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Marketing Guide for Summer Placements
1. Marketing vs. Selling:
Marketing: Marketing is an integrated communications-based process through which individuals and communities are informed or persuaded that existing and newly-identified needs and wants may be satisfied by the products and services of others. Marketing creates the atmosphere to make it easy for sales to happen. Eg. ITC launched Fiama. Here are some marketing activities: Handling incoming inquiries Asking your current customers for referrals for more business Networking and building relationships Advertising and public relations. Direct mail and e-newsletters Special promotional events Merchandising and merchandise selection Holding sales, offering preferred customer bonuses Getting articles published. Blogging Doing cold calls to set appointments Market research, customer surveys Branding, creating your sales message Design and creation of collateral materials Building and maintaining your web site, blog, Facebook page, Twitter Market planning and strategizing
Selling: Selling includes the activities that get customers to make a purchase. Selling is closing sales that make you money. Eg. An insurance agent trying to sell insurance, a salesperson selling encyclopaedias door to door. A few things included in selling are: presenting, answering questions, making suggestions, doing proposals or estimates, addressing concerns, negotiating. And most important, asking for the sale. Then completing the sales agreement, etc. The Difference: The selling concept takes an inside-out perspective. It starts with the factory, focuses on the company’s existing products, and calls for heavy selling and promoting to produce profitable sales. The marketing concept takes an outside-in perspective. It starts with a well-defined market, focuses on customer needs, coordinates all the activities that will affect customers, and produces profits through creating customer satisfaction. Thus, you could say that: –Marketing is money OUT the door. –Selling is money IN the door.
Segmentation is the process of grouping people or organizations within a market according to similar needs, characteristics, or behaviour. “Dividing the market into groups” • An entire market rarely has the same tastes and preferences Targeting is the actual selection of the segment you want to serve the target market is the group of people or organizations whose needs a product is specifically designed to satisfy Positioning is the use of marketing to enable people to form a mental image of your product In their minds (relative to other products)
A less obvious but ubiquitous mass produced service is a computer operating system. Typical examples of a mass produced tangible object are the motor car and the disposable razor.Technology . Intangible products are often service based like the tourism industry & the hotel industry or codes-based products like cell phone load and credits.3. Methods used to improve differentiate the product or increase sales or target sales more effectively or to gain competitive advantage .Changed packaging .New Editions .Specialized Versions .Extension Strategies .Improvements . 4P’s and 7P’s A tangible object or an intangible service that is mass produced or manufactured on a large scale with a specific volume of units.
3 Levels of Product For many a product is simply the tangible.' So what is the difference between the three products. and finally the AUGMENTED product. or more precisely 'levels?' Three Levels of a Product The CORE product is NOT the tangible. buy and then collect. for which you may or may not pay a premium. the customer service support offered by the car's manufacture. part of the augmented product would be the warranty. You can get some use out of it. That's because the core product is the BENEFIT of the product that makes it valuable to you. You buy a new car and that's the product -simple! Or maybe not. So with the car example. The ACTUAL product is the tangible. . So when you buy a car. The AUGMENTED product is the non-physical part of the product. These are known as the 'Three Levels of a Product. is the product more complex than you first thought? In order to actively explore the nature of a product further. it is the vehicle that you test drive. physical product. Another core benefit is speed since you can travel around relatively quickly. When you buy a car. You can't touch it. Again with the car example. the ACTUAL product. let’s consider it as three different products -the CORE product. the benefit is convenience i. when You want to.e. It usually consists of lots of added value. and any after-sales service. the ease at which you can go where you like. physical entity that they may be buying or selling. physical product.
Such high prices are charge for luxuries such as Cunard Cruises. It is determined by a number of factors including market share. Penetration Pricing The price charged for products and services is set artificially low in order to gain market share. Premium Pricing Use a high price where there is uniqueness about the product or service. competition. product identity and the customer's perceived value of the product. Savoy Hotel rooms. This approach is used where a substantial competitive advantage exists. Let's have a look at some of them and try to understand the best policy/strategy in various situations. This approach was used by France Telecom and Sky TV. There are many ways to price a product. The business may increase or decrease the price of product if other stores have the same product. material costs.Product Life Cycle and Customer Life Cycle are also important tools for studying the product. the price is increased. The price is the amount a customer pays for the product. and Concorde flights. Once this is achieved. .
Economy Pricing This is a no frills low price. penetration pricing. Supermarkets often have economy brands for soups. Captive Product Pricing Where products have complements. and the price inevitably falls due to increased supply. Manufacturers of digital watches used a skimming approach in the 1970s. companies will charge a premium price where the consumer is captured. For example a razor manufacturer will charge a low price and recoup its margin (and more) from the sale of the only design of blades which fit the razor. For example 'price point perspective' 99 cents not one dollar. rather than rational basis. The high price tends to attract new competitors into the market. The cost of marketing and manufacture are kept at a minimum. However. They form the bases for the exercise. Product Bundle Pricing Here sellers combine several products in the same package. Basic wash could be $2. Optional Product Pricing Companies will attempt to increase the amount customer spend once they start to buy. Once other manufacturers were tempted into the market and the watches were produced at a lower unit cost. For example airlines will charge for optional extras such as guaranteeing a window seat or reserving a row of seats next to each other. . other marketing strategies and pricing approaches are implemented. economy pricing. However there are other important approaches to pricing. spaghetti. the advantage is not sustainable. Psychological Pricing This approach is used when the marketer wants the consumer to respond on an emotional. Product Line Pricing Where there is a range of product or services the pricing reflect the benefits of parts of the range. Videos and CDs are often sold using the bundle approach. etc. Optional 'extras' increase the overall price of the product or service. For example car washes. Price Skimming Charge a high price because you have a substantial competitive advantage. and price skimming are the four main pricing policies/strategies. wash and wax $4. Premium pricing. and the whole package $6. This also serves to move old stock.
and fixed costs whether related to the production and sale of the product or service or not. Loss Leader–Loss leader or leader is a product sold at a low price (at cost or below cost) to stimulate other. value meals at McDonalds.Promotional Pricing Pricing to promote a product is a very common application. or where shipping costs increase price. It is used primarily because it is easy to calculate and requires little information. The price can even be so low that the product is sold at A loss. and then includes an additional amount to represent profit. Sometimes leader is now used as a synonym for loss leader and means any popular article. There are many examples of promotional pricing including approaches such as BOGOF (Buy One Get One Free). There are several varieties. in other words marketing concentrating on a pricing strategy. in other words one sold at a normal price. but the common thread in all of them is that one first calculates the cost of the product. Cost Plus–Cost-plus pricing is a pricing method used by companies.g. Value Pricing This approach is used where external factors such as recession or increased competition force companies to provide 'value' products and services to retain sales e. . and has been criticized as promoting wasteful expenditures. The method determines the price of a product or service that uses direct costs. Geographical Pricing Geographical pricing is evident where there are variations in price in different parts of the world. For example rarity value. These costs are converted to per unit costs for the product and then a predetermined percentage of these costs is added to provide a profit margin. A loss leader is often a popular article. It is a kind of sales promotion. Cost-plus pricing is often used on government contracts. indirect costs. profitable sales.
.A channel of distribution comprises a set of institutions which perform all of the activities utilised to move a product and its title from production to consumption. how many retailers in Southern Spain). Which companies as intermediaries to avoid 'intra-channel conflict' (i. and yours? Look for 'synergy'. Qualification Assessment-establish the experience and track record of your intermediary. strategies. . Place is also known as channel. . Producer-distributor fit-Is there a match between their polices. It is the mechanism through which goods and/or services are moved from the manufacturer/ service provider to the user or consumer.e. Once they were sold via a few specific stores.g. Number of intermediaries at each level (e. There are six basic 'channel' decisions: Do we use direct or indirect channels? (e.g. Foldaway scooters are now available everywhere. infighting between local distributors). distribution. . image. Cumulative length of the multiple channels. Single or multiple channels. Changes during the product life cycle-different channels can be exploited at different points in the PLC e. 'direct' to a consumer. or intermediary. Selection Consideration-how do we decide upon a distributor? Market Segment-the distributor must be familiar with your target consumer and segment.g. Types of intermediary. ‘indirect' via a wholesaler). Training – How much training and support will your distributor require? .
Perhaps a direct mail campaign would push the consumer to the point of purchase. However if you vary the amounts of one of the ingredients. It is transmitted during a set of commercials from a radio station (Message/Media).Another one of the 4P's is 'promotion'. the message from the marketer follows the 'communications process' as illustrated above. The Promotions Mix. As with Neil H. The elements of the promotions mix are: Personal Selling Sales Promotion Public Relations Direct Mail Trade Fairs and Exhibitions Advertising Sponsorship The elements of the promotions mix are integrated to form a coherent campaign. You can 'integrate' different aspects of the promotions mix to deliver a unique campaign. The message is decoded by a car radio (decoding) and the target consumer interprets the message (receiver). all competing for attention. The sales person acts on behalf of the organization. As with all forms of communication. It is the same with promotions. Let us look at the individual components of the promotions mix in more detail. For example. This information will inform future elements of an integrated promotional campaign. The consumer might buy a car or express an interest or dislike (feedback). For example salesmen are often used to sell cars or home improvements where the margin is high. 1. . the basic ingredients are always the same. He or she might visit a dealership or seek further information from a web site (Response). Noise represents thousands of marketing communications that a consumer is exposed to everyday. However sales people are very expensive and should only be used where there is a genuine return on investment.Borden's marketing mix. Remember all of the elements are 'integrated' to form a specific communications campaign. They tend to be well trained in the approaches and techniques of personal selling. the final outcome is different. The car manufacturer (sender) pays for a specific advert with contains a message specific to a target audience (encoding). marketing communications has its own promotions mix. a radio advert is made for a car manufacturer. Personal Selling.' Think of it like a cake mix. This includes all of the tools available to the marketer for 'marketing communication'. Personal Selling is an effective way to manage personal customer relationships.
For example the BOGOF promotion. if you are marketing medical text books. national. It is relatively cheap. . The purpose is to increase awareness and to encourage trial. Public Relations (PR) Public Relations is defined as 'the deliberate. Sales promotions tend to be thought of as being all promotions apart from advertising. television (local. but certainly notcheap. 3. bus sides). There are many advertising 'media' such as newspapers (local. you would use a database of doctors' surgeries as the basis of your mail shot. trade). 6. and transmit information in order to gain a response from the target market. the potential consumer is 'defined' based upon a series of attributes and similarities. Companies will sponsor sports events such as the Olympics or Formula One. The pre-planned PR machine clicks in very quickly with a very effective rehearsed plan. create awareness. The elements of the promotional mix are then integrated to form a unique. 5. and so on. 7. The mail is sent out to the potential consumers and responses are carefully monitored. cause or image. Sponsorship. As with all marketing. It is used to develop attitudes. All airlines exploit PR. or Buy One Get One Free. 4. and introductory offers (such as buy digital TV and get Free installation). Direct Mail Direct mail is very highly focussed upon targeting consumers based upon a database. personal selling. For example. outdoor advertising (such as posters. Each sales promotion should be carefully costed and compared with the next best alternative. Companies will seldom sell much at such events. terrestrial. money-off promotions. Sponsorship is where an organization pays to be associated with a particular event. satellite) cinema. They offer the opportunity for companies to meet with both the trade and the consumer. Successful strategies tend to be longterm and plan for all eventualities. free accessories (such as free blades with a new razor). Others include couponing. competitions. Sales Promotion. planned and sustained effort to establish and maintain mutual understanding between an organization and its publics' (Institute of Public Relations). and public relations. national. The attributes of the event are then associated with the sponsoring organization. just watch what happens when there is a disaster.2. magazines and journals. Creative agencies work with marketers to design a highly focussed communication in the form of a mailing. free. Trade Fairs and Exhibitions Such approaches are very good for making new contacts and renewing old ones. but coherent campaign. Advertising Advertising is a 'paid for' communication.
skills and appearance of all staff need to be first class. and aspects of the customer experience are altered to meet the 'individual needs' of the person consuming it. as a part of the marketing mix is training. The need for the extension is due to the high degree of direct contact between the providers and the customers. Services are a special kind of product. so the attitude. Services tend to be produced and consumed at the same moment. personal selling and customer service. Remember.Extended Marketing Mix In 1980s Booms and Bitner included three additional ‘Ps’ to accommodate trends towards a service or knowledge based economy: People Process Physical Evidence What is significant about services is the relative dominance of intangible attributes in the make-up of the “service product”. physical evidence and process within the original-Ps framework (for example people can be considered part of the product offering) the extension allows a more thorough analysis of the marketing ingredients necessary for successful service marketing. They may require special understanding and special marketing efforts. Most of us can think of a situation where the personal service offered by individuals has made or tainted a tour. People are the most important element of any service or experience. While it is possible to discuss people. . the highly visible nature of the service process. people buy from people that they like. vacation or restaurant meal. and the simultaneity of the production and consumption. Some ways in which people add value to an experience.
processes that measure the achievement marketing objectives. you are greeted. Some see processes as a means to achieve an outcome. but not particularly customer focused. or 7P's. You have two weeks of services from restaurants and evening entertainment. . All views are understandable. It's best viewed as something that your customer participates in at different points in time.e. Finally.Process is another element of the extended marketing mix. A further view is that marketing processes are used to control the marketing mix. to casinos and shopping. and your baggage is delivered to you. from the customer's point of view. Here are some examples to help your build a picture of marketing process. For the purposes of the marketing mix. for example -telemarketing and Internet marketing can be integrated. This is a highly focused marketing process. Example -Going on a cruise -from the moment that you arrive at the dockside.There are a number of perceptions of the concept of process within the business and marketing literature. you arrive at your destination. Another view is that marketing has a number of processes that integrate together to create an overall marketing process. for example -to achieve a 30% market share a company implements a marketing planning process. i. your baggage is taken to your room. process is an element of service that sees the customer experiencing an organization’s offering.
tickets and despatch notes) Brochures Furnishings Signage Uniforms Business Cards The building itself (such as prestigious offices or scenic headquarters) Mailboxes and many others A sporting event is packed full of physical evidence. for example tourism attractions and resorts (e. Disney World). Lloyds of London). The stadium itself could be impressive and have an electrifying atmosphere. You travelled there and parked quickly nearby. and your seats are comfortable and close to restrooms and store.g. including some of the following: Packaging Internet/Web Pages Paperwork (such as invoices. All you need now is for your team to win! Some organizations depend heavily upon physical evidence as a means of marketing communications. parcel and mail services (e. and players are wearing uniforms. so a consumer tends to rely on material cues. UPS trucks). There are many examples of physical evidence. .g.g.Physical Evidence Physical evidence is the material part of a service. Your tickets have your team's logos printed on them. and large banks and insurance companies (e. Strictly speaking thereare no physical attributes to a service.
Low prices act as a barrier to entry Eg. The strategy works on the expectation that customers will switch to the new brand because of the lower price. Promotion Mix Marketers have at their disposal four major methods of promotion. Reliance mobile Price skimming is a pricing strategy in which a marketer sets a relatively high price for a product or service at first. then theoretically no customer will pay less for the product than the maximum they are willing to pay. it is almost impossible for a firm to capture this entire surplus. Examples: Playstation. rather than to make profit in the short term. etc. Specific Attack Strategies Pioneers Late Arrivals Early Movers Early Movers Follow this link: http://www. In practice. In this section a basic definition of each method is offered while in the next section a comparison of each method based on the characteristics of promotion is presented. mostly paid promotions often using mass media outlets to deliver the marketer’s message. Taken together these comprise the promotion mix. The objective of a price skimming strategy is to capture the consumer surplus. While historically advertising has involved one-way communication with little feedback opportunity for the customer experiencing the advertisement. Suitable for elastic demand The advantages of penetration pricing.edu/~sjwong/pdf540/leader_follower_strategy. Penetration pricing is most commonly associated with a marketing objective of increasing market share or sales volume. not giving them time to react It can create goodwill among the early adopters Discourages the entry of competitors. Advertising–Involves non-personal. the advent of computer technology and.pdf 5. If this is done successfully. .iastate. to attract new customers. Penetration Pricing and Price Skimming Penetration pricing is the pricing technique of setting a relatively low initial entry price. 6. DVDs.public. and then lowers the price over time Price skimming is sometimes referred to as riding down the demand curve. This can take the competition by surprise. often lower than the eventual market price. in particular.4. the Internet has increased the options that allow customers to provide quick feedback. Types of Entry Strategies.
the use of retail coupons with expiration dates requires customers to act while the incentive is still valid. make the decision. Concept of Customer Derived Value Marketing is about meeting the needs of your targeted market. For instance. The term was coined in 1969 by Al Ries and Jack Trout in the paper "Positioning" is a game people play in today’s me-too market place" in the publication Industrial Marketing. . 7.g. "Positioning: The Battle for Your Mind". Sales Promotion–Involves the use of special short-term techniques. Al Ries and Jack Z Trout on Positioning A product's position is how potential buyers see the product.. Positioning is expressed relative to the position of competitors. such as consumers. such as members of a company buying center). this form of promotion involves personal contact between company representatives and those who have a role in purchase decisions (e. 8. and particularly the news media. Personal Selling–As the name implies. to offer a favourable mention of the marketer’s company or product without direct payment to the publisher of the information. or have an influence on a decision. This value is determined when subtracting the benefits a customer gets from the product with the customer costs he does to get it. to encourage customers to respond or undertake some activity. Often this occurs face-to-face or via telephone. Public Relations–Also referred to as publicity. though newer technologies allow this to occur online via video conferencing or text chat. but also providing them with a value. It was then expanded into their ground-breaking first book. often in the form of incentives. this type of promotion uses third-party sources.
the product positioning process involves: Defining the market in which the product or brand will compete (who the relevant buyers are) Identifying the attributes (also called dimensions)that define the product 'space' Collecting information from a sample of customers about their perceptions of each product on the relevant attributes Determine each product's share of mind Determine each product's current location in the product space Determine the target market's preferred combination of attributes (referred to as an ideal vector) Examine the fit between: o The position of your product o The position of the ideal vector Position. relative to the identity of your own product. we can't feel them or touch them or show nice product pictures. Re-positioning involves changing the identity of a product. product or service in relation to their perceptions of the competitors in the same category. Services.Positioning is something (perception) that happens in the minds of the target market. reactive or passive about the on-going process of evolving a position. In marketing. The Process of Positioning Generally. in the collective minds of the target market. But a company can positively influence the perceptions through enlightened strategic actions. It is the 'relative competitive comparison' their product occupies in a given market as perceived by the target market. in the collective minds of the target market. So you need to ask first your customers and then yourself. De-positioning involves attempting to change the identity of competing products. . It will happen whether or not a company's management is proactive. brand. or organization. however. don't have the physical attributes of products -that is. relative to the identity of competing products. positioning has come to mean the process by which marketers try to create an image or identity in the minds of their target market for its product. what value do clients get from my services? How are they better off from doing business with me? Also ask: is there a characteristic that makes my services different? Write out the value customers derive and the attributes your services offer to create the first draft of your positioning. It is the aggregate perception the market has of a particular company. The process is similar for positioning your company's services.
