distant:

Most companies
compete with
competitors who
resemble them the
most
"Good" versus "Bad":

should support its
good competitors
(Play by the rules)
and attack its bad
competitors.
Competitive Strategies for Market Leaders

Expanding the Total Market
New customers: Potential new users maybe divided into three groups:
Those who might use it but do not (market-penetration strategy)
Those who have never used it (new-market segment strategy)
Those who live elsewhere (geographical-expansion strategy)
More usage: Two ways of increasing usage
Increasing the level or quantity of consumption: through packaging or product
design or by increasing the availability of product
Increasing the frequency of consumption: identifying completely new and different
ways to use the brand and communicate the advantages of using the brand more
frequently
Defending Market Share

The most constructive response is continuous innovation. The leader leads the industry in
developing new product and customer services, distribution effectiveness, and cost cutting. It
keeps increasing its competitive strength and value to customers.
Position Defense: It involves occupying the most desirable market space in the minds
of the consumers
Flank Defense: the market leader should also erect outposts to protect a weak front or
possibly serve as an invasion base for counterattack.
Preemptive Defense: A more aggressive maneuver is to attack before the enemy starts
its offense. A company can launch a preemptive defense in several ways
Counteroffensive Defense: the leader can meet the attacker frontally or hit its flank or
launch a pincer movement. An effective counterattack is to invade the attacker's main
territory so that it will have to pull back to defend the territory.
Mobile Defense: In mobile defense, the leader stretches its domain over new
territories that can serve as future centers for defense and offense through market
broadening and market diversification.
Contraction Defense: giving up weaker territories and reassigning resources to
stronger territories.
Chapter 9 - Dealing with Competition
Competitive
Strategies for
Market
Expanding Market Share

A company should consider four factors before pursuing increased market share:
The possibility of provoking antitrust action
Economic cost
Pursuing the wrong marketing-mix strategy
The effect of increased market share on actual and perceived quality
Follower:
A market follower must
know how to hold
current customers and
win a fair share of new
customers. It must keep
its manufacturing costs
low and its product
quality and services
high. Four broad
strategies can be
distinguished:
Counterfeiter duplicates the
leader's product and
package and sells it
Cloner - emulates the
leader's products,
name, and
Competitive Strategies for Market Challengers

Defining the Strategic Objective and Opponent(S)
A market challenger must decide whom to attack:
It can attack the market leader. This is a high-risk but potentially high-payoff strategy
It can attack firms of its own size that are not doing the job and are underfinanced
It can attack small local and regional firms
Choosing a General Attack Strategy
Frontal Attack: The attacker matches its opponent's product, advertising, price, and
distribution
Flank Attack: Identifying shifts in market segments geographic areas that are causing
gaps to develop, and then rushing in to fill the gaps and develop them into strong
segments.
Encirclement Attack: The encirclement involves launching a grand offensive on
several fronts. Make sense when the challenger commands superior resources
Bypass Attack: It means bypassing the enemy and attacking easier markets to
broaden one's resource base. Three lines of approach: diversifying into unrelated
products, diversifying into new geographical markets, and leapfrogging into new
technologies to supplant existing products.
Guerrilla Warfare: Small, intermittent attacks to harass and demoralize the
opponent and eventually secure permanent footholds (selective price cuts, intense
promotional blitzes, and occasional legal action)
Few more specific strategies: Price discount, Lower price goods, Value-priced goods and
services, Prestige goods, Product proliferation, Product innovation, improved services,
Distribution innovation, Manufacturing-cost reduction, Intensive advertising promotion
packaging, with slight

variations.
Imitator - copies
Competitive Strategies for Market-Nicher
The nicher achieves high margin, whereas the mass marketer achieves high volume. Nichers
some things from the have three tasks: creating niches, expanding niches, and protecting niches. Because niches
can weaken, the firm must continually create new ones therefore multiple niching is
leader but maintains preferable to single niching. The key idea in successful nichemanship is specialization. Here
are some possible niche roles:
differentiation in
End-user specialist: The firm specializes in serving one type of end-use customer.
terms of packaging,
Customer-size specialist: The firm concentrates on selling to small, medium-sized, or
large customers.
advertising, pricing,
Geographic specialist: The firm sells only in a certain locality, region, or area of the
or location.
world.
Product-feature
specialist: The firm specializes in producing a certain type of
Adapter - takes the
product or product feature
leader's products and Quality-price specialist: The firm operates at the low- or high-quality ends of the
market
adapts or improves
Channel specialist: The firm specializes in serving only one channel of distribution
them.
logo copy.tif
SUMMARY by
Chapter
10
Creating Brand Equity
It is important for the marketer to create a strong brand and maintain customer loyalty. This
chapter talks about the concepts of brand and how branding works. We will understand
what brand equity is, how it is built and measured as well as the decisions involved in
branding strategy.
Brand:
A name, term, sign,
Brand Equity
Added value endowed on products and services. Reflected in way consumers think, feel and
symbol or design, or a act with respect to a brand. Customer based brand equity differential effect brand
combination of them, knowledge has on customer response to the marketing of a brand. Maybe positive or
intended to identify
negative depending on how consumers respond. It has three key ingredients
the goods or services
Brand equity arises from differences in customer response
Differences in response are a result of consumers knowledge of the brand. Brand
of one seller or group
Knowledge consists of all thoughts, feelings, images, experiences, beliefs and so on that
of sellers and to
differentiate them
from those of
competitors.
become associated with the brand
The differential response is reflected in perceptions, preferences and behaviour related

