m 1 Overview of Marketing New | Market Segmentation | Marketing

MARKETIN MODULE-1 Overview of Marketing G OVERVIEW OVERVIEW OF MARKETING OF LEARNING OBJECTIVES MARKETIN After reading this module, students

should: G Know why marketing is important
          

Know what is the scope of marketing Know some of the fundamental marketing concepts Know what are the necessary tasks for successful marketing management Know scope and importance of marketing Know what are the recent trends of marketing Know what are the different levels of market segmentation Know how a company can divide a market into segments Know how a company should choose the most attractive target markets Know what marketing mixes are.

Know 111how marketing management has changed

1

SUMMARY From a managerial point of view, marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stake holders. Marketing management is the art and science of choosing target markets and getting, keeping, and growing customers through creating, delivering, and communicating superior customer value. Marketers are skilled at managing demand: They seek to influence the level, timing, and composition of demand. Marketers are involved in marketing many types of entities: goods, services, events, experiences, persons, places, properties, organizations, information, and ideas. They also operate in four different marketplaces: consumer, business, global, and nonprofit. Marketing is not done only by the marketing department. Marketing needs to affect every aspect of the customer experience. To create a strong marketing organization, marketers must think like executives in other departments, and executives in other departments must think more like marketers. Today’s marketplace is fundamentally different as a result of major societal forces that have resulted in many new consumer and company capabilities. These forces have created new opportunities and challenges and marketing management has changed significantly in recent years as companies seek new ways to achieve marketing excellence. There are five competing concepts under which organizations can choose to conduct their business: the production concept, the product concept, the selling concept and the marketing concept. Target marketing includes three activities: market segmentation, market targeting, and market positioning. We can target markets at four levels: segments, niches, local areas, and individuals. Market segments are large, identifiable groups within a market. A niche is a more narrowly defined group. Globalization and the Internet have made niche marketing more feasible to many. Marketers appeal to local markets through grassroots marketing for trading areas, neighborhoods, and even individual stores. More companies now practice individual and mass customization. The future is likely to see more self-marketing, a form of marketing in which individual consumers take the initiative in designing products and brands. There are two bases for segmenting consumer markets: consumer characteristics and consumer responses. The major segmentation variables for consumer markets are geographic, demographic, psychographic, and behavioral. Marketers use them singly or in combination.
Marketing Management, 1st semester,(Strictly for Private Circulation) 1

MODULE-1 Overview of Marketing

Business marketers use all these variables along with operating variables, purchasing approaches, and situational factors. To be useful, market segments must be measurable, substantial, accessible, differentiable, and actionable. A firm has to evaluate the various segments and decide how many and which ones to target: a single segment, several segments, a specific product, a specific market, or the full market. If it serves the full market, it must choose between differentiated and undifferentiated marketing. Firms must also monitor segment relationships, and seek economies of scope and the potential for marketing to super segments. Marketers must develop segment-bysegment invasion plans and choose target markets in a socially responsible manner at all times. The value delivery process involves choosing (or identifying), providing (or delivering), and communicating superior value. The value chain is a tool for identifying key activities that create value and costs in a specific business. Strong companies develop superior capabilities in managing core business processes such as newproduct realization, inventory management, and customer acquisition and retention. Managing these core processes effectively means creating a marketing network in which the company works closely with all parties in the production and distribution chain, from suppliers of raw materials to retail distributors. Companies no longer compete—marketing networks do. Target marketing includes three activities: market segmentation, market targeting, and market positioning. We can target markets at four levels: segments, niches, local areas, and individuals. Market segments are large, identifiable groups within a market. A niche is a more narrowly defined group. Globalization and the Internet have made niche marketing more feasible to many. Marketers appeal to local markets through grassroots marketing for trading areas, neighborhoods, and even individual stores. More companies now practice individual and mass customization. The future is likely to see more self-marketing, a form of marketing in which individual consumers take the initiative in designing products and brands. There are two bases for segmenting consumer markets: consumer characteristics and consumer responses. The major segmentation variables for consumer markets are geographic, demographic, psychographic, and behavioral. Marketers use them singly or in combination. Business marketers use all these variables along with operating variables, purchasing approaches, and situational factors. To be useful, market segments must be measurable, substantial, accessible, differentiable, and actionable. A firm has to evaluate the various segments and decide how many and which ones to target: a single segment, several segments, a specific product, a specific market, or the full market. If it serves the full market, it must choose between differentiated and undifferentiated marketing. Firms must also monitor segment relationships, and seek economies of scope and the potential for marketing to super segments. Marketers must develop segment-by-segment invasion plans and choose target markets in a socially responsible manner at all times. Introduction- Market and Marketing Who Markets? Marketers and Prospects A marketer is someone seeking a response (attention, purchase, vote, donation, etc.) from another party called the prospect. A) Marketers are responsible for stimulating demand for a company’s product. E.g just as production and logistics professionals are responsible for supply management, marketers are responsible for demand management. B) Marketing managers seek to influence the level, timing, and composition of demand to meet the organization’s objectives. Eight demand states are possible: 1) Negative demand—consumers dislike the product and may even pay a price to avoid it. 2) Non-existent demand—consumers may be unaware or uninterested in the product.
3) Latent demand—consumers may share a strong need that cannot be satisfied by an existing product.