The higher your market share. Dogs: Low Market Share / Low Market Growth In these areas. Market growth is used as a measure of a market's attractiveness. even if their market share remains stable. which should provide the opportunity for businesses to make more money.MARKET SHARE & MARKET GROWTH Market share is the percentage of the total market that is being serviced by your company. Markets experiencing high growth are ones where the total market is expanding. . The Boston Matrix assumes that if you enjoy a high market share you will normally be making money (this assumption is based on the idea that you will have been in the market long enough to have learned how to be profitable. so it's going to take a lot of hard work to get noticed. Also. the higher proportion of the market you control. and will be enjoying scale economies that give you an advantage). measured either in revenue terms or unit volume terms. so it's going to be difficult to make a profit. your market presence is weak. you won't enjoy the scale economies of the larger players.
Ansoff Matrix The Ansoff Product-Market Growth Matrixis a marketing tool created by Igor Ansoff and first published in his article "Strategies for diversification" in the Harvard Business Review (1957). They aren't generating much revenue right now because you don't have a large market share. Stars: High Market Share / High Market Growth Use large amounts of cash.png Question Marks (Problem Child): Low Market Share / High Market Growth These are the opportunities no one knows what to do with. but they could just as easily absorb effort with little return. in existing and/or new markets –there are four possible product/market combinations. Cash cows are stars of yesterday n the foundation of the company. they are the leaders in business so they should produce large amounts of cash as well. Profits and cash generation should be high. But. you're well-established. Question Marks might become Stars and eventual Cash Cows. and you should work hard to realize them. 10. so it's easy to get attention and exploit new opportunities. . These are fantastic opportunities. they are in high growth markets so the potential to make money is there. These opportunities need serious thought as to whether increased investment is warranted.mrdashboard.com/images/Ansoff_Matrix_Excel.Cash Cows: High Market Share / Low Market Growth Here. The matrix allows marketers to consider ways to grow the business via existing and/or new products. http://www. Because of low growth investments needed should be low.
and new facilities. and merchandising resources which are used for the original product line. The matrix illustrates. and there may exist opportunities to increase market share if competitors reach capacity limits. In a growing market. The business is focusing on markets and products it knows well.Ansoff's matrix provides four different growth strategies: Market Penetration-the firm seeks to achieve growth with existing products in their current market segments. diversification usually requires new skills. Product Development-the firms develops new products targeted to its existing market segments. most marketing activity revolves around penetration. However. market penetration has limits. product development (requiring. Market penetration seeks to achieve four main objectives: Maintain or increase the market share of current products –this can be achieved by a combination of competitive pricing strategies. new techniques. A market penetration marketing strategy is very much about “business as usual”. aiming to increase its market share. in particular. that this strategy will require investment in new market research. In his original work. which did not use the matrix form. For this reason. a new product) and market extension (a new market) typically involve a greater risk than `penetration' (existing product and existing market). this would require a much more aggressive promotional campaign. simply maintaining market share will result in growth. financial. in effect. Igor Ansoff stressed that the diversification strategy stood apart from the other three. Thus. therefore. While the latter are usually followed with the same technical. It is unlikely. It is likely to have good information on competitors and on customer needs. supported by a pricing strategy designed to make the market unattractive for competitors Increase usage by existing customers –for example by introducing loyalty schemes. Market penetration Market penetration is the name given to a growth strategy where the business focuses on selling existing products into existing markets. that the element of risk increases the further the strategy moves away from known quantities -the existing product and the existing market. Market Development-the firm seeks growth by targeting its existing products to new market segments. Diversification-the firm grows by diversifying into new businesses by developing new products for new markets. and once the market approaches saturation another strategy must be pursued if the firm is to continue to grow. and diversification (new product and new market) generally carries the greatest risk of all. As a result it almost invariably leads to physical and organizational changes in the structure of the business which represent a distinct break with past business experience. . sales promotion and perhaps more resources dedicated to personal selling Secure dominance of growth markets Restructure a mature market by driving out competitors. The market penetration strategy is the least risky since it leverages many of the firm's existing resources and capabilities. advertising.
the market need not be new in itself. the point is that the market is new to the company. but frequently markets new burgers. including: • New geographical markets. when a firm creates new products. new products): A firm with a market for its current products might embark on a strategy of developing other products catering to the same market (although these new products need not be new to the market. Other ways include attracting non-users of your product or convincing current clients to use more of your product/service. Lucozade was first marketed for sick children and then rebranded to target athletes. For example. with advertising or other promotions. . The best way to achieve this is by gaining competitors' customers (part of their market share).Market development Market development is the name given to a growth strategy where the business seeks to sell its existing products into new markets. Again. existing products): An established product in the marketplace can be tweaked or targeted to a different customer segment. Diversification Diversification is the name given to the growth strategy where a business markets new products in new markets. Product development (existing markets. it can gain new customers for these products. therefore. There are many possible ways of approaching this strategy. McDonald's is always within the fast-food industry. new product development can be a crucial business development strategy for firms to stay competitive. This strategy may require the development of new competencies and requires the business to develop modified products which can appeal to existing markets. Market penetration (existing markets. For a business to adopt a diversification strategy. for example exporting the product to a new country • New product dimensions or packaging: for example • New distribution channels • Different pricing policies to attract different customers or create new market segments Product development Product development is the name given to a growth strategy where a business aims to introduce new products into existing markets. Market development (new markets. This is a good example of developing a new market for an existing product. the point is that the product is new to the company). existing products): Market penetration occurs when a company enters/penetrates a market with current products. For example. This is an inherently more risk strategy because the business is moving into markets in which it has little or no experience. it must have a clear idea about what it expects to gain from the strategy and an honest assessment of the risks. Market penetration is the least risky way for a company to grow. Frequently. as a strategy to earn more revenue for the firm. Hence.
11. functional divisions (top down). McKinsey and Company. information systems Staff is described in terms of personnel categories within the organisation Skills variable refers to the capabilities of the staff within the organisation as a whole Style is the way in which key managers behave in achieving organisational goals . The McKinsey model is a model that describes 7 factors that determine how one can holistically and effectively organize a company. Mckinsey 7-S Model The McKinsey 7-S model was named after a consulting company. It is basically a Value Based Management Model. refers to the significant meanings or guiding concepts that organisational members share---shared beliefs and attitudes--what the org stands for and what it believes in Structure is defined as the skeleton of the organisation or the organisational chart---the way in which the organization’s units relate to each other---centralized. to leverage the Virgin brand. Diversification (new markets. new products): Virgin Cola. matrix etc Strategy is the plan or course of action in allocating resources to achieve identified goals over time---environment. competition. recruiting. originally termed super ordinate goals. The seven factors of McKinsey 7-S model are Shared values. Opportunity and Threat Matrix (SWOT Analysis) 12. This resulted in the company entering new markets where it had no presence before. It consists of seven factors. Virgin Telecommunications are examples of new products created by the Virgin Group of UK. decentralized. Together these factors determine the way in which a corporation operates. Virgin Airlines. customers Systems are the routine processes and procedures followed within the organisation--financial systems. promotion and performance appraisal systems. Virgin Megastores.
word-of-mouth. Now let's define what is -Customer 2 Customer and Word Of Mouth. will turn against you. ad games etc. B2C." Word of Mouth as defined by Philip Kotler: . And worse. Customer to Customer(C2C) markets are innovative ways to allow customers to interact with each other. Customer 2 Customer as defined by Philip Kotler: "Customer 2 Customer includes all activities involving interaction between consumers. communication. In customer to customer markets the business facilitates an environment where customers can sell these goods and or services to each other. if we want to study a company post merger we would do the following: 1) Assess the current situation for each of the 7-S for 2) Decide on what is the desired situation 3) Focus on strategy and business plan (costs. but if the product you deliver fails to satisfy. C2C Marketing Customer to Customer (C2C) MARKETING Customer 2 Customer or the commonly used acronym C2C is a new marketing mantra for Indian firms and the foreign multinationals. At around the same time Tom Peters and Robert Waterman were exploring what made a company excellent.Advantages of using this framework diagnostic tool for understanding organizations that are ineffective guides organizational change combines rational and hard elements with emotional and soft elements managers must act on all Ss in parallel and all Ss are interrelated It is basically used to audit companies based on the 7-Ss For instance. benefits. classified ads. migration. They all came up with the 7-S model in1978 and was taken up as a basic tool by McKinsey 13. personal. BB. risks etc) to go from step 1 to step 2 Trivia: The 7-S framework was first mentioned in the “The Art of Japanese Mgmt” by Richard Pascale and Anthony Athos in 1981. the best advertising of all. Customer 2 Customer activities include auctions between consumers that are facilitated by firms such as e-bay. A terrific marketing strategy might bring a customer to your door. The quality of a product is vital for the continued success of a business. They had been investigating how the Japanese industry had been so successful. they will never return.
Alternatively the person may be a friend. The individual perceived as an influencer is also perceived as an expert. Now how did they get this taxi tag? It all happened because of the word of mouth –the best medium of advertisement. And one of the sole reasons behind the huge volume of sales is its taxi tag. This illustration mainly focuses on the success behind Toyota Qualis. Word of mouth. and making every moment and aspect of the relationship a pleasant -or better yet. exceeding their expectations. which may also be referred to as."Personal communication about a product between target buyers and neighbours. is quite common in urban and metro areas.e. Delighted them means -they were able to provide delight to their customers by understanding their specific personal interests. At times. But in nuclear and single families and with the increase in the literacy among women and number of working couples. C2C's role in consumer decision making: Often we find that in a consumer decision process several individuals get involved. decisions are joint. an exhilarating -experience. 2. anticipating their needs. The decider/s considers both economic and non-economic parameters before selecting a brand. a colleague or even the sales person. i. friends. This person may be a part of the customer's family like spouse or parents. Husband. Influencer Influencer is a person within or outside the immediate family of the customer who influences the decision process. 3. a relative. more than one role may be played by an individual." Let's understand the real meaning of Customer 2 Customer and Word of Mouth through an illustration. media reports and the marketing cues created by the firm. In a joint family often it's the head of the family or the elders in the family who take a decision. Now coming to the second aspect. Toyota Qualis is a car that has a tag of a taxi. particularly on major purchases. Initiator This is the person who sows the seed in a prospective customer's mind to buy the product. Each of them plays an influencing role. These values. wife and even the entire family taking the decision. . family members and associates. Decider He is the person who actually takes the decision.e. than that of a personal or a private car. These roles are: 1. one finds more often than not. It is important to note that the people who play these roles seek different values in the product or service. Private taxis are the most roughly-driven cars and if these drivers swear by a car. then it's the best ad for its reliability and toughness. The perception of the value is to a large extent influenced by their prior experience of others. This illustration proves only one aspect of Customer 2 Customer i. In consumer durable sale the dealer plays an influencing role. How were they able to win over these drivers? They won over them because they delighted them. market value is the potential of a product or service to satisfy customer's needs and wants.
A consumer is a buyer of products that are not business related. B2C focuses on merchandising and point of buying activities including coupons. Repetition and imagery create its brand identity. In B2C markets. B2C marketing also involves advertising through newspapers. etc. remain loyal and potentially pay a higher price. It is one of the many marketing campaigns that business houses can use for publicizing their goods and services. These representatives can address customers at public places. houses. Ebay provides sellers a platform to freely hawk their goods as well as interact with customers. Now days with the advent of Internet. single step buying process and shorter sales cycle. All these factors make B2C marketing one of the most effective modes of communication. It not only helps in developing a direct contact between the consumer and business house but also allows the businessman to advertise and sell his products and services in an easy manner. Business to consumer marketing is when a business markets products to a consumer market. These modes provide the companies with better consumer marketing strategies that can be worked upon to build a bigger market for the products and services and thus achieve a Profitable goal. B2C features a large target market. Basically any business that offers a retail product to the public comes under this type. These sellers themselves are non-business individuals. sell goods that they have bought to other individual customers. . cars. such as shopping malls or districts and make them aware about company’s products and services by distributing flyers containing company’s information or by handing over various forms of promotional materials. a businessman can make use of various online advertising strategies which help to cater to wider section of potential market globally. who were initially customers themselves. Online advertising strategies such as PPC and Podcast are counted among the most effective promotion campaigning for any business. For this the company can hire people who can reach out to the general public as company representatives. That individual may be influenced by other factors such as family members or friends. clothes. phone services. displays and store fronts. but ultimately it’s a single person that pulls out their wallet. Business to consumer (B2C) marketing B2C marketing is one of the most popularly used strategies for effective market communication and profitable business building. The company’s representatives also undertake door to door marketing to promote company products or services. A B2C sale is to an individual.The most common and widely used example of C2C marketing is Ebay. B2C products include goods and services such as food. These advertisements can be displayed on various search sites so that they are viewed by many people at the same time. credit repair services. where sellers. television and radio for better communication. the brand encourages the shopper to purchase. A real-life example is auctions. The B2C internet marketing is one of the most advanced consumer marketing strategies that revolutionized the business world.
Making aware of company’s offerings via websites also helps the business house to successfully cater the potential audience. Also, the online shopping facility provided through the websites make the customers in availing the facilities and buying the products without wasting any time and extra money to visit any physical store for making a desirable purchase. It is not enough to just establish a business; the business should also flourish and produce profit. To meet the objective, various strategies are used for good publicity. Among various business market strategies, B2B marketing i.e. business to business marketing and B2C marketing i.e. business to consumer marketing are being constantly talked about. A constant debate over the two has created a B2B vs. B2C marketing situation in the business world. Though the purpose of both is same i.e. business development and to generate profits but their approaches are different. While B2B deals with transactions between two businesses, B2C marketing strategy helps the business house in directly targeting the Customers. Examples A family is at home on a Sunday night and is watching television. An advertisement appears that advertises home delivered pizza. The family decides to order a pizza. Walking down a supermarket aisle, a single man aged in his early 30's sees a hair care product that claims to reduce dandruff. He pick's the product and adds it to his shopping cart. A pensioner visits her local shopping mall. She purchases a number of items including her favourite brand of tea. She has bought the same brand of tea for the last 18 years.
Business-to-Business (B2B) Marketing Business to Business marketing is the practice of individuals or organizations (commercial businesses, governments and institutions) facilitating the sale of their products or services to other companies or organizations that in turn resell them, use them as components in products or services they offer, or use them to support their operations. This is also known as Industrial marketing. In B2B, the customers can be: 1) Companies that consumer products or services eg. Automakers, who buy gauges to put in their cars 2) Government agencies – this includes centre, state and local governments 3) Institutions - schools, hospitals and nursing homes, churches and charities 4) Resellers – Wholesalers, brokers and industrial distributors A B2B sale is to an organization.B2B describes commerce transactions between businesses, such as between manufacturer and a wholesaler, or between a wholesaler and a retailer. The volume of B2B transactions is much higher than the volume of B2C transactions. The main reason is that in any supply chain, there will be many B2B transactions, e.g. involving subcomponent or raw materials, and only on B2C transaction, i.e. the finished good’s sale to
customer. B2B Marketing is driven purely on the basis of fewer, but larger, customers. It is very necessary to be able to customize offering based on the buyer’s needs. Some B2B Marketing Strategies: B2B Branding–Closely align corporate brands, divisional brands and product/service brands and to apply brand standards to material often considered informal such as email and other correspondence. Product–cost-saving or revenue-producing benefits of products/services should factor throughout product development and marketing cycle. People–Usually, the target market for business products are smaller and have more specialized needs. Thus, there can be multiple influencers on purchase decision, and these need to be marketed to as well. Pricing–Business markets can pay premium prices if the pricing and payment terms are structured well. This is particularly true in the case of a strong brand. Promotion–Specific trade shows, analysts, publications, blogs and retail/wholesale outlets tend to be fairly common to each industry/product area. In essence, with proper knowledge of your industry/product, the promo strategy almost writes itself. Place--The importance of a knowledgeable, experienced and effective direct (inside or outside) sales force is often critical in the business market. If you sell through distribution channels also, the number and type of sales forces can vary tremendously and your success as a marketer is highly dependent on their success.
Business Marketing vs. Consumer Marketing
Although on the surface the differences between business and consumer marketing may Seem obvious, there are more subtle distinctions between the two with substantial ramifications. Dwyer and Tanner (2006) note that business marketing generally entails shorter and more direct channels of distribution. While consumer marketing is aimed at large demographic groups through mass media and retailers, the negotiation process between the buyer and seller is more personal in business marketing. According to Hutt and Speh (2004), most business marketers commit only a small part of their promotional budgets to advertising, and that is usually through direct mail efforts and trade journals. While that advertising is limited, it often helps the business marketer set up successful sales calls. Marketing to a business trying to make a profit (Business-to-Business marketing) as opposed to an individual for personal use (Business-to-Consumer, or B2C marketing) is similar in terms of the fundamental principles of marketing. In B2C, B2B and B2G marketing situations, the marketer must always: successfully match the product/service strengths with the needs of a definable target market; position and price to align the product/service with its market, often an intricate balance; and . Communicate and sell it in the fashion that demonstrates its value effectively to the target market.
14. Basics of Media Planning
15. Below the Line Initiatives
What is BTL, compare & contrast BTL with ATL? BTL–Below the Line. All advertising by means other than the five major media -the press, television, radio, cinema and outdoors; below-the-line advertising employs a variety of methods -direct mail, sponsorship, merchandising, trade shows, exhibitions, sales literature and catalogues, and so on. Below the line promotions are becoming increasingly important within the communications mix of many companies, not only those involved in FMCG products, but also for industrial goods. With the increasing pressure on the marketing team to achieve communication objectives more efficiently in a limited budget, there has been a need to find out more effective and cost efficient ways to communicate with the target markets. This has led to a shift from the regular media based advertising.
