Kotler Chapters Summary PDF

Marketing Management
By Philip, Kevin Lane Keller, Abraham Koshy, Mithileshwar Jha
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SUMMARY by
Chapter 1
Understanding Marketing
Management
Marketing is an essential art and science that is engaged in a vast number of activities
by both persons and organizations. It has become an increasingly vital ingredient in the
success of a business. Good marketing is the result of careful planning and execution.
There are two sides to marketing – the formulated side and the creative side. It is
important to lay the foundation in marketing concepts, tools, frameworks and issues of
the formulated side while at the same time instil the real creativity and passion for
Social marketing, as we shall come to see in this chapter.
Definition of
Marketing is increasingly becoming an important function in all organizations to ensure
Marketing that demand for a product or service persists along with customer retention.
Marketing is a
societal process by Scope of Marketing
which individuals A good marketer must be able to answer the following questions:
and groups obtain
what they need and What is Marketing?
want through The formal definition of marketing is, Marketing is an organizational function and a set
creating, offering of processes for creating, communicating and delivering value to customers and for
and freely managing customer relationship in ways that benefit the organization and its
stakeholders.
exchanging
products and What is Marketed?
services of value
with others. Some of the common entities that are marketed are goods, services, events,
experiences, persons, places, properties, organizations, information and ideas.
Chapter 1 - Understanding Marketing Management
Who Markets?
A marketer is someone who seeks a response, attention, purchase, vote, donation etc
from another party called the prospect. Marketing managers are responsible for demand
The five key management.
Eight demand states are possible:
functions of a • Negative demand
• Nonexistent demand
marketing • Latent demand
manager or •
•
Declining demand
Irregular demand
CMO are: • Full demand
• Overfull demand
• Unwholesome demand
• Strengthening
The key customer markets are consumer markets, business markets, global markets,
the brand
non-profit and governmental markets.
• Measuring
marketing
effectiveness
Core Marketing Concepts:
• Driving new
product • Needs - state of felt deprivation for basic items such as food and clothing and
complex needs such as for belonging. i.e. I am hungry.
development
• Wants - form that a human need takes as shaped by culture and individual
based on personality i.e. I want a hamburger, French fries, and a soft drink.
customer needs • Demands - human wants backed by buying power. i.e. I have money to buy this
meal.
• Gathering
• Target Markets are the market segments identified by the marketer which
meaningful
present the greatest opportunity.
customer • Value Proposition is a set of benefits that companies offer to customers to
insights satisfy their needs. The intangible value proposition is made physical by as
offering. A brand is an offering from a known source.
• Utilizing new
• Value reflects the sum of the perceived tangible intangible benefits and costs to
marketing customers. Satisfaction reflects a person’s judgements of a product’s perceived
technology performance.
• To reach a target market a marketer uses different marketing channels like
communication channels, distribution channels and service channels.
• Supply chain is a longer channel stretching from raw materials to components
to final products that are carried to final buyers.
Chapter 1 - Understanding Marketing Management
Company orientation towards Marketplaces:

The major marketing philosophies are:
• The Production Concept
o Consumers favor products that are available and highly affordable.
o Improve production and distribution.
• Product Concept
New o Consumers favor products that offer the most quality, performance, and
innovative features.
Marketing • Selling Concept
Realities: o Consumers will buy products only if the company promotes/ sells these
products.
• Marketing Concept
o Focuses on needs/ wants of target markets & delivering satisfaction better
Some of the major than competitors.
societal forces that • Societal Marketing Concept
marketers have to o Focuses on needs/ wants of target markets & delivering superior value.
• Holistic Marketing Concept
deal with today are
o Based on the development, design and implementation of marketing
network programs, processes and activities that recognize their breadth and
information interdependencies.
technology, • Relationship Marketing
globalization, o Aims to build mutually satisfying long-term relationships with key
constituents in order to earn and retain their business.
deregulation,
privatization,
heightened
competition, Marketing Management Tasks:
industry The following are the most important marketing management tasks:
convergence, • Developing Marketing Strategies and Plans
• Capturing Marketing Insights
consumer
• Connecting with Customers
resistance, retail • Building Strong Brands
transformation and • Shaping the Marketing Offerings
disintermediation. • Delivering Value
• Communicating Value
• Creating Long-Term Growth
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Chapter 2
Developing Marketing
Strategies And Plans
In this chapter, mainly the following points have been discussed
• How does marketing affect customer value?
• How is strategic planning carried out at different levels of the organization?
• What does a marketing plan include?
Developing the right marketing strategy over time, through discipline and a creative
Supply thought process can go a long way in the marketing management process. Firms must
constantly strive to improve every aspect of their strategy and the plans to guide the
Chain marketing process.
Many companies
today outsource less
The Value Delivery Process
In the new view of business processes, marketing is viewed at the beginning of the
critical resources if
planning stage. A smart competitor must design and deliver products for well-defined
they can obtain micro-markets and cater to their specific wants, perceptions and preferences. The Value
better quality or Creation and Delivery Sequence can be divided into two segments of marketing:
lower cost. Also, Strategic Marketing and Tactical Marketing.
many companies
partner with specific
suppliers and
distributors to
create a superior
value delivery
network, also Core Competencies
known as Supply Core Competency refers to areas of special technical and production expertise, whereas
Chain. distinctive capability describes excellence in broader business processes. Market-driven
organizations generally excel in three distinctive capabilities: market sensing, customer
linking and channel bonding.
Chapter 2 - Developing Marketing Strategies And Plans
A firm must coordinate all the department activities to conduct its core business
processes, through cross-functional teams
• Market-sensing process
• New-offering realization process
Holistic • Customer Acquisition process
• Customer Relationship Management Process
Marketing • Fulfillment Management Process
Holistic marketing
orientation means, Value Chain
integrating the The value chain is a tool which is used for identifying ways to create more customer
value exploration, value. There are 9 strategically relevant activities – 5 primary and 4 support.
value creation and