to all aspects of the marketing of the brand
Marketer must build a strong brand that ensures that the consumers have the right
experiences.
Brand Promise
Marketers vision of what the brand must be and do for the consumers. The true and future
value depends on customers, their brand knowledge and their likely response to marketing
activity.
Chapter 10 - Creating Brand Equity

Trends
Brand
Equity Models
Brand Asset Valuator
It provides comparative measures of the brand equity of thousands of brands across
hundreds of different categories.
Leaders
Brand
Element:
Those trademark able
devices that identify
and differentiate the
brand. Most strong
brands employ
multiple brand
Energized Brand Strength

(Differentiation, Relevance, Energy)
Up and
coming/Niche
Google
JetBlue
USA
Declining
Ikea
Pringles
Leaders
Nike
TiVo
Kodak
AAA
Redbull
Tide
New/Undeveloped
Eroded/Commoditized
Blackberry
Centrum
Sephora
Entertainment Weekly
SAP
Wells Fargo
Brtish Airways
Budget Rent-A-Car
elements. Brand
element choice
criteria includes 6
main parameters
first three being
memorable,
meaningful and
likable (brand
Brand Structure
(Esteem & Knowledge)
(E
There are the five key components of the model
1. Differentiation degree to which a brand is seen as different from others
2. Energy brands sense of momentum
3. Relevance breadth of brands appeal
4. Esteem how well the brand is regarded and respected
5. Knowledge how familiar and intimate customers are with the brand
building) and last
Brand Resonance Model
three being
Creation of significant brand equity requires reaching the top or pinnacle of the brand
pyramid, which occurs only if the right building blocks are put into place.
transferable,
adaptable and
protective
(defensive).
Resonance
Judgement Feelings
Performance
Salience
Imagery
Chapter 10 - Creating Brand Equity

Trends
Brand Salience how often and how easily customers think of the brand under
various purchase or consumption situations.
Brand Performance how well the product or service meets customers functional
needs
Brand Imagery - describes the extrinsic properties of the product or service; also the
way in which brand attempts to meet customers psychological or social needs
Brand
Brand Judgements focus on customers own personal opinions and evaluations
Brand Feelings customers emotional responses and reactions with respect to the
brand
Reinforcement
Brand Resonance nature of the relationship customers have with the brand and the
extent to which they feel theyre in sync with it
Brand needs to be
managed so its value
does not depreciate.
Brand Audit consumer focussed series of procedures to assess the health of the
brand, uncover its sources of brand equity and suggest ways to improve and leverage its
equity.
Brand equity
reinforced by
Brand Valuation Job of estimating the total financial value of the brand.
marketing actions that
Devising a Brand Strategy
consistently convey the

meaning of the brand
When a firm introduces a new product it has 3 choices
in terms of what it
Develop new brand elements for the new product
represents and how it
Apply some of the existing brand elements (Product is called brand extension)
makes the products
Use a combination of new and existing brand elements (Maybe called a sub brand)
superior. Reinforcing
Brand Portfolios
requires innovation
and relevance
throughout the
marketing program.
Marketers need multiple brands to cater to multiple markets. The reasons for diversifying
the brand portfolio 1. Increasing shelf presence and retailer dependence in the store
2. Attracting customers seeking variety who may otherwise have switched to another
brand
3. Increasing internal competition within the firm
4. Yielding economies of scale in advertising, sales, merchandising and physical
distribution
Customer Equity
Sum of lifetime values of all customers. The aim of Customer Relationship Management
(CRM) is to produce high customer equity.
logo copy.tif
SUMMARY by
11
Chapter
Crafting the Brand Positioning

This chapter illustrates how a firm can choose an effective positioning in the market and
differentiate its brand. It describes the various strategies a firm can employ at each stage of a
products life cycle and finally shows the implications of Market evolution for marketing
Positioning:
Positioning is the act
of designing the
companys offering
and image to occupy
strategies.
Developing and Communicating a Positioning