Below the Line uses less conventional methods than the usual specific channels of advertising to promote products, services, etc. than Above the Line strategies. These may include activities such as direct mail, public relations and sales promotions for which a fee is agreed upon and charged up front. Below the line advertising typically focuses on direct means of communication, most commonly direct mail and e-mail, often using highly targeted lists to maximize response rates. Above the line is much more effective when the target group is very large and difficult to define. But if the target group is limited and specific, it is always advisable to use BTL promotions for efficiency and cost-effectiveness. Examples Most of the educational institutes like Career Launcher, Time and PT are holding informative workshops and free tests for students which give a direct interaction of these institutes with the target customer, and hence, a suitable platform to sell themselves. Sales counters, beauty advisors, and dealer aids such as shade cards etc. –LAKME Search, email and online advertising Price Promotion o A discount to the normal selling price of a product, or o More of the product at the normal price
It launched a website. a newly launched malted drink. to inform the parents residing in the rural areas of the country about how to plan their children's education better. (3) Dabur India ran a school activation campaign in 500 schools across 21 cities to look for Super Champs. to educate children about the importance of saving money and investing. the initiative was taken to underprivileged children in South India. (4) HomeStop(of shoppers stop ). called Pragati Ki Anokhi Paathshala (PKAP). which started on the Internet and moved to on-ground.kidzzbank. promising to pay their entire school fees for a year. Through the campaign. The primary objective of the activity is to create awareness and drive consumer engagement for Dabur Chyawanprash and Dabur Chyawan Junior. www. decided to launch its regular exchange offer scheme under which customers can bring in their old furniture (which in turn will be donated to charity by HomeStop) and avail of attractive discounts and offers on new furniture in return . (2) ICICI Prudential Life Insurance recently launched a rural activation programme.com. the insurance player seeks to inform its target consumers about its education insurance plans. Later.o 1) ING Vysya Bank also launched a social responsibility campaign.
The brand of cigarette was promoted through organizing parties for the BPO employees on weekly basis and collecting their database and then making the cigarette available at their door steps. in a campaign for encouraging people to vote.. display banners and posters.jaagore. centred its communication round a website www. (10) Ring-tones and music-videos on cell phones are helping the entertainment industry to promote a music video or a movie for dirt-cheap rate as compared to media promotion (11) The Dove Evolution Campaign (12)‘Igen’ –A cigarette brand was build through below the line marketing efforts. (16) Max New York Life (MNYL) Insurance launched a 'Wheel of Fortune' game in all Spencer's retail stores across Delhi to enhance its lead generation exercise (17) Hewlett Packard (HP) created 'Experience Zones' in airports to promote its newly launched Elite Books with corporate & executives (18) Tata Tea. Shoppers’ Stop. (8) Most of the pharmacy companies do BTL promotion by getting shelf-space through doctors to display their products or by giving away free calcium tablets again through doctors. The site was used to get voter registrations through a campaign that comprised a TV commercial. a suitable platform to sell themselves.(5) Most of the educational institutes like Career Launcher. knowing that for a patient a personal advise from a doctor would hold more value as compared to a commercial advertisement (9)Media companies like Hindustan Times are holding weekly events throughout the country in which companies can put up their stalls. Delhi. The ‘Stay Sharp’ campaign conveys that the anine (an ingredient present in Lipton Yellow Label tea) helps clear minds and stay sharp and focused. (7) Another interesting BTL promotion was by NIKE. the exercise was continued for quite a few months and a strong database and customer base was developed for the brand among the BPO employees. Lipton. The brand has taken an online jigsaw activity on-ground in Delhi. (6) Pepsi organized an inter-school cricket event for 425 schools across 14 cities which did wonders for the company by promoting the brand amongst the right target customer for almost no cost. which had managed the on-ground promotions for the website earlier. (19) GM's Chevrolet Spark organised a BTL activity 'Jeevan mein umang. . Lifestyle etc. (13)The tea brand from Hindustan Unilever (HUL).which give a certain incentive on every purchase from the store. and arrange for some fun activities. an athlete dressed up in Nike sportswear could be seen jogging on an elevated treadmill for the whole day on National Highway 8.com. is riding on its ‘Stay Sharp’ proposition. The activity is being managed by Ogilvy Action. Spark ke sang' to promote the newly priced Spark in small towns & cities. and hence. (14) (Example from the Non Traditional Marketing Workshop) The Scotch Brite Fountain (15) The membership cards given by stores like Westside. OOH and on-ground activation in colleges and offices. Time and PT are holding informative workshops and free tests for students which give a direct interaction of these institutes with the target customer.
branding is an important decision. Maxus. Mindshare and Mindshare Fulcrum. and eventually. Some brands acquire a bad reputation that results in negative brand equity. Increases cash flow by increasing market share. For example. However. Attitude strength is built by experience with a product. the value of brand extensions is more difficult to quantify than are direct financial measures of brand equity. The benefits of brand extensions are the leveraging of existing brand awareness thus reducing advertising expenditures. This concept is referred to as brand equity. devised an interesting route to reach media planners and buyers during the launch of Bhootwala Serial. However.(20) CavinKare's Chic Shampoo too launched a school campaign 'Choo Lo Sitharon Ko' to educate school going girls. There are at least three perspectives from which to view brand equity: Financial-One way to measure brand equity is to determine the price premium that a brand commands over a generic product. the comedy channel from MSM India. Lintas Media Group. brand loyalty. brand equity is not always positive in value. Consumer-based-A strong brand increases the consumer's attitude strength toward the product associated with the brand. appropriate brand extensions can enhance the core brand. The brand can add significant value when it is well recognized and has positive associations in the mind of the consumer. Brand Equity A brand is a name or symbol used to identify the source of a product. However. this premium provides important information about the value of the brand. reducing promotional costs. As part of this initiative. For this Nokia has set up recycling bins across its priority dealers & care centres. Madison. 16. Strong brand equity provides following benefits: Facilitates a more predictable income stream. inferred attributes. (21) In the media space. Furthermore. India's first horror comedy. (23) Nokia's Take Back campaign. This importance of actual experience by the customer implies that trial samples are more effective than advertising in the early stages of building a strong brand. Starcom. When developing a new product. expenses such as promotional costs must be taken into account when using this method to measure brand equity. and allowing premium pricing. Sab TV. promoters dressed in scary ghostly costumes went across all agencies like Zenith Optimedia. Lodestar. Brand extensions-A successful brand can be used as a platform to launch related products. Brand equity is an asset that can be sold or leased. The consumer's awareness and associations lead to perceived quality. and a lower risk from the perspective of the consumer. Breaking the clutter. an e-waste recycling programme. Nokia will encourage people to dispose of mobile handsets in an ecologically friendly manner. if consumers are willing to pay $100 more for a branded television over the same unbranded television. Negative brand equity can be measured by surveys in .
As in line extensions by the same company. especially when there is a perceptual connection between the products. A positive evaluation by the consumer is important. Brand equity also can be "bought" by licensing the use of a strong brand for a new product. the consumer should easily remember his or her positive evaluation of the brand. Farquhar outlined the following three stages that are required in order to build a strong brand: 1. Alternative Means to Brand Equity Building brand equity requires a significant effort. 3.which consumers indicate that a discount is needed to purchase the brand over a generic product. Sony offers many different product categories under its brand. Fortification-the brand should carry a consistent image over time to reinforce its place in the consumer's mind and develop a special relationship with the consumer. Multi-brand categories-Different brands for different product categories. For example. In other cases. Managing Brand Equity. Peter H. In some cases. Building and Managing Brand Equity In his 1989 paper. . Nesquik. such extensions are successful. 2. These strategies are: Single brand identity-a separate brand for each product. but only with related products having a perceived fit in the mind of the consumer. Cheer. There should be accessible brand attitude. Bold. etc. and V8 for juices. For example. brand equity can be borrowed by extending the brand name to a line of products in the same product category or even to other categories. Brand equity is an important factor in multi-product branding strategies. and Nestea for beverages. Managing Multi Brands Different companies have opted for different brand strategies for multiple products. Nestle uses Nescafe. Introduction-Introduce a quality product with the strategy of using the brand as a platform from which to launch future products. For example. that is. Campbell Soup Company uses Campbell's for soups. Brand extensions can further fortify the brand. Pepperidge Farm for baked goods. in laundry detergents Procter & Gamble offers uniquely positioned brands such as Tide. Elaboration-make the brand easy to remember and develop repeat usage. Umbrella-all products under the same brand. the success of brand licensing is not guaranteed and must be analyzed carefully for appropriateness. and some companies use alternative means of achieving the benefits of a strong brand. the extensions are unsuccessful and can dilute the original brand equity. Family of names-Different brands having a common name stem.
Break it. Try and make a chocolate shakewith Horlicks by using their freebie and this technique. Fair & Lovely:-One of the ads showed the viewers to apply the cream on the face and massage it in the shape of eight. Wrigley's Chiklets:-Shake the box of chewing gums 2 make that chik-chik noise… 7. 5.!! Denoted how to enjoy the cool drink and the coffee froth. 6....17.com/diary/fecjmqtqm/COMPLAN-vs-HORLICKS Ad: www. 18. Boomer:-the bubble that everyone started making while chewing the gum…. In the promotional front. Article: http://www. 8. Ummm. Pepsi My can:-The way they hold the can in the ads to ask the viewers to do the same. (Heinz)Complan vs (GSK)Horlicks Complan has never been an aggressive player compared to the market leader Horlicks .. 4. Corona Beer:-Consume the beer with a slice of lemon… 9. Lick. Some rituals become a part of our behavior over time. 3. Brand Rivalry (examples) 1. Close up:-The HA-HA thing which we do by holding our palm in front of our mouth to check the fresh breath 2. Unwrap and eat.. 10. The major happening for this brand in 2008 was the launch of the new flavor Kesari Badam . Tequila Shots:-The trademark way of consuming tequila. Complan was lying low all these years. This explains the reason why such a powerful brand is languishing in a distant position of 15% market share compared to the 60 % share of Horlicks. the brand was in a low key mode continuing with the extension of its earlier campaign focusing on EXTRA growth.com/watch?v=LcbLBJSTtQg .mouthshut. Brand Rituals (10 examples) Brand ritual is the performance of an act by the consumers as defined by the brand (Owners). Few examples are as follows: 1. Bru Cappuccino:-Sip. These days brand rituals are a common strategy adopted by marketers. Pull your thumb across the lines between the chocolate bars. Horlicks:-Epang Opang Jhapang. Kitkat:-Push the chocolate out of the paper wrap.. While Horlicks has been breaking new grounds with a series of variants aiming at the entire family segment..youtube.
Kotex v/s whisper: Whisper has the highest market share in the product segment & Kotex attacking the no. don't whisper be loud.2.html http://themanmeetsabharwalblog.com/?tag=dairy-milk 3. There is a case filed by HUL regarding the same in the high court. Pepsi vs Coca Cola-Pepsi's 'Nothing Official About It' campaign in World Cup 96 after Coca Cola became the official sponsor. Nestle Munch which is the biggest rival of dairy Milk hit it with an ad campaign showing that Munch can be eaten on any day & there needn't be any specific day for which it should wait. Article: http://vettyofficer. by showing in the retro style people celebrating their payment on the 1st day of month through Dairy Milk.youtube. then came two hot beverage products doing this and now its the turn for the Chocolates -Dairy Milk vs Nestle Munch. 1 brand came up with the ad campaign which showed. HUL v/s Eureka Forbes: Eureka Forbes making mockery of the Pureit Mascot.com/2009/08/dairy-milk-vs-nestle-munch-ad-war. (Nestle) Munch vs (Cadbury) Dairy Milk Fighting with advertisements is not new in the Indian consumer market. This was to directly attack the Whisper Brand. ie the guy in the yellow raincoat. Ad: http://www. One of its effects was the stringent anti-ambush marketing laws that cricketers had to sign in 2002 5. Other rivalries areSony vs Nintendo AMD vs INTEL Huggies vs Pampers Energizer vs Duracell Mcdonalds vs Burger King USA CCD vs barista Ford vs GM BMW vs Mercedes Benz PS: Don’t forget RIN vs Tide .com/watch?v=QRIwkKF2cm8 4.blogspot. (Coca Cola) Sprite vs (Pepsi) Mountain Dew Sprite came up with an ad hitting on mountain dew’s jingle. 7. Nestle Munch v/s Cadbury Dairy Milk: Cadbury as it always comes up with ads showing new reasons to celebrate. First we saw two cola companies making ads against each others. 6.
using the product . consumer organizations. packaging.g. I am hungry.g. the buyer recognizes a problem or need (e. in more routine purchases. neighbours etc Commercial sources: advertising. Buyers Decision Process Research suggests that customers go through a five-stage decision-making process in any purchase. then a purchase decision is likely to be made there and then. specialist magazines Experiential sources: handling. However. This is summarized in the diagram below: This model is important for anyone making marketing decisions. a student buying a favourite hamburger would recognize the need (hunger) and go right to the purchase decision. A customer can obtain information from several sources: Personal sources: family. customers often skip or reverse some of the stages. we need a new sofa. It forces the marketer to consider the whole buying process rather than just the purchase decision (when it may be too late for a business to influence the choice!) The model implies that customers pass through all stages in every purchase. For example. I have a headache) or responds to a marketing stimulus (e. the model is very useful when it comes to understanding any purchase that requires some thought and deliberation.19. If not. dealers. The buying process starts with need recognition. An “aroused” customer then needs to decide how much information (if any) is required. salespeople. point-of-sale displays Public sources: newspapers. examining. If the need is strong and there is a product or service that meets the need close to hand. radio. skipping information search and evaluation. then the process of information search begins. television. However. At this stage. you pass Starbucks and are attracted by the aroma of coffee and chocolate muffins). friends. retailers.
the advantages compared with the competition. High-involvement purchases include those involving high expenditure or personal risk –for example buying a house. the marketer needs to provide a good deal of information about the positive consequences of buying. and maybe even encourage “trial” or “sampling” of the product in the hope of securing the sale. Then after having made a purchase. Where a purchase is “highly involving”. In these circumstances that customer will not repurchase immediately. Cause Related Marketing Cause marketing or cause-related marketing refers to a type of marketing involving the cooperative efforts of a "for profit" business and a non-profit organization for mutual benefit. The customer. In the evaluation stage. This arises from a concept that is known as “cognitive dissonance”. having bought a product. choosing some breakfast cereals in the supermarket) have very simple evaluation processes. By involvement. In high-involvement decisions. It is common for customers to experience concerns after making a purchase decision. To manage the post-purchase stage. Why should a marketer need to understand the customer evaluation process? The answer lies in the kind of information that the marketing team needs to provide customers in different buying situations. Post-purchase evaluation -Cognitive Dissonance The final stage is the post-purchase evaluation of the decision. products and services. 20. How does the customer use the information obtained? An important determinant of the extent of evaluation is whether the customer feels “involved” in the product.g. but is likely to switch brands next time. the customer is likely to carry out extensive evaluation. The sales force may need to stress the important attributes of the product. the customer must choose between the alternative brands. The challenge for the marketing team is to identify which information sources are most influential in their target markets. may feel that an alternative would have been preferable. a car or making investments. Low involvement purchases (e. we mean the degree of perceived relevance and personal importance that accompanies the choice. Research suggests that customers value and respect personal sources more than commercial sources (the influence of “word of mouth”). .The usefulness and influence of these sources of information will vary by product and by customer. buying a soft drink. it is the job of the marketing team to persuade the potential customer that the product will satisfy his or her needs. the customer should be encouraged that he or she has made the right decision.
• Outreach to Niche Markets: Partnering with non-profit organizations can help a company to connect with specific demographic or geographic markets. to the education of underprivileged children. (Wikipedia) Attracting and Retaining Customers: Companies that have engaged in Cause –Related Marketing reports that those efforts help attracts and build long-term relationships with customer. (Cause Related Marketing A Conceptual Paradigm) Examples in Indian context: 1. Cause-Related Marketing has helped them to create an alternative and distinctive approach to brand advertising. affinity credit cards. The Ford Division of the Ford Motor Company has issued thousands of public service announcements in an effort to both communicate a critical health message to women and to enfold them into its brand identity. The term was then used to describe the marketing campaign led by American Express in 1983 for the Statue of Liberty Restoration project. Tata Chemicals Limited Contributes 10 paise for every kilo of Tata Salt. Jabala. West Bengal . while cause marketing is a marketing relationship generally not based on a donation. $2 million was raised for Lady Liberty. was born. CRM can help companies distinguish themselves from their peers by offering the consumer the opportunity to contribute to something more then the company’s bottom line. help credit card companies develop long term relationships with consumers. For Example. Lok Shakti Vikas Sansthan. The Good Shepherd Society. The creation of the term "cause-related marketing" is attributed to American Express. and a dollar for each new card issued was given to the Statue of Liberty renovation program. namely: . reiterated its commitment to the cause of educating underprivileged children and announced its Desh Ko Arpan programme. The money raised was Rs 33 lakhs in a period of one month. including in-house marketing efforts by non-profit organizations. In addition to its Substantial financial and in –kind donations to Race events. Chennai. Barmer. Tamil Nadu . Child Relief and You (CRY) has been chosen as partners. The Desh Ko Arpan Programme. For Example. • Market Differentiation: For many companies. Because marketing differs from corporate giving (philanthropy) as the latter generally involves a specific donation that is tax deductible. sold during specific periods. Tata Salt. National and International brands can better identify with their local markets by linking themselves with community organizations. The money raised will support six child – development initiatives across the country. uses the card to make a purchase. transaction activity jumped 28 percent and the concept that doing well was good for business. Ford Motor Company successfully positioned itself among a formerly disengaged target market –Women.A penny for each use of the American Express card. the pioneers and undisputed leaders in the packaged and iodized Salt Category. Kolkata. Rajasthan .The term is sometimes used more broadly and generally to refer to any type of marketing effort for social and other charitable causes. or with regional or nongovernmental organizations. Over a four-month period. in which a non profit organization benefits each time a consumer. and it was coined to describe efforts to support locally based charitable causes in a way that also promoted business.