Marketers try to capture this demand and come out with newer and better products.
Marketing Management, 1st semester,(Strictly for Private Circulation) 2

Markets Economists describe a market as a collection of buyers and sellers who transact over a particular product or product class. services. 1st semester. monthly. 6) Full demand—consumers are adequately buying all product put into the marketplace. 4) There is an exchange of information. Marketers use the term “market” to cover various groups of customers. 7) Overfull demand—too many consumers would like to buy the product that can be satisfied. Marketing Management. 3) There is an exchange of money for goods and services. and communications to the market.(Strictly for Private Circulation) 3 . or even an hourly basis.MODULE-1 Overview of Marketing 4) Declining demand—consumers begin to buy the product less frequently or not at all. Key Customer Markets A) Consumer Markets .Consumer goods and services such as soft drinks and cosmetics spend a great deal of time trying to establish a superior brand image. 2) In return they receive money and information. 8) Unwholesome demand—consumers may be attracted to products that have undesirable social consequences. daily. The five basic markets are: A) Resource Markets B) Government Markets C) Manufacturer Markets D) Intermediary Markets E) Consumer Markets Structure of Flows in a Modern Exchange Economy A) Sellers and buyers are connected by flows: 1) Seller sends goods. 5) Irregular demand—consumer purchases vary on a seasonal.

mechanics. amazon. and managing the marketing effort.com. industrial chemicals. and growing customers through creating. To create strong marketing organizations. selecting target markets. central market place. Metamarkets A) The marketplace is physical. and freely exchanging products and services of value with others. Marketplaces.” A) The American Marketing Association offers the following formal definition: “Marketing is an organizational function and a set of processes for creating. classified auto ads in newspapers. machine tools. insurance companies.com etc. consumer durable goods like television sets and refrigerator. service shops.Companies selling business goods and services often face well-trained and well-informed professional buyers who are skilled in evaluating competitive offerings. and how to price their products. Marketing planning process consists of analyzing marketing opportunities. communicating. organizations. spare parts dealers. auto magazines.Physical goods constitute the bulk of production and marketing efforts e.g indiatimes shopping. Marketspaces. how to enter the country.” What Is Marketed? Marketing people are involved in marketing ten types of entities: goods. ebay. events. universities. Goods . delivering.Companies face challenges and decisions regarding which countries to enter. designing marketing strategies. online shopping e. D) Nonprofit and Governmental Markets . B) Marketing management is the art and science of choosing target markets and getting. 1st semester. new and used car dealers. C) The metamarket is a cluster of complementary products and services that are closely related in the consumer’s mind but spread across a diverse set of industries. C) Global Markets . developing marketing programs. charitable organizations and government agencies.g automobiles. Marketing Management. experiences. C) A social definition of marketing is that “marketing is a societal process by which individuals and groups obtain what they need and want through creating. marketers must think like executives on other departments and other departments must think like marketers. e. roadside shops.MODULE-1 Overview of Marketing B) Business Markets . and auto sites on the internet. watches etc. services. keeping.com.g shopping malls. There are five key functions for a CMO (chief marketing officer) in leading marketing within an organization A) Strengthening the brands B) Measuring marketing effectiveness C) Driving new product development based on customer needs D) Gathering meaningful customer insights E) Utilizing new marketing technology MODERN DEFINATION OF MARKETING Marketing deals with identifying and meeting human and social needs.g automobile metamarket consist of automobile manufacturers. E.com. how to adapt their products/services to the country. 1. homeshop18. and communicating superior customer value. persons. information. financing companies.Companies selling to these markets have to price carefully because these organizations have limited purchasing power like churches.com. places. mobilebazaar. and ideas. One of the shortest definitions of marketing is “meeting needs profitably. properties. B) The marketspace is digital. and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders”.(Strictly for Private Circulation) 4 . Marketing in Practice How is marketing done? Increasingly marketing is not done only by the marketing department. offering.

4. E) Holistic Marketing Concept . states.The product concept holds that consumers will favor those products that offer the most quality.Actively work to build a strong. performance. purchases and other interactions with customers and suppliers. favorable. Organizations . a firm can create and market experiences such as Walt Disney World’s Magic Kingdom.Can be produced and marketed as a product. Places . 7. and communicating superior customer value to its chosen target markets. 9.The marketing concept holds that the key to achieving organizational goals consists of the company being more effective than competitors in creating. maintenance and repair people. 8. and activities that recognizes the breath and interdependencies of their efforts. and the Olympics. 6. Events .Marketers promote time-based events such as trade shows. mutually satisfying sales. E. Proactive marketing orientation—researching or imagining latent consumers’ needs through a “probeand-learn” process. or innovative features. D) Marketing Concept . universities. price. Information . COMPANY ORIENTATION TOWARD THE MARKETPLACE The competing concepts under which organizations have conducted marketing activities include. B) Product Concept . Experiences . hotels. Finally it recognizes that marketing concepts and techniques apply to non-profit organizations as well as to profit-oriented businesses. software programmers and management consultants. services of airlines.A growing portion of business activities are focused on the production of services e.The production concept holds that consumers will prefer products that are widely available and inexpensive. Oprah Winfrey.Holistic marketing can be seen as the development. product concept. The concept’s emphasis on creating and maintaining relationships is consistent with the focus in business on long-term. Marketing Management. and holistic marketing concept. design. to product organization and to service organizations. Schools. Ideas .MODULE-1 Overview of Marketing 2. it assumes that the organization begins by identifying and analyzing the consumer segments that it will later satisfy through its production and marketing activities. artistic performances. and new residents. car rental firms.Every market offering includes a basic idea. Social marketers are busy promoting such ideas by creating awareness about AIDS. factories. In addition.Are intangible rights of ownership of either real property (real estate) or financial property (stocks and bonds).The selling concept holds that consumers and businesses. • • Reactive market orientation—understanding and meeting consumers’ expressed needs. will ordinarily not buy enough of the organization’s products. Persons . marketing concept. the organization must undertake aggressive selling and promotion effort. Companies that practice both reactive and proactive marketing orientation are implementing a total market orientation. and unique image in the minds of their target publics. and whole nations compete actively to attract tourists.Celebrity marketing is a major business. and implementation of marketing programs. therefore. promotion and distribution – that combine to provide customer satisfaction. Properties . 1st semester.g David Beckham. 3. A) Production Concept . Services . 10.By orchestrating several services and goods. processes. and others produce information and then market it. C) Selling Concept . The concept also identifies the marketing variables – product.g. the production concept.Cities.(Strictly for Private Circulation) 5 . encourageing family planning and discouraging smoking. Products and services are platforms for delivering some idea or benefit. 5. selling concept. delivering. regions. to domestic and global organizations. as well as to organizations targeting consumers and other businesses.