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

fresh ideas from a youth perspective, from people new to the field and organization, to
gain an understanding and a new approach to marketing.
Chapter 2 - Developing Marketing Strategies And Plans
Mission Statement
The best Mission Statement reflects a vision, an almost impossible dream that provides
a direction for the company for the next 10 or 20 years. A good mission statement
focuses on limited number of goals, links the company’s policies and values and gives a
Strategic long term view. It is as short, relevant and meaningful as possible.
Business Unit
A Strategic Business Unit Strategic Planning
Business Unit is a
The Business Unit Strategic Planning process consists of the following steps
single business (or
a collection of 1. The Business Mission: Each business unit needs to define its specific mission
similar businesses) within the broader company mission.
that can be 2. SWOT Analysis: The overall analysis of a company’s Strengths, Weaknesses,
Opportunities and Threats is called SWOT analysis. It is a way of monitoring the
planned
external and internal marketing environment.
separately from
To evaluate opportunities, companies can use Market Opportunity Analysis.
the rest of the 3. Goal Formulation: Developing specific goals for a short term is known as Goal
company. By Formulation. They are specific with respect to magnitude and time. Goals must
identifying the be consistent and realistic and could be a mix of various objectives.
4. Strategy Formulation: Strategy is a game plan for achieving the goals. It consists
company’s SBUs, it
of a Marketing Strategy, Technology Strategy and a Sourcing Strategy.
is easy to develop 5. Program Formulation: The unit must plan programs in accordance with its goals
separate strategies and strategy and thus work upon the various departments, to strengthen them
and assign and integrate all of them together.
6. Implementation: Even a great marketing strategy can be sabotaged by a poor
appropriate
implementation. It must coordinate its tasks to implement its plan properly.
funding.
These tasks must be in line with the interests of the stakeholders as well.
7. Feedback and Control: The key to organizational health is willingness to
examine the changing environment and adopt new goals and behaviors. In the
rapidly changing market environment, even large organizations which are
subject to inertia can be changed through strong leadership.
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Chapter 3
Capturing Marketing insights
and Spotting Market Trends
To provide insight into an inspiration for marketing decision making, companies must
possess comprehensive, up-to-date information about macro trends as well as micro
trends particular to their business. This chapter deals with various modes of obtaining
this information and also looks into the major macroeconomic forces that affect
MIS marketing decisions.
(Marketing
Information MIS (Marketing Information System)
System) MIS can provide data e.g. Swiss eat most chocolates, Greeks eat most cheese. It relies
on internal company records, marketing intelligence activities and Market Research.
Consists of people, MIS provides information on market happenings and changes in environment. Purposes
equipment and of MIS have been noted below.
procedures, to
gather, sort, • Train the sales force for intelligence gathering by observing competitors
activities and listening to customer comments.
analyze, evaluate
• Motivate retailers and distributors to pass intelligence. E.g. mystery shoppers to
and distribute identify customer treatment and possible flaws.
needed, timely and • Network externally using competitor’s annual reports, talking with their
accurate retailers, distributors and employees, attending shareholder meetings. It should
be done ethically and legally.
information to
• Use government sources (Census, NSSO reports) or purchase data from outside
marketers.
suppliers (AC-Nielsen, etc)
• Create a panel of largest, sophisticated and important customers for feedback.
• Use online forums, sites offering customer and expert reviews, Customer
compliant sites,
Chapter 3 - Capturing Marketing insights and Spotting Market
Trends
Internal Company Records
• Order to Payment cycle - Customer places order for goods -> Sales team sends
invoice to various departments -> Sales team back orders out of stock items ->
Suppliers send goods and sales team pays suppliers -> Sales team delivers order and
receives payment. Purpose is to minimize number and duration of cycles.
• Sales Information System - Keeping constant track of sales, customers, etc. It can
help in identifying trends.
• Database / Data warehousing / Data Mining - Separate databases are there for
products, salespersons and customers. Purpose is to analyze (mine) data using
statistical methods and discover trends.
Analyzing the
Macro
Major Macro Environmental Forces
Environment
Demographic
Fad – 16.7% of World population in India; Male to Female ratio of 933:1000
Unpredictable, Population Age mix : median age of 23.8 years, 34% b/w 12 and 25yrs, 24% b/w 25 and
short-lived, without 34 years
Literacy level: 65.38% literate, 75.8% males and 54.16% females, 76% literacy between
any economic or
15-24yrs age group, 64.5% literacy between 25-34yrs age group.
social significance
Trend -
Sequence of events
Economic
that have Purchasing Power depends on income, savings, prices, credit availability. India’s GDP is
momentum and $1.2 trillion, per capital income of $3100
durability, reveals Income distribution: 77.7% of urban households have income up to Rs3000/month while
only 2.1% have income more than Rs 10,000/month.
the future.
Categories of Indian consumers: Destitute ( less than Rs16,000 annually, inactive
Megatrend – participants in market exchange), Aspirants ( Rs 16,000 to Rs22,000, new entrants in
Large social and consumption system), Climbers, (Rs 22,000 to Rs 45,000, have desire and willingness to
economic influence, buy but has limited cash), Consuming Class ( Rs 45, 000 to Rs 2,15,000, majority have
slow in formation money and are willing to pay), Rich ( more than Rs 2,15 000, have money and own a
variety of products).
but has lasting
Trend shows increasing % of Consumers and Climbers while a decreasing % of Destitute
effect. and Aspirants.
Social-Cultural
Society shapes beliefs, values, demands, and requirements. It affects dress codes, food
habits, brand preferences. Trend shows an increasing role of children on purchasing
decisions e.g. bicycles, computers, wrist watches, shoes and other FMCG goods.
Chapter 3 - Capturing Marketing insights and Spotting Market
Trends
Natural
Deterioration of environment is a significant concern e.g. Greenhouse Effect, Ozone
layer and fossil fuel depletion. Government concerns in this aspect are Euro-2
emissions norms and CNG.
Although majority feels necessity of environmental friendly products, they do not buy
because
(a) Perception of green good being of inferior quality and (b) Perception that good does
not contribute majorly to the environment.
Corporate Environmentalism is recognizing the importance of environmental issues
What is the affecting the firm and integrating those in its strategic plans is fast gaining ground. E.g.
Focus on Non-renewable sources like Jatropha oil, Pollution Control Systems like
difference landfills, recycling centers and focus on CNG initiatives.
between a
Fad and a Technological
Four major trends are
(a) Accelerated Pace of Change: e.g. Apple selling 23.5 million in 2006
Trend? (b) Unlimited Opportunities for Innovation e.g. Developments in Bio-tech,
A fad becomes a telecommunication, Robotics, aid vaccines, contraceptive pills.
trend when it (c) Varying R & D Budget: e.g. Increasing R & D in Pharmaceutical companies like Cipla,
Dr. Reddy’s, and Ranbaxy
affects a large
(d) Increasing regulation of technological change e.g. Drugs and cosmetic act, control
number of people, on clinical trial, standard for drugs.
has functional
value, has lesser
number of Political and Legal
Two major trends are
substitutes, and has
(a) Increase in business legislation: to protect companies from unfair competition, to
other trends
protect consumers from unfair business practices, to protect society from unbridled
promoting it. business behavior and to charge businesses with social costs created by their products
or processes
(b) Growth of special interest groups and improvements like the Consumer Protection
Act.
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Chapter 4
Conducting Marketing Research
and Forecasting Demand
Why Marketing Research?

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

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

Chapter 4 - Conducting Marketing Research and Forecasting
Step 1:
Achieve clarity on the content, the scope of market research and what all decisions are
to be made on the basis of research.
Step 2:
Primary Data ccan be collected through following:
Secondary
Data: Research Methods Research Tools
Already existing •Observational

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

Types of Demand
and access to a Market Demand
particular offer. • It is the total volume that would be bought by a defined customer group in a
defined geographical area in a defined time period in a defined marketing
environment under a defined marketing program
Target market Company Demand
The part of the • It is the company’s estimated share of the market demand at alternative levels of
company marketing effort in a given time period
qualified available
Current Demand
market the company
• It is the demand that companies attempt to determine by measuring total
decides to pursue. market potential, area market potential industry sales and market share
Future Demand
• It is the demand that companies determine by surveying buyer’s intentions,
Penetrated solicit their sales force’s input, gather expert opinions, analze past sales or
market engage in market testing mathematical models, advanced statistical techniques
and computerized data collection procedures
Set of consumers who
are buying the To estimate current demand companies attempt to determine total market potential,
company's product. area market potential industry sales and market share
To estimate future demand companies’ survey buyer’s intentions solicit their sales
force’s input, gather expert opinions, analyze past sales or engage in market testing
mathematical models, advanced statistical techniques and computerized data collection
procedures are essential to all types of demand and sales forecasting.
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Chapter 5
Creating Customer Value,
Satisfaction and Loyalty
In the face of increasing competition, companies today face their toughest test of
survival. Moving from a product-to-sales philosophy to a holistic marketing philosophy,
however, may provide a better chance of outperforming competition. And at the
cornerstone of this philosophy are strong customer relations.
Customer This chapter discusses the importance and various methods of creating customer value
and sustaining customer loyalty. As customers have become more informed and
Perceived educated than ever, organisations have started to adopt business models where the
customer is at the top.
Value:
Total Customer Benefit
Customer It is the perceived monetary value of the bundle of economic, functional, and
Perceived Value: It psychological benefits customers expect from a given market offering because of the
products, services, personnel and image involved.
is the difference
between the
prospective Total Customer Cost
It is the perceived bundle of costs customers expect to incur in evaluating, obtaining,
customer’s
using, and disposing of the given market offering, including monetary, time, energy, and
evaluation of all the psychological costs.
benefits and all the
costs of an offering,
Very often, a customer value analysis is undertaken by managers to better understand
and the perceived the company’s strengths and weaknesses in comparison with competition. It follows the
alternatives. pattern below
1. Identify the major attributes and benefits that customers value.
2. Assess the quantitative importance of the different attributes and benefits.
Chapter 5 - Creating Customer Value, Satisfaction and Loyalty
Trends
3. Assess the company’s and competitors’ performances on the different customer
values on each attribute and benefit.
4. Assess how customers in a specific segment rate the company’s performance
against a major competitor on an individual attribute or benefit basis.
5. Monitor customer values over time as the economy, technology, and features
change.
Total
Customer Customer profitability
A profitable customer is one that over time yields a revenue stream that is significantly
Satisfaction: greater than that company’s cost stream for attracting, selling and servicing that
customer.
It is the measure of
a customer’s
feelings of pleasure
150-20 Rule
The 20% most profitable customers generate as much as 150% of the profits of the
or disappointment
company; the 20% least profitable customers lose 100% of the profits.
that results from Measuring customer profitability lies in the concept of Customer Lifetime Value (CLV).
comparing a CLV describes the net present value of the future stream of profits expected over the
product’s perceived customer’s lifetime purchases. CLV calculations are generally used by marketers to
develop a long-term perspective.
performance to
their expectations.
Customer Relationship Management (CRM)

Satisfaction is
It is the process of carefully managing detailed information about individual customers
usually measured and all occasions where a customer encounters a brand/product to maximise customer
with the help of loyalty.
customer surveys. CRM can be conducted using the following 4 steps –
The two major 1. Identify your prospects and customers.
2. Differentiate customers in terms of their needs and their value to your
factors involved in
company.
customer 3. Interact with individual customers to improve your knowledge about their
satisfaction are needs and to build stronger relationships.
complaint handling 4. Customize products, services, and messages to each customer.
and product/service
The value of the customer base can be increased by improved by measures such as
quality. reducing the rate of customer defection, increasing the longevity of the customer
relationship, making low-profit customers more profitable or terminating them, etc.
Chapter 5 - Creating Customer Value, Satisfaction and Loyalty
Trends
Building Customer Loyalty
It involves the following procedures –
1. Interacting with customers
2. Developing loyalty programs
3. Personalising marketing
4. Creating institutional ties
Database marketing
It is the process of building, maintaining and using customer databases and other
databases to contact, transact and build customer relationships.
Customer Database
It contains customers’ past purchases, past volumes, past prices and profits; buyers’
personal details, status of current contacts, the company’s share of the buyer’s
business, competitive suppliers, etc.
Datamining
Through datamining, marketers can extract information about individuals, trends, etc.
from the customer database. It uses techniques such as cluster analysis, predictive
modelling, etc.
Disadvantages of Datamining and CRM