The community Services Guild. Gramya. H&S.pdf 21. http://dspace. Oral B. irrespective of sales will be Rs. http://www.brandchannel. Rachana Society for Social Reconstruction. Minimum contribution from P&G to Shiksha. Pune Maharashtra. Rejoice. Duracell or Pampers. Ariel.pdf 3.ac.in/bitstream/2259/367/1/215-218. Shiksha enabled the education of 33052 children in 435 communities in 2006 More info: 1. 2. Vicks VapoRub. Pantene. Nalgonda. http://www.iimk. P&G’s Shiksha campaign Every time you choose to buy a large pack of Tide. Tamilnadu . Gillette series.asp?sp_id=583 2. Namakkal. P&G promises to contribute are helping thousands of underprivileged children across India to access their right to education. Andhra Pradesh . Customer Relationship Management (CRM) Main aim: customer retention and customer satisfaction . Gillette Mach 3 Turbo.com/hp/shiksha07.pg-india.. 1 crore. Whisper.com/papers_review.
and sales management by optimizing information shared by multiple employees.We have to make list of the customers. taking orders using mobile devices) Allowing the formation of individualized relationships with customers. account. Customer Relationship Marketing Customer Relationship Marketing (Basics) Focuses on retaining existing Customers to create long-term value to the firm DOES NOT FOCUS on targeting new customers/acquisition of new clients It costs four-to-six times more to convert a customer than it does to retain one Directly linked to enhancing the levels of Customer Satisfaction It can be applied when there are competitive product alternatives for customers to choose from and also when there is an ongoing & periodic desire for the product or service. or want or can afford or products. its customer base. understand and identify customer needs and effectively build relationships between the company. identifying the most profitable customers and providing them the highest level of service. CRM consists of: Helping an enterprise to enable its marketing departments to identify and target their best customers. Providing employees with the information and processes necessary to know their customers. spending rate and profits It is a process or methodology used to learn more about customers' needs and behaviours in order to develop stronger relationships with them. these serve as the target lists. Strategy should be: Save money by not marketing to those who are less likely to respond. retention. CRM helps businesses use technology and human resources to gain insight into the behaviour of customers and the value of those customers. According to industry view. and distribution partners. manage marketing campaigns and generate quality leads for the sales team. resulting in higher loyalty. We build relationship with our best customers. referral. Make money by making relevant offers to those who need. 22. with the aim of improving customer satisfaction and maximizing profits. and streamlining existing processes (for example. Primary Objectives: o Reduce Customer Turn-over/ Increase Customer Retention o Increase Customer Loyalty . Assisting the organization to improve telesales.
which is one of the most costeffective campaigns that a product can get. 3.) It is empirically proven that a 5% improvement in customer retention can cause an increase in profitability of between 25 and 85 percent. between market segments. and complaints. and over time. 4. One of the advantages of retaining customers is that these long-term customers may initiate free word of mouth promotions and referrals. Different Pricing Strategies PRICING STRATEGIES The pricing strategy for a new product should be developed so that the desired impact on the market is achieved while the emergence of competition is discouraged. tastes. visible endorsement of top management. activities. Usually facilitated by Customer Relationship Management systems (software systems that facilitate tracking and analyzing customer's preferences purchasing behavior. This ratio can be used to make comparisons between products. illustrated with examples where they can be found. In accordance with this statistic. Customer retention efforts involve considerations such as the following: 1. Determine reasons for defection-Look for the root causes. Develop and implement a corrective plan-This could involve actions to improve employee practices. . Other techniques include the analysis of customers' complaints and competitive benchmarking. dislikes. etc. making it difficult for competitors to enter the market or gain market share. it is best to start defining the most commonly used strategies. Customer retention measurement-This is simply the percentage of customers at the beginning of the year that are still customers by the end of the year. not mere symptoms. This involves probing for details when talking to former customers. Customers that stay with you tend to be satisfied with the relationship and are less likely to switch to competitors. Thus. 2. Customer valuation-describes how to value customers and categorize them according to their financial and strategic value so that companies can decide where to invest for deeper relationships and which relationships need to be served differently or even terminated.o Increase Customer Satisfaction o Increasing switching barriers (especially when there are many competitors offering similar products/services) It relies upon the communication and acquisition of consumer requirements solely from existing customers in a mutually beneficial exchange so as to create value. Pricing strategies are as many as there are market scenarios. an increase in retention rate from 80% to 90% is associated with a doubling of the average life of a customer relationship from 5 to 10 years. using bench marking to determine best corrective practices. adjustments to the company's reward and recognition systems. likes. and the use of "recovery teams" to eliminate the causes of defections 23.
food stuffs. o Suitable for products with long anticipated life cycles o May be useful if launching into a new market Eg. Psychology pricing: Used to play on consumer perceptions Classic example –Rs 999 instead of Rs 1000! Links with value pricing –high value goods priced according to what Consumers THINK should be the price Example: dollar store (everything is priced at Rs99) 4.g. 3. etc.1. DVDs. modem along with internet connection. Reliance mobile 2.g. e. after a patent runs out) Examples: Playstation. Skin care products like Olay Loss leader: o Goods/services deliberately sold below cost to encourage sales elsewhere o Typical in supermarkets. Market Skimming : High price. Going Rate (Price Leadership): . etc. Low volumes Skim the profit from the market Suitable for products that have short life cycles or which will face competition at some point in the future (e. selling bottles of gin at £3 in the hope that people will be attracted to the store and buy other things o Purchases of other items more than covers ‘loss’ on item sold o Example: ‘Free’ mobile phone when taking on contract package. Penetration pricing: Price set to ‘penetrate the market’ ‘Low’ price to secure high volumes o Typical in mass market products –chocolate bars. Value pricing: o Price set in accordance with customer perceptions about the value of the product/service o Eg. household goods. bottled water like Bisleri. at Christmas.
Delhi Metro Rail project 6. Autocomponents (fixed cost of tools+ variable material cost) 9. Absorption/Full Cost Pricing: Full Cost Pricing –attempting to set price to cover both fixed and variable costs Absorption Cost Pricing –Price set to ‘absorb’ some of the fixed costs of production Eg. Price Discrimination: Charging a different price for the same good/service in different market Requires each market to be impenetrable Requires different price elasticity of demand in each market Eg: Airlines. Tender Pricing: Many contracts awarded on a tender basis Firm (or firms) submit their price for carrying out the work Purchaser then chooses which represents best value Mostly done in secret . the price could be varied a good deal to attract . on a flight from London to New York –providing the cost of the extra passenger is covered. Destroyer/Predatory Pricing: Deliberate price cutting or offer of ‘free gifts/products’ to force rivals (normally smaller and weaker) out of business or prevent new entrants Anti-competitive and illegal if it can be proved Eg: Rs 500 mobile phone by Reliance 8. Eg. ‘going rate’ pricing may be applicable Eg banks. Marginal Cost Pricing: Marginal cost –the cost of producing ONE extra or ONE fewer item of production MC pricing –allows flexibility Particularly relevant in transport where fixed costs may be relatively high Allows variable pricing structure –e. too low: theprice leader would match price and force smaller rival out of market May follow pricing leads of rivals especially where those rivals have a clear dominance of market share Where competition is limited. supermarkets. petrol. rivals have difficulty in competing on price too high: they lose market share. Defence vehicle contracts. dell (online & store prices diff for the same model) 7. electrical goods –find very similar prices in all outlets 5.g. In case of price leader.
Target Pricing: Setting price to ‘target’ a specified profit level Estimates of the cost and potential revenue at different prices. Ace = Mini Truck. For example. Since consumers use a frame of reference in understanding a product. If Frooti launches an Apple Drink. Contribution Pricing: Contribution = Selling Price –Variable (direct costs) Prices set to ensure coverage of variable costs and a ‘contribution’ to the fixed costs Similar in principle to marginal cost pricing Break-even analysis might be useful in such circumstances 11. the goals it helps consumers achieve and it does it in a unique way. the . and thus the break-even have to be made. Frame of reference is that evaluative criterion which is used by consumers to make a better understanding of the product/services. Once the frame of reference is identified. Eg. Coca Cola = Cola. Humans understand and remember new things by linking it to existing (known) objects. Real Estate 12. A good brand positioning strategy will lead to clarifying the brands essence. to determine the mark-up Mark-up = Profit/Cost x 100 . the concept has a very important place in the positioning of the product. Positioning requires the marketer to clearly communicate the similarities and differences between brands. the frame of reference used to evaluate Frooti is that it is a mango drink. the consumers will find it difficult to accept the product since it is out of the frame of reference used to Evaluate/understand Frooti.10. Cost-Plus Pricing: Calculation of the average cost (AC) plus a mark up AC = Total Cost/Output 24. Frame of reference also explains the context in which consumers tend to evaluate /place the product. Dettol = Antiseptic etc. Determining a positioning strategy requires establishing a ‘frame of reference’ by identifying the target market and the competition and identifying the ideal points of parity and points of difference brand associations. Frame of reference is the framework used by the consumers to make sense of the product in question. Positioning and Differentiation Positioning: Positioning is the act of designing the company’s offering and image to occupy a distinctive place in the minds of the target market.
the consumers should be made aware of such a category. These strategies will fail if the marketers did not understand the frame of reference used by consumers in evaluating the product. The brand wants to be a guilt-free snack for hunger moments.marketer will position the product in line with the frame of reference. Competitor POP is where marketers tell the consumers that their brand have all the properties/qualities of their competing brands. hand sanitizer is a new category and consumers are not aware of such a category. its advantages and uses. Points of parity are those associations that are not necessarily unique to the brand but may in fact be shared with other brands. Some examples of positioning: Dominoes –Hot pizza delivered within 30 mins Monaco smart chips –healthy snack Lays -convenient snack. For example Lifebuoy soap will establish competitive POP with Dettol soap by claiming that it has germ killing qualities and vice versa. The concept of Points of Parity helps marketers to place the product in line with the consumer's frame of reference. It is essential for a marketer to be able to differentiate his product to break through the clutter. In case of products that lack a frame of reference. Category POPs are those associations that consumers view as being necessary to be a legitimate and credible offering with a certain product or service category. Usually marketers use packaging.com/watch?v=6ku0HkfGsbs&feature=player_embedded Differentiation The market is flooded with similar products and offerings which has created a huge clutter of brands and products. For that. Once the frame of reference is established. . then the brand should be placed in the category. So when a brand is being launched in such a new category. For example. This lack of understanding can lead to positioning failures that eventually lead to product failure. There are two forms of Points of Parity -Category POP and Competitive POP. Bingo -different tastes Aliva -health + taste Hippo is being positioned as a hunger-killer. Right now marketers are using infomercials to educate the consumers about hand sanitizer. brand managers should first establish a category POP. Competitive POP are those associations designed to negate competitor's Points of Parity.youtube. Differentiation based on product features has become a difficult task with competitors taking no time in copying /adopting that feature. Interesting ad positioning hippo http://www. marketers should create a frame of reference for the consumers. product form and labels to establish category points of parity.
Differentiations based on incremental product improvements /features have become difficult to develop and sustain in the market. Methods of differentiation: 1) Invest in R&D India is an R&D and product development hub for most of the MNCs but seldom Indian marketers were able to create breakthrough products for the Indian market. Tata Nano has shown the world what Indian minds can do when inspired. The market is moving in a direction where only those brands will succeed who can innovate. 2) Protect the Differentiation An important determinant of a successful differentiation is the brand’s ability to protect the differentiation. Smart brands use ingredient branding to protect their key differentiators. Ingredient branding is where a particular product feature or an ingredient is branded by the company. There are two kinds of ingredient brands. a) Where the ingredient is owned by another company. Intel is a pioneer in ingredient branding. Intel has built ingredient brands like Pentium, Celeron and Atom etc. b) Where the feature/ingredient is owned by the company itself. Bajaj has a powerful ingredient brand DTSI (which is also a patented technology) which it now uses for all of its two wheeler brands.
3) Connect to a Relevant Need Creating a sustainable differentiation is possible only when brands become customer focused. When products become standardized, it is important for marketers to create differentiation focusing on consumer needs. ‘Brand laddering’ is a strategy that can be used by marketers to create differentiation on a need rather than on a product feature (attribute to value). Raymond is a brand that has created a space for itself by effectively laddering up to a customer need (Complete Man). The benefit of such a strategy is that competitors will find it difficult to copy the differentiation since it is based on an intangible attribute. The brand has created a unique powerful image which is sustainable over time.
4) Long Term Vision through Brand Charter It is important for marketers to create a brand charter which will spell out the long term vision for the brands, its differentiation and positioning platforms, guidelines and strategies. Such a brand charter will guide the future brand managers to create tactics which are in line with the overall brand vision. If a brand chose to create intangible differentiation opportunities, there has to be a consistency in the brand’s positioning and differentiation strategies. Brand Charter will help bring consistency which will in turn facilitate create a sustainable differentiation. Types of Differentiation:
Personnel Differentiation: By using better trained employees. Singapore airlines are well regarded because of its flight attendants. Channel Differentiation: By efficiently and effectively designing distribution channels coverage, expertise and performance. Eureka Forbes water purifiers and vacuum cleaners gained popularity due to their differentiated positioning through their direct to home channel. Examples: The Himalaya drug company differentiates itself by using ayurvedic ingredients. Product Positioning: -In marketing, positioning has come to mean the process by which marketers try to create an image or identity in the minds of their target market for its product, brand, or organization. It is the 'relative competitive comparison' their product occupies in a given market as perceived by the target market. Positioning means determining and communicating the central benefit of the product in the minds of target buyers. For example, a car manufacturer might target buyers for whom safety is a major concern. The company "positions" its cars as the safest vehicles that customers can buy. Positioning starts with a product. A piece of merchandise, a service, a company, an institution, or even a person. But positioning is not what you do to a product. Positioning is what you do to the mind of the prospect. That is, you position the product in the mind of the prospect. Brands usually position themselves using certain parameters. These parameters highlight the most relevant features of its product and the image, the brands wishes to portray to its consumers. How to write a positioning statement:Who wants/needs [compelling reason to buy] The [product name] is a [product category] That provides [key benefit]. Unlike [main competitor], The [product name] [key differentiation] Product differentiation:-Differentiation is the act of distinguishing your company's offering from competitors' offerings in ways that are meaningful to consumers. You can differentiate products physically or through the services your company provides in support of the product. In business terms, to differentiate means to create a benefit that customers perceive as being of greater value to them than what they can get elsewhere. It's not enough for you to be different-a potential customer has to take note of the difference and must feel that the difference somehow fits their need better. (Other words that mean virtually the same thing: Competitive Advantage; Unique Selling Proposition; or Value Proposition.) Products' physical distinctions include: form—size, shape, physical structure; for example, aspirin coating and dosage features—such as a word processing software's new text-editing tool
performance quality—the level at which the product's primary characteristics function conformance quality—the degree to which all the units of the product perform equally durability—the product's expected operating life under natural or stressful conditions reliability—the probability that the product won't malfunction or fail reparability—the ease with which the product can be fixed if it malfunctions style—the product's look and feel design—the way all the above qualities work together; (it’s easy to use, looks nice and lasts a long time)
Products' service distinctions include: ordering ease—how easy it is for customers to buy the product delivery—how quickly and accurately the product is delivered installation—how well the work is done to make the product useable in its intended location customer training—whether your company offers to train customers in using the product . customer consulting—whether your company offers advising or research services to buyers of the product maintenance and repair—how well your company helps customers keep the product in good working order
Keys to Successful Differentiation: Know your customers, really, really well. Pick a blend of differentiation methods that, in the eyes of your customers, truly sets you apart. Talk about your differentiation in terms of customer benefits. Tell everyone about what differentiates you--often. Keep your differentiation fresh by listening for changing customer needs.
25. Digital Marketing/Online Marketing
Digital Marketing is the practice of promoting products and services using digital distribution channels to reach consumers in a personal and cost-effective manner. Media include: Internet Banner Ad: An advertisement that appears on a Web page, most commonly at the top (header) or bottom (footer) of the page. Designed to have the user click on it for more information. Blog: blog is a user-generated Web site where entries are made in journal style and displayed in a reverse chronological order Brand and consumer interaction through social web and brand’s own website Microsite: A mini Web site design to promote a specific portion or brand from a larger corporate site. Used often with contests or as a landing page for a specific promotion.
the inability of shoppers to touch. pay per play. a follow up campaign would be sent via text message (SMS) with the special offer. measured. The advertisers can use a variety of methods: pay per impression. Personalised E-mails to subscribers of company’s newsletters etc/ potential customers Social Media Websites – Facebook. DISADVANTAGES Consumers can easily connect with one another. Internet marketers also have the advantage of measuring statistics easily and inexpensively.com where users have the choice to select their country location first and are then presented with a different site or article content depending on their selection. This is called geo-targeting. pay per click. if a company is trying to promote a new product release. and tested. Nearly all aspects of an Internet marketing campaign can be traced. push messaging can help drive new revenue as well. an email could be sent to a list of potential customers with a special offer for those that also include their cell phone number. Global audience and interactive nature of the media Different content by choice: A typical example for different content by choice in geo targeting is the FedEx website at FedEx. or pay per action. High Return on Investment (ROI) possible –if executed the right way. often using multimedia sites such as YouTube and Flickr. 21 years old or over and living in California. Detailed tracking and reporting –marketers can see not only how many people saw their message but also specific information about each user such as their name as well as demographic and psychographic data. consumers may trust information obtained in this way much more than they do information from your company From the buyer's perspective. . A couple of days later. Linkedin Mobile Phones o SMS o MMS o Mobile Internet ADVANTAGES Multi-Channel Communications: For example. smell. Also an email campaign can include a banner ad or link to acontent download SERVING as brand reinforcement Can be personalized --messages received can be highly targeted and specific to selected criteria –like a special offer for females. What’s more. Therefore. marketers can determine which messages or offerings are more appealing to the audience. so they themselves can satisfy their need for information about products. taste or "try on" tangible goods before making an online purchase can be limiting. RSS or Real Simple Syndication is technology designed to allow users to subscribe to a specific content feed and be automatically alerted when new updates are available.