Strategy
Category Membership:
products or set of products with which the brand
competes and which function as close substitutes.
a distinctive place in
the minds of the
Points of Difference (POD):
target market.
associate with a brand, positively evaluate and believe they could not find to the same extent
Positioning requires
in another brand.
determining on a
Points of Parity (POP): They are associations that are not unique to the brand
frame of reference
but in fact maybe shared with other brands. It has two forms:
based on the
Category Points of Parity: Associations customers view as essential to a legitimate and

credible offering within a certain product or service category.
following factors:
1. Identifying the
Attributes or benefits consumers strongly
Competitive Points of Parity: Associations designed to negate a competitors pointsof-difference.
target market.
2. Analyzing the
competition.
Choosing POPs and PODs

POPs: They are driven by the needs of category membership (to create category POPs) and the
necessity of negating competitors PODs (to create competitive PODs)
PODs: The following two criteria are considered while choosing POPs
Desirability Criteria
Deliverability Criteria
Relevance
Distinctiveness
Believability
Feasibility
Communicability
Sustainability
Chapter 11 - Crafting the Brand Positioning

Establishing category membership
The typical approach to positioning is to inform consumers about a brands category
membership before stating its points of difference. Initial advertising often concentrates on
create brand awareness and subsequent advertising attempts to craft the Brand Image.
Differentiating Strategies
Competitive Advantages
It is a companys ability to perform in 1 or more ways that competitors cant match. Two
Straddle
Positing:
sustainable competitive advantages are:
advantages
used when a
company tries to
straddle between two
Dimensions to differentiate Market Offerings
well crafted
marketing program
straddled Luxury
and Performance as
Personnel differentiation: Better trained employees E.g. smartly dresses flight

attendants of Kingfisher Airlines.
frames of reference.
E.g. BMW through a
Customer Advantage: is an advantage that a customer sees in the companys

offering
It is a common
positioning technique
Leverageable Advantage: is one that a company can use as a springboard to new
Channel Differentiation: more effectively and efficiently designed channels,

coverage, expertise and performance.
Image differentiation: Companies can craft powerful compelling images. E.g.

Marlboros macho cowboy image.
Product Lifestyle Marketing Strategies

Most product life-cycle curves are portrayed as bell shaped curves.
both POD and POP.
A companys positioning and differentiation strategy must change as the product, market and
competitors change over the product life cycle (PLC).
Chapter 11 - Crafting the Brand Positioning

Trends
Summary of Product
Lifecycle Characteristics,
Objectives and Strategies
Introduction
Growth
Maturity
Decline
Sales
Low Sales
Rapidly rising
sales
Peak Sales
Declining Sales
Costs
High Cost per

customer
Average Cost per Low cost per

customer
customer
Low cost per

customer
Profits
Negative
Rising Profits
High Profits
Declining Profits
Innovators
Early Adopters
Middle majority
Laggards
Create product
awareness and
trial
Maximize market Maximize profit

while defending
share
market share
Offer a basic
product
Offer product
Diversify brands
Phase out weak
extensions,
and items models products
service, warranty
Characteristics
Maturity:
When the
competitors cover all Customers

major segments of
Marketing
the market maturity
Objectives
stage occurs.
Competitors invade
each others profits
Strategies
and as market growth Product

slows down, market
splits into finer
Price
Charge cost-plus Price to penetrate Price to match or Cut price

market
best competitors
Distribution
Build selective
distribution
Build Intensive
distribution
Build more
intensive
distribution
Go selective: phase
out unprofitable
outlets
Advertising
Build product
awareness
among early
adopters
Build awareness
and interest in
mass market
Stress brand
differences and
benefits
Reduce to level
needed to retain
hard-core loyals
segments and market

segmentation occurs.
This is often followed
by market
consolidation caused
by the emergence of
a new attribute that
has greater appeal.
Mature markets
Sales Promotion Use heavy sales Reduce to take

Increase to
promotion to
advantage of
encourage brand
heavy consumer switching
entice trial
demand
swing between
fragmentation and
consolidation.
Reduce
expenditure and
milk the brand
Reduce to
minimum level
Market Evolution
Emergence: Before a market materializes it exists as a latent market. Here the

entrepreneur has three options:
1. Single Niche Strategy: Design a product to meet preferences of 1 segment of the
market
2. Multiple-Niche Strategy: Launch 2 or more products simultaneously to capture 2 or
more parts of the market
3. Mass Market Strategy: Design a product for the middle of the Market
Maturity
Decline: Eventually demand for the current products will begin to decrease because
either:
1.
Societys total need level declines
2.
New Technology replaces the old
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SUMMARY by
Chapter
12
Setting Product Strategy