These goods and services can represent cars. viz. He/ she Marketing Management. social needs. If at times the term ‘product’ does not seem to be appropriate. a person may consider a number of options – drink water or a soft drink or a fruit juice. The guiding concept is customer value. employees. how do they choose from among these many products? They make their buying choices based on their perceptions of a product’s value. People satisfy their needs and wants with products. Products A product is anything that can be offered to a market to satisfy a need or want. as well as society as a whole. they want to choose products that provide the most satisfaction for their money. satisfier are used. the concept of product is not limited to physical objects. physical needs. Humans have many needs. groceries. that is.(Strictly for Private Circulation) 6 . thirst is a need. A need is a state of felt deprivation. When backed by buying power (ability). Wants are described in terms of objects that will satisfy needs. more want-satisfying products. other companies. To quench this thirst. services and a variety of other vehicles that can satisfy customers’ needs and wants. Wants are thus shaped by both the internal and external factors. persons and even ideas. These objects (which represent the different choices for a person to fulfill his/her need) comprise the potential wantlist. CORE MARKETING CONCEPTS Needs. It is a part of the human makeup. A customer will estimate the capacity of each product to satisfy his need. As people are exposed to more objects that arouse their interest and desire. Marketers often use the expressions goods and services to distinguish between physical products and intangible ones. For example. computers. spiritual needs and so on. which places to visit for a holiday. places. which ideas to adopt for their problems and so on. People have almost unlimited wants but limited resources. Though the word suggests a physical object. Customers decide which entertainers to watch on television.. Value and Satisfaction When the customers have so many choices to choose from to satisfy a particular need. 1st semester. a want becomes a demand. and Demands Needs (basic human requirements) A) Stated needs B) Real needs C) Unstated needs D) Delight needs E) Secret needs Demands (for specific products backed by the ability to pay) The most basic concept underlying marketing is that of human needs. Therefore. Thus the term ‘product’ covers physical goods. marketers try to provide more choices. Wants. Wants are the form taken by needs as they are shaped by the one’s culture and personality. competition.MODULE-1 Overview of Marketing Holistic marketing recognizes that “everything matters” with marketing—the consumer. other terms such as market offering.

Transaction marketing is part of the larger idea of relationship marketing. Transactions and Relationships Marketing occurs when people decide to satisfy needs and wants through exchange. After all. If they agree. A monetary transaction involves trading goods and services in return for money whereas a barter transaction involves trading goods and services for other goods and services. exchange becomes even more centralized. several conditions must be satisfied. A market is the set of actual and potential buyers of a product. Target markets. Large supermarkets now serve millions of people who formerly shopped in smaller outlets. It consists of a trade of values between two parties. the customer will value each existing product according to how close it comes to his/her ideal product and end up choosing the product that gives the most benefit for the rupee – the greatest value. This is based on the assumption that if good relationships are built. Of course. and each must have something of value to the other. as seen in the growth of huge companies. Of course. Whether the exchange actually takes 20 place depends on the parties’ coming to an agreement. 1st semester. Positioning and Segmentation A) Identify and profile distinct groups of buyers who might prefer or require varying products and services mixes by examining  Demographic information  Psychographic information  Behavioral information B) Target market C) Market offering Offering and Brands  Value proposition: a set of benefits they offer to customers to satisfy their needs  Brand: is an offering from a known source Marketing Channels  Communication channels  Distribution channels Marketing Management. It may exist in a physical environment as a marketplace or in a virtual environment (on the internet platform) as a marketspace. In this sense. Thought it is only one of the many ways people can obtain a desired object. Markets The concept of transactions leads to the concept of a market. A transaction is marketing’s unit of measurement. we must conclude that the act of exchange has left both of them better off or at least not worse off. the ideal product is the one which gives all the benefits at zero cost. For an exchange to take place. Each party also must want to deal with the other party and each must be free to accept or reject the other’s offer. These conditions simply make exchange possible. but no such product exists. profitable transactions will simply follow. Merchants and central marketplaces greatly reduce the total number of transactions needs to accomplish a given volume of exchange. It gives customers more consumption possibilities. Exchange is the act of obtaining a desired object from someone by offering something in return. Value and Satisfaction  Successful if it delivers value and satisfaction to the target buyer  Value is a central marketing concept  Satisfaction reflects a person’s judgment of a product’s perceived performance Exchange. each party must be able to communicate and deliver. Finally. Marketing is shifting from trying to maximize the profit on each individual transaction to maximizing mutually beneficial relationships with consumers and other parties. each was free to reject or accept the offer. As economies grow. exchange creates value just as production creates value.MODULE-1 Overview of Marketing might rank the products from the most need-satisfying to the least need-satisfying.(Strictly for Private Circulation) 7 . it allows a society to produce much more than it would with any alternative system. at least two parties must participate. Still.

(Strictly for Private Circulation) 8 . Environment iii. FUNCTIONS OF MARKETING Marketing Management. Economic iv. Nature of marketing  Marketing is consumer oriented process. SCOPE AND IMPORTANCE OF MARKETING The application. Many firms have created a Chief Marketing Officer (CMO) to put marketing on an equal footing with other Chief Executives such as a CFO and CEO. Social-cultural NATURE.  It helps the enterprise to adapt to the changing conditions and circumstances. Political-Legal vii. and increase the company's perceived value.  Marketing is process of exchange.MODULE-1 Overview of Marketing  Service channels Supply Chain Competition  Marketing environment  Task environment  Broad environment: i.  Marketing is a system. Marketing is tricky and making the right decisions is not always easy.  It helps the community to satisfy their economic and social needs and thus raise their standard of living.  Marketing is goal oriented process. Effective marketing is essential for survival and growth of the organization. Skillful marketing is a never-ending pursuit. productivity and profitability with the minimum effort and cost.  It helps the enterprise in achieving the maximum efficiency. 1st semester. Effective marketing management will use a company's resources to increase its customer base. Financial success often depends on marketing ability.  Marketing is a process. Importance of Marketing  Marketing helps in achieving the organizational objectives. improve customer opinions of the company's products and services.  It helps in producing those products that are needed by the consumers and community at large.  It ensures the economic growth of the enterprise which results in growth and economic development of the country.  It provides guidance to the organization on the innovations to be adopted. The scope of a business' marketing management depends on the size of the business and the industry in which the business operates. Technological vi. Physical v. tracking and review of a business' marketing resources and activities. Demographic ii.  Market starts and ends with the customer (C2C)  Marketing is the guiding element of business. enabling it to face competition.