Experimental Marketing Definition: Experiential marketing gives customers an opportunity to engage and interact with brands. They opened several music outlets and gave the customers a real feel of Xpress Music in Nokia . speed. Many consumers are hesitant to purchase items over the Internet because they do not trust that their personal information will remain private. handling and breaking comfortability. Encryptionis the primary method for implementing privacy policies. Nokia 5800 Xpress Music Activation Launch They had their associates helping the customers in activating the service and giving a demo on how to use it. Customers are unaware if and when their information is being shared. Personal experiences help people connect to a brand and make intelligent and informed purchasing decisions. products. Of those individuals who use the Internet. http://www.com/watch?v=lHVjPydAiKE http://www.youtube. Examples: 1. control. The event was organized to get a real feel of driving a Hyundai Car. They were asked about the pick-up. and are unable to stop the transfer of their information Effects on industries Music Industry-By 2008 Apple Inc.youtube. and services in sensory ways that provides exact and precise information. 44percent now perform banking activities over the Internet in the US Internet Auctions have become popular-eBay is often used as a price-basis for specialized items 26. Social Media Marketing 27.'s iTunes Store has become the largest music vendor in the United States Internet marketing is now overtaking radio marketing in terms of market share E-commerce—this is where goods are sold directly to consumers (B2C) or businesses (B2B). Hyundai “Drive-In” California event. along with interiors of the car.com/watch?v=2PWWghyHpCQ&feature=related 2. It's the difference between telling people about features of a product or service and letting them experience the benefits for themselves. It was totally new to the market and the customers had no idea about it. They gave customers a trial ride of Hyundai car on a special track made of obstacles.
including product modification. They also had Nokia handsets to experiment with.youtube. be genuine. Products varying from Refrigerator to MotorBikes http://www.rcmindia. Green Marketing The marketing of products that are presumed to be environmentally safe Refers to the process of selling products and/or services based on their environmental benefits. and give them the opportunity to participate. Such a product or service may be environmentally friendly in itself or produced and/or packaged in an environmentally friendly way.com/watch?v=Rs8YyYAXf2A&feature=player_embedded 4.Phones. This allowed customers to actually analyze the quality of music and other handset features." underscoring its new "super long life" positioning and promise of saving $26 in energy costs over its fiveyear lifetime HP's promise to cut its global energy use 20 percent by the year 2010. .com/case_GKB. Incorporates a broad range of activities. 1) Being genuine means that a) That you are actually doing what you claim to be doing in your green marketing campaign and b) That the rest of your business policies are consistent with whatever you are doing that's environmentally friendly. as well as modifying advertising Also called Environmental Marketing and Ecological Marketing Examples: Under Philips light Marathon they launched a CFL bulb as "Marathon.com/watch?v=3BN4n3Qihac&feature=related 3. packaging changes. RC&M: GRAMEENO KE BEECH A multi village fair with participation of various corporate all under one roofWhere customer can actually feel the experience of product by trial usage. changes to the production process. Indica EV-an electric car from Tata Motors which runs on polymer lithium ion batteries For green marketing to be effective.youtube. Coca Cola New Grip Bottle http://www. you have to do three things.html 28. Both these conditions have to be met for your business to establish the kind of environmental credentials that will allow a green marketing campaign to succeed. http://www. The HewlettPackard Company announced plans to deliver energy-efficient products and services and institute energy-efficient operating practices in its facilities worldwide. educate your customers.
judgment. but also a matter of letting them know why it matters. Examples: 1.2) Educating your customers isn't just a matter of letting people know you're doing whatever you're doing to protect the environment. Otherwise. Automobile industry: Example is hybrid cars launched by Civic (in India) 10. Toshiba Laptops: Concept of Eco utility (Built in power modeto reduce power consumption). New Mantra of corporate: Companies like HP emphasize on saving energy by going green. Introduction of CNG in Delhi 7. Tetra pack of milk 29. Ban of Plastic Bags to wrap customer purchases. 4. and guesswork Guerrilla Marketing: Defined . for a significant portion of your target market. normally through letting the customer take part in positive environmental action. 2. Online Shopping: Marketed by the Proposition of saving fuel and reducing pollution. Car sharing services 6. 3. 3) Giving your customers an opportunity to participatemeans personalizing the benefits of your environmentally friendly actions. Videocon: look for the new campaigns 9. 8. and the recycling scheme after your computer hardware gets old. Guerilla Marketing Philosophy of Guerilla Marketing Major reasons why guerilla marketing draws analogy from the guerilla warfare are it is associated with a) Counters the traditional large spends on marketing through unconventional methods which is effective yet involves much lesser spends b) They are unexpected and unconventional where customers are targeted in unexpected places c) It should be based on human psychology instead of experience. CFL’s 5. it's a case of "So what?" and your green marketing campaign goes nowhere.
and guesswork. the primary investments of marketing should be time. engaging and thought-provoking concept to generate buzz. judgment. Instead of money. guerrilla marketing campaigns are unexpected and unconventional. energy. and larger transactions. Guerrilla Marketers should always use a combination of marketing methods for a campaign. Forget about the competition and concentrate more on cooperating with other businesses. The objective of guerrilla marketing is to create a unique. Create a standard of excellence with an acute focus instead of trying to diversify by offering too many diverse products and services. energy and imagination rather than a big marketing budget. PR stunts. and consumers are targeted in unexpected places. potentially interactive. more transactions with existing customers. not sales. Instead of concentrating on getting new customers. Typically. any unconventional marketing intended to get maximum results from minimal resources. street giveaways of products. The primary statistic to measure your business is the amount of profits. Principles of Guerilla Marketing Levinson identifies the following principles as the foundation of guerrilla marketing: Guerrilla marketing is specifically geared for the small business and entrepreneur. aim for more referrals. Use current technology as a tool to empower your business. Examples: 1) Nike . The marketer should also concentrate on how many new relationships are made each month.The concept of guerrilla marketing is an unconventional system of promotions that relies on time. The term was coined and defined by Jay Conrad Levinson in his book Guerrilla Marketing Guerrilla marketing involves unusual approaches such as intercept encounters in public places. It should be based on human psychology instead of experience. and imagination.
The orange M of that brand is quite well known there and earlier this year the M showed up on various town and city signs. 2) MIRGOS An M Better Migros is the largest supermarket chain in Switzerland and the largest employer in that country. It’s a nice example of guerrilla marketing work. covering the M in those signs.Impact on Psychology Nike passed these cards out to runners so they can alert their friends and family that they Have "gone running". A guerrilla marketing activity that goes along well with their campaign or in English "An M better. 3) McDonalds .
Marlboro cigarettes had high status as a real American brand. This high status came from the introduction of "The Marlboro Man" in 1955 by Leo Burnett Co. The promotion is only 2 weeks long. Along those lines. but why? We need to pay tribute to one of the earliest and most successful guerilla marketing campaigns in Americas advertising history. Marlboro brand was ranked 31st but once this great marketing tactic went national they reached the number one cigarette brand in America. but that only works when people find out about it. this coffee pot lamp post promoting FREE McDonalds coffee at the intersection of 6th Ave and Cambie Street in Vancouver is tough to overlook.More coffee please Everyone loves free coffee. 4) Marlboro The MALBORO MAN We all know what Marlboro's are. but the memories of this ambient marketing effort will last quite a bit longer. For More Examples: http://koikoikoi. Before the rough cowboy image was introduced.com/2009/04/guerrilla-marketing-collection1/ .
Starbucks doesn’t have one. These are basic underlying feelings that drive our decisions and buying behavior. People really aren't much interested in attributes.http://blog. Other examples can be seen with other top brands such as Starbucks. The packaging and collateral are nothing special and I challenge you to find an advertisement in any magazine. consumers manifest it in their own lives. like the pleasant smell of food cooking. The Starbucks Example– Starbucks is one of the strongest global brands around –without following the marketing text book. pictures. specific.achievement. try tapping into the direct process of brain patterns and emotional images with sharp. its love of the potential for the athlete inside everyone lives inside the people in Beaverton. colors or shapes. unfamiliar industry jargon. Emotions drive our behavior. which reveal the associated feelings of a previous experience. Nike succeeds because its core belief -its brand promise. Image and Emotional Marketing Rational only generates interest in the product the ultimate driver is emotion The practice of emotional marketing is all about getting your target audience to connect with your product. Its complicated logo is not memorable." The result is not only an emotional connection but an individual one.com 30. Your marketing can target positive emotions through the use of unusual words. acceptance. such as: security. reinforced by the mental picture of luxury possessions. service. It may be a need for financial security. happiness. but uses emails as the . numbers. self-esteem. Emotional marketing appeals include personal and social needs. When that love is manifested in their gear. comfort. Having a one-to-one relationship in today's marketplace is essential for market dominance. or it could be a desire for status and achievement. or a day at the beach. status. These products and services make an emotional connection with the people they serve. which is associated with an image of a safe investments and insurance. Starbucks does advertise. saving money. and relevant details that can sway the buying choices of your potential customers.guerrillacomm. word rhythms and rhymes. It is all about values. Emotional marketing is better in many instances than rational marketing that focuses on product attributes. and most people will not be able to recreate it if you ask them to. or selling how good you are. They will describe it as “something green” “roundish” with a “person or something” in the middle. Appealing to an underlying desire that triggers an automatic memory image can cause an emotional response that reinforces logical thoughts. and before you rack your brains. The slogan is not memorable either. and brand at a very basic and fundamental level -the level of emotions. Rather than using ads with dull corporate speak. or symbols. which converge and lead to a buying decision. Porsche. or making money. the world is driven by emotions. they want to know if they can have a product that suits their personality. Rational thought leads customers to be interested but it is emotion that sells. and so on.
31. in its business. a treat. others will know you have a great product. In a separate article by Roger Dooley. That’s the reason why Starbucks’ cup sizes are "grande" and "venti. Each cup of coffee is also freshly made by a "barista" at a separate counter and never behind a wall or out of sight from the customer. should they be smell Stefan Floridian Waters again. and many have plush sofas and armchairs. Many Starbucks also have Internet connection for their customers’ convenience A few marketing techniques work well in emotional marketing: Word of mouth -people trust other people that tell them your product works or if it is the best. will be reminded of the airline and the pleasant emotions it brought them. and the people who participated in the trials are satisfied. and other elements of their service. The Starbucks store has tables and chairs for congregating or reading and working. and a satisfying reward all rolled in one. it’s cheaper to ship the coffee pre-ground in sealed packages. Stefan Floridian Waters. Forums -this is basically electronic word of mouth. you have proof that your product works. Trials -if you have concrete results.preferred medium. in their hot towels. Emotional Marketing may also include “Sensory-emotional” marketing. the smell of freshly ground coffee beans. in the perfume worn by flight attendants. he reports that. Testimonials -again. coffee is not just a beverage. Presumably. but it is a ritual.” Consumers then link the airline to the scent and. people trust other people. “The most startling hang is that the firm will go back to grinding coffee in its stores for the sole purpose of improving the coffee aroma. So what is the success factor of the Starbucks brand? The emotional experience of its consumers –they feel sophisticated and part of what many brand experts refer to as a "coffee house" community. Starbucks also uses a scent. a habit. Some examples -Singapore Airlines and Starbucks “*Singapore Airlines+ not only employs the more common consistent visual themes one might expect from an airline. but Starbucks management apparently feels that any productivity loss at the stores will be offset by improved customer loyalty and higher sales. Line Extension . which appeals to people's skeptical side. . but incorporates the same scent. If people are willing to take the time to give a testimonial." not medium or large. For the Starbucks community.
Surf Excel. Diet Coke. or prices.Line Extension: A product line extension is the use of an established product’s brand name for a new item in the same product category. As a result its sales dropped from 5. Line consistency refers to how closely related the products that make up the line are. added ingredients. On example of that is 7Up. A Word of Caution -Although we might tend to think that Line Extension leads to more sales due because of more products and the company is anyways leveraging the brand equity that it has created. Line depth refers to the number of product variants in a line. • It provides a convenient route for infusing new values into an ongoing brand and gaining presence in new market.2%. But it can sometime lead to drop in sales too. It became popular as a Lemon Uncola but in 1978 introduced many flavours such as 7Up Gold and Cherry 7Up and various diet versions too. Its disadvantages are: . Line extensions happen when the brand launches the new product in the same category targeting a new segment through new forms. When you add a line extension that is of better quality than the other products in the line. this is referred to as trading up or brand leveraging. in the same product category. • It increase efficiency of promotional expenditures and allow for packaging and labeling efficiencies. Vanilla Coke Clinic All Clear. • It reduces risk associated with new product introduction in customers and distributors.7% of the soda beverage market to 4. colgate cibaca A line can comprise related products of various sizes. colours and ingredients. • It helps in satisfying the changing desires of customers that is variety-seeking. Product Extensions help in the growth stage of PLC. colgate total. types. qualities. Clinic Plus Colgate going onto colgate fresh. such as with new flavours. modern and contemporary. package sizes etc. colors. The parent brand covers a new product within a product category it currently serves. Its advantages are: • It helps in strengthening the brand power and keeps the brand live. forms. Surf Excel Blue Coke. Examples: Surf. • It decreases the cost of gaining distribution and trial. Line vulnerability refers to the percentage of sales or profits that are derived from only a few products in the line. Line extension is to offer a new product under the same brand name. colors. because it creates confusion in the minds of the consumer as to what the brand means.
one of the only symbols of urban sophistication in an otherwise rustic party. After all. not looking at the whole industry of the product neglecting the fields of opportunities in their area of industry. and disappear. Marketing Myopia is the short sighted look of the managers in wrongly identifying the category and goals of the company. the party bets it will connect with 'less sophisticated' masses who identify with what's rural and rustic. the people) and contrived (read. particularly in failing to spot customer’s desires through excessive product focus. the BJP has lost its last hope at connecting with a rapidly changing voter demographic in India. railway companies that define their markets in terms of trains. who amongst the citizenry looks to staying still? Staying stuck to relics of the past and the soon to be obsolete present? It’s the 'moving on' masses the BJP will miss if it holds on to what it calls ideology. and buses. "What business are we in?" Example: Political Parties and Marketing Myopia Afflictions The expulsion of Jaswant Singh from the BJP points to the party falling prey to what's termed 'Marketing Myopia'. Marketing Myopia Marketing Myopia is the lack of vision on the part of companies. falter. fall. a lifestyle that they may not for the moment enjoy. This concept was discussed in an article (titled 'Marketing Myopia. Theodore C. Marketing Myopia is a short sighted and inward looking approach to marketing that focuses on the needs of the firm instead of defining the firm and its products in terms of the customers' needs and wants. but surely crave. The inability to see the future and design offerings that will be relevant in that future to come. gone.' in July-August 1960 issue of Harvard Business Review) by Harvard Business School emeritus professor of marketing. Levitt (1925-). the brand) that seem like they are a throwback to yore. who suggests that firms get trapped in this bind because they omit to ask the vital question. Marketing Myopia is the failure to define an organization's purpose in terms of its function from the consumers' point of view. will find it increasingly difficult to connect with voters who want move forward and leave behind cultural hangovers of the past. Of course. is what's . even the 'less sophisticated' crave urban sophistication. despite their previous eminence. not listening to the customer's real needs. airlines. fail to recognize the challenge of competition from cars. real (read. But tell you what. It is therefore necessary to define the needs of the consumer in more general terms rather than product-specific terms.• In case of failure it would affect the product itself and slight connections with the brand image. Such self-centred firms fail to see and adjust to the rapid changes in their markets and. And the mass media has presented to them on a platter. A party saddled with symbols. With Jaswant. rather than transportation. 32. For example. Liberalised urban India seeks sophistication in their lifestyle.
There was no significant value addition between these upgrades. The Amby with Isuzu again lifted thesales of the brand. 33. HM launched a radically designed Ambassador variant Avigo in 2004. For four decades. Even now Ambassador costs more than Rs 4. Marketing Myopia. The company also has never invested in the brand. The competition is immense and the quality of cars has also gone up.termed. drivability. At that price one could afford a more luxurious Indigo sedan. Non-Conventional Advertising Medium . Ambassador never changed with times. If we look at the product.000. Ambassador is never in the radar of the consumers. Consumers now have new set of purchase considerations like quality. the brand could have survived the competition. The brand made many cosmetic changes from 1958-2000 and three upgrades was made which was namedas Mark II. is a learning that's imperative. Indica took away the taxi car market from Ambassador. Second factor that failed Amby was the price. But the euphoria was short lived. the HM plant had achieved full depreciation in 2000. In order to lift the sagging sales of the brand. Mark III and Mark IV. The nail in the coffin came with the launch of Indica. Without investing in either brand or product. The fundamental issue was with the product and price. Again the diesel loving individual consumers had a better affordable modern car as compared to the ageing Ambassador. Although the styling was radical. And not knowing that isn't ideology that matters.80. brand. HM had sealed the fate of this brand. luxury. Had the company rationalised the price of Amby in 2000. There are many reasons that can be attributed to this brand's failure. Its a learning of what businesses know keeps them alive and Case Study : Ambassador as an example of Marketing Myopia The fall of Ambassador from a leadership position to a marginal player is a classic case of marketing myopia. the customer response was lukewarm. cost of maintenance etc In the value proposition domain. Indian consumer is now spoilt with choices. A major change happened when the brand introduced a 1800 Isuzu engine. the brand has been taking its customers for granted. The look and the built quality remained the same. and that its about what the voter wants. According to reports. The apathy of HM to offer product changes in tune with the times made the brand stale. But the company did not thought of passing on the reduced cost to the consumer. HM never bothered to rationalize the price of the brand. The narrowing price difference between petrol and diesel also eroded the value in investing in an old dated Ambassador.
rectangular boxes containing text and perhaps a picture that companies pay to place on relevant Web sites. Product placement in movie: Movie Viruddh. Place advertising Or out of home advertising. that pop up between changes on a Web site. The rationale is that markers are better off reaching people where they work. Mobile Marketing: Every 2 minute mobile episode of Fox’s show Prison Break starts with a 10 second message that show cases Toyotas new subcompact sedan Yaris. More traditional companies find it difficult to embrace non-traditional advertising.Non-traditional advertising is a form of advertising that is atypical. Online Advertising Display Ads or banner ads are small. but are slowly becoming more aware and open-minded that it is a way of reaching consumers with a greater impact. Non-traditional advertising can encompass alternative media and outdoor media. Social Media: Companies use social networking websites as a platform for advertising too. rectangular boxes containing text and perhaps a picture that companies pay to place on relevant Web sites. Online Advertising Display Ads or banner ads are small. myspace. play and of course shop. Traditional these banners were placed on . Billboards have been transformed and now use colourful digitally produced graphics. the virtual world of engagement and the Physical world of engagement. Examples: facebook. is a broad category including many creative and unexpected forms to grab customer’s attention. however now youtube videos also have such ads below the video. the use of mediums that break from traditional advertising models. friendster. GlaxoSmithKline when launched their first weight-loss drug ‘Alli’. which displays the N97 screen with scrolling text. Interstitials: advertisements often with a video or animation. Ads for Johnsons & Johnsons’s Tylenol headache reliever would appear on brokers’ web sites whenever the stock market fell by 100 points. They project display ads to focus on their target audience using information given by users on the website. sounds movement and usual 3 dimensional images. Example: the Nokia N97 Live online Billboard ad. they sponsored a weight-loss online community. There are two parts of such advertisements. backlighting. where Amitabh Bachan and John Abraham discuss the benefits of Westerm Union. Sponsorships: Companies get their name of the web site by sponsoring certain content on the site. instant messaging and chat discussions about special interests to the company’s brands and products. New emerging methods of advertising. Online Communities: many companies sponsor online communities whose members communicate through postings. Traditional these banners were placed on top of the web site or on the side panels. orkut.