Product is the first and the most important element of a marketing mix. This chapter deals
with various product strategies for making coordinated decisions on product mixes, product
lines, brands, packaging, labeling and warranties and guarantees.
Product Levels
Marketers need to address 5 product levels:
Product:
Anything that can
be offered to a
Core Benefit: The benefit a customer really buys. E.g. Hotel guest buys rest and sleep
Basic Product: e.g. hotel room includes bed, bathroom, desk, dresser, closet, towel etc
Expected product: attributes that buyers normally expect along with their product.
Augmented product: attributes that exceed buyer expectations. In developed countries,

brand positioning and competition take place at this level, while in developing countries
market to satisfy a
need or want,
it takes place at expected product level.
Potential product: it encompasses all the augmentations and transformations the

product or offering might undergo in the future.
including physical
goods, services,
Product classification
experiences,
events, persons,
Durability and tangibility

1. Nondurable goods: tangible goods that are normally consumed in a day or two. E.g.:
places, properties.
soaps, soft drinks. They are purchased frequently, thus should be made available in
many locations, charged a small markup, and advertised heavily to induce trial.
2. Durable goods: tangible goods that survive many uses. E.g. Clothes, machines.
Require more personal selling, higher margins, more seller guarantees.
3. Services: intangible, variable, perishable products. E.g. Haircuts, repairs. Require
more quality control, supplier credibility, adaptability.
Consumer goods classification: done on the basis of shopping habits. 4 types1. Convenience goods: purchased frequently, immediately, with minimum effort
Staples: purchased on regular basis
Impulse goods: purchased w/o planning e.g. Chocolates
Emergency goods: purchased when need is urgent e.g. Umbrellas
Chapter 12 - Setting Product Strategy

2. Shopping goods: goods that consumer compares based on suitability, price etc
Homogeneous: similar in quality but different in price.
Heterogeneous: similar in price but different in product features.
3. Specialty goods: they have unique characteristics for which consumers can spend mo
E.g. Cars, mens suits etc. they dont require comparison.
4. Unsought goods: those that consumers do not know about or think of buying. E
Insurance, reference books. Require advertising and personal selling.
Industrial goods classification: done on the basis of relative cost and how they enter t
production process1. Materials and parts: those that enter the manufacturers product completely.
Straddle
Raw materials: 2 kinds- Farm products, which are seasonal and require spec
marketing apart from advertising, and Natural products, which are limited in supp
Positing:
Manufactured materials and parts: 2 kinds- component materials (e.g. Iro
cement. These are usually fabricated further), and component parts (e.g. Moto
It is a common
positioning technique
used when a
company tries to
straddle between two
tires. These enter the final product w/o change.)
2. Capital items: long lasting goods that facilitate developing or managing the finish
products. They include
that personal selling

well crafted
marketing program
straddled Luxury
and Performance as
both POD and POP.
Equipment: includes portable factory tools and equipments. Sales force mo

important than advertising.
frames of reference.
E.g. BMW through a
Installation: includes buildings and heavy equipments. Advertising less importa
3. Supplies: short term goods that facilitate developing or managing finished produc
They include
Maintenance and repair items. E.g. Paint, broom.
Operating supplies. E.g. Lubricants, writing paper, pencils.
4. Business services: short term services that facilitate developing or managing finish
products. They include
Maintenance and repair services. E.g. Air conditioner maintenance.
Business advisory services. E.g. Management consulting, advertising.
Differentiation
Product Differentiation
Form: this includes size, shape, physical structure.
Features: they supplement the basic function of the product. Company must compare
customer value v/s company cost for each potential feature.
Customization: requires gathering and using information about consumers. Mass
customization is the ability of a company to meet each customers requirements.
Performance quality: it is the level at which a products primary characteristics
operate. 4 performance levels- low, average, high, and superior. The level must be
appropriate to the target segment and not necessarily the best.
Conformance quality: the degree to which all produced units is identical and meets the
promised specifications.
Durability: buyers generally pay more for more durable products. However, the extra
price must not be excessive and the product must not be subject to rapid technological
obsolescence
Reliability: probability that a product will not fail within a specified time period.
Reparability: the ease of fixing a product when it malfunctions or fails
Style: the products look and feel. Creates distinctiveness that is difficult to copy.

Services Differentiation
Ordering ease: ease of placing an order
Delivery: includes speed, accuracy, and care throughout the process.
Installation: work done to make a product operational in its planned location. Becomes
a selling point when the target market is technologically novice.
Customer training: training customers employees to use vendors equipment
efficiently and properly.
Customer consulting: data, information and advice services that seller offers to buyers.
Maintenance and repairs: helps customers keep products in working order.
Returns: they are of two types1. Controllable: result from problems, difficulties, or errors of seller or customer and
can be eliminated with proper strategies.
2. Uncontrollable: cant be eliminated by the company in the short run.
Product line
length:
Product Hierarchy
1. Need family: the core need that underlies the existence of a product family. E.g.
Companies seeking
Security.
higher market share
2. Product family: product classes that satisfy a core need. E.g. Savings and income
have longer product
3. Product class: a group of products within a family that have functional coherence
lines, those seeking
4. Product line: a group of products within a class that perform similar function, are sold
to same customers, are marketed through same channels. E.g. Life insurance.
higher profitability
5. Product type: a group of items within a line that share of possible forms of the
have shorter product
product. E.g. Term life insurance.
lines. They lengthen
6. Item: a distinct unit within a brand or product line distinguishable by size, price,
appearance, etc. ICICI prudential term life insurance.
over time. Excess

