Professional Documents
Culture Documents
Marketing Book Part I PDF
Marketing Book Part I PDF
org
The two essential mantras to achieve success in life are true devotion and continuous efforts.
Devotion comes from within, It requires an inner strength so powerful that it will motivate you for
devoting your powers towards aiming for the moon. Continuous efforts, on the other hand, can be
in terms of appropriate guidance that can be provided to the students in the form of study material
Mahendra’s has once again, here, made a serious effort to provide its students with previous
years papers and practice papers. This book contains the basic theory and terminology in marketing
along with MCQs to help students understand need of marketing in todays world. With the advent
of globalization it has become necessary to learn new & innovative marketing techniques that will
gradually make India a self-sufficient & powerful nation. This book will help you and give you
Determination and dedication are two most essential pillars of success. We do not support the
fact that there is any shortcut for success but at the same time planning has its own importance.
If we perform a task in a pre-planned manner then it is bound to lead to success. This book
presents a planned structure in front of you to motivate and encourage you to succeed in your
efforts.
CHAPTER 1
CHAPTER 2
SWOT analysis (alternatively SWOT Matrix) also sometimes known as TOWS, is a structured
planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved
in a project or in a business venture. A SWOT analysis can be carried out for a product, place,
industry or person. It involves specifying the objective of the business venture or project and identifying
the internal and external factors that are favorable and unfavorable to achieving that objective. The
technique is credited to Albert Humphrey, who led a convention at the Stanford Research Institute
(now SRI International) in the 1960s and 1970s using data from Fortune 500 companies.[1][2] The
degree to which the internal environment of the firm matches with the external environment is
expressed by the concept of strategic fit. Setting the objective should be done after the SWOT
analysis has been performed. This would allow achievable goals or objectives to be set for the
organization.
? Strengths: characteristics of the business or project that give it an advantage over others
? Weaknesses: are characteristics that place the team at a disadvantage relative to others
? Opportunities: elements that the project could exploit to its advantage
? Threats: elements in the environment that could cause trouble for the business or project
Identification of SWOTs is important because they can inform later steps in planning to achieve the
objective.
CHAPTER 3
MARKETING ENVIRONMENT
A marketing environment is what surrounds and creates impact on business organizations. The
market environment is a marketing term and refers to factors and forces that affect a firm’s ability
to build and maintain successful relationships with customers. Three levels of the environment are:
Micro (internal) environment - small forces within the company that affect its ability to serve its
customers. Meso environment – the industry in which a company operates and the industry’s
market and the Macro (national) environment - larger societal forces that affect the
microenvironment.
Micro Environment
The micro environment refers to the forces that are close to the company and affect its ability to
serve its customers. It includes the company itself, its suppliers, marketing intermediaries, customer
markets and publics.
The company aspect of microenvironment refers to the internal environment of the company. This
includes all departments, such as management, finance, research and development, purchasing,
operations and accounting. Each of these departments has an impact on marketing decisions. For
example, research and development have input as to the features a product can perform and
accounting approves the financial side of marketing plans and budgets.
Macro-Environment (external environment)
The macroenvironment refers to all forces that are part of the larger society and affect the
microenvironment. It includes concepts such as demography, economy, natural forces, technology,
politics, and culture.
Factors affecting organisation in Macro environment are known as PESTEL, that is: Political,
Economical, Social, Technological, Environmental and Legal. Demography refers to studying human
populations in terms of size, density, location, age, gender, race, and occupation. This is a very
important factor to study for marketers and helps to divide the population into market segments
and target markets.
PESTEL ANALYSIS
Political Environment: The political environment includes all laws, government agencies, and
groups that influence or limit other organizations and individuals within a society. It is important for
marketers to be aware of these restrictions as they can be complex. Some products are regulated
by both state and federal laws. There are even restrictions for some products as to who the target
market may be, for example, cigarettes should not be marketed to younger children.
Economic Environment: Another aspect of the macroenvironment is the economic environment.
This refers to the purchasing power of potential customers and the ways in which people spend
their money. Within this area are two different economies, subsistence and industrialized.
Subsistence economies are based more in agriculture and consume their own industrial output.
Industrial economies have markets that are diverse and carry many different types of goods.
Social Environment: The social environment, social context, sociocultural context, or milieu,
refers to the immediate physical and social setting in which people live or in which something
happens or develops. It includes the culture that the individual was educated or lives in, and the
CHAPTER 4
MARKETING RESEARCH
Marketing research is “the process or set of processes that links the consumers, customers, and
end users to the marketer through information — information used to identify and define marketing
opportunities and problems; generate, refine, and evaluate marketing actions; monitor marketing
performance; and improve understanding of marketing as a process. Marketing research specifies
the information required to address these issues, designs the method for collecting information,
manages and implements the data collection process, analyzes the results, and communicates
the findings and their implications.”
It is the systematic gathering, recording, and analysis of qualitative and quantitative data about
issues relating to marketing products and services. The goal of marketing research is to identify
and assess how changing elements of the marketing mix impacts customer behavior. The term is
commonly interchanged with market research; however, expert practitioners may wish to draw a
distinction, in that market research is concerned specifically with markets, while marketing research
is concerned specifically about marketing processes.