Natrajan Iyer from Titan . Online Communities: many companies sponsor online communities whose members communicate through postings. which is specifically for the vehicle. Social Media: Companies use social networking websites as a platform for advertising too. backlighting. automobiles. Billboards have been transformed and now use colorful digitally produced graphics. Wrapped Vehicles can include public transportation buses. Example: Santro Xing Remember ‘Gold Nano’ shown by Mr. instant messaging and chat discussions about special interests to the company’s brands and products. Contextual Advertising: Contextual advertising is a form of targeted advertising for advertisements appearing on websites or other media. however now youtube videos also have such ads below the video. Product Sampling: Giving free samples of the product at malls. which displays the N97 screen with scrolling text. etc. Example: the Nokia N97 Live online Billboard ad. GlaxoSmithKline when launched their first weight-loss drug ‘Alli’. Product placement in movie: Movie Viruddh. vans. play and of course shop. The rationale is that markers are better off reaching people where they work. Ads for Johnsons & Johnsons’s Tylenol headache reliever would appear on brokers’ web sites whenever the stock market fell by 100 points. This high-impact format reaches both pedestrian and vehicular traffic and provides market penetration by traveling throughout the target region. where Amitabh Bachan and John Abraham discuss the benefits of Westerm Union.top of the web site or on the side panels. Entirely covered by full-color advertising design. trucks. Place advertising Or out of home advertising. Sponsorships: Companies get their name of the web site by sponsoring certain content on the site. They project display ads tofocus on their target audience using information given by users on the website. The advertisements themselves are selected and served by automated systems based on the content displayed to the user. is a broad category including many creative and unexpected forms to grab customer’s attention. promotional value and makes a statement about the advertiser. The customized overall design of this format provides eye-catching attention. myspace. Mobile Marketing: Every 2 minute mobile episode of Fox’s show Prison Break starts with a 10 second message that show cases Toyotas new subcompact sedan Yaris. friendster. Interstitials: advertisements often with a video or animation. such as content displayed in mobile browsers. sounds movement and usual 3 dimensional images. they sponsored a weight-loss online community. shuttles. Examples: facebook. orkut. that pop up between changes on a Web site.
Another recent phenomenon is to create brand awareness by solving community problems. This kind of advertising uses a surprise effect to tantalize the viewer when they are in a situation where they would not typically find media. The average number of riders per day is at least 500. 34. on July 13. This functional innovation was the talk of the town and got wide coverage in local media. The Tokyo Ubiquitous Network Project currently has the technology. completely generate the school’s required power needs. as they stroll by a store. Another new trend is elevator advertising. which translates to approximately 90. The glass is a special "Security Glass" that is touted as "unbreakable". Two great examples of this are: Aircel stuck an empty raft on a billboard near the Milan Subway in Mumbai (which is notorious for flooding during the monsoons). ‘In case of emergency. People in and around the area promptly removed the raft and used it to get around. The world’s first solar powered billboard was introduced in Africa by Nedbank. Mumbai was flooded and so was Milan Subway. The copy simply said. Chinese food is being delivered with a message from Cingular Wireless imprinted on the food containers. Sure enough. Examples: The 7up Street teams offering free samples during peak hour traffic Ad for Mr. PLC and strategies at each stage THE PRODUCT LIFE CYCLE . It harnesses the solar energy of the sun into a much needed necessity: electricity. and will. It is a way of getting the viewer’s attention without them expecting it. cut rope’. in time. It currently powers the kitchens of a township primary school. Apart from the goodwill it generated among consumers (some of whom were referring to it as the Aircel boat). Clean 3M filled a container with money and let it at a bus stop. In New York.000 views in a six month period.Guerilla marketing efforts such as street teams are a form of non-traditional advertising. High resolution ads are placed on a screen in bustling high-rise condos or office buildings. to send shoppers personalized advertising messages on their cell phones. the buzz that it generated in unpaid media was huge.
you may decide to re-invest the money back into promoting the product/service in an attempt to stimulate future sales (and profit). Once you begin to make profit. break-even) until late in the introduction stage. etc. Each stage has its own attributes and will vary in length (time) with different products and services. As you begin to make sales. Sales will be slow during the introduction stage and so you should not become impatient and spend more money than necessary to try to increase the speed of sales: it will take time for people to use and trust your product/service. It is important that you recognize any risk during this time as small businesses will be affected if the product/service does not prove to be successful once introduced: the costs of development and introduction may never be recovered where larger companies can usually compensate for unsuccessful products. a product/service may never move onto the next stage because you may decide that the risk is too high to launch the product/service. During development. Stage 1: Development As soon as you put pen to paper. This is the time where you will design and develop your product/service with all the direct costs that may beincurred such as wages. the product has not yet been introduced to the market and consequently there are no sales. Stage 2: Introduction It is arguable that this stage can influence the length of the PLC and so the product/service should be introduced in the market as effectively as possible.The PLC is a model that illustrates the different stages (six in total) that a product or service will pass through. . the money used for developing and introducing the product/service may not be fully recovered (i. this is where the PLC of the product/service begins. research. Within this stage. materials for prototypes. The time that it takes for your product/service to move through the PLC will largely be determined by how effective your marketing plan is. This is the time when the product/service is new in the market and a high degree of marketing will be needed such as promotions and advertising to increase commercial awareness.e. The expenditure of development has also created a loss. It should therefore be stressed that the PLC is a marketing tool to assist you when compiling a marketing plan.
commonly the smaller businesses. services in particular are withdrawn because they are no longer needed. low demand.Stage 3: Growth Once your product/service has become established in the market. will soon attract the attention of competitors. Kellogg's still have a range of cereals that are as popular today as when they were first released in the early 1900s. If you have released your own version of an existing product (making you the competitor). Stage 6: Decline The product/service moves into the decline stage when sales start to drop continuously and will be a result of the issues that moved the product through maturity and saturation (competition. Also note. you can expect the number of sales to increase rapidly and marketing expenditure may now be used for brand building. . Once competitors join the bandwagon. etc). unfavourable or out of fashion. many businesses. but also by new alternative products/services in the market becoming more popular. Services over products will generally have far longer periods of growth (usually years) where products. the sales will gradually slow down and force you into marketing new prices: consequently resulting in fewer profits. The time taken to reach this stage of the PLC will differ with different products/services: for an extreme example. As pricing becomes more competitive (resulting in even less profits). At this point. This is the stage where you will benefit from high profits but this is also the stage where your profits will peak. the product/service has no future for profits because there are too many competitors or the product/service is no longer popular. Maturity does not only result from increased competition. then the growth stage may be short depending on how long the existing product has been available in the market. cannot compete and consequently withdraw their product/service from the market. Stage 4: Maturity The stage of maturity begins when the product/service sales peak and become stable mainly due to the introduction of competitors during the end of the growth stage (influencing the move into the maturity stage). unfashionable. but they have to spend a lot of money advertising that fact: there being nothing new or exciting about plain old cornflakes makes this agreat example of brand marketing. Stage 5: Saturation The saturation stage is sometimes overlooked in many PLC models but is seen as the first sign of product/service decline. Quite often. particularly those that are new. Kellogg’s may have the number one cereal.
supermarkets selling clothing Introducing accessories to the product or new additions to theservice e. Extending the PLC: Extension Strategies The most profitable period of the PLC is during the later stages of growth (stage 3) and maturity (stage 4). the more common strategies include: A move into new markets e. However. But pioneer advantage is inevitable as they set the trend for the market class Speeding up innovation is essential in an age of shortening product life cycles Rapid-Skimming strategy involves launching the new product at a high price and high promotion levels . Advertising differentiates the product. Every product/service will spend different lengths of time in each stage and there is no physical way of showing this on the PLC model. it is a good idea to either improve your product or remove it completely to avoid damaging your image. a skimming price strategy is employed.In the small business world. the more you will be able to track individual products/services. To be first can be rewarding but very risky and expensive. as said before. Although you may have your own ideas. This is the reason why many businesses try to delay the product/service from reaching the decline stages for as long as possible. too early or too late. Limited numbers of product are available in few channels of distribution. If the product has no or few competitors. Decide when to enter the market. the better your financial control. when your products/services move into decline. colour range. The product is promoted to create awareness.g. It is then fair to say that the model can only be used to help identify the symptoms of each stage.g. Summary The PLC model is only part of the marketing mix and is used to determine the different stages that a product or service can be expected to go through. By using the model as guidance. the packaging design. The PLC model illustrates that profits are highest during the stages of growth and maturity and so it is good business to integrate extension strategies during this time to maintain high STRATEGIESFOR THE DIFFERING STAGES OF THE PLC Introduction stage of PLC The need for immediate profit is not a pressure. introducing financial management advice in accountancy book keeping services Changing the design and functionality of the existing product e. effective and timely marketing will take the product/service through each stage and can be planned in advance (the marketing plan.g. This is done by introducing PLC extension strategies during the maturity stage. mobile phones used for Internet access The Problems of PLC Models Not all products/services go through every stage of the PLC and it is common to go straight from the introduction stage to decline: this may be seen as a result of poor marketing. It is often hard to tell which stage the product/service is in and consequently marketing actions could be taken.
Rapid-Penetration strategy involves launching the new product at a low price and high promotion. Convert non users Enter new market segments Win competitor’s customers. Market modification: the company might try to expand the market for its mature brand by increasing the number of users and/or the usage rate. Market share tends to stabilise. Products become more profitable and companies form alliances. Price wars and intense competition occur. Slow-Penetration strategy involves launching the new product at a low price and low level of promotion. products of different sizes. Maturity stage of PLC Those products that survive the earlier stages tend to spend longest in this phase. Promotion becomes more wide spread and uses a greater variety of media. features or style. Increase distribution coverage and enter new distribution channels Lower price to attract the next layer of price-sensitive buyers Shifts from product awareness advertising to product-preference advertising. Enter new market segments. Print ad of a Printer giving details about its specifications Growth stage of PLC Competitors are attracted into the market with very similar offerings. and so forth that protect the main product. flavors. Producers begin to leave the market due to poor margins. Promote more frequent use Use more of the product on each occasion New and more varied uses Eg: Johnson & Johnson promoted its baby shampoo to adult users.e. Advertising puts price ahead of the competition. Advertising spend is high and focuses upon building brand. Advertising establishes participation with the marketplace. Pears introduced pink soap to target children Product modification: Manager also try to stimulate sales by improving the product’s quality. . Slow-skimming strategy involves launching the new product at a high price and low promotion. joint ventures and take each other over. Sales grow at a decreasing rate and then stabilise. Improve product quality and add new features and improved styling Add new models and flanker products (i. At this point the market reaches saturation. Producers attempt to differentiate products and brands are key to this.
change message. special occasions. timing and frequency of advertising Sales promotion -stepping up or reducing sales promotion Personal selling –increase quality of sales force and sales territories Services –speed up delivery and technical assistance. Decline stage of PLC At this point there is a downturn in the market. lasting longer than a few months. It generates the strategy that underlies sales techniques. Divest the business quickly by disposing of its assets as advantageously as possible 35. and business development. business communication. Defensive advertising or for revitalization. Marketing mix modification: Modify other marketing program elements such as Pricing –cuts. It is visible in industrial production. Quality improvement –increase the product’s functional performance. while simultaneously strengthening its investment in lucrative niches Harvesting investment to recover cash quickly. Increase investment –to dominate or strengthen its competitive position Maintain its investment level until the uncertainties about the industry are resolved Decrease its investment level selectively. Marketing: Marketing is the process by which companies create customer interest in goods or services. real income and wholesale-retail trade. . The technical indicator of a recession is two consecutive quarters of negative economic growth as measured by a country's gross domestic product (GDP). by sloughing off unprofitable customer groups. Eg: Pillsbury advertises its wheat flour as ‘chakki fresh atta’ and ‘good for family’s heart’ Feature improvement –add new features Eg: Pfizer embarked on feature improvement for its Listerine brand Style improvement –increase the product’s esthetic appeal. John Quelch. Profits can be improved by reducing marketing spend and cost cutting. discounts. credit terms. employment. Recession Marketing Recession: A significant decline in activity across the economy. It is an integrated process through which companies build strong customer relationships and create value for their customers and for themselves. For example more innovative products are introduced or consumer tastes have changed. increase price and quality Distribution –more outlets and new distribution channels Advertising –increasing expenditure. a prof at HBS identifies 8 factors which companies should bear in mind before strategizing marketing policies. There is intense price-cutting and many more products are withdrawn from the market.
but you may need to offer more temporary price promotions. Knowing your cost structure can ensure that any cuts or consolidation initiatives will save the most money with minimum customer impact. Safety. try to maintain the frequency of advertisements by shifting from30-second to 15second advertisements. In tough times. but advertising should stress superior price performance. and price smaller pack sizes more aggressively. Research the customer. and discretionary spending on home furnishings and home entertainment will hold up well. when competitors are cutting back. Stress market share. 7. Companies such as Wal-Mart and Southwest Airlines. not corporate image. extend credit to long-standing customers. Maintain marketing spending. as uncertainty prompts us to stay at home but also stay connected with family and friends. no one wants to tie up working capital in excess inventories. in some cases. Marketers must reforecast demand for each item in their product lines as consumer’s trade down to models that stress good value. survival. CEOs must spend . Look for cozy hearth-and-home family scenes in advertising to replace images of extreme sports. Tough times favour multi-purpose goods over specialized products. It is well documented that brands that increase advertising during a recession.1. 3. price cuts attract more consumer support than promotions such as sweepstakes and mail-in offers. This is not the time to cut advertising. durability. doing so can jeopardize existing relationships and your brand image. If you have to cut marketing spending. Adjust product portfolios. Other companies with healthy balance sheets can do so by acquiring weak competitors. New products. Be careful about expanding distribution to lower-priced channels. we tend to retreat to our village. Customers will be shopping around for the best deals. Consumers take more time searching for durable goods and negotiate harder at the point of sale. such as cars with fewer options. In all but a few technology categories where growth prospects are strong. Uncertain consumers need the reassurance of known brands. substituting radio for television advertising. reliability. Emphasize core values. 4. and rugged individualism. When economic hard times loom. extended financing and generous return policies motivate distributors to stock your full product line. you need to know more than ever how consumers are redefining value and responding to the recession. telephone use. In uncertain times. Greeting card sales. Instead of cutting the market research budget. Zany humor and appeals on the basis of fear are out. trade down. and weaker items in product lines should be pruned. 5. 2. Focus on family values. 8. chief executives can cement the loyalty of those who remain by assuring employees that the company has survived difficult times before. maintaining quality rather than cutting corners. can improve market share and return on investment at lower cost than during good economic times. and performance are in. Gimmicks are out. now may be the time to drop your weaker distributors and upgrade your sales force by recruiting those sacked by other companies. with strong positions and the most productive cost structures in their industries. They are more willing to postpone purchases. or increasing the use of direct marketing. This is particularly true with unproven new products. 6. especially those that address the new consumer reality and thereby put pressure on competitors. Adjust pricing tactics. should still be introduced. can expect to gain market share. and servicing existing customers rather than trying to be all things to all people. However. reduce thresholds for quantity discounts. which gives more immediate sales impact. Although most companies are making employees redundant. Early-buy allowances. Support distributors. adventure. companies are in a battle for market share and. or buy less. You do not necessarily have to cut list prices.
On the basis of intent. it can be further classified into: Product-oriented advertising Image advertising Advocacy Public service advertising http://tutor2u.smalltownmarketing. According to the medium used. Economic recession can elevate the importance of the finance director's balance sheet over the marketing manager's income statement. Kiosks.more time with customers and employees.htm http://www. 1. CEOs must counter this. health campaigns. Magazines. Managing working capital can easily dominate managing customer relationships. 4. Successful companies do not abandon their marketing strategies in a recession. Tradeshows and Events Broadcast advertising –Television. Radio and the Internet Covert Advertising/Product placement –Advertising in Movies 2. Informative advertising -this gives the customer information. Fliers Outdoor Advertising –Billboards.net/business/gcse/marketing_promotion_advertising. Brochures. 36. Based on what is being advertised. Advertising can also be categorized as the following: Surrogate Advertising –Advertising Indirectly Public Service Advertising –Advertising for Social Causes Celebrity Advertising Infomercials Business to Business advertising 3. they adapt them. Mostly done by the government (e.html . Types of Advertising Advertising can be classified in different ways.g. new welfare benefits).knowthis. advertising is of the following types: Print Advertising –Newspapers.com/sixads.com/principles-of-marketing-tutorials/advertising/types-ofadvertising-image/ http://www. Advertising can be split into two main types: Persuasive advertising -this tries to entice the customer to buy the product by informing them of the product benefit.
USP. 3. By offering the lowest price. 2. This is the Rolls-Royce approach to selling. More and more firms offer a unique packaging of information or knowledge. a British department store. But this is a rocky route to success. Water Proof 2. IIM Rohtak: Diversification in work profiles Uniqueness can be sought in a number of ways: 1. By offering the highest quality. John Lewis. . Customers continue to go to John Lewis for many reasons other than its price promise. NANO. Moreover. Examples: 1. Slim Cameras 5. used to claim that it was “never knowingly undersold”. Service 3. This was the case with many early internet retailing experiments. Mac Book Air: World’s lightest laptop 4. World’s cheapest car 3.37. USP can be: 1. this is an increasingly common type of USP. ESP USP (Unique Selling Point):“THE LOGICAL BENEFITS” The task of projecting your product as something which has differentiating factors comes under the ambit of USP. By being exclusive. Nokia 1100: Torch Light 6. In the information age. Samsung new mobile Marine: Features like Unbreakable. buyers who base their purchasing decisions on price alone are often disloyal. packaging etc. Combination of product and service They should resonate with the needs and wants of the consumer. Its USP established it as the cheapest vendor (under certain prescribed conditions) of the items that it sold.) 2. Product (Include features. particularly at a time when there are firms prepared to sell (temporarily) at well below cost just to establish turnover.
guaranteed. Emotional Selling Point: It is said that people buy emotionally and then justify logically. "Finger lickin' good" from KFC 8.Almost all of them 4. Examples: 1. Hero Honda Pleasure “ Why should boys have all the fun” 6. A side benefit of a USP like this is that it compels the firm’s employees to try that bit harder to achieve the promise. By giving the best guarantee. Insurance schemes like “ Sar Utha ke Jeeyo”. can claim to offer a wider selection of cheeses than anyone else. This is particularly important in industries such as travel and catalogue selling." Ex: You can emphasize the end emotion after purchase -L'Oreal's "Because you're worth it" emphasizes pride and recognition of your own self worth. Polio Campaign “Do Boond Zindagi Ki”and other social cause campaigns against poverty. L'Oreal's "Because you're worth it" emphasises pride and recognition of your own self worth 7. I am going to buy it. 5. A specialist cheese shop. Domino’s Pizza became the bestselling brand in the United States on the basis of its USP: “Fresh.” It did not promise high quality or low price. hot pizza delivered in 30 minutes or less. say. The use of the ESP is more of a strategic than a tactical decision and has to be approached very carefully. where customers pay for something upfront and then have to hope that what they think they have bought is eventually delivered. A firm that fails to fulfil the promise in its USP is condemned to a short future if it cannot quickly come up with a new one. 5.4. "Make safe sex feel sexy" (Durex condoms) . The Emotional Selling Proposition gives you the opportunity to control the marketing message and to drive an emotional reaction that creates the connection and triggers "I want this. This is particularly appropriate to niche markets. By offering the widest choice. By offering the best customer service. 6. just fast delivery. Cadbury: 1-1/2 glass of milk 3. Caveat: Narrator: I like the idea of an emotional selling proposition to help emphasize the benefit payback but you can't abandon logical benefits supported by credible features. AIDS etc. Incredible India Campaign: Kerala “God’s place on Earth” 2.
