MARKETING 101

What is Marketing?
Marketing is the study of markets.

What is Market?
A market is an exchange between buyer and seller but it could also include non-profits and
also non-monetary exchanges.
So, the core of Marketing is the exchange.
NOTE-
Since, Marketing core is exchange so what you mean by marketing would change/differ as a
function of different aspects of these exchanges.

Illustration/ Model:
Let’s take an example of a very simple exchange – BUYER and SELLER.
Let’s take two extreme scenarios in this exchange – Buyer’s Market and Seller’s Market

Seller’s Market/ Product Focused Market –

In this market, if buyer wants a product, he/she needs to come to seller.
In Seller’s Market, marketing is based upon product and seller needs to focus on quality of
product, innovation and quantity of products sold. The main objective of marketing would be
to increase market share which would lead to increase revenue and decrease marginal costs
which results in increase profitability. For growth in seller’s market, a company would need
to make new products or expand globally.

Buyer’s Market/ Customer Focused Marketing –

In this market, company sells what a buyer/costumer wants. Products are sold by offering
products that customer wants better than the competition. So, company decides which
customers need do they cater for (Market Segmentation) as it is impossible to cater needs of
all customers. But since, customization of product comes at a premium price, the profits are
earned by offering premium price to customers instead of reducing cost. It is also known as
Value Based Marketing. So, focus is on customer share or share of customer wallet. The main
objective is customer loyalty as marginal cost decreases over time and thus costs are
decreased and profitability increases. Many times, company could offer other products that
customer needs which could increase profitability like in a clothing store, the employee could
offer you belts and socks when you buy a pair of pants etc. This is known as Cross Selling.
So, main profitability comes from offering a premium price, customer loyalty and cross
selling in Customer Based Marketing.

Current Scenario –
With the advent of internet, customers can now interact with other costumers. This changes
the original marketing strategy as now firms need to focus on overall experience of the
customer. It could be measured by Buzz, W-O-M, Referrals.
After 2008 –
With global recession and distrust of costumer in corporation especially Financial
Corporations, it resulted in a need of authenticity in marketing for firms. Now, Marketers
need to be authentic, flexible and trustworthy to market something.

From above information, we could summarize marketing in 4 phases –

1. Production Orientation
2. Marketing Orientation
3. Experience Orientation
4. Trust Orientation

3 Principles of Marketing –
1. Principle of Customer Value
2. Principle of Differentiation
3. Principle of Segmentation, Targeting and Positioning

3 P’s of Marketing –
1. Product
2. Place
3. Promotion
4. Price

Strategic Marketing
Introduction of Framework to become competitive and leader in the market based on “The
Discipline of Market Leaders by Treacy and Wiersema”.

Market-Driven Principles
1. Know your Markets - Most businesses are in customer based markets, they are
competitive and global. The only way to remain competitive in market is to know your
customer and how your competitors are likely to react.
2. Customers have the final say -
a) Three bundles - Operational excellence, Performance Superiority, Customer
Intimacy.
b) The product need to be best at one dimension and good enough on other two.
 c) If the product is pretty good on all three dimensions, the customer won’t pick it but
if its best on one dimension that customer wants and good enough in other two, the
product would be competitive in the market.
3. Commit to being first in the markets you serve - It has implications to the business, it
implicates how your business is structured, how you prioritize and allocate resources and
what type of people you hire in the company etc. Suppose a company focuses on Operational
Excellence then the company’s structure would be bureaucratic, more focusing on
information and will hire more people for market search or if the company focuses on
Performance Superiority, the company will focus on R&D and structure would be more
flexible and will focus more on hiring more innovative employees.
4. Deliver total quality to guarantee customer satisfaction

Fair Value -
If you offer more benefits, customers are willing to pay higher price and if you charge a
lower price, customer will expect lower benefits.
Fair Value is dynamic not static, suppose a company say Apple creates a product with best
design then other companies starts imitating and now, the fair value starts decreasing and
industry becomes more competitive.
So, we can say fair value is a function of competitiveness.

Segmentation and Targeting

Positioning Process -
1. Segmentation
2. Targeting
3. Positioning

What is a market segment?

Market Segmentation is the process of dividing a market into distinct subsets, where any
subset may conceivably be selected as a marketing target to be reached with a distinct
marketing mix.
Segmentation Methods
1. Characteristics of the Customer
2. Benefits Sought
3. Systematic, Product-Related Behaviors
Example -
Cohort Analysis
It is not based upon age but experience they have.
Geographical Segmentation
 Regional Segmentation
 Zip Clustering

Select a Target Segment

What makes a segment attractive?
Balancing Segment Attractiveness with our capability and continuously monitoring whether
the actual buyers match the segment.
Selection Criteria
1. Segment Analysis - Segment Size, Growth of segment, value and stability
2. Company Analysis - current company’s position in the segment, ease of entry
3. Competition Analysis - ease of competitive entry into segment and number and
strength of competitors.

Positioning -
A positioning statement defines the value proposition of product to the target
market.
Positioning is implemented through all elements of the marketing mix: product,
price, promotion, place.
Should focus on a few key benefits. (unique selling proposition.)
Position must be defensible
Positioning requires making choices.
3 Aspects of Brand Positioning -
1. Target Market
2. Point of Difference - Strong, favorable, unique brand associations
3. Points of Parity - Associations that are not unique to the brand; they are shared with
other brands. (Category POP and Competitive POP)
POD Crtiteria
Are POD desirable to customer?
Can you deliver that to the customers?

Brand Mantra
An articulation of “the heart and soul” of the brand.
Similar to “brand essence” or “core brand promise”
Short 3 to 5 words phrases that capture the irrefutable essence or spirit of the brand
positioning and brand values.

Considerations -
1. Communicate
2. Simplify
3. Inspire

Designing the Brand Mantra

1. The Brand function - the nature of the product or service or the type of experiences
or benefits the brand provides.
2. The Descriptive modifier - further clarifies its nature.
3. The Emotional modifier - how exactly does the brand provide benefits, and in what
way?

Experiential Branding
(What a brand is)