1. Building and maintaining a database requires huge amounts of investment in
terms of computer hardware.
2. Convincing employees to be customer oriented than using traditional methods.
3. Customer attitudes about privacy of personal data.
Probability of error of CRM methods or assumptions made thereof.
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Chapter 6
Analyzing Consumer Markets
Since marketing starts from the customer, it is of primary importance to understand the
psyche of the customers and their buying motives. This chapter talks about the various
behavioural patterns that govern the decision making process of a customer. A
marketer needs to understand these factors affecting the customer’s purchase
decisions so as to design an appropriate marketing strategy.
Factors affecting Consumer Buying

Behaviour
1. Cultural Factors
a. Culture - Frames traditions, values, perceptions, preferences. E.g. Child
learning from family & surroundings.
b. Sub-culture - Provides more specific identification and socialization. Include
nationalities, religions, racial groups and geographic regions.
c. Social Class – Homogeneous and enduring divisions in a society which are
hierarchically ordered. Members share similar tastes and behaviour.
2. Social Factors
a. Reference Groups – Have direct or indirect influence on person’s attitude
and behaviour. Primary groups: regular interaction, e.g. family, friends,
neighbours. Secondary groups: religious, professional, trade union groups.
Aspirational Groups: ones that a person hopes to join. Dissociative groups:
whose values or behaviour and individual rejects.
b. Family – Family of orientation: parents and siblings. Acquires orientation
towards religion, politics and economics, sense of personal ambition, self
worth and love. Family of procreation: spouse and children. More direct
influence on buying behaviour.
c. Roles and Status – Role consists of activities a person is expected to
perform. Each role carries a status. Marketers must be aware of the status
symbol of each product.
Chapter 6 - Analyzing Consumer Markets
3. Personal Factors
a. Age and Stage in the Life Cycle – Tastes are age related. Markets should also
consider critical life events or transitions.
b. Occupation and Economic Circumstances – Economic Circumstances like
spendable income, savings, assets, debts, borrowing power etc affect
consumption patterns.
c. Personality and Self Concept – Personality, set of distinguishing
characteristics that influence his/her buying behaviour. Consumers match
brand personality with their ideal self concept instead of their actual self
concept.
d. Lifestyle and Values
4. Psychological Factors
a. Motivation: Freud’s theory of id, ego and super ego; Maslow’s need
hierarchy theory; Herzberg’s two factor model.
b. Perception: Process by which we select, organize and interpret information
inputs. In marketing, perceptions are more important than reality.
c. Learning – Induces changes in behaviour arising from experience. Marketers
can build demand by associating the product with positive drives.
d. Memory – Short term and long term memory. Build brand knowledge and
brand recall as node in memory.
Problem Information Evaluation of Purchase Postpurchase

Recogniton Search Alternatives Decision Behaviour
The Buying Decision Process

• Problem Recognition - Customer recognises a need triggered by internal or
external stimuli. Marketers need to identify circumstances that trigger needs.
• Information Search - Two levels of involvement – Heightened attention when
person becomes more receptive to information about the product. At next level
consumer may enter into active information search, looking for reading
material, phoning friends etc.
• Evaluation of Alternatives - Factors influencing a particular choice over the
other include attitudes, beliefs and expectancy value.
• Purchase Decision - Between purchase intention and purchase decision, 2
intervening factors come into play- Attitudes of others and Unanticipated
situational factors. Marketers should understand that these factors provoke risk
and should provide information to reduce it.
• Post purchase Behaviour - Marketers must monitor postpurchase satisfaction,
postpurchase actions, and postpurchase product uses.
Chapter 6 - Analyzing Consumer Markets
Trends
Level of customer involvement
Involvement
High Low
Significant
Differences in Brands
Complex
Buying Variety Seeking
Behaviour
Insignificant Dissonance Habitual

Reducing
1. Complex Buying Behaviour: When a customer purchases something for the

first time.
2. Variety Seeking: Consumers will keep switching varieties just out of
boredom. Eg- Biscuits. Marketer should keep introducing new products and
display the product prominently.
3. Habitual: Buying the same thing out of habit and not out of loyalty.
Distribution network should be excellent in this case. Maintain consistency
in product and advertising.
4. Dissonance Reducing: In case of repeat purchase of same product.
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Chapter 7
Analyzing Business Markets
and Buyer Behavior
Business buyers purchase goods and services to achieve specific goals, such as making
money, reducing operating costs, and satisfying social or legal obligations. Therefore to
provide superior customer value to the business buyers this chapter familiarizes you
with the underlying dynamics and process of business buying.
Blanket contract establishes a long-term relationship in which the supplier promises to

Organizatio- resupply the buyer as needed at agreed-upon prices over a specified period. Because
the seller holds the stock, blanket contracts are sometimes called stockless purchase
nal buying plans.
Product value analysis is an approach to cost reduction in which components are
is the decision- carefully studied to determine if they can be redesigned or standardized or made by
making process by cheaper methods of production.
which
organizations
establish the need
The Business Market versus the Consumer
for purchased Market
products and • Fewer buyers: Business marketers normally deal with far fewer buyers than do
services and consumer marketers.
• Larger buyers: Buyers for a few large firms do most of the purchasing in many
identify, evaluate,
industries.
and choose among • Close supplier customer relationship: Smaller customer base and importance of
alternative brands larger customers, suppliers have to customize offerings to meet the needs of
and suppliers. individual customers.
• Geographically concentrated buyers
• Derived demand: Demand for business goods is derived from demand for consumer
goods, so business marketers must monitor the buying patterns of ultimate
consumers.
• Inelastic demand: Not much affected by price changes as producers cannot make
quick production changes.
•
Chapter 7 - Analyzing Business Markets and Buyer Behavior
• Fluctuating demand: Demand for business products is more volatile than consumer
Three types of products.