manufacturing forces
production of newer
Product system:
items. However,
compatible manner.
a group of diverse but related items that function in a
Product Mix
other costs increase

and thus some non
It is the set of all products and items a particular seller offers for sale.
performing items are
Width: how many product lines the company carries.
eliminated.
Length: the total no. of items in the mix.
Depth: how many variants are offered of each product in the line?
Consistency: how closely related the various product lines are in end use.
Product line
Product line analysis: based on
Sales and Profit: a company can classify its products based on the margins.
o Core products: basic products that have a high sales volume but with low margins
as they are essentially undifferentiated commodities. E.g. Basic computers.
o Staples: lower sales volume, higher margins, no promotions. E.g. Faster CPU
o Specialties: lower sales volume, highly promoted. E.g. Installation, delivery.
o Convenience items: peripherals selling in high volumes, less promotion, high
margins. E.g. Software, carry cases.
Market Profile: product line managers must review how the line is positioned against
competitors lines.

Line stretching: occurs when companies try to go beyond their current range
offered. Companies stretch in the following ways
Down Market Stretch: introducing lower-priced line than the one being offered. It can be
risky as the price may not be less enough for competitors or some customers may shift the
cheaper version.
Up-Marker Stretch: entering high end of market for better growth, higher margins.
Two way Stretch: middle level companies entering both high end and low end markets.
Helps in establishing market dominance. E.g. Titan started as mid level watch, and then
introduced Sonata for low end and Edge, Xylus for high end.
Note: a high end model of a low end brand is preferred over a low end model of a high end
brand.
Line filling: lengthening product line by introducing more items in the present range.
Line modernization, Featuring and Pruning:
product
lines need to change with the times. Can be done piecemeal or all at once. Piecemeal allows
company to gauge the effect of change on consumers, but allows competitors to copy and
pose greater challenge. Improvements must not occur too early (as they will affect sales of
current product) and too late (as competitors would get more time).
The company may choose between featuring their most selling items and promoting their
weak items from time to time.
Companies also need to optimize their brand portfolio. For this, they need to identify the weak
items, and weed them away. E.g. Unilever found only 400 of its 1600 items generated 90% of
companys profits.
Product-Mix Pricing: searching for a set of prices that maximizes profits on

the total mix.
Product Line Pricing: companies develop product lines and introduce price steps. Their
task is to establish perceived quality differences that justify price differences.
Optional Feature Pricing: e.g. Automobile cos. Advertise entry level models at low prices
to attract more customers. These modes are stripped of several features that buyers
usually end up buying.
Captive Product Pricing: e.g. Manufacturers of razors price them low and set high markups
on razor blades. If price is too high, counterfeiting and substitutions can erode sales.
Two-Part Pricing: fixed fee+ variable usage fee. Fixed fee should be low to encourage more
sales; profit can be maximized from variable fees.
By-Product Pricing: e.g. Production of petroleum products produces several by products. If

producer can sell these to the customer, he can price the main product lower.
Product Bundling Pricing

1. Pure bundling: products offered only as bundles. E.g. tour operators bundle stay and travel.
2. Mixed bundling: products offered individually as well as in bundles. E.g. Auto
manufacturers. Customers may not plan to buy all components, but may be lured by the
saving.

Co-Branding:
2 or more brands are combined into a joined product or are
marketed together in some fashion. It includes same company co-branding (Gillette launched
Mach 3 Turbo with its shaving gel), joint venture co-branding (Indian oil and Citibank cobranded credit cards), multiple sponsor co-branding ( Taligent, a one time alliance of Apple,
IBM and Motorola) and retail co-branding (2 retail establishments using the same location to
optimize space and profits).
It allows products to be convincingly positioned and generating greater sales as 2 well known
images are combined.
However, consumer expectations with the level of involvement are high, so an unsatisfactory
performance will be damaging for the partner company as well.
Ingredient
Branding:
special case of cobranding. It created
brand equity for
For co-branding to succeed, both brands must have brand equity, and must fit in terms of
values, goals and capabilities.
Packaging: activities of designing and producing containers for a product. Packages

may include 3 levels of materials. Package is the buyers first encounter with the product.
Factors leading to growing use of packaging:
Self service
Consumer affluence
components, parts
Company and brand image: package leads to instant recognition of brand
that are contained
Innovation opportunity: packaging can be used to target different segments.
materials,
within other branded Packaging needs to achieve the following objectives:
Identify the brand
Convey descriptive and persuasive information
Facilitate product transportation and protection
preference for their
Assist at-home storage
products so that
Aid product consumption
products. Ingredient
brands create
customers do not but After designing, the packaging needs to be tested:

a host product which
does not have that
ingredient.
Engineering tests: ensure that package stands up under normal circumstances
Visual tests: ensure that script is legible and colors harmonious
Dealer tests: dealers should find package attractive and easy to handle
Consumer test: buyers must respond favorably
Labeling: labels identify the product, grade the product, describe the product and
promote the product (through attractive graphics).
Warranties and Guarantees:
warranties are formal statements of
expected product performance by the manufacturer. Products under warranties can be

returned to the manufacturer for replacement, repair.
Guarantees reduce the buyers perceived risk. They are especially helpful when the company is
not well known or when product quality is superior to that of competitors.
logo copy.tif
SUMMARY by
133
Chapter
Designing and Managing

Services
Today as product companies find it harder and harder to distinguish their physical products,
Service
marketing is
different from goods
marketing as service
they turn to service differentiation. Service providers find significant profitability in delivering
superior services.
How do we define and classify services and how do

they differ from goods
intangible and does not result in the ownership of anything .Its production may or may
consumer relies on
word of mouth, they
not be tied to physical product Categories of services mix.
cues to judge
Services can be equipment based or people based & they differ in their objectives and
ownership.
rely heavily on price,

personnel & physical
A service is any act or performance one party can offer to another that is essentially
Service companies can choose among different processes to deliver their service.
Services needs client presence & may meet a personal or business need.
quality. They are
Categories of services mix
highly loyal to
service providers
Pure Tangible Goods
No services accompany the product. E.g

Soap,toothpaste
who satisfy them &

because switching
Tangible Goods with

accompanying services
The
The offering accompanied by one or more services E.g
Computers, Cell Phones & cars
costs are high,

consumer inertia
Hybrid
The
The offering contains equal parts goods and services. E.g
restaurants
can make it
challenging to entice
a customer away
from a competitor.
Major service with

accompanying minor
goods and services
Pure Service
The
The offering consists of major service along with
additional services or supporting goods. E.g Airplane
travel alog with its services
The
The Offering consists of only a service.E.g psycotherapy
Chapter 13 - Designing and Managing Services

Holistic Marketing for Services
External Marketing
It
It describes the normal
work of
preparing,pricing,distribut
ion,and promoting the
service to customers.
Internal Marketing
It describes the training
and motivating
employees to serve the
customers well.Engage
every employee in the
organization to practise
marketing
Interactive Marketing
It describes the employee
skills in serving the client
Distinctive Characteristics of Services

Intangibility
Services are intangible Service marketers must be able to transform

intangible services into concrete benefits.
Inseparability
Services are typically produced and consumed simultaneously .Thus

service providers must learn to work in larger groups to provide
services to customers
Variability
Services
Services are variable and buyers are aware of this variability and often
talk to others about quality before selecting a services.
Invest In Good Hiring
Standardize the service-performance
performance process
MonitorCustomer Satisfaction process
Perishability
Services
Services cannot be stored hence there is always a mismatch between
demand & supply.Stratgies that marketers must use :
Demand Side - Differential Pricing,Nonpeak Demand,Complementary
Services,Reservation Systems
Supply Side - Part-Time
Time employees ,Peak Time efficiency,Increased
consumer participation,shared services,Facilities for future expansion
Developing Brand Strategies for services

Chosing Brand Elements
Focus on logos,symbols,slogans to build brand awareness
Establishing Image Dimensions

desgin marketing communication, information programs and building brand personality
Devising Branding Stratgey

Create a brand hierarchy and brand portfolio that permits positioning, targeting of
different market segments
Provide Post-Sales
Sales support
Identify what is most valuable to customer and include repair & maintainence services
Chapter 13 - Designing and Managing Services

Trends
Best Practices of Service Quality Management
STRATEGIC
COMPONE
NT
Top
companies
are
customer
obsessed
They have
clear sense
of target
customer
and their
need
TOP
MANAGEM
ENT
COMMITME
NT
Thorough
commitme
nt to
service e.g
Marriot,Xer
ox
Both
financial &
service
performanc
e
monitored
by top
manageme
nt
HIGH
STANDARDS
Setting
high
service
standards
developing
reliable,resi
lient &
innovative
customer
Intefrace
systems
SELFSERVICE
TEHNOLOGI
ES
replacing
person to
person
interaction
s with self
service
technologie
s e.g ATMs
Helping
customers
to use
these
facilities
MONITORIN
G SYSTEMS
Auditing
service
performanc
e of own &
competitor
s
SATISFYING
EMPLOYEES
&
CUSTOMERS
Instilling a
possitive
attitude
about
customer
satisfaction
in
employees
logo copy.tif
SUMMARY by
14
Chapter
Developing Pricing Strategies