(Strictly for Private Circulation) Provid . Physical distribution Point of difference functions Starting point 3. 1. Selling Descr Ensuri quanti Using person SELLING VS MARKETING The difference between selling and marketing can be best illustrated by this popular customer quote: ‘Don’t tell me how good your product is. 1st semester. Facilitating functions 5. Standardizing and grading 6. Transporting Focus 4. THE NEW MARKETING REALITIES Major societal Forces affecting marketing:  Network information technology  Globalization  Deregulation  Privatization  Heightened Competition  Industry Convergence  Consumer Resistance  Retail Transformation  Disintermediation B. Storing Means End Movin Sel conve Fac Exi Ware Sel Pro New Consumer Capabilities  A substantial increase in buying power  Greater variety of goods and services  Great deal of information available C.MODULE-1 Overview of Marketing Marketing function A. but tell me how good it will make me’. Financing Ensuri quanti 9 Marketing Management. Exchange functions. Buying 2.

it can be used to determine how to market your product. place and promotion that combine to satisfy the needs of the target market. Marketing Management. The outer circle in Figure lists environmental characteristics that provide the framework within which marketing strategies are planned. and to assess changes in the business environment that may affect the size and nature of the market in the future. both in terms of providing instant response and eliciting responses. is the marketing of products or services over the Internet. Marketing Framework The basic elements of a marketing strategy consist of (1) the target market.”  Market research was an offshoot of the advertising boom of the 1950s in the USA. and to seek more direct feedback about their markets. The interactive nature of Internet marketing. “the process of acquiring and analyzing information in order to understand the market (both existing and potential customers). 1st semester. is a unique quality of the medium.  Internet marketing also referred to as i-marketing. and (2) the marketing mix variables of product.  Market intelligence (MI) according to Cornish. and sale. The first is that it attempts to send its messages directly to consumers. or eMarketing. Questionnaires and focus group discussion surveys are some of the instruments for market research. development. The Internet has brought many unique benefits to marketing. then the effort is considered to be direct response advertising. training. It can also involve discovering how they act. for instance call a free phone number or visit a website. advertising. measurable positive (but not negative) responses from consumers (known simply as "response" in the industry) regardless of medium. The second characteristic is that it is focused on driving a specific "call-to-action. There are two main definitional characteristics which distinguish it from other types of marketing. usually unsolicited. and wireless media.MODULE-1 Overview of Marketing  Greater ease in interacting and placing orders  Ability to compare notes on products and services  Amplified voice to influence peer and public opinion New Company Capabilities  Internet  Research  Speed of internal information  Speed of external information “buzz’  Better target marketing  Mobile marketing  Differentiated goods  Improved purchasing. Advertisers began to realize the significance of demographics revealed by Radio and television sponsorship. however. Internet marketing is sometimes considered to have a broader scope because it not only refers to digital media such as the Internet. online marketing. If the advertisement asks the prospect to take a specific action. This involves commercial communication (direct mail. Internet marketing also includes management of digital customer data and electronic customer relationship management (ECRM) systems. Once that research is completed. price. including design. and telemarketing) with consumers or businesses. one of which being lower costs and greater capabilities for the distribution of information and media to a global audience. without the use of intervening media. need. e-mail. and communications  Direct marketing is a sub-discipline and type of marketing.(Strictly for Private Circulation) 10 . attitudes and behavior of the market. web marketing. Market research is for discovering what people want. Internet marketing ties together creative and technical aspects of the Internet. e-mail. to determine the current and future needs and preferences. recruiting. or believe." This aspect of direct marketing involves an emphasis on trackable.

The social-cultural environment offers cues for the marketers to ‘connect’ well with the target market. 1st semester. technological and social-cultural dimensions. The 4 Ps blend to fit the needs and preferences of a specific target market. Marketers do not make decisions about target markets and marketing mix variables in a vacuum. a market-driven organization begins its overall strategy with a detailed description of its target market: the group of people toward whom the firm decides to direct its marketing efforts. The product strategy involves deciding what goods and services the firm should offer to a group of consumers and also making decisions about customer service. marketers blend together the various elements of promotion to communicate most effectively with their target market. labeling. Unlike the controllable marketing mix elements. In the promotional strategy. Adherence to the law of the land is an imperative for a marketer to be a good and responsible corporate citizen.(Strictly for Private Circulation) 11 .  The economic environment dictates the mood in the target market who take decisions such as to buy or save. marketing decision making can be divided into four areas: product. The pricing strategy deals with the methods of setting profitable and justifiable prices. So the developments in the competitive environment will have lot of repercussions. to buy now or later. Although they must manipulate many variables to reach this goal. In addition. consistent and effective message.MODULE-1 Overview of Marketing Elements of a marketing strategy and its environmental framework Marketing activities focus on the consumer. These are the four variables that a marketer can use and control in different combinations to create value for customers. They must take into account the dynamic nature of the five marketing environmental dimensions as shown in Figure – competitive.  Failure on part of the marketer to understand the social-cultural environment will have serious consequences. Place-related decisions involve the distribution functions and marketing intermediaries (channel members). A marketers can not afford to rub a society/culture on the wrong side! Marketing Management. economic.  The political-legal environment includes the governing and regulatory bodies who impose guidelines to the marketers. they direct their activities towards profitably satisfying that target segment. Therefore. price. Figure illustrates the focus of the marketing mix variables on the central choice of consumer or organizational target markets. brand name. political. the environmental variables frequently lie outside the control of marketers. Marketers develop place (distribution) strategy to ensure that consumers find their products available in the proper quantities at the right times and places. These 4 Ps of marketing are referred to as the marketing mix. Many firms use an approach called Integrate Marketing Communications (IMC) to coordinate all promotional activities so that the consumer receives a unified. place (distribution) and promotion (marketing communication).  The technological environment can spell life or death for a marketer with break-through technologies.legal. packaging. Marketers often leap forward or get left behind owing to the changes in the technological environment. product life cycles and new product development. decisions about the 4 Ps are affected by the environmental factors in the outer circle of that figure. After marketers select a target market.  Marketers compete for the same consumers.