Activities involved in the channel are wide and varied though the basic activities revolve around these general tasks: . who sells to end customers. Outlets such as estate agencies and building society offices are crowding out traditional grocers from major shopping areas. Can your product/service make the prospect: * Feel important * Feel valued * Feel part of a unique group or select band of people * Feel whole * Feel remembered * Feel attractive * Feel trendy * Feel hip * Feel safe * Feel accepted "USPs are great but ESPs are even better" 38. hotels and car rental services. For example.So think about the feelings and the emotions that you want to stir up with your prospects and clients and use this in your sales. sell or deliver the physical product or service to the buyer or user. there has been an increase in franchising and in rental services -the latter offering anything from televisions through tools. particularly in the travel and tourism sectors. Retailer (also called dealer or reseller). A number of alternate 'channels' of distribution may be available: Distributor. For example. There have also been some innovations in the distribution of services. Different types of Distribution Channels Marketer uses distribution channels to display. They include distributors. who sells to retailers. There has also been some evidence of service integration. there has been a significant increase in retail outlets for the service sector. links now exist between airlines. wholesalers. In addition. and Advertisement typically used for consumption goods. with services linking together. retailers and agents.
especially 'second level'. in consumer goods a retailer. Firstly. In addition. is now mainly used to extend distribution to the large number of small. for example. The other advantages of selling to a wholesaler are that they may have strong links with quality retailers: research will help discover this fact. it is often you will sell at a price much lower than the final retail price. Alternatively. products/services can be sold directly to the consumer on-site i. But the most important is the distributor or wholesaler. your products will be sold on by the wholesaler to retailers. it reduces the burden of on-site storage at your premises reducing overhead costs. features just one intermediary. A one tier channel means that vendors IT product manufacturers (or software publishers) work directly with the dealers. Further. the 'one-level' channel. Wholesalers. A one tier / two tier channel means that vendors work directly with dealers and with distributors who sell to dealers. Direct Distribution-Very common for small businesses. a wholesaler for example. In IT and Telecom industry levels are named "tiers". as the 'zero-level' channel. Kotler defined The simplest level that of a direct contact with no intermediaries involved. The main function of a wholesaler is to provide a link between the producer (you) and the retailer. for industrial goods a distributor.•Ordering •Handling and shipping •Storage •Display •Promotion •Selling •Information feedback Channel members: Distribution channels can thus have a number of levels. In Japan the chain of distribution is often complex and further levels are used. there are three ways that your product will reach the consumer. The next level. Because there are thousands of retailers located all around the country. This can be related with. even for the simplest of consumer goods. Retailers-Retailers can promote your product by making consumers aware of its availability and by passing on technical information that could encourage the sale. because they buy in bulk. Once selling to a wholesaler. In large markets (such as larger countries) a second level. In Bangladesh Telecom Operators are using different Chains of Distribution. they are an excellent intermediary for distributing your product to a wide geographical range of consumers. In small markets (such as small countries) it is practical to reach the whole market using just one-and zero-level channels. The disadvantage of using a wholesaler to distribute your products is that they cannot market your products extensively.reaching a potentially large number of consumers. neighbourhood retailers or dealers. because they buy in bulk.e. directly from your shop. a village . the consumer will purchase directly from the wholesaler: this is the less common route out of the three. office or home by consumers physically coming into the premises to make a purchase.
This together account for almost60 to 70% of the total retail market. The following types of Channel Memberships are possible: Intensive distribution-Where the majority of resellers stock the 'product' (with convenience products. according to India Brand Equity Foundation (IBEF). national. flyers. Virtual Shopping. and pharmaceuticals. Selective distribution-This is the normal pattern (in both consumer and industrial markets) where 'suitable' resellers stock the product. but will not take ownership of what they are selling at any time. Similar to direct mail.baker or a hand-made furniture business where the products are made and sold at the same place. for example. this type of marketing can produce sales on a local. Exclusive distribution-Only specially selected resellers or authorized dealers (typically only one per geographical area) are allowed to sell the 'product'. Retail Marketing Strategies in India: Advertising Merchandising . They usually work on commission taking a percentage of the total sales made by themselves. there is some cost involved but is considerably cheaper compared to other sources of marketing such as advertising Telemarketing-Selling your product/service through telemarketing is becoming increasingly popular. taking a commission on the sales. Perhaps the most common example of an agent would be a travel agency. accommodation. telemarketing allows sales to be made on a local. Instead. food and groceries account for the largest share of 74%. brochures or catalogues (often targeted to particular consumers) selling your product/service. Agents/Brokers-An agent or broker will help sell your product/service. national and global scale. leaflets. The marketer must assess the benefits received from utilizing a channel partner versus the cost incurred for using the services and design the Distribution Channels best suited to his needs. Any interested receivers of the mail would make an order through the contact details/order form that would be included. they act as a link between the holiday resort and the consumer. Works well only when the TG is in the local region only Direct Mail-Also known as a mail shot. and particularly the brand leaders in consumer goods markets) price competition may be evident. They never own the holidays or credit the full amount of the sale to their business. Your business would send out. etc. An agency or brokerage will sell your product or service. apparel. tickets for entertainment. consumer durables. Retail market in India The retail sector can broadly classified into four major categories—food and groceries. scale. for example insurance. although the costs will increase with the time and distance of phone calls. Internet (E-Commerce)-Sites such as E Bay. or even global. 39. Of these four categories. Although very effective. say.
It is the practice of making products in stores available to consumers. Trade shows. primarily by stocking shelves and displays. Private Branding Products (or services) which are generally manufactured or provided by one company under the retailer’s brand. Ex: Big Bazaar has its own line of towels and apparels. The important factors in retail markets include: Store location Target market Channel structure Channel management Retailer image Retail logistics Retail distribution People element Staff capability Efficiency Availability Effectiveness Customer interaction Internal marketing 40. Types include: Creating attractive displays (ITC Bingo). While many elements may make up a firm’s retail marketing mix. What can be defined as luxury market in India? . Visual display photo galleries. the essential elements may include: Store location Store image Store design Sales incentives Merchandise assortments Store ambience Customer service Price Communication with customers Personal selling The retail marketing mix must be consistent with the expectations of customers and must be responsive to competition.
home electronics and high-end watches have achieved good penetration among male Indian consumers. the well-travelled Indian luxury consumer is being wooed by all. handbags and mobile phones. Super-deluxe brands like Porsche. of around 1. Sheer Rich. Rolls-Royce.000 still puts them on the country’s rich list – and makes them well worth targeting by brands keen to secure an Indian market presence. Rolex. 44% travelling abroad for holidays at least once a year. cosmetics and skincare can already boast high levels of awareness. Low-penetration sectors that are yet to make an impact include gourmet food. average age 36-37. Bvlgari and others have entered the market. The New Indian Luxury Consumer’. premium footwear. fragrances.000 (US$18. the Indian economy has evoked a lot of interest globally given its statistics of some of the highest disposable incomes and increase in the number of millionaires.000 and US$40. Owns a premium/luxury saloon car such as a Honda Accord. Chanel. jewellery. In sharp contrast to consumers in more mature markets. Champagnes and cigars still rate low on the wish-lists of many Indian men seeking luxury brands. luxury wines. Clear Rich and Near Rich) – a figure that is set to more than double in the next five years. tableware and imported furniture. Brands – and retailers – that want to capture a share of this fast-paced business need to learn and adapt. a Vectra. Luxury households can also be categorised into segments according to their attitudes to luxury goods purchasing: . The last couple of years have seen a profusion of luxury brands into the Indian market: from stand-alone stores in five star hotels to luxury Malls. 65% are housewives Most are educated to post-graduate level Incidence of foreign travel is 53%. Luxury clothing.7 million Indians qualify as rich (sub-definitions are Super Rich.000) a year.Luxury retail in India has been a fascinating journey from a socio-economic perspective. or risk missing one of the great untapped opportunities for the luxury business. Among women consumers. The luxury consumer in profile A profile of the Indian luxury consumer. as per a study by research group KSA Tecnopak: Primarily resident in urban India Lives in a household earning more than about INR800. a Skoda Octavia etc. followed by categories such as underwear. With one of the highest levels of disposable incomes. belts. Among women. the spending power of Indians earning between US$20. Projected as the next China for luxury goods consumption. Louis Vuitton. The luxury goods market in India is one of the world’s most diverse and exciting – and a challenging one for brands seeking to gain a presence there. but items such as cufflinks. where the chief wage earner is male. these labels which were previously only seen in international fashion magazines and high streets abroad were now household names in India. wallets.
this group wants to project a lifestyle image that will gain them acceptance into the higher echelons of society. The Climbers: As the name suggests. noodles. This is the smallest group (15% of the target audience). yet many lack the discernment that comes with exposure to luxury brands and wealth over a long period. the product is called a brand extension. professionals or business people that are in their late 40s or early 50s. says the study. Brand extension poses more risk than line extension. They Arrived: This is the most affluent group. Its major disadvantages are: • Poorly executed extension of brand to new product categories can jeopardize current image of parent brand. This group comprises a high proportion of college drop-outs and graduates who are in business or work as office executives. this group remains nonchalant about luxury goods consumption. • It helps in avoiding risk of developing new names. sauces Horlicks – Foodles. • The image and financial figures of parent brand may be endangered due to the failure of strategy implementation. The Laggards: Although well-heeled and targeted by luxury brands. Biscuit 42. Eg: Harley Davidson bikes. . 41. Its advantages are: • It helps in enhancing parent brand image. Brand Extension Brand extension is a part of brand management to diversify and leveraging the existing brand by entering into new product category by new product development. Competitive Advantage Competitive advantage is a position of a company in a competitive landscape that allows the company earning return on investments higher than the cost. Maggi in soups. This group is 17% of the target customer base. comprising 49% of the target audience of luxury goods companies. A firm uses an established brand to introduce a new product. The Actualised Ascetic: This group comprises largely self-made men. These are 19% of the target universe for luxury brands. • It cannibalizes sales of the parent brand. later ventured into bike accessories.
Michael Porter suggested four "generic" business strategies that could be adopted in order to gain competitive advantage. either by means of lower prices or by providing greater benefits and service that justifies higher prices. Competitive Strategies Following on from his work analysing the competitive forces in an industry. The four strategies relate to the extent to which the scope of businesses' activities are narrow versus broad and the extent to which a business seeks to differentiate its products. The four strategies are summarised in the figure below: .Competitive Advantage -Definition A competitive advantage is an advantage over competitors gained by offering consumers greater value.
it can further increase its market share.net/business/strategy/competitive_advantage.The differentiation and cost leadership strategies seek competitive advantage in a broad range of market or industry segments. or specialist holiday operator (e. less differentiated products. Many (perhaps all) market segments in the industry are supplied with the emphasis placed minimising costs. and about giving customers clear reasons to prefer the product over other. a lowcost leader will also discount its product to maximise sales. a business aims to differentiate within just one or a small number of target market segments. then the lowest-cost producer will (in theory) enjoy the best profits. Dell Computers Strategy -Differentiation Focus In the differentiation focus strategy.g. particularly if it has a significant cost advantage over the competition and. (e.g. The important issue for any business adopting this strategy is to ensure that customers really do have different needs and wants -in other words that there is a valid basis for differentiation-and that existing competitor products are not meeting those needs and wants. Bang & Olufsen Strategy -Cost Leadership With this strategy. the differentiation focus and cost focus strategies are adopted in a narrow market or industry. Differentiation is about charging a premium price that more than covers the additional production costs. Tesco. Examples of Cost Focus: Many smaller retailers featuring own-label or discounted label products. (http://tutor2u. By contrast. The product will be basic -perhaps a similar product to the higher-priced and featured market leader. Examples of Cost Leadership: Nissan. the objective is to become the lowest-cost producer in the industry. but acceptable to sufficient consumers. Examples of Differentiation Strategy: Mercedes cars. Occasionally. Examples of Differentiation Focus: any successful niche retailers. Strategy -Differentiation This strategy involves selecting one or more criteria used by buyers in a market -and then positioning the business uniquely to meet those criteria. The Perfume Shop). Carrier) Strategy -Cost Focus Here a business seeks a lower-cost advantage in just on or a small number of market segments. The special customer needs of the segment mean that there are opportunities to provide products that are clearly different from competitors who may be targeting a broader group of customers.htm) Examples: Toyota -quality . This strategy is usually associated with charging a premium price for the product -often to reflect the higher production costs and extra value-added features provided for the consumer. Such products are often called "me-too's". in doing so. If the achieved selling price can at least equal (or near)the average for the market. This strategy is usually associated with large-scale businesses offering "standard" products with relatively little differentiation that are perfectly acceptable to the majority of customers.
product. BOP consumers are getting connected and networked. innovations that are lower in performance and lower cost. A disruptive technology or disruptive innovation is a term describing a technological innovation. rather than an "evolutionary" or "sustaining" strategy. whereas a lower-end disruptive innovation is aimed at mainstream customers who were ignored by established companies. 44. Disruptive innovations can be broadly classified into low-end and new-market disruptive innovations. but poorest socio-economic group. They are rapidly exploiting the benefits of information networks. Examples of true disruptive innovations. Disruptive Innovation Disruptive innovation is a term used in business and technology literature to describe innovations that improve a product or service in ways that the market does not expect. typically by lowering price or designing for a different set of consumers. BOP Market The bottom of the pyramid is the largest. This term was coined by C K Prahlad.Mc Donald’s -value for money & service 43. to overturn the existing dominant technologies or status quo products in a market. Initiative like E-choupal is a part of it. or service that uses a "disruptive" strategy. Contrary to the popular view. but by their sheer number there is a lot of money in the market. . i. Distribution access to the BOP markets is very difficult and therefore represents a major impediment for the participation of large firms and MNCs. A new-market disruptive innovation is often aimed at non-consumption. It has been systematically shown to the research community that most disruptive innovations are in a minority compared to revolutionary innovations which introduce an innovation of higher performance to the market. succeeding are rare. Refer to original CK Prahlad document to avoid confusion.e. Although they don’t have a high purchasing power parity.
Innovation In marketing: Oral-B Sprite 250 ml TVS Scooty balancing wheels Fairness meter Disruptive innovations: In storage space industry-floppies to cds. But the Linux OS is inexpensive compared to other server operating systems. it should be reflected in all aspects starting from any phone conversation with them and friendly salesman at the store location to prompt after-sales service. the disruptor is focused initially on serving the least profitable customer. This type of customer is not willing to pay premium for enhancements in product functionality. For example. and direct marketing work together as a unified force. In low-end disruption. a disruptive technology may enter the market and provide a product which has lower performance than the incumbent but which exceeds the requirements of certain segments. cds being challenged by usb drives and mp3 players Ceat caught unaware by JK Tyres’ invention of radial tyres-leading to a drastic fall in market share in the car segment. Therefore. After years of improvements Linux is now installed in 84. rather than permitting each to work in isolation so that they speak consistently with one voice all the time. sales promotion. if a company markets its product as being customer friendly. public relations. The Linux operating system (OS) when introduced was inferior in performance to other server operating systems like Linux and Windows NT.Christensen distinguishes between "low-end disruptions" which targets customers who do not need the full performance valued by customers at the high-end of the market and "new-market disruption" which targets customers who have needs that were previously un served by existing incumbents. At this point.6% of the world’s 500 fastest supercomputers. at some point the performance of the product overshoots the needs of certain customer segments. thereby gaining a foothold in the market. . 45. "Low-end disruption" occurs when the rate at which products improve exceeds the rate at which customers can adopt the new performance. every time. Integrated Marketing Communication A management concept that is designed to make all aspects of marketing communication such as advertising. who is happy with a good enough product. "New market disruption" occurs when a product fits a new or emerging market segment that is not being served by existing incumbents in the industry.
updated information and special offers which. IMC wraps communications around customers and helps them move through the various stages of the buying process. aroused. an engineer may service your air-conditioning. IMC saves money as it eliminates duplication in areas such as graphics and photography since they can be shared and used in say. The organisation simultaneously consolidates its image. help them move comfortably through the stages of their buying process. 46. IMC also increases profits through increased effectiveness. a unified message has more impact than a disjointed myriad of messages. develops a dialogue and nurtures its relationship with customers. and cannot be owned since is quickly perishes.e. in turn. boost sales and profits. exhibitions and sales literature. shortens the search process and helps to dictate the outcome of brand comparisons. the engineer or his equipment. Finally. A person could go to a café one day and have excellent service. This 'Relationship Marketing' cements a bond of loyalty with customers which can protect them from the inevitable onslaught of competition. and then return the next day and have a poor experience. IMC also makes messages more consistent and therefore more credible. You cannot sell it on once it has been consumed. At its most basic level. time and stress.e. material) since you can touch it and own it. In a busy world. a consistent. Marketing of Services Marketing of services A service is the action of doing something for someone or something. For example. not material). initial research suggests that images shared in advertising and direct mail boost both advertising awareness and mail shot responses. to make a purchase Carefully linked messages also help buyers by giving timely reminders. while saving money. and ultimately. when presented in a planned sequence. It is largely intangible (i. A service tends to be an experience that is consumed at the point where it is purchased. . advertising. So often marketers talk about the nature of a service as: Lack of ownership: Right of ownership is not taken to the service. So IMC can boost sales by stretching messages across several communications tools to create more avenues for customers to become aware. consolidated and crystal clear message has a better chance of cutting through the 'noise' of other messages At another level. A product is tangible (i. This reduces risk in the mind of the buyer which. but you do not own the service. and do not take ownership of it. since you merely experience it.Benefits: IMC creates competitive advantage.