and Programs
Traditionally, price has been the major determinant of a buyers choice. And this is still the
case with large segments of markets across the world. Although non-price factors have
recently risen in importance, pricing remains an important factor in determining sales and
Pricing
Environment:
Many firms are
profitability. Also, price is the only component in the marketing mix that provides revenue and
not costs.
Buyers can :
Get instant price comparisons from thousands of vendors: Websites like
nowadays following
pricescan.com offer data about products like prices and reviews from hundreds of
the low-price trend
merchants.
and have seen success
seller willing to meet this price on sites like priceline.com. Also, volume-aggregating
in converting the
acquired customers to
Name their prices: The consumer can state his desired price for a product and find the
sites collate orders from many customers and press the supplier for a deeper discount.
Get products free: The open source software movement has eroded margins for
more expensive
almost any major software player. Also, the recent emergence of low-cost airlines
products by
providing tickets only for the amount of taxes levied on a ticket is an example how
combining unique
firms have been successful with free offerings.
product formulations
and engaging
marketing campaigns.
Sellers can :
Monitor customer behaviour and customize offers: Firms use software to analyse
pricing requests with pricing factors such as past sales data, discounts, etc. to reduce
processing time of these requests greatly.
Offer certain customers special prices: Certain customers are offered lower prices by
firms in order to capture a certain market segment on ensure the loyalty of existing
customers further.
Setting the price

Firms set a price when they introduce a new product, or venture into a new market with an
existing product. This is usually achieved by following a six-step process as follows
Chapter 14 - Developing Pricing Strategies and Programs
Consumer
psychology and
pricing:
Reference prices:
Consumers often employ
reference prices,
comparing an observed
price to an internal
reference price or a posted
regular retail price.
Sellers manipulate this by
product positioning,
suggesting that the actual
price of the product is
much higher or by
pointing to a competitors
high price.
Step 1: Selecting the Pricing Objective The firm first decides where it wants to position
its market offering. The five major pricing objectives are
Survival: Companies pursue survival if they are plagued with over-capacity, intense
competition, or changing consumer wants.
Maximum current profit: Many firms try to set a price that maximises their current
profits and delivers a high return on investment.
Maximum market share: Here, firms believe that a higher sales volume will lead to
lower unit costs and higher long-run profits and thereby maximise their market
share.
Maximum market skimming: Companies offering new technologies often set high
prices initially in order to gain high profits from various segments of the market
early on.
Product-Quality Leadership: Many firms aspire to be the product-quality leader in

the market.
Step 2: Determining Demand Each price leads to a different level of demand and
therefore has a different impact on a companys marketing objectives. The factors
entailing this are
Price Sensitivity: The relation between price and demand, i.e. the demand curve can
be analysed to determine the markets probable purchase quantity at various prices.
This helps a firm to maximise its profits.
Estimating Demand Curves: Most companies use the following methods to estimate
Price-Quality inferences:
demand curves: Market Surveys, Price Experiments, Statistical Analysis, etc.
Many consumers use price Price Elasticity: Marketers need to know how responsive, or elastic, the demand
would be, to a change in price. If the price elasticity is high, increasing prices would
as an indicator of quality.
lead to a great reduction in demand, while decreasing prices would lead to increase
High-price cars are
in demand. Hence, marketers prefer inelastic markets where price changes do not
perceived to be of higher
elicit great shifts in demand.
quality and vice versa.
Price cues: Consumer
perceptions of prices are
also affected by the
manner in which prices are
displayed. Many sellers
believe setting a price of
Rs.2999 puts a product
into the 2000 range
instead of the 3000 range
as perceived by the
consumer. Putting Sale
signs near the price
display have also been
known to be effective.
Step 3: Estimating Costs While demand sets a ceiling on the range of price a firm can
charge for its product, costs determine the floor.
Types of Costs and Levels of Production: Costs are classified as Fixed costs and
Variable costs. Fixed costs include salaries, electricity bills, etc. which do not depend
upon quantity produced. Variable costs include processing costs, packaging costs,
shipping costs, etc. which depend upon quantity produced. Hence, companies must
decide on a level of production which will more or less guarantee no losses on the
cost of production.
Accumulated Production: As firms gain experience in production of a good, the

costs involved begin to decline. This is due to various factors such as workers finding
shortcuts, smoother flow of materials, etc. This decline in cost with production
experience is called experience curve.
Target Costing: Other than production scale and experience, costs also change a
result of concentrated efforts by designers, engineers, purchase agents etc. They
examine each cost component and try to find ways to reduce the costs involved in
each of these.
Initiating and
Chapter 14 - Developing Pricing Strategies and Programs

Step 4: Analyzing Competitors The introduction of any change in price, cost, offers given by
Trends
responding to
price changes:
Initiating price
cuts: Companies
sometimes initiate
any seller can elicit a response in the market.