1st semester. The heterogeneous marketplace can be divided into many homogeneous customer segments along several segmentation variable. Measurable: . This involves identifying different points of differentiation and formulating a unique selling proposition (USP). Products seldom succeed by appealing to everybody. 2. A) Local marketing reflects a growing trend called grassroots marketing. B) Globalization has facilitated niche marketing. A) Niche marketers presumably understand their customers’ needs so well that the customers willingly pay a premium.it should be possible to determine the values of the variable used for the segmentation. Such communications are referred to as positioning the product or service in the mind of the customer so as to occupy a unique place. In today’s marketplace.(Strictly for Private Circulation) 12 . B) The marketer’s task is to identify the segments and decide which one(s) to target. Relevant: . and mass promotion of one product for all buyers.the target audiences must be diverse and able to show different reactions to different marketing mix. A) The argument for mass marketing is that it creates the largest potential market. the seller engages in the mass production. D) Market segments can be defined in many different ways: One way to carve up a market is to identify preference segments Homogeneous preferences Diffused preferences Clustered preferences Niche Marketing A niche is a more narrowly defined customer group seeking a distinctive mix of benefits. Local Marketing Target marketing is leading to marketing programs tailored to the needs and wants of local customer groups.the target customers must be reachable and servable for the organization. BASES FOR SEGMENTING CONSUMER MARKETS Marketing Management. 3. to the lowest costs that in turn can lead to lower prices or higher margins. 5. not every product appeals to every customer. Marketers usually identify niches by dividing a segment into sub-segments. A market segment consists of a group of customers who share a similar set of needs and wants. Feasible: .the firm must have an ability to draw an effective marketing program for its customers.it should justify the expected profits and the growth potential. Accessible: . which leads. C) A flexible market offering consists of two parts: 1) A naked solution containing the product and service elements that all segment member’s value 2) Discretionary options that some segment member’s value. In mass marketing. Philip Kotler mentioned five criteria for an effective segmentation which states that Segmentation should be: 1. The division of the total market into smaller relatively homogeneous groups is called market segmentation. differentiation holds the key to marketing success. mass distribution. A) The marketer does not create the segments.MODULE-1 Overview of Marketing Levels of Market Segmentation The starting point for discussing segmentation is mass marketing. Segment Marketing The market place is heterogeneous with differing wants and varying purchase power. The identified segments are then targeted with clear marketing communications. 4. The reasons are simple: not every customer is profitable nor worth retaining. Hence the organizations look for a fit between their competencies and the segments’ profitability. C) The low cost of setting up shop on the Internet has led to many small business start-ups aimed at niches. Distinguishable: .

Generation A) B) 1) Each generation is profoundly influenced by the times in which it grows up. They share similar outlooks and values. B) Some traditionally more male-orientated markets. B) Demographic variables are easy to measure. Social Class A) B) Psychographic Segmentation Marketing Management. generation. gender. and social class. changing how they design and sell their products. Geographic Segmentation Geographic segmentation calls for dividing the market into different geographical units. A) Descriptive characteristics: geographic. Social class has a strong influence on preferences for consumers. Income A) Income segmentation is a long-standing practice in product and service categories. education. C) Increasingly. Demographic Segmentation In demographic segmentation. Gender A) Men and women tend to have different attitudinal and behavioral orientations. based partly on genetic makeup and partly on socialization. Age and Life-Cycle Stage A) Consumer wants and abilities change with age. occupation. A) A) Consumer needs. the market is divided into groups on the basis of variables such as age. C) Generational cohorts also influence each other. income does not always predict the best customers for a given product. 1st semester. nationality. family life cycle. More and more. family size. These life stages present opportunities for marketers who can help people cope with their major concerns.MODULE-1 Overview of Marketing Two broad groups of variables are used to segment consumer markets. Life Stage A) Persons in the same part of the life cycle may differ in their life stage. religion. D) Marketers often advertise to a cohort by using the icons and images prominent in its experiences. income. Demographers call these groups cohorts. race. or brands Regardless of which type of segmentation scheme is employed.(Strictly for Private Circulation) 13 . and product and brand preferences are often associated with demographic variables. regional marketing means marketing right down to a specific zip code. are beginning to recognize gender segmentation. 2) Marketers often advertise to a cohort group by using icons and images prominent in their experiences. and psycho-graphic. wants. Many companies design products and services for specific social classes. Life stage defines a person’s major concern. B) Behavioral considerations: such as consumer responses to benefits. demographics. companies are finding that their markets are “hourglass-shaped” as middle-market Americans migrate toward more premium products. the key is that the marketing program can be profitably adjusted to recognize customer differences. use occasions. B) However. usage rates.