• Professional purchasing: Organizational purchasing policies and constraints are followed
Business • Multiple buying influences: More people typically influence buying decisions
• Multiple sales calls: Multiple sales calls to win most business orders, and the sales cycle
Buying can take years.
• Direct purchasing: Business buyers often buy directly from manufacturers rather than
Situations: intermediaries
• Reciprocity: Business buyers often select suppliers who also buy from them.
• Leasing: Many industrial buyers lease rather than buy heavy equipment to conserve
Straight rebuy:
capital, get the latest products, receive better service, and gain tax advantages.
situation in which
the purchasing
The Buying Center
department
(Decision-making unit of a buying organization)
reorders on a Seven roles in the purchase decision process:
routine basis (e.g., • Initiators: People who request that something be purchased
office supplies, bulk • Users: use the product or service; often, users initiate the buying proposal and help
define product requirements.
chemicals).
• Influencers: People who influence the buying decision, including technical personnel.
• Deciders: Those who decide on product requirements or on suppliers.
Modified rebuy: • Approvers: People who authorize the proposed actions of deciders or buyers.
situation in which • Buyers: People who have formal authority to select the supplier and arrange the
the buyer wants to purchase
modify product • Gatekeepers: People who have the power to prevent sellers or information from reaching
members of the buying center
specifications,
prices, delivery
requirements, or
Major Influences on Business Buying
Environmental Factors
other terms.
Attention to numerous economic factors, including interest rates and levels of production,
investment, and consumer spending. Business buyers also monitor technological, political-
New task: regulatory, and competitive developments.
situation in which a
Organizational Factors
purchaser buys a
Business marketers need to be aware of the following organizational trends in purchasing:
product or service
• Purchasing department upgrading: Strategically positioned and highly
for the first time • Cross-functional roles: strategic, technical, team-oriented, and involving more
(e.g., office responsibility
building, new • Centralized purchasing: recentralized their purchasing, to gain more purchasing clout and
savings.
security system).
• Decentralized purchasing of small-ticket items
• Long-term contracts: Buyers are increasingly initiating long-term contracts
• Internet purchasing: Low transaction and personnel costs reduce time between order and
delivery, purchasing companies moving towards internet purchasing.
• Purchasing-performance evaluation & incentive systems and buyers’ professional
Chapter 7 - Analyzing Business Markets and Buyer Behavior
• Lean production: incorporates just-in-time (JIT) production, stricter quality control,
development frequent and reliable supply delivery, suppliers locating closer to
Major customers, computerized purchasing, and stable production schedules.
Influences on
8 stages of PURCHASING PROCESS
Business Buying: Stage 1: Problem Recognition
Someone in the company recognizes a problem or need that can be met by acquiring a good
or service. Internally, developing a new product, need for new equipment and materials or
Interpersonal Factors
to obtain lower prices or better quality. Externally, occur when a buyer gets new ideas at a
Buying centers usually
trade show, sees a supplier’s ad, or is contacted by a sales representative offering a better
include several product. Business marketers can stimulate problem recognition by direct mail,
participants with telemarketing, effective Internet communications, and calling on prospects.
differing interests, Stage 2: General Need Description
The buyer has to determine the needed item’s general characteristics and the required
authority, status,
quantity. In this stage, business marketers can assist buyers by describing how their products
empathy, and would meet such needs.
persuasiveness. Stage 3: Product Specification
Company assigns a product value analysis (PVA) to engineering team. By getting in early and
influencing buyer specifications, a supplier can significantly increase its chances of being
Individual Factors
chosen.
Each buyer carries
Stage 4: Supplier Search
personal motivations, The supplier should get listed in online catalogs or services develop communications to reach
perceptions, and buyers, and build a good reputation in the marketplace. After evaluating each company, the
preferences, as buyer will end up with a short list of qualified suppliers
Stage 5: Proposal Solicitation
influenced by the
The buyer invites qualified suppliers to submit proposals. When the item is complex or
buyer’s age, income, expensive, the buyer will require a detailed written proposal from each qualified supplier.
education, job position, After evaluating the proposals, the buyer will invite a few suppliers to make formal
personality, attitudes presentations.
toward risk, and Stage 6: Supplier Selection
The buying center specifies desired supplier attributes (such as product reliability and service
culture.
reliability) and indicate their relative. A blanket contract may be established. The buyer’s
computer automatically sends an order to the seller when stock is needed, and the supplier
Cultural Factors arranges delivery and billing according to the blanket contract.
Marketers carefully Stage 7: Order-Routine Specification
The buyer negotiates the final order, listing the technical specifications, the quantity needed,
study the culture and
the delivery schedule, and so on. In the case of MRO items, buyers are moving toward
customs of each region
blanket contracts rather than periodic purchase orders.
to better understand Stage 8: Performance Review
the cultural factors that The buyer periodically reviews the performance of the chosen supplier(s). Three methods
can affect buyers and are used. The buyer may contact the end users and ask for their evaluations. Or the buyer
may rate the supplier on several criteria using a weighted score method. Or the buyer might
the buying
aggregate the cost of poor supplier performance to come up with adjusted costs of
organization. purchase, including price.
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Chapter 8
Identifying Market Segments
and Targets
This chapter deals with one of the quintessential concepts of Marketing: STP i.e.
Segmentation, Target and Positioning. It explains different levels of Market Segmentation,
bases for Segmenting Consumer Markets, choosing target Markets & finally analyses the
various requirement for effective segmentation.
Mass Steps in market segmenta

segmentation,
tion, targeting and
positioning
Marketing: 1. Market •Identify
Identify bases for segmenting the market
The seller engages Segmentation •Develop

Develop segment profiles
in mass •Develop
Develop measure of segment attractiveness
2. Target Marketing •Select
Select target segments
production, mass
distribution and •Develop
Develop positioning for target segments
3. Market Positioning •Develop
Develop a marketing mix for each segment
mass promotion
of one product for
all buyers Levels of Market Segmentation: Micromarketing
marketing: Dividing a market into distinct groups with distinct needs,
A. Segment marketing
characteristics, or wants who might require separate products or marketing mixes.
Segment Marketing offers key benefits over Mass Marketing as the company can
offer better design, price, disclose and also can fine-tune
fine the marketing program to
better reflect competitors marketing.
Marketing: A niche is a more narrowly defined customer group seeking a
B. Niche Marketing
distinctive mix of benefits. Marketers usually define niches by dividing segments into
sub segments.
egments. For e.g. Ezee, the liquid detergent from Godrej is a fabric washing
product for woolen clothes.
Chapter 8 - Identifying Market Segments and Targets
C. Local Marketing: Target marketing that involves marketing programs tailored to the
needs and wants of local customer groups in trading areas, neighborhoods and even
individual stores is called as Local Marketing. E.g. Many Banks in Kerala have special
‘NRI Branches’ to cat
cater
er to the needs of customers whose relatives remit money from
abroad.
D. Individual Marketing: This is the ultimate level of marketing that leads to “segments of
one”,” customized marketing” or “one
“one-to-one
one marketing”. Customerization empowers
customers to de
design
sign the product and service offering to their choice. For e.g. Asian
Paints retailers facilitate customers to mix and match colors of their choice from a
catalogue.
Bases for Segmenting Consumer Markets

A. Geographic Segmentation: Division of the Market into different geographical Units
such as nations, cities, states, regions, neighborhoods etc
• Region: South India, Western Region, North, East
• City: Class
Class-I cities, class-II cities, Metro cities etc
• Rural, urban , semi urban areas
B. Demographic Segmentation: The market is divided on the basis of variables such as
age, family size, family life cycle, gender, income, occupation, education, religion etc.
Demographic variables are easy to measure and are directly associated with customer
needs and wants
FAMILY LIFE CYCLE STAGES

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

Five patterns of target market selection that can be followed are:
• Concentration:: Concentrated Marketing where the firm gains a
Single Segment Concentration
strong knowledge of segments needs and acquires a strong market presence
• Specialization:: a firm selects a number of segments. Each objectively
Selective Specialization
attractive and appropriate, there may be little or no synergy between the segments
segme
• Product Specialization: The firm makes a certain product that it sells to several
different market segments.
• Market Specialization: The firm concentrates on serving many needs of a particular
customer.
• Full Market Coverage: The firm attempts to serve all
a customer groups with all
products they may need. E.g. Coca Cola (non
(non-alcoholic
alcoholic beverage segment), Microsoft
(Software Market) etc.
P = Product
M = Market
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SUMMARY by
Chapter 9
Dealing with Competition
Building strong brands requires a keen understanding of competition. To effectively devise and
implement the best possible brand positioning strategies, companies must pay attention to
their competitors. Markets have become too competitive to just focus on the consumer alone.
Vertical Integration is to integrate backward or forward i.e. with suppliers and

costumers which often lowers costs and can manipulate prices and costs in different parts of
Technological the value chain.
leapfrogging Benchmarking is the art of learning from companies that perform certain tasks
better than other companies.
is a bypass strategy
practiced in high-tech Competitive Forces (Michael Porter’s 5 forces)
1. Threat of intense segment rivalry - segment is unattractive if it contains numerous, strong,
industries. The
or aggressive competitors.
challenger patiently 2. Threat of new entrants - segment's attractiveness varies with the height of its entry and exit
barriers. The most attractive segment has high entry barriers and low exit barriers.
researches and
3. Threat of substitute products - A segment is unattractive when there are actual or potential
develops the next substitutes for the product.
4. Threat of buyers' growing bargaining power - A segment is unattractive if buyers possess
technology and
strong or growing bargaining power.
launches an attack, 5. Threat of suppliers' growing bargaining power - A segment is unattractive if the company's
suppliers are able to raise prices or reduce quantity supplied.
shifting the
battleground to its Identifying Competitors
territory, where it has Industry Concept
an advantage. • Number Of Sellers And Degree Of Differentiation
• Entry, Mobility, And Exit Barriers
• Cost Structure
• Degree Of Vertical Integration
• Degree Of Globalization
Marketing Concept
According to marketing approach, competitors are companies that satisfy the same customer
need. The market concept of competition reveals a broader set of actual and potential
competitors. By mapping the buyer's steps in obtaining and using the product a company's
direct and indirect competitors can be identified.
Chapter 9 - Dealing with Competition
Trends Analyzing Competitors
• Strategies: What strategies a company uses to enter/survive in the market?
• Objectives: What are the objectives of the competitor’s and what drives its behavior?
Factors shaping a competitor’s objectives include size, history, current management,
and financial situation.
Selecting • Strengths and Weaknesses: A company needs to gather information on each
competitor's strengths and weaknesses.
Competitors: Three Important Variables for analyzing competitors
• Share of market - The competitor's share of the target market.
• Share of mind - The percentage of customers who named the competitor in
responding to the statement, "Name the first company that comes to mind in this
Strong versus Weak:
industry."
Weak require fewer • Share of heart - The percentage of customers who named the competitor in
responding to the statement, "Name the company from which you would prefer to buy
resources per share
the product."
point gained. The firm
Companies that make steady gains in mind share and heart share will inevitably make gains in
should also compete market share and profitability.
with strong
competitors to keep
up with the best.
Competitive Strategies for Market Leaders
Expanding the Total Market
New customers: Potential new users maybe divided into three groups:
Close versus Distant: • Those who might use it but do not (market-penetration strategy)
• Those who have never used it (new-market segment strategy)
Most companies • Those who live elsewhere (geographical-expansion strategy)
compete with
More usage: Two ways of increasing usage
competitors who • Increasing the level or quantity of consumption: through packaging or product
resemble them the design or by increasing the availability of product
• Increasing the frequency of consumption: identifying completely new and different
most ways to use the brand and communicate the advantages of using the brand more
frequently
"Good" versus "Bad": Defending Market Share