Physical evidence It is the material part of a service. motor insurance may have a certificate. Business cards. Services have to be produced and consumed simultaneously and cannot be stored for future consumption because of their perishable nature. The buyer purchases are intangible . once a 100 metres Olympic final has been run. including some of the following: Packaging. there will be not other for 4 more years. There are many examples of physical evidence. Strictly speaking there are no physical attributes to a service. Services are more heterogeneous in nature. i. Uniforms. For example. it is intangible. so a consumer tends to rely on material cues. returning to the same garage time and time again for a service on your car might see different levels of customer satisfaction.e. Paperwork (such as invoices. 2. Furnishings. For example. deeds and performances. Mailboxes and many others Services’ marketing is the marketing of processes.Intangible: Service is intangible and cannot have a real. The marketing mix has seen an extension and adaptation into the extended marketing mix for services. not a service. and from the provider of the service. For example. Some of the major differences. Internet/web pages. including: 1. as compared to products which are more standardized in nature. Inseparable: Service is inseparable from the point where it is consumed. anything which is essentially intangible in nature. Marketing a service-base business is different from marketing a goods-base business. and even then it will be staged in a different place with many different finalists Variability: Since the human involvement of service provision means that no two services will be completely identical.e. you cannot take a live theatre performance home to consume it (a DVD of the same performance would be a product. process and people. but the financial service itself cannot be touched i. tickets and dispatch notes). 3. Perishable: Service is perishable in that once it has occurred it cannot be repeated in exactly the same way. also known as the 7P's -physical evidence. or speediness of work. The building itself (such as prestigious offices or scenic headquarters). Signage (such as those on aircraft and vehicles). physical presence as does a product. Brochures. For example.
The process itself can be tailored to the needs of different individuals. promotion. At each stage of the process. and service knowledge to provide the service that consumers are paying for. aptitude. experiencing a similar service at the same time. the four Ps: product. Recruiting the right staff and training them appropriately in the delivery of their service is essential if the organisation wants to obtain a form of competitive advantage. Customers are retained. Process. physical evidence and people enhance services. Staff should have the appropriate interpersonal skills. it’s more difficult to compare the quality of similar services 6. An efficient service that replaces old credit cards will foster consumer loyalty and confidence in the company. The expanded marketing mix for services includes: In addition to the 4 p’s there are 3 more P’s added in marketing of services: People An essential ingredient to any service provision is the use of appropriate staff and people.e. which tells consumers that staff are taken care off by the company and they are trained to certain standards. Processes essentially have inputs. What was the process that allowed you to obtain an efficient service delivery? Banks that send out Credit Cards automatically when their customer’s old one has expired again require an efficient process to identify expiry dates and renewal. Consumers make judgements and deliver perceptions of the service based on the employees they interact with. Feedback can be taken and the mix can be altered. markets: Deliver value through all elements of the marketing mix. Many British organisations aim to apply for the Investors In People accreditation. Marketing adds value to each of the stages. Take a look at the lesson on value chain analysis to consider a series of processes at work. Physical Evidence . and other serves or products are extended and marked to them. Thus.4. The buyer cannot return the service This criterion of intangibility also differentiates goods from services and underlines the importance of marketing of services to be managed in a different manner as compared to marketing of products. throughputs and outputs (or outcomes). The service may be based on the reputation of a single person 5. Imagine you walk into Burger King and you order a Whopper Meal and you get it delivered within 2 minutes. Process Refers to the systems used to assist the organisation in delivering the service. the services marketing is marketing of services while appreciating these differences and adding additional elements in the tradition marketing mix i. pricing and place (distribution).
Customer services provided expertise (e. controlling service engineers. consumers will make perceptions based on their sight of the service provision which will have an impact on the organisations perceptual plan of the service. The next sort of sales person is the missionary. or improving or ruining a company's reputation. This is tough selling. The second type is the order taker. Their in-depth knowledge supports them as they advise customers on the best purchase for their needs.g.g. The skill is identifying the needs of a customer and persuading them that they need to satisfy their previously unidentified need by giving an order. on the selection of financial services). The induction will involve the person in the organization's culture for the first time. as well as briefing him or her on day-to-day policies and procedures. People tend to buy from people that they like. and tends to offer the biggest incentives. . The external sales person would be working in the field. Today.' Onthe-job training involves training whilst the job is being performed e.' The internal sales person would take an order by telephone. and these may be either 'internal' or 'external. or mail. training centre or conference facility. The disposition and attitude of such people is vitally important to a company. customer service can be face-to-face. e. His or her main task is to deliver the product.g. At this very early stage the training needs of the individual are identified. In both cases little selling is done. A training and development plan is constructed for the individual whom sets out personal goals that can be linked into future appraisals. Here. services and experiences are supported by customer services teams. e-mail or over a counter. Training should begin as soon as the individual starts working for an organization during an induction. Personal Selling: There are different kinds of salesperson. the salesperson builds goodwill with customers with the longer-term aim of generating orders. Again. and so effective customer service is vital. actually closing the sale is not of great importance at this early stage. Offthe-job training sees learning taking place at a college. offering advice on IT and software) and coordinate the customer interface (e. On an aircraft if you travel first class you expect enough room to be able to lie down! Physical evidence is an essential ingredient of the service mix. Attention needs to be paid to Continuing Professional Development (CPD) where employees see their professional learning as a lifelong process of training and development. Creative sellers work to persuade buyers to give them an order.g. training of bar staff. Training: All customer facing personnel need to be trained and developed to maintain a high quality of personal service.g. friendly environment. fast food.Where is the service being delivered? Physical Evidence is the element of the service mix which allows the consumer again to make judgements on the organisation. there are creative sellers. In practice most training is either 'on-the-job' or 'off-the-job.g. and selling is of less importance e. over the telephone or using the Internet. There is the product delivery salesperson. Customer services can add value by offering customers technical support and expertise and advice. If you walk into a restaurant your expectations are of a clean. technical support (e. The way in which a complaint is handled can mean the difference between retaining or losing a customer. Finally. Customer Service: Many products. as with those missionaries that promote faith. a technical sales engineer. The forth type is the technical salesperson. or communicating with a salesman).
Markets are growing but mainly for low-value items. They are consumer of premium category products .065 m household. Rural markets are growing at a much faster than urban markets and rural consumers are largely value for money customers. A study conducted by The National Centre for Applied Economic Research (NCAER) divides Indian households into five categories based on income. This segment is very comparable to consumers in the developed world and is willing to spend more for greater benefits. The five categories are as given below The very rich account for a miniscule 0. The Indian consumer market is not secular in nature.47. NCAER Classification of consumers in the country Consumer Classification According to National Council of Applied Economic Research (NCAER) there are 5 consumer classes that differ in their ownership patterns and consumption behaviour across various segments of goods. consumption. The 5 classes of consumer households (consumer classification) show the economic development across the country based on consumption trends. The key assumption for such a classification is that consumption. and not income alone differentiates consumer segments. asset ownership and education level.
The consuming class comprises 30 m households.100 in PPP terms. The average per capita income in India is around US$ 350 or US$ 1. The aspirants’ category consumers comprising of another 50 m households aspire to greater consumption but need money to achieve their goal. Around 67% of urban India and 35% of rural India watches television. growing at around 2% annually. The climbers comprising of 50 m householder are at the bottom of the consumption ladder. Households in this segment are below the poverty line and their basic housing and food and clothing.500 in purchasing power parity (PPP) terms. Private channels have a predominantly urban viewer base. but rarely expensive. . Viral Marketing Viral Marketing is known as a word of mouth or these days with the increased use of the internet “word of mouse”with the objective of marketing the product of a company via tools such as social media networking sites like Orkut. Blogspotetc. Consumers in this class mainly demand mid-price and low-price products. social media sharing sites such as Youtube etc. Consumer profile India has a huge population base of around 952 m -almost 3. This segment consists of cash-constrained benefit-maximizes. More important. This segment also seeks a judicious balance between categories between benefits and costs with affair amount of elasticity. The aspirants’ category consumers comprising of another 50 m households aspire to greater consumption but need money to achieve their goal. the average rural per capita income is about US$ 1. In short it can be defined as any strategy which uses individuals to pass on a marketing message to others. The large rural population makes up roughly 50% of consumer spending. but occasionally indulge in the premium product. The only true national channel is Doordarshan with a penetration of 50%. Facebook. 48. mainly consuming low-priced and unbranded products. Around 70% of India is in rural areas. or sites which have a social connect such as Twitter. but is projected to rise from 29% currently to 31% in FY2001. Urbanisation is reducing this proportion. rather than consumer goods. creating scope for exponential growth in the company’s spread of the intended message. high-end items that offer extra features. which influences consumer patterns. This class too focuses mainly on unbranded products. This class consumes most products. This class too focuses mainly on unbranded goods. The destitute consumers accounting for 35 m households lead a hand-to-mouth existence.7X that of the US and around 16% of the world’s population.
Illiteracy 40% . 72% Part of Indian Population .6% Reach of Electricity ---Barriers in Promotion via Television adds . 2 kinds of houses Kaccha House/ Pakka House . No. 49.e. Transportation Problem . it used the principles of viral marketing when it sent an automatic invite to every person who the Hotmail user was sending a mail to. NAREGA/Indira Gandhi Aawas Yojana/Pradhanmantri Gram Sadak Yojana are few govt. Viral Marketing could also be compared to buzz marketing which is yet another form of word of mouth marketing that creates a buzz or excitement i. t market their products. its spreads from one person to another just as a virus would spread. Other prominent examples to explain use of viral marketing are: 1) The million-dollar homepage i. to join Hotmail. the site which sold pixels on its homepage and made millions out of it. For example: Cadbury using the Gorilla advertising campaign 2) Its uses the basic tenet of a virus in its spreading i. of Total Villages 690000 . like a craze amongst people by spreading messages in similar ways that viral marketing spreads in. Caste System plays major role in social status . Man is dominating member in Household . The two basic differentiators of viral marketing from other marketing mediums are: 1) It is rather inexpensive in its use and also value for money since at times it may be more effective a marketing tool than contemporary marketing media. initiative . Strategy of FMCG Companies for getting into Rural Markets Facts of Rural India . 2) Dove Evolution video-This was a part of a campaign run by Dove to show that models have artificial beauty and this message via online videos struck a chord with female audiences 3) Ford using the medium of online advertising for their new model Ford Ka (which they had previously disowned as their ad claiming that some marketing company had done it without their permission).e. 57. Example: When Hotmail started.Companies could even use non-internet mediums such as phone SMS etc. FMCG Market Size 6500 bn Rs .e.
Cavinkare’s Chik shampoo: Cavinkare launched Chik in 50 paise sachets.: Nikhar in Bihar HUL Lifebuoy: HUL launched a direct rural contact program called Lifebuoy Swasthya Chetana’ campaign. it became the market leader in the rural markets with over 50% market share. Cleanliness of self.FMCG way to go: The future lies with those companies who see the poor as their customers.” (LUP) Nestle Munch launched in SKU of Rs 2 Nestlé’s Maggi: Nestle’s rural initiatives have largely been based on Price-led initiatives. Brand such as Maggi noodles are priced at Rs. Cavinkare targeted rural and small town customers who used soaps to wash their hair. It helped Nestle in making roads in to rural market. society e. Companies should focus on creative solution and product engineering to reduce their costs and offer tremendous ‘life time value’ to the ‘Bottom of the Pyramid’ customers. Strategy: “Using a renowned celebrity from in rural background” . Strategy:“small pack -lower price” Promotion: CSR Activities: Making them aware about purity of water Free sampling of Farmlands and guidance in their agricultural Issues. Aamir khan playing foot sic with village bells. Strategy: “lifebuoy has always been positioned on the platform of health and Hygiene” Local Touch to ads and use of local language: Coca-cola: Coca-cola ad ‘thanda matlab coca-cola’ caught attention of the rural consumers so much.5. It created a ‘sachet revolution’. Strategy: “low unit price packs.000 villages. made sales goes up by 20% in 17. Below putting some successful strategies used by the marketers: Product: More Features in one Product HUL developed a combined soap and shampoo that was cost-effective and also less harsh on hair than ordinary soaps.g. HUL launched the new soap-cum shampoo ‘Breeze 2-in-1’ Price: Value for Money Nirma’s yellow detergent powder launch which took the market from Surf.
Originally the term referred specifically to oral communication (literally words from the mouth). Personal—Word of mouth can be a very intimate dialogue that reflects personal facts. HUL launched ‘operation stream line’. Whose Word of Mouth Matters? . Word of Mouth Definition Word of mouth is a reference to the passing of information from person to person. and experiences.telephone. email. Coca-Cola has evolved a ‘hub and spoke’ distribution model for effectively reaching and serving rural markets. and it often follows noteworthy or meaningful events or experiences. such as face to face. Strategy: “HUL product can reach a place. Credible—People trust others they knowand respect. and text messaging. Timely—It occurs when people want it to and when they are most interested. ‘tractors’ and cycles. Strategy: “Coke is available where. Today HUL’s products touch the lives of two out of every three Indians. In this marketing strategy a wake up call for coke’s rural focus. 2. Characteristics of Word of Mouth Word of mouth also takes many forms online or off-line. where you cannot reach” Use of Self Help Group : HUL Shakti Amma 50. Coca-Cola provides low-cost ice boxes to the small distributors in rural areas because of the lack of the electricity. but now includes any type of human communication. Three noteworthy characteristics are: 1. even water is not available” HUL: Hindustan Unilever Limited. distributed HUL’s products in villages using unconventional transport like ‘bullock carts’. HUL is the first company to step into the Indian rural marketing. 3. the pioneer and a large player in India’s FMCG market.Place: Coca –Cola is a pioneer company in distribution network. word of mouth can be highly influential. opinions.
recommendations are generally perceived as incentive-free. who may over-promise in a bid to increase sales. get more affiliate commissions or just gain more new readers or supporters for your website. word of mouth marketing is one the most powerful ways to do so. products or services. ahead of television. word-of-mouth marketing spreads from one person to another outside of a formalized setting. A recommendation from someone familiar and trust-worthy is the easiest path to a product sale. They include Taiwan. link or new subscriber. which came fifth as only 65 per cent said they were trustworthy. . through conversations or links? 1. Online communities have a tightly knit group of users who can help to increase brand awareness for the product. Leverage Existing Social Networks.According to Mintel. 87 per cent of those who use the Internet trust others’ advice rather than any kind of advertising. India comes fourth among the top ten countries which trust in recommendations from consumers. Most of the top ten markets that rely most on “recommendations from consumers” are in Asia. South Korea and the Philippines. Tap into these communities with tools or content targeting their specific sub-culture and you are likely to get a lot of attention. Indonesia. Like its literal meaning. unlike the obvious motivation of advertisers. Word of mouth and India In the case of India. while one-quarter bought based on advice from a spouse or domestic partner. with Hong Kong topping the list with 93 per cent. If you want to sell more products. What better way to spread your brand than to have an army of supporters constantly talking about or referencing it online or offline. Difference between Word of Mouth and Viral marketing The major different between word-of-mouth marketing and viral is that word-of-mouth is often driven by you the marketer or business owner and viral marketing driven by the passion of your consumers and its success does not depend on you. Five Word of Mouth Marketing Strategies Word of Mouth Marketing (WOMM) is a form of promotional campaign which operates through an individual’s personal recommendations of specific brands. Newspapers come second in the ‘most trusted list’. 34% of US Internet users who bought a product or service based on a recommendation got that tip from a friend or relative. without heavy intervention by advertisers. proving that word-of-mouth is the most powerful advertising tool. This is because. a press release issued by the research agency found. Opinions expressed online and on brands’ Web sites were the third and fourth most trusted at 73 and 72 per cent. with 77 per cent saying so.
Exclusivity invites curiosity and scarce products generate consistent demand and conversation. An example would be a TV commercial that says 'come into the store to sample XYZ product'. above the line (ATL). are classed as above the line promotion. In this example. Firefox and Word press. The terms "below the line" promotion or communications. Combine this with influencer marketing and you’ll have an excellent method to disseminate brand awareness for new websites. radio and newspaper. even non-media advertising. "Through the line" refers to an advertising strategy involving both above and below the line communications in which one form of advertising points the target to another form of advertising thereby crossing the "line". They should preferably be individuals who have many personal connections or a large and loyal audience. BTL. where someone had to invite you to open an account. TTL Below the line (BTL). ATL. build a relationship with them and market through their existing sphere of social influence. 3. are advertising techniques. Remember how people were incessantly asking for or writing about Gmail. 2. but also for industrial goods. refers to forms of non-media communication.These can include applications for platform-specific websites like Facebook. Promotional activities carried out through mass media. Below the line promotions are becoming increasingly important within the communications mix of many companies. Examples of influencers include celebrities. the target customer is presented with "below the line" promotional material such as store banners. in organizational business and marketing communications. your website or product will very easily be disseminated within a targeted group of potential users. . products or services. Identify these influencers. Look for individuals who are trend-setters or authorities on a specific topic. Some dangle the bait of limited edition products or temporal discounts. competition entry forms etc. power users on social websites and popular webmasters or bloggers with many loyal supporters. not only those involved in FMCG products. which each have a large body of users. If these people spread your message. a while ago? 51. Target the Influencers. Promotion can be loosely classified as "above the line" or "below the line". such as television. Exclusivity and Scarcity. Many websites or businesses launch virally by offering a limited number of site invites. the TV commercial is a form of "above the line" advertising and once in the store. and Through the Line (TTL).
The threat of substitute products . The bargaining power of suppliers .52. The bargaining power of buyers/customers . Rivalry with the competitors Attractiveness of the market depends on: • Intense competition allows minimal profit margins • Mild competition allows wider profit margins Barriers to Entry: There are a number of factors that determine the degree of difficulty in entering an industry: • Economies of scale • Product differentiation • Capital requirements vs. Although its an excellent framework to understand the thoughts about an organization. It has endured as one of the most famous and talked about frameworks in the consulting field. switching costs• Access to distribution channels • Cost advantages independent of scale • Proprietary product technology • Favorable access to raw materials • Favorable location • Government subsidies • Learning curve • Government policy Relationship with Buyers: A buyer group is powerful if: . its analysis is not complete. Porter’s Five Forces Model Michael Porter’s Five Forces is probably the most famous framework used in preparation for the case interviews. The threat of new entrants . Five primary forces: .
• It is concentrated or purchases large volumes relative to seller's sales • The products it purchases front the industry are standard or undifferentiated • It faces few switching costs • Buyers pose a credible threat of backward integration • The industry's product is unimportant to the quality of the buyer's products or services • The buyer has full information Relationship with Suppliers: A supplier group is powerful if: • It is not obliged to contend with other substitute products for sales in the industry • The industry is not an important customer of the supplier group • The supplier group is an important input to the buyer's business • The supplier group's products are differentiated or it has built up switching costs • The supplier group poses a credible threat of forward integration Substitute Products: Substitute products that deserve the most attention are those that: • Compete in price with the industry's products • Are produced by industries earning high profits Rivalry: Rivalry among existing competitors increases if: • Numerous or equally balanced competitors exist • Industry growth is slow • Fixed costs are high • There is lack of differentiation or switching costs • Capacity is augmented in large increments .
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