Makers d. month. Business marketers generally identify segments through a sequential process. interested. and regular users. or other well-defined temporal aspects of a consumer’s life. 1st semester. Believers b. buyers are divided into different groups on the basis of lifestyle or personality or values. Experiencers 2) The major tendencies of the four groups with lower resources are: a. ex-users. C) One of the most popular commercially available classification systems is SRI Consulting Business Intelligence’s VALS framework. Thinkers c. )C User Status: Every product has its nonusers. Within a given target market industry and customer size.MODULE-1 Overview of Marketing A) Psychographics is the science of using psychology and demographics to better understand consumers. year. Strivers c. )F Loyalty status: )1 Hard-core loyals )2 Split loyals )3 Shifting loyals )4 Switchers BASIS FOR SEGMENTING BUSINESS MARKETS Business markets can be segmented with some of the variables used in consumer market segmentation but business marketers also use other variables. B) In psychographic segmentation. potential users. )E Buyer-Readiness stage: unaware. and heavy product users. medium.(Strictly for Private Circulation) 14 . informed. desire. Achievers d. Marketing Management. aware. Survivors Behavioral Segmentation Many marketers believe behavioral variables are the best starting points for constructing market segments: )A Occasions: can be defined in terms of the time of day. and intend to buy. first-time users. a company can segment further by purchase criteria. )B Benefits: Not everyone who buys a product wants the same benefits from it. Innovators b. week. 1) The major tendencies of the four groups with high resources are: a. )D Usage rate: Light.

the firm gains a strong knowledge of the segment’s needs and achieves a strong market presence. MARKET TARGETING Once a firm has identified its market-segment opportunities. B) Selective specialization 1) The firm selects a number of segments. Effective Segmentation Criteria To be useful. a.(Strictly for Private Circulation) 15 . D) Market Specialization 1) The firm concentrates on serving many needs of a particular customer group. C) Product specialization 1) The firm makes a certain product that it sells to several different market segments. 2) In undifferentiated marketing. it must decide how many and which ones to target. F) Differentiated Marketing Costs Differentiated marketing typically creates more total sales than undifferentiated marketing but also increases the cost of doing business. market segments must rate favorable on five key criteria: )A Measurable )B Substantial )C Accessible )D Differentiable )E Actionable Evaluating and Selecting the Market Segments In evaluating different market segments. A) Single-segment concentration 1) Through concentrated marketing. the firm ignores segment differences and goes after the whole market with one offer. 3) For these reasons. the firm must look at two factors: The segment’s overall attractiveness and the company’s objectives and resources. 1st semester. 3) In differentiated marketing.MODULE-1 Overview of Marketing BENEFITS OF MARKET SEGMENTATION The following are the advantages of Market Segmentation for a firm: • Helps in better understanding of the customers’ needs and wants. the firm operates in several market segments and designs different products for each segment. a market segment can turn sour. each objectively attractive and appropriate. • Reducing cost / expenses on various marketing activities and increases market share. Marketing Management. resulting in higher profits. • Improving service delivery standards. A super-segment is a set of segments sharing some exploitable similarity. • Retaining the existing customers and attracting new ones. 2) This multi-segment strategy has the advantage of diversifying the firm’s risk. or a competitor may invade the segment. • Maintaining effective relationship with the customers. many companies prefer to operate in more than one segment. • Encourages two-way communication among the potential buyer and the organization. • Better targeting and position of the product. 2) However. 4) Companies can try to operate in super-segments rather than in isolated segments. there are risks. E) Full market coverage 1) The firm attempts to serve all customer groups with all the products they might need. This has lead some researchers to advocate a needs-based market segmentation approach.

MARKET TARGETING Target market selection is the next logical step following segmentation. changes in the size of that segment or in customer buying patterns may result in severe financial problems. a company may be forced to practice differentiated marketing in order to remain competitive. 4) Megamarketing is the strategic coordination of economic. It may be a small segment. 5) Once in. A firm that attempts to satisfy everyone in the market with one standard product may suffer if competitors offer specialized units to smaller segments of the total market and better satisfy individual segments. It used to be much more common in the past than it is today. 2. and ethical choice of market targets. The public is concerned when marketers take unfair advantage of vulnerable groups or promote potentially harmful products. to gain the cooperation of a number of parties in order to enter or operate in a given market. the organization got to decide how many and which ones to target. Sales may also drop if new competitors appeal successfully to the same segment. Marketers have identified four basic approaches to do this: 1. concentrated marketing has its dangers.MODULE-1 Overview of Marketing Additional Considerations Three other considerations must be taken into account in evaluating and selecting segments: segment-bysegment invasion plans. but a profitable segment. a firm may opt for a concentrated marketing approach. It is still aimed at satisfying a large part of the total market. political. it also raises production. Differentiated Marketing Firms that promote numerous products with different marketing mixes designed to satisfy smaller segments are said to practice differentiated marketing. it also brings in inherent dangers. psychological. A common example is the case of Model T built by Henry Ford and sold for one price to everyone who wanted to buy. Concentrated Marketing Rather than trying to market its products separately to several segments. This calls for well-thought-out civic positioning. Undifferentiated Marketing A firm may produce only one product or product line and offer it to all customers with a single marketing mix. Ethical Choice of Market Targets Market targeting generates public controversy. By providing increased satisfaction for each of many target markets. 2) A company’s invasion plans can be thwarted when it confronts blocked markets. ‘as long as it is black’. a multinational must be on its best behavior. Despite higher marketing costs. a company can produce more sales by following a differentiated marketing approach. updating segmentation schemes. Lot of marketing effort is dedicated to developing strategies that will best match the firm’s product offerings to the needs of particular target segments. He agreed to paint his cars any colour that consumers wanted. A) Segment-by-segment invasion plans 1) A company would be wise to enter one segment at a time. inventory and promotional costs. In general. Once the market-segment opportunities have been identified. and publicrelations skills. Such a firm is said to practice undifferentiated marketing. Since this approach ties a firm’s growth to a particular segment. With concentrated marketing (also known as niche marketing). 1st semester. Niche marketing leaves the fortunes of a firm to depend on one small target segment. While undifferentiated marketing is efficient from a production viewpoint (offering the benefits of economies of scale). Instead of marketing one product with a single marketing program. the firm markets a number of products designed to appeal to individual parts of the total market. 3) The problem of entering blocked markets calls for a megamarketing approach. also called mass marketing. This approach can appeal to a small firm that lacks the financial resources of its competitors and to a company that offers highly specialized good and services. 3. a firm focuses its efforts on profitably satisfying only one market segment. Marketing Management. Along with its benefits. The firm should look for a match between the value requirements of each segment and its distinctive capabilities.(Strictly for Private Circulation) 16 .