The most constructive response is continuous innovation. The leader leads the industry in
should support its developing new product and customer services, distribution effectiveness, and cost cutting. It
good competitors keeps increasing its competitive strength and value to customers.
• Position Defense: It involves occupying the most desirable market space in the minds
(Play by the rules) of the consumers
and attack its bad • Flank Defense: the market leader should also erect outposts to protect a weak front or
possibly serve as an invasion base for counterattack.
competitors.
• Preemptive Defense: A more aggressive maneuver is to attack before the enemy starts
its offense. A company can launch a preemptive defense in several ways
• Counteroffensive Defense: the leader can meet the attacker frontally or hit its flank or
launch a pincer movement. An effective counterattack is to invade the attacker's main
territory so that it will have to pull back to defend the territory.
• Mobile Defense: In mobile defense, the leader stretches its domain over new
territories that can serve as future centers for defense and offense through market
broadening and market diversification.
• Contraction Defense: giving up weaker territories and reassigning resources to
stronger territories.
Chapter 9 - Dealing with Competition
Competitive Expanding Market Share
A company should consider four factors before pursuing increased market share:
Strategies for • The possibility of provoking antitrust action
• Economic cost
Market • Pursuing the wrong marketing-mix strategy
• The effect of increased market share on actual and perceived quality
Follower:
A market follower must Competitive Strategies for Market Challengers
know how to hold
Defining the Strategic Objective and Opponent(S)
current customers and A market challenger must decide whom to attack:
win a fair share of new It can attack the market leader. This is a high-risk but potentially high-payoff strategy
It can attack firms of its own size that are not doing the job and are underfinanced
customers. It must keep It can attack small local and regional firms
its manufacturing costs
Choosing a General Attack Strategy
low and its product • Frontal Attack: The attacker matches its opponent's product, advertising, price, and
distribution
quality and services
• Flank Attack: Identifying shifts in market segments geographic areas that are causing
high. Four broad gaps to develop, and then rushing in to fill the gaps and develop them into strong
segments.
strategies can be
• Encirclement Attack: The encirclement involves launching a grand offensive on
distinguished: several fronts. Make sense when the challenger commands superior resources
• Bypass Attack: It means bypassing the enemy and attacking easier markets to
• Counterfeiter -
broaden one's resource base. Three lines of approach: diversifying into unrelated
duplicates the products, diversifying into new geographical markets, and leapfrogging into new
technologies to supplant existing products.
leader's product and
• Guerrilla Warfare: Small, intermittent attacks to harass and demoralize the
package and sells it opponent and eventually secure permanent footholds (selective price cuts, intense
promotional blitzes, and occasional legal action)
• Cloner - emulates the
leader's products, Few more specific strategies: Price discount, Lower price goods, Value-priced goods and
services, Prestige goods, Product proliferation, Product innovation, improved services,
name, and Distribution innovation, Manufacturing-cost reduction, Intensive advertising promotion
packaging, with slight
variations.
Competitive Strategies for Market-Nicher
• Imitator - copies The nicher achieves high margin, whereas the mass marketer achieves high volume. Nichers
some things from the have three tasks: creating niches, expanding niches, and protecting niches. Because niches
can weaken, the firm must continually create new ones therefore multiple niching is
leader but maintains preferable to single niching. The key idea in successful nichemanship is specialization. Here
differentiation in are some possible niche roles:
• End-user specialist: The firm specializes in serving one type of end-use customer.
terms of packaging, • Customer-size specialist: The firm concentrates on selling to small, medium-sized, or
advertising, pricing, large customers.
• Geographic specialist: The firm sells only in a certain locality, region, or area of the
or location. world.
• Adapter - takes the • Product-feature specialist: The firm specializes in producing a certain type of
product or product feature
leader's products and • Quality-price specialist: The firm operates at the low- or high-quality ends of the
adapts or improves market
• Channel specialist: The firm specializes in serving only one channel of distribution
them.
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SUMMARY by
Chapter 10
Creating Brand Equity
It is important for the marketer to create a strong brand and maintain customer loyalty. This
chapter talks about the concepts of brand and how branding works. We will understand
what brand equity is, how it is built and measured as well as the decisions involved in
branding strategy.
Brand:
A name, term, sign,
Brand Equity
Added value endowed on products and services. Reflected in way consumers think, feel and
symbol or design, or a act with respect to a brand. Customer based brand equity – differential effect brand
combination of them, knowledge has on customer response to the marketing of a brand. Maybe positive or
intended to identify negative depending on how consumers respond. It has three key ingredients –
• Brand equity arises from differences in customer response
the goods or services
• Differences in response are a result of consumer’s knowledge of the brand. Brand
of one seller or group
Knowledge consists of all thoughts, feelings, images, experiences, beliefs and so on that
of sellers and to become associated with the brand
differentiate them • The differential response is reflected in perceptions, preferences and behaviour related
from those of to all aspects of the marketing of the brand
Marketer must build a strong brand that ensures that the consumers have the right
competitors.
experiences.
Brand Promise
Marketer’s vision of what the brand must be and do for the consumers. The true and future
value depends on customers, their brand knowledge and their likely response to marketing
activity.
Chapter 10 - Creating Brand Equity
Trends
Brand Equity Models
Brand Asset Valuator
It provides comparative measures of the brand equity of thousands of brands across
hundreds of different categories.
Leaders
Up and
coming/Niche Google
(Differentiation, Relevance, Energy)