A firm must analyse the value offered by a competitor to a customer in terms of prices, addons, post-sale services, etc. and thereby modify its own price in order to be competitive in the
market.
Step 5: Selecting Pricing Methods There are six major pricing methods:
the producers cost.
Initiating price
support, suppliers reputation, etc.
to increase their profits

by taking into account
Value Pricing: Here, high quality products are assigned a fairly low price. The basic aim
here is to attract a value-conscious customer base by reengineering the company to
increases: Companies
initiate price increase
Perceived-value Pricing: Perceived-value pricing is made up of several factors like the

buyers image of the product, the channel deliverables, warranty quality, customer
through lower prices.
Target-return Pricing: In target-return pricing, the firm determines the price that would
yield its target return on investment.
price cuts in order to

dominate the market
Mark-up Pricing: The most elementary pricing method is to add a standard mark-up to
become a low-cost producer without sacrificing quality.
Going-rate Pricing: Here, firms base their prices largely on competitors prices, charging
nearly the same as major competitors in the market do.
Auction-type Pricing: There are three types in this pricing method
the feasibility of the
English Auctions (Ascending bids): Here, the seller puts up an item and the bidders raise
price rise. A major
the price until the top price is reached.

Dutch Auctions (Descending bids): Here, the seller announces a high price and then goes
factor leading to these
on lowering the price until a bidder accepts it. Or, a buyer announces his desire for a
price increases is over
product and sellers compete to offer him the lowest price.
demand, where the
Sealed-bid Auctions: Here, potential suppliers submit their bids without knowledge of
company cannot
other bids made and the best bid is selected.
supply all its customers

and hence raises its
prices.
Responding to
competitors price
Step 6: Selecting the Final Price After the pricing methods have narrowed the range of the
price, the company selects the final price by taking into account factors as listed below:
Impact of other marketing activities: The final price must take into account the brands
quality and advertising relative to the competition.
Company Pricing Policies: The final price must be compliant with the companys pricing
policies.
changes: Firms respond Gain-and-Risk-sharing Pricing: Buyers may resist accepting a suppliers proposal because
of a high perceived level of risk. Hence, the seller has the option of offering to absorb part
to price cuts/raises by
or all of the risk if the promised value is not delivered.
competitors by
considering various
factors like the
Impact of price on other parties: The final prices effect on other parties such as
distributors, dealers, competitors, government should also be taken into account by the
management.
products stage in the
Adapting the Price
life cycle, its

importance in the
company portfolio, etc.
Geographical Pricing
Price Discounts and Allowances
Promotional Pricing
Differentiated Pricing

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Marketing Management

By Philip, Kevin Lane Keller, Abraham Koshy, Mithileshwar Jha

Marketing is increasingly becoming an important function in all organizations to ensure

A good marketer must be able to answer the following questions:

and groups obtain

what they need and

Chapter 1 - Understanding Marketing Management

The five key

Eight demand states are possible:

Core Marketing Concepts:

complex needs such as for belonging. i.e. I am hungry.

Value Proposition is a set of benefits that companies offer to customers to

To reach a target market a marketer uses different marketing channels like

Supply chain is a longer channel stretching from raw materials to components

Chapter 1 - Understanding Marketing Management

The Production Concept

Consumers favor products that are available and highly affordable.

Improve production and distribution.

Some of the major

Societal Marketing Concept

Focuses on needs/ wants of target markets & delivering superior value.

Holistic Marketing Concept

Based on the development, design and implementation of marketing

Focuses on needs/ wants of target markets & delivering satisfaction better

societal forces that

Aims to build mutually satisfying long-term relationships with key

Marketing Management Tasks:

The following are the most important marketing management tasks:

Developing Marketing Strategies and Plans

Capturing Marketing Insights

Connecting with Customers

Building Strong Brands

Shaping the Marketing Offerings

Creating Long-Term Growth

How does marketing affect customer value?

How is strategic planning carried out at different levels of the organization?

What does a marketing plan include?

The Value Delivery Process

they can obtain

lower cost. Also,

Strategic Marketing and Tactical Marketing.

distinctive capability describes excellence in broader business processes. Market-driven

Chapter 2 - Developing Marketing Strategies And Plans

processes, through cross-functional teams

New-offering realization process

Customer Acquisition process

Customer Relationship Management Process

Fulfillment Management Process

value. There are 9 strategically relevant activities 5 primary and 4 support.

value creation and

operates at two levels: strategic and tactical.

chain that delivers

service and speed,

features, promotion, merchandising, pricing, sales channels and service.

All corporate headquarters undertake four planning activities

Defining the corporate mission

Establishing strategic business units

Assigning resources to each Strategic Business Unit

Assessing growth opportunities

Innovation in marketing is critical. Senior management should identify and encourage

Chapter 2 - Developing Marketing Strategies And Plans

long term view. It is as short, relevant and meaningful as possible.

Business Unit Strategic Planning

be consistent and realistic and could be a mix of various objectives.