A company discovers different needs and groups in the marketplace. Micro Marketing This approach is still more narrowly focused than concentrated marketing. With the ability to customize (individualization attempts by the firm) and to personalize (individualization attempts by the customer). marketers must then decide how best to position the product in the market. Positioning is the act of designing the company’s offer so that it occupies a distinct and valued place in the target customers’ minds. Quality/price positioning is when the product is positioned as the best value for money. the internet offers the benefit of mass customization – by reaching the mass market with individualized offers for the customers. For example. but not so important attribute is highlighted. Product category positioning is when a product is positioned to belong to a particular category and not another category which probably is crowded. For example. 1st semester. the customer does not see any value in such a position. and then positions its offering so that the target market recognizes the company’s distinctive offering and image. In the positioning decision. caution must be taken to avoid certain positioning errors: Underpositioning is done when a unique. targets those needs and groups that it can satisfy in a superior way. Marketers can create a competitive positioning map from information solicited from consumers or from their accumulated knowledge about a market. micromarketing may even target individuals themselves. such as by the postal code. the positioning statement of toothpaste X may read as follows: Toothpaste X is positioned as offering to kids a toothpaste made especially for those kids who don’t like to brush with the competitive advantage of a mild fruit taste and lower foaming.MODULE-1 Overview of Marketing 4. Confused positioning is when the customer fails to categorize the product correctly and the product ends up being perceived differently from what was intended. Positioning map is a valuable tool to help marketers position products by graphically illustrating consumers’ perceptions of competing products within an industry. As a result. a positioning map might present two different characteristics. Micro marketing involves targeting potential customers at a very basic level. DEVELOPING AND COMMUNICATING A POSITIONING STRATEGY All marketing strategy is built on STP—Segmentation. A general form of such a statement is given below: Product X is positioned as offering (benefit) to (target market) with the competitive advantage of (competitive advantage) based on (basis for competitive advantage). Each one of them offers a distinct positioning possibility for a pizza. Every product must have a positioning statement. a Pizza may be positioned on its taste or it’s natural contents or as an easy meal or with a thicker topping or as the lowest priced offering the best value for money. The concept of positioning seeks to place a product in a certain ‘position’ in the minds of the prospective buyers. and show how consumers view a product and its major competitors based on these traits. Positioning = Differentiation + Segmentation Doubtful positioning is when the customer finds it difficult to believe the positioning claims. It is referred to as marketing to segments of one.(Strictly for Private Circulation) 17 . Benefit positioning is when a derived benefit is highlighted as the unique selling propositioning. Overpositioning is done when the product performance does not justify the tall claims of positioning. The internet allows marketers to boost the effectiveness of micromarketing. and Positioning. For instance. Ultimately. price and quality. POSITIONING Having chosen an approach for reaching the firm’s target segment. but what you do to the mind of your customer. Positioning can be done along different possibilities. Marketing Management. Attribute positioning is when the positioning is based on some attribute of the product. specific occupation or lifestyle. In a world that is getting more and more homogenized differentiation and positioning hold the key to marketing success! Positioning is not what you do to your product. Competitor positioning is when a comparison is drawn with the competitor and a differentiation from the competitor is emphasized. Targeting.

The place of delivery. The intangible include such things as the image of the offering . except for their apple ness’’ does not stand the heat of nuts-and-bolts.e. branding. the additional prescribed Ps given below refer to activities that are service marketing mix can be summarized as follows: Product . feel. A place that meets his or her needs better may be worth more. the psychological aspects of pricing (high price to many customers is equated with high quality .. then it can work out the rest of its marketing planning and differentiation from its positioning strategy. Promotion . Positioning requires that similarities and differences between brands be defined 4) Deciding on positioning requires determining a frame of reference by identifying target markets and competition and identifying the ideal points-of-parity and points-of-difference brand associations. or smell. discounts.Advertising. touch. Place: The place is where the customer receives the product. which includes the image of the organization making the offering. coverage. Price . are those things that the customer can see. place. Given the product / service characteristics and activities in product/service firms.location. a visitor center in the park. Product: The product.. In setting its strategy. Promotion:Promotion includes all forms of communication you use to communicate the benefits of your offering to the target market(s). The tangible. Price: The price is what the customer pays. terms of payment. Place . But such wax-like logic as “apples are just like oranges. It includes direct and indirect costs as well as opportunity costs.and vice versa). eight Ps’ framework for services has been proposed.MODULE-1 Overview of Marketing A) If a company does an excellent job of positioning. MARKETING MIX The most popular 4 Ps’ framework as suggested by McCarthy with the marketing mix variables. 2) The result of positioning is the successful creation of a customer-focused value proposition.(Strictly for Private Circulation) 18 .products. or program includes both tangible and intangible elements. personal selling and publicity. 3) and communicated.service core. However service characteristics are radically different fro goods. a cogent reason why the target market should buy the product. service. It is wrong to imply that services are just like products except for intangibility. taste. and so are the challenges in their marketing. promotion and price had origination from the study of the manufacturers – i. is part of what the consumer buys. channels of distribution. or an interpretive exhibit along a trail. For the services. of course.price. including all of its resources. or program. the organization must determine how much the target market is willing to pay for atmosphere and physical resources of place. 1) The goal is to locate the brand in the minds of consumers to maximize the potential benefit to the firm. additional services. Price includes all costs associated with the product. service. sales promotion. The term promotion mix is commonly used to refer to the types Marketing Management. or program. the organization engaged in production and marketing of goods – it is more oriented to deal with goods marketing situations. levels. service. Marketing Product / service characteristics and add new dimensions to a marketing situation that is faced by the service manager. B) Positioning is the act of designing the company’s offering and image to occupy a distinctive place in the mind of the target market. The benefits of the product have to be great enough to warrant the price. The objective is to persuade the customer in such a way that he or she recognizes that your offering is uniquely qualified to meet his or her needs. The place may be a park. 1st semester.