Brand JetBlue USA
Pringles
Declining
Leaders
Energized Brand Strength

Ikea
Nike Kodak
Element: TiVo
Redbull
AAA
Tide
Those trademark able
devices that identify
New/Undeveloped Eroded/Commoditized
and differentiate the
Blackberry Centrum
brand. Most strong Sephora Entertainment Weekly
brands employ SAP Wells Fargo
Brtish Airways Budget Rent-A-Car
multiple brand
elements. Brand
element choice Brand Structure
(Esteem & Knowledge)
criteria includes 6 (E
There are the five key components of the model –
main parameters –
1. Differentiation – degree to which a brand is seen as different from others
first three being 2. Energy – brand’s sense of momentum
memorable, 3. Relevance – breadth of brand’s appeal
4. Esteem – how well the brand is regarded and respected
meaningful and
5. Knowledge – how familiar and intimate customers are with the brand
likable (‘brand
building’) and last Brand Resonance Model
three being Creation of significant brand equity requires reaching the top or pinnacle of the brand
transferable, pyramid, which occurs only if the right building blocks are put into place.
adaptable and
protective
(‘defensive’). Resonance
Judgement Feelings
Performance Imagery
Salience
Chapter 10 - Creating Brand Equity
•
Trends
Brand Salience – how often and how easily customers think of the brand under
various purchase or consumption situations.
• Brand Performance – how well the product or service meets customers’ functional
needs
• Brand Imagery - describes the extrinsic properties of the product or service; also the
way in which brand attempts to meet customers’ psychological or social needs
• Brand Judgements – focus on customers’ own personal opinions and evaluations
Brand • Brand Feelings – customers’ emotional responses and reactions with respect to the
brand
Reinforcement • Brand Resonance – nature of the relationship customers have with the brand and the
extent to which they feel they’re “in sync” with it
Brand needs to be
Brand Audit – consumer focussed series of procedures to assess the health of the
managed so its value brand, uncover its sources of brand equity and suggest ways to improve and leverage its
does not depreciate. equity.
Brand equity
reinforced by Brand Valuation – Job of estimating the total financial value of the brand.
marketing actions that
consistently convey the Devising a Brand Strategy
meaning of the brand When a firm introduces a new product it has 3 choices –
in terms of what it • Develop new brand elements for the new product
represents and how it • Apply some of the existing brand elements (Product is called brand extension)
• Use a combination of new and existing brand elements (Maybe called a sub brand)
makes the products
superior. Reinforcing
requires innovation Brand Portfolios
Marketers need multiple brands to cater to multiple markets. The reasons for diversifying
and relevance
the brand portfolio -
throughout the 1. Increasing shelf presence and retailer dependence in the store
marketing program. 2. Attracting customers seeking variety who may otherwise have switched to another
brand
3. Increasing internal competition within the firm
4. Yielding economies of scale in advertising, sales, merchandising and physical
distribution
Customer Equity
Sum of lifetime values of all customers. The aim of Customer Relationship Management
(CRM) is to produce high customer equity.
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SUMMARY by
Chapter 11
Crafting the Brand Positioning
This chapter illustrates how a firm can choose an effective positioning in the market and
differentiate its brand. It describes the various strategies a firm can employ at each stage of a
products life cycle and finally shows the implications of Market evolution for marketing
strategies.
Positioning:
Positioning is the act Developing and Communicating a Positioning
of designing the Strategy
company’s offering
Category Membership: products or set of products with which the brand
and image to occupy
competes and which function as close substitutes.
a distinctive place in
the minds of the Points of Difference (POD): Attributes or benefits consumers strongly
target market. associate with a brand, positively evaluate and believe they could not find to the same extent
Positioning requires in another brand.
determining on a Points of Parity (POP): They are associations that are not unique to the brand
frame of reference but in fact maybe shared with other brands. It has two forms:
based on the • Category Points of Parity: Associations customers view as essential to a legitimate and
credible offering within a certain product or service category.
following factors:
• Competitive Points of Parity: Associations designed to negate a competitor’s points-
1. Identifying the of-difference.
target market.
2. Analyzing the Choosing POPs and PODs
POPs: They are driven by the needs of category membership (to create category POPs) and the
competition.
necessity of negating competitors’ PODs (to create competitive PODs)
PODs: The following two criteria are considered while choosing POP’s
Desirability Criteria Deliverability Criteria
Relevance Feasibility
Distinctiveness Communicability
Believability Sustainability
Chapter 11 - Crafting the Brand Positioning
Establishing category membership
The typical approach to positioning is to inform consumers about a brands category
membership before stating its points of difference. Initial advertising often concentrates on
create brand awareness and subsequent advertising attempts to craft the Brand Image.
Differentiating Strategies
Competitive Advantages
It is a company’s ability to perform in 1 or more ways that competitors can’t match. Two
sustainable competitive advantages are:
Straddle • Leverageable Advantage: is one that a company can use as a springboard to new
advantages
Positing: • Customer Advantage: is an advantage that a customer sees in the company’s
offering
It is a common
positioning technique
used when a
Dimensions to differentiate Market Offerings
• Personnel differentiation: Better trained employees E.g. smartly dresses flight
company tries to
attendants of Kingfisher Airlines.
straddle between two • Channel Differentiation: more effectively and efficiently designed channels,
frames of reference. coverage, expertise and performance.
E.g. BMW through a • Image differentiation: Companies can craft powerful compelling images. E.g.
well crafted Marlboro’s “macho cowboy” image.
marketing program
straddled ‘Luxury’ Product Lifestyle Marketing Strategies
and ‘Performance’ as Most product life-cycle curves are portrayed as bell shaped curves.
both POD and POP.
A company’s positioning and differentiation strategy must change as the product, market and
competitors change over the product life cycle (PLC).
Chapter 11 - Crafting the Brand Positioning
Summary of Product Trends
Lifecycle Characteristics,
Objectives and Strategies
Introduction Growth Maturity Decline
Characteristics
Sales Low Sales Rapidly rising Peak Sales Declining Sales
sales
Maturity: Costs High Cost per Average Cost per Low cost per Low cost per
customer customer customer customer
When the
Profits Negative Rising Profits High Profits Declining Profits
competitors cover all Customers Innovators Early Adopters Middle majority Laggards
major segments of Marketing
the market maturity Objectives
Create product Maximize market Maximize profit Reduce
stage occurs.
awareness and share while defending expenditure and
Competitors invade trial market share milk the brand
each others profits Strategies
and as market growth Product Offer a basic Offer product Diversify brands Phase out weak
product extensions, and items models products
slows down, market service, warranty
splits into finer Price Charge cost-plus Price to penetrate Price to match or Cut price
market best competitors’
segments and market
Distribution Build selective Build Intensive Build more Go selective: phase
segmentation occurs. distribution distribution intensive out unprofitable
This is often followed distribution outlets
Advertising Build product Build awareness Stress brand Reduce to level
by market
awareness and interest in differences and needed to retain
consolidation caused among early mass market benefits hard-core loyals
adopters
by the emergence of
Sales Promotion Use heavy sales Reduce to take Increase to Reduce to
a new attribute that promotion to advantage of encourage brand minimum level
has greater appeal. entice trial heavy consumer switching
demand
Mature markets
swing between
Market Evolution
fragmentation and
• Emergence: Before a market materializes it exists as a latent market. Here the
consolidation. entrepreneur has three options:
1. Single Niche Strategy: Design a product to meet preferences of 1 segment of the
market
2. Multiple-Niche Strategy: Launch 2 or more products simultaneously to capture 2 or
more parts of the market
3. Mass Market Strategy: Design a product for the middle of the Market
• Maturity
• Decline: Eventually demand for the current products will begin to decrease because
either:
1. Society’s total need level declines
2. New Technology replaces the old
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SUMMARY by
Chapter 12
Setting Product Strategy
Product is the first and the most important element of a marketing mix. This chapter deals
with various product strategies for making coordinated decisions on product mixes, product
lines, brands, packaging, labeling and warranties and guarantees.
Product Levels
Marketers need to address 5 product levels:
• Core Benefit: The benefit a customer really buys. E.g. Hotel guest buys rest and sleep
Product: • Basic Product: e.g. hotel room includes bed, bathroom, desk, dresser, closet, towel etc
Anything that can • Expected product: attributes that buyers normally expect along with their product.
• Augmented product: attributes that exceed buyer expectations. In developed countries,
be offered to a
brand positioning and competition take place at this level, while in developing countries
market to satisfy a it takes place at ‘expected product’ level.
need or want, • Potential product: it encompasses all the augmentations and transformations the
including physical product or offering might undergo in the future.
goods, services,
experiences, Product classification
events, persons, • Durability and tangibility
places, properties. 1. Nondurable goods: tangible goods that are normally consumed in a day or two. E.g.:
soaps, soft drinks. They are purchased frequently, thus should be made available in
many locations, charged a small markup, and advertised heavily to induce trial.
2. Durable goods: tangible goods that survive many uses. E.g. Clothes, machines.
Require more personal selling, higher margins, more seller guarantees.
3. Services: intangible, variable, perishable products. E.g. Haircuts, repairs. Require
more quality control, supplier credibility, adaptability.
• Consumer goods classification: done on the basis of shopping habits. 4 types-
1. Convenience goods: purchased frequently, immediately, with minimum effort
Staples: purchased on regular basis
Impulse goods: purchased w/o planning e.g. Chocolates
Emergency goods: purchased when need is urgent e.g. Umbrellas
Chapter 12 - Setting Product Strategy
2. Shopping goods: goods that consumer compares based on suitability, price etc
Homogeneous: similar in quality but different in price.
Heterogeneous: similar in price but different in product features.
3. Specialty goods: they have unique characteristics for which consumers can spend mo
E.g. Cars, men’s suits etc. they don’t require comparison.
4. Unsought goods: those that consumers do not know about or think of buying. E
Insurance, reference books. Require advertising and personal selling.
• Industrial goods classification: done on the basis of relative cost and how they enter t
production process-
1. Materials and parts: those that enter the manufacturer’s product completely.
Straddle Raw materials: 2 kinds- Farm products, which are seasonal and require spec
marketing apart from advertising, and Natural products, which are limited in supp
Positing: Manufactured materials and parts: 2 kinds- component materials (e.g. Iro
cement. These are usually fabricated further), and component parts (e.g. Moto
It is a common tires. These enter the final product w/o change.)
positioning technique 2. Capital items: long lasting goods that facilitate developing or managing the finish
products. They include-
used when a
Installation: includes buildings and heavy equipments. Advertising less importa
company tries to that personal selling
straddle between two Equipment: includes portable factory tools and equipments. Sales force mo
frames of reference. important than advertising.
3. Supplies: short term goods that facilitate developing or managing finished produc
E.g. BMW through a
They include-
well crafted
Maintenance and repair items. E.g. Paint, broom.
marketing program Operating supplies. E.g. Lubricants, writing paper, pencils.
straddled ‘Luxury’ 4. Business services: short term services that facilitate developing or managing finish
and ‘Performance’ as products. They include-
Maintenance and repair services. E.g. Air conditioner maintenance.
both POD and POP.
Business advisory services. E.g. Management consulting, advertising.
Product Differentiation
Differentiation
Form: this includes size, shape, physical structure.
Features: they supplement the basic function of the product. Company must compare
customer value v/s company cost for each potential feature.
Customization: requires gathering and using information about consumers. Mass
customization is the ability of a company to meet each customer’s requirements.
Performance quality: it is the level at which a product’s primary characteristics
operate. 4 performance levels- low, average, high, and superior. The level must be
appropriate to the target segment and not necessarily the best.
Conformance quality: the degree to which all produced units is identical and meets the
promised specifications.
Durability: buyers generally pay more for more durable products. However, the extra
price must not be excessive and the product must not be subject to rapid technological
obsolescence
Reliability: probability that a product will not fail within a specified time period.
Reparability: the ease of fixing a product when it malfunctions or fails
Style: the product’s look and feel. Creates distinctiveness that is difficult to copy.
Services Differentiation
Ordering ease: ease of placing an order
Delivery: includes speed, accuracy, and care throughout the process.
Installation: work done to make a product operational in its planned location. Becomes
a selling point when the target market is technologically novice.
Customer training: training customer’s employees to use vendor’s equipment
efficiently and properly.
Customer consulting: data, information and advice services that seller offers to buyers.
Maintenance and repairs: helps customers keep products in working order.
Returns: they are of two types-
1. Controllable: result from problems, difficulties, or errors of seller or customer and
Product line can be eliminated with proper strategies.
2. Uncontrollable: can’t be eliminated by the company in the short run.
length: Product Hierarchy