though seldom discussed. Process – Activity sequence. Marketing Management. customer participation and delivery process Services Marketing and the Extended Marketing Mix (7P's). skills.MODULE-1 Overview of Marketing of communication that are available: advertising.e. A service tends to be an experience that is consumed at the point where it is purchased. equipment. It is largely intangible (i. Word of mouth. material) since you can touch it and own it. publicity. not material). THEY ARE: People . 1st semester.ambience.customer-provider relationship. personal selling. A service is the action of doing something for someone or something. machines Evidence – Buildings.e. training. Physical. quality management. is powerful promotion.(Strictly for Private Circulation) 19 Elements of the Marketing Mix Sub-El Produc Produc Produc Packag Product Breadth Level a Produc New pr Produc Manufa prices Terms a Price Bidding . and cannot be owned since is quickly perishes. and attitudes. and then return the next day and have a poor experience. A product is tangible (i. public relations. Some authors include direct marketing. and sales promotion. ADDITIONAL 4 Ps WERE ADDED FOR MARKETING SERVICES. appearance. physical facilities. culture. A person could go to a café one day and have excellent service.

The way in which a complaint is handled can mean the difference between retaining or losing a customer.g. • Training . technical support (e. and selling is of less importance e. or mail.g. In both cases little selling is done. Finally. vacation or restaurant meal. There are many examples of physical evidence. on the selection of financial services). actually closing the sale is not of great importance at this early stage.g.g. Creative sellers work to persuade buyers to give them an order. so a consumer tends to rely on material cues. as with those missionaries that promote faith. Business cards. Attention needs to be paid to Continuing Professional Development (CPD) where employees see their professional learning as a lifelong process of training and development.g. including some of the following: • • • • • • • • • Packaging. Personal Selling . and these may be either 'internal' or 'external. There are many examples of physical evidence.MODULE-1 Overview of Marketing Physical Evidence . tickets and despatch notes). skills and appearance of all staff need to be first class. e-mail or over a counter. the salesperson builds goodwill with customers with the longer-term aim of generating orders. In practice most training is either 'on-the-job' or 'off-the-job. over the telephone or 20 • • Marketing Management. Customer services provided expertise (e. training centre or conference facility. The next sort of sales person is the missionary. Their in-depth knowledge supports them as they advise customers on the best purchase for their needs. The forth type is the technical salesperson. Again. there are creative sellers. training of bar staff. There is the product delivery salesperson. as well as briefing him or her on day-to-day policies and procedures. fast food. Here are some ways in which people add value to an experience. including some of the following: Physical evidence is the material part of a service. customer service can be face-to-face.(Strictly for Private Circulation) . 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.There are different kinds of salesperson. services and experiences are supported by customer services teams. Customer Service . The second type is the order taker. The building itself (such as prestigious offices or scenic headquarters). At this very early stage the training needs of the individual are identified.Physical Evidence is the material part of a service. so the attitude. personal selling and customer service. or communicating with a salesman).' The internal sales person would take an order by telephone. people buy from people that they like. offering advice on IT and software) and coordinate the customer interface (e. 1st semester. A training and development plan is constructed for the individual which sets out personal goals that can be linked into future appraisals. and aspects of the customer experience are altered to meet the 'individual needs' of the person consuming it. Most of us can think of a situation where the personal service offered by individuals has made or tainted a tour. Off-the-job training sees learning taking place at a college.Many products. Internet/web pages. Strictly speaking there are no physical attributes to a service. The induction will involve the person in the organization's culture for the first time.All customer facing personnel need to be trained and developed to maintain a high quality of personal service. Today.People are the most important element of any service or experience. Strictly speaking there are no physical attributes to a service. Furnishings. and tends to offer the biggest incentives. Brochures.' On-the-job training involves training whilst the job is being performed e. Remember. The external sales person would be working in the field. Paperwork (such as invoices.g. The disposition and attitude of such people is vitally important to a company. Here. as part of the marketing mix . His or her main task is to deliver the product.training. Uniforms. e. controlling service engineers. a technical sales engineer. or improving or ruining a company's reputation. Training should begin as soon as the individual starts working for an organization during an induction. Signage (such as those on aircraft and vehicles). This is tough selling. Services tend to be produced and consumed at the same moment. so a consumer tends to rely on material cues. People .

Abraham Kosley and Mithileshwar Jha.There are a number of perceptions of the concept of process within the business and marketing literature. You have two weeks of services from restaurants and evening entertainment. for example . and so effective customer service is vital. For the purposes of the marketing mix. All views are understandable. to casinos and shopping. Finally. Pearson Education. Another view is that marketing has a number of processes that integrate together to create an overall marketing process. but not particularly customer focused.Process is another element of the extended marketing mix. REFERANCE:  ‘Marketing management : A south Asian Perspective’ 13th ed. Some see processes as a means to achieve an outcome. A further view is that marketing processes are used to control the marketing mix.wikipedia. Kevin Lane Keller.com . Here are some examples to help your build a picture of marketing process.(Strictly for Private Circulation) 21 . Going on a cruise . This is a highly focused marketing process. you are greeted. or 7P's. Marketing Management. People tend to buy from people that they like. beginning with the market & environment research.  http://en. After fixing the targets and setting the strategies.org/wiki/Marketing_management  http://www. and your baggage is delivered to you. by Philip kotler. you arrive at your destination. It consists of 5 steps.e. throughputs and outputs (or outcomes).marketingteacher. processes that measure the achievement marketing objectives. for example . Marketing adds value to each of the stages. Customer services can add value by offering customers technical support and expertise and advice.telemarketing and Internet marketing can be integrated. process is an element of service that sees the customer experiencing an organisation's offering. from the customer's point of view. The marketing process model based on the publications of Philip Kotler. The last step in the process is the marketing controlling. 1st semester. your baggage is taken to your room.MODULE-1 Overview of Marketing using the Internet. It's best viewed as something that your customer participates in at different points in time. Process . they will be realized by the marketing mix in step 4.from the moment that you arrive at the dockside.to achieve a 30% market share a company implements a marketing planning process. i. Processes essentially have inputs.

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