1. Need family: the core need that underlies the existence of a product family. E.g.
Companies seeking
Security.
higher market share 2. Product family: product classes that satisfy a core need. E.g. Savings and income
have longer product 3. Product class: a group of products within a family that have functional coherence
lines, those seeking 4. Product line: a group of products within a class that perform similar function, are sold
to same customers, are marketed through same channels. E.g. Life insurance.
higher profitability
5. Product type: a group of items within a line that share of possible forms of the
have shorter product product. E.g. Term life insurance.
lines. They lengthen 6. Item: a distinct unit within a brand or product line distinguishable by size, price,
over time. Excess appearance, etc. ICICI prudential term life insurance.
manufacturing forces
production of newer Product system: a group of diverse but related items that function in a
items. However, compatible manner.
other costs increase Product Mix

and thus some non It is the set of all products and items a particular seller offers for sale.
performing items are • Width: how many product lines the company carries.
eliminated. • Length: the total no. of items in the mix.

• Depth: how many variants are offered of each product in the line?
• Consistency: how closely related the various product lines are in end use.
Product line
Product line analysis: based on –
• Sales and Profit: a company can classify its products based on the margins.
o Core products: basic products that have a high sales volume but with low margins
as they are essentially undifferentiated commodities. E.g. Basic computers.
o Staples: lower sales volume, higher margins, no promotions. E.g. Faster CPU
o Specialties: lower sales volume, highly promoted. E.g. Installation, delivery.
o Convenience items: peripherals selling in high volumes, less promotion, high
margins. E.g. Software, carry cases.
• Market Profile: product line managers must review how the line is positioned against
competitor’s lines.
Line stretching: occurs when companies try to go beyond their current range
offered. Companies stretch in the following ways-
• Down Market Stretch: introducing lower-priced line than the one being offered. It can be
risky as the price may not be less enough for competitors or some customers may shift the
cheaper version.
• Up-Marker Stretch: entering high end of market for better growth, higher margins.
• Two way Stretch: middle level companies entering both high end and low end markets.
Helps in establishing market dominance. E.g. Titan started as mid level watch, and then
introduced Sonata for low end and Edge, Xylus for high end.
Note: a high end model of a low end brand is preferred over a low end model of a high end
brand.
Line filling: lengthening product line by introducing more items in the present range.
Line modernization, Featuring and Pruning: product

lines need to change with the times. Can be done piecemeal or all at once. Piecemeal allows
company to gauge the effect of change on consumers, but allows competitors to copy and
pose greater challenge. Improvements must not occur too early (as they will affect sales of
current product) and too late (as competitors would get more time).
The company may choose between featuring their most selling items and promoting their
weak items from time to time.
Companies also need to optimize their brand portfolio. For this, they need to identify the weak
items, and weed them away. E.g. Unilever found only 400 of its 1600 items generated 90% of
company’s profits.
Product-Mix Pricing: searching for a set of prices that maximizes profits on

the total mix.
• Product Line Pricing: companies develop product lines and introduce price steps. Their
task is to establish perceived quality differences that justify price differences.
• Optional Feature Pricing: e.g. Automobile cos. Advertise entry level models at low prices
to attract more customers. These modes are stripped of several features that buyers
usually end up buying.
• Captive Product Pricing: e.g. Manufacturers of razors price them low and set high markups
on razor blades. If price is too high, counterfeiting and substitutions can erode sales.
• Two-Part Pricing: fixed fee+ variable usage fee. Fixed fee should be low to encourage more
sales; profit can be maximized from variable fees.
• By-Product Pricing: e.g. Production of petroleum products produces several by products. If
producer can sell these to the customer, he can price the main product lower.
• Product Bundling Pricing
1. Pure bundling: products offered only as bundles. E.g. tour operators bundle stay and travel.
2. Mixed bundling: products offered individually as well as in bundles. E.g. Auto
manufacturers. Customers may not plan to buy all components, but may be lured by the
saving.
Co-Branding: 2 or more brands are combined into a joined product or are

marketed together in some fashion. It includes same company co-branding (Gillette launched
Mach 3 Turbo with its shaving gel), joint venture co-branding (Indian oil and Citibank co-
branded credit cards), multiple sponsor co-branding ( Taligent, a one time alliance of Apple,
IBM and Motorola) and retail co-branding (2 retail establishments using the same location to
optimize space and profits).
It allows products to be convincingly positioned and generating greater sales as 2 well known
images are combined.
However, consumer expectations with the level of involvement are high, so an unsatisfactory
performance will be damaging for the partner company as well.
Ingredient For co-branding to succeed, both brands must have brand equity, and must fit in terms of
values, goals and capabilities.
Branding:
special case of co- Packaging: activities of designing and producing containers for a product. Packages
may include 3 levels of materials. Package is the buyer’s first encounter with the product.
branding. It created
Factors leading to growing use of packaging:
brand equity for
• Self service
materials, • Consumer affluence
components, parts • Company and brand image: package leads to instant recognition of brand
that are contained • Innovation opportunity: packaging can be used to target different segments.
within other branded Packaging needs to achieve the following objectives:
• Identify the brand
products. Ingredient
• Convey descriptive and persuasive information
brands create • Facilitate product transportation and protection
preference for their • Assist at-home storage
products so that • Aid product consumption
customers do not but After designing, the packaging needs to be tested:
• Engineering tests: ensure that package stands up under normal circumstances
a host product which
• Visual tests: ensure that script is legible and colors harmonious
does not have that
• Dealer tests: dealers should find package attractive and easy to handle
ingredient. • Consumer test: buyers must respond favorably
Labeling: labels identify the product, grade the product, describe the product and
promote the product (through attractive graphics).
Warranties and Guarantees: warranties are formal statements of

expected product performance by the manufacturer. Products under warranties can be
returned to the manufacturer for replacement, repair.
Guarantees reduce the buyer’s perceived risk. They are especially helpful when the company is
not well known or when product quality is superior to that of competitors.
logo copy.tif
SUMMARY by
Chapter 133
Designing and Managing
Services
Today as product companies find it harder and harder to distinguish their physical products,
they turn to service differentiation. Service providers find significant profitability in delivering
Service superior services.
How do we define and classify services and how do

marketing is
they differ from goods
different from goods
• A service is any act or performance one party can offer to another that is essentially
marketing as service
intangible and does not result in the ownership of anything .Its production may or may
consumer relies on not be tied to physical product Categories of services mix.
word of mouth, they • Services can be equipment based or people based & they differ in their objectives and
rely heavily on price, ownership.
• Service companies can choose among different processes to deliver their service.
personnel & physical
• Services needs client presence & may meet a personal or business need.
cues to judge
quality. They are
highly loyal to
Categories of services mix
• No services accompany the product. E.g
service providers Pure Tangible Goods
Soap,toothpaste
who satisfy them &
because switching Tangible Goods with •The
The offering accompanied by one or more services E.g
accompanying services Computers, Cell Phones & cars
costs are high,
consumer inertia •The
The offering contains equal parts goods and services. E.g
Hybrid
restaurants
can make it
Major service with •The
The offering consists of major service along with
challenging to entice accompanying minor additional services or supporting goods. E.g Airplane
goods and services travel alog with its services
a customer away
from a competitor. Pure Service •The
The Offering consists of only a service.E.g psycotherapy
Chapter 13 - Designing and Managing Services
Holistic Marketing for Services
External Marketing Internal Marketing Interactive Marketing

•It
It describes the normal •It describes the training •It describes the employee
work of and motivating skills in serving the client
preparing,pricing,distribut employees to serve the
ion,and promoting the customers well.Engage
service to customers. every employee in the
organization to practise
marketing
Distinctive Characteristics of Services
• Services are intangible Service marketers must be able to transform

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

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

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

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

Create a brand hierarchy and brand portfolio that permits positioning, targeting of
different market segments
Provide Post-Sales
Sales support
Identify what is most valuable to customer and include repair & maintainence services
Chapter 13 - Designing and Managing Services
Trends
Best Practices of Service Quality Management
STRATEGIC TOP HIGH SELF- MONITORIN SATISFYING

COMPONE MANAGEM STANDARDS SERVICE G SYSTEMS EMPLOYEES
NT ENT TEHNOLOGI •Auditing &
•Setting
COMMITME ES service CUSTOMERS
•Top high
companies NT service •replacing performanc •Instilling a
are •Thorough standards person to e of own & possitive
customer commitme •developing person competitor attitude
obsessed nt to reliable,resi interaction s about
•They have service e.g lient & s with self customer
clear sense Marriot,Xer innovative service satisfaction
of target ox customer technologie in
customer •Both Intefrace s e.g ATMs employees
and their financial & systems •Helping
need service customers
performanc to use
e these
monitored facilities
by top
manageme
nt
logo copy.tif
SUMMARY by
Chapter 14
Developing Pricing Strategies
and Programs
Traditionally, price has been the major determinant of a buyers’ choice. And this is still the
case with large segments of markets across the world. Although non-price factors have
recently risen in importance, pricing remains an important factor in determining sales and
profitability. Also, price is the only component in the marketing mix that provides revenue and
Pricing not costs.
Environment:
Buyers can :
Many firms are • Get instant price comparisons from thousands of vendors: Websites like
nowadays following pricescan.com offer data about products like prices and reviews from hundreds of
the low-price trend merchants.
and have seen success • Name their prices: The consumer can state his desired price for a product and find the
seller willing to meet this price on sites like priceline.com. Also, volume-aggregating
in converting the
sites collate orders from many customers and press the supplier for a deeper discount.
acquired customers to • Get products free: The open source software movement has eroded margins for
more expensive almost any major software player. Also, the recent emergence of low-cost airlines
products by providing tickets only for the amount of taxes levied on a ticket is an example how
combining unique firms have been successful with free offerings.
product formulations
and engaging Sellers can :
marketing campaigns. • Monitor customer behaviour and customize offers: Firms use software to analyse
pricing requests with pricing factors such as past sales data, discounts, etc. to reduce
processing time of these requests greatly.
• Offer certain customers special prices: Certain customers are offered lower prices by
firms in order to capture a certain market segment on ensure the loyalty of existing
customers further.
Setting the price

Firms set a price when they introduce a new product, or venture into a new market with an
existing product. This is usually achieved by following a six-step process as follows
Chapter 14 - Developing Pricing Strategies and Programs
Consumer Step 1: Selecting the Pricing Objective – The firm first decides where it wants to position
its market offering. The five major pricing objectives are
psychology and • Survival: Companies pursue survival if they are plagued with over-capacity, intense
competition, or changing consumer wants.
pricing: • Maximum current profit: Many firms try to set a price that maximises their current
profits and delivers a high return on investment.
• Reference prices: • Maximum market share: Here, firms believe that a higher sales volume will lead to
Consumers often employ lower unit costs and higher long-run profits and thereby maximise their market
reference prices, share.
comparing an observed • Maximum market skimming: Companies offering new technologies often set high
price to an internal prices initially in order to gain high profits from various segments of the market
early on.
reference price or a posted
• Product-Quality Leadership: Many firms aspire to be the product-quality leader in
‘regular retail price’.
the market.
Sellers manipulate this by
product positioning, Step 2: Determining Demand – Each price leads to a different level of demand and
suggesting that the actual therefore has a different impact on a company’s marketing objectives. The factors
price of the product is entailing this are
• Price Sensitivity: The relation between price and demand, i.e. the demand curve can
much higher or by
be analysed to determine the market’s probable purchase quantity at various prices.
pointing to a competitor’s
This helps a firm to maximise its profits.
high price. • Estimating Demand Curves: Most companies use the following methods to estimate
• Price-Quality inferences: demand curves: Market Surveys, Price Experiments, Statistical Analysis, etc.
Many consumers use price • Price Elasticity: Marketers need to know how responsive, or elastic, the demand
as an indicator of quality. would be, to a change in price. If the price elasticity is high, increasing prices would
lead to a great reduction in demand, while decreasing prices would lead to increase
High-price cars are
in demand. Hence, marketers prefer inelastic markets where price changes do not
perceived to be of higher
elicit great shifts in demand.
quality and vice versa.
• Price cues: Consumer Step 3: Estimating Costs – While demand sets a ceiling on the range of price a firm can
perceptions of prices are charge for its product, costs determine the floor.
also affected by the • Types of Costs and Levels of Production: Costs are classified as Fixed costs and
Variable costs. Fixed costs include salaries, electricity bills, etc. which do not depend
manner in which prices are
upon quantity produced. Variable costs include processing costs, packaging costs,
displayed. Many sellers
shipping costs, etc. which depend upon quantity produced. Hence, companies must
believe setting a price of decide on a level of production which will more or less guarantee no losses on the
Rs.2999 puts a product cost of production.
into the 2000 range • Accumulated Production: As firms gain experience in production of a good, the
instead of the 3000 range costs involved begin to decline. This is due to various factors such as workers finding
shortcuts, smoother flow of materials, etc. This decline in cost with production
as perceived by the
experience is called experience curve.
consumer. Putting ‘Sale’
• Target Costing: Other than production scale and experience, costs also change a
signs near the price result of concentrated efforts by designers, engineers, purchase agents etc. They
display have also been examine each cost component and try to find ways to reduce the costs involved in
known to be effective. each of these.
Chapter 14 - Developing Pricing Strategies and Programs
Trends
Step 4: Analyzing Competitors – The introduction of any change in price, cost, offers given by
Initiating and any seller can elicit a response in the market.
A firm must analyse the value offered by a competitor to a customer in terms of prices, add-
responding to ons, post-sale services, etc. and thereby modify its own price in order to be competitive in the
market.
price changes:
Step 5: Selecting Pricing Methods – There are six major pricing methods:
• Initiating price
• Mark-up Pricing: The most elementary pricing method is to add a standard mark-up to
cuts: Companies the producer’s cost.
sometimes initiate • Target-return Pricing: In target-return pricing, the firm determines the price that would
price cuts in order to yield its target return on investment.
• Perceived-value Pricing: Perceived-value pricing is made up of several factors like the
dominate the market
buyer’s image of the product, the channel deliverables, warranty quality, customer
through lower prices. support, supplier’s reputation, etc.
• Initiating price • Value Pricing: Here, high quality products are assigned a fairly low price. The basic aim
here is to attract a value-conscious customer base by reengineering the company to
increases: Companies
become a low-cost producer without sacrificing quality.
initiate price increase
• Going-rate Pricing: Here, firms base their prices largely on competitors’ prices, charging
to increase their profits nearly the same as major competitors in the market do.
by taking into account • Auction-type Pricing: There are three types in this pricing method –
the feasibility of the English Auctions (Ascending bids): Here, the seller puts up an item and the bidders raise
the price until the top price is reached.
price rise. A major
Dutch Auctions (Descending bids): Here, the seller announces a high price and then goes
factor leading to these on lowering the price until a bidder accepts it. Or, a buyer announces his desire for a
price increases is over product and sellers compete to offer him the lowest price.
demand, where the Sealed-bid Auctions: Here, potential suppliers submit their bids without knowledge of
company cannot other bids made and the best bid is selected.
supply all its customers

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

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Marketing Management

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

Company orientation towards Marketplaces:

value creation and

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

Why Marketing Research?

What is What are the major steps of Marketing Research

Step 5 : Present the findings

Step 6 : Make the decision

Already existing •Observational

have interest income

Customer Relationship Management (CRM)

Disadvantages of Datamining and CRM

Factors affecting Consumer Buying

Problem Information Evaluation of Purchase Postpurchase

The Buying Decision Process

Insignificant Dissonance Habitual

1. Complex Buying Behaviour: When a customer purchases something for the

Blanket contract establishes a long-term relationship in which the supplier promises to

Three types of products.

Mass Steps in market segmenta

The seller engages Segmentation •Develop

Bases for Segmenting Consumer Markets

FAMILY LIFE CYCLE STAGES

Requirements for Effective Segmentation

Evaluating and Selecting Market Segments

Vertical Integration is to integrate backward or forward i.e. with suppliers and

"Good" versus "Bad": Defending Market Share

(Differentiation, Relevance, Energy)

Energized Brand Strength

both POD and POP.

length: Product Hierarchy

items. However, compatible manner.

other costs increase Product Mix

eliminated. • Length: the total no. of items in the mix.

Line modernization, Featuring and Pruning: product

Product-Mix Pricing: searching for a set of prices that maximizes profits on

Co-Branding: 2 or more brands are combined into a joined product or are

Warranties and Guarantees: warranties are formal statements of

How do we define and classify services and how do

External Marketing Internal Marketing Interactive Marketing

Distinctive Characteristics of Services

• Services are intangible Service marketers must be able to transform

• Services are typically produced and consumed simultaneously .Thus

Developing Brand Strategies for services

Establishing Image Dimensions

Devising Branding Stratgey

STRATEGIC TOP HIGH SELF- MONITORIN SATISFYING

Setting the price

supply all its customers

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