Marketing research is often partitioned into two sets of categorical pairs, either by target market:
? Consumer marketing research, and
? Business-to-business (B2B) marketing research
Or, alternatively, by methodological approach:
? Qualitative marketing research, and
? Quantitative marketing research
Marketing Research Process
CHAPTER 5
ANALYZING CONSUMER MARKETS AND IDENTIFYING MARKET SEGMENTS
Consumer Behaviour
Consumer behaviour is the study of individuals, groups, or organizations and the processes they
use to select, secure, and dispose of products, services, experiences, or ideas to satisfy needs
and the impacts that these processes have on the consumer and society.[1] It blends elements
from psychology, sociology, social anthropology and economics. It attempts to understand the
decision-making processes of buyers, both individually and in groups. It studies characteristics of
individual consumers such as demographics and behavioural variables in an attempt to understand
people’s wants. It also tries to assess influences on the consumer from groups such as family,
friends, reference groups, and society in general.
Consumer Behaviour is a branch which deals with the various stages a consumer goes through
before purchasing products or services for his end use.
Why do you think an individual buys a product?
? Need
? Social Status
? Gifting Purpose
Why do you think an individual does not buy a product?
? No requirement
? Income/Budget/Financial constraints
? Taste
When do you think consumers purchase products?
? Festive season
? Birthday
? Anniversary
? Marriage or other special occasions
There are in fact several factors which influence buying decision of a consumer ranging from
psychological, social, economic and so on.
To understand the complete process of consumer decision making, let us understand it with the
help of the given diagram.
A consumer goes through several stages before purchasing a product or service.
Step 1: Need is the most important factor which leads to buying of products and services. Need
infact is the catalyst which triggers the buying decision of individuals.
An individual who buys cold drink or a bottle of mineral water identifies his/her need as thirst.
However in such cases steps such as information search and evaluation of alternatives are generally
missing. These two steps are important when an individual purchases expensive products/services
such as laptop, cars, mobile phones and so on.
Step 2: When an individual recognizes his need for a particular product/service he tries to gather
as much information as he can.
An individual can acquire information through any of the following sources:
? Personal Sources - He might discuss his need with his friends, family members, co workers and
other acquaintances.
CHAPTER 6
Level of Market segmentation can be anything in the below list based on the marketing plan of the
marketer and the product attributes. For some products, it can be marketed to all the customers
and some products it can only be marketed to only high income group. Product attributes and
branding play an important role while finalizing the level of market segmentation.
? Mass Marketing
? Segment Marketing
? Niche Marketing
? Local Marketing
Mass Marketing: In mass marketing the seller or the marketer of the product targets the mass
market or the entire consumer base. Here the seller engages in mass production and uses the
mass distribution system to reach all the customers in the market. The promotional and
advertisements are very much generic in nature attract the entire consumer base. Mass market
can be profitable for the seller as it leads to lower cost of production and higher margin due to mass
production. For mass marketing, the price is kept low to attract customers from all income level.
At the same time, Mass marketing leads to high competition in the market and high advertising
and promotional cost to reach to all the potential customers. One best example of mass marketing
would be Mosquito coil, Toothpaste, Detergent etc.
Segment Marketing: In Segment marketing, the seller or marketer divides the market into different
segments depending on the consumers’ buying behavior, requirements, purchasing power, location
and age level. Segment marketing helps the marketer to connect to each type of customers in the
best possible way. Most company uses different market segments to market its entire list of
products which caters to different market levels. The promotional and advertising activities for a
particular focus only to the target market for that product only.
The best example is a passenger car marker which has different range of passenger cars catering
to different segment of markets. Its low cost cars cater to comparatively lower income level consumer
group, Mid range cars cater to mid range consumer base, luxury segment caters to high net worth
consumer base and SUV segment caters to mainly tourism segment.
Niche Marketing: In Niche marketing, the seller caters to a very specific market segment which
requires more attention and very high quality of services. Here the market segment size is very
small which enables the seller to provide the niche area of services. The main requirements or
characteristics of Niche marketing are
? Comes up with premium prices for higher quality and niche services
Here in Niche marketing, the competition is usually lower which helps the service providers or
sellers to ask for higher prices. Here the customers are either high net worth individuals (for product)
or any organizations needs high end services to improve its competitiveness. Examples would be
Harley Davidson which manufacturers very high end Niche bikes, Mckinsey which provides
specialized consulting services. All these have a niche market for themselves.
Local Marketing: In Local marketing, the seller or the marketer only concentrates in the local
market. The products also have the local appeal or the local usage and the promotional activities
are planned based on the location only with local flavors. Here the cost remains high due to lower
production and competition is also less. Marketer can concentrate more in the local market to
reach to all the customers in the region. The best example would be marketing of regional TV
channels; regional chain of hotels or restaurants, Locally produced food products etc.
Individual Marketing: It is almost same as Direct Marketing where the marketers target the
individual customers separately either through direct communication channels or salesmen. This
is mostly used for Business-to-Business marketing where more attention is required to market a
product or services. Sales persons are used to meet each individual prospective customer and
provide demo of the product or services. Best example would be specialized IT services or Aquaguard
water purifier. Eureka Forbes uses direct salesmen to visit different houses and sell their famous
water purifier product Aquaguard after providing the proper demo and information about the product.
Demographic Segmentation
Demographic segmentation consists of dividing the market into groups based on variables such as
age, gender family size, income, occupation, education, religion, race and nationality. As you
might expect, demographic segmentation variables are amongst the most popular bases for
segmenting customer groups. This is partly because customer wants are closely linked to variables
such as income and age. Also, for practical reasons, there is often much more data available to
help with the demographic segmentation process. The main demographic segmentation variables
are summarised below:
Mahendra Publication Pvt. Ltd. 27 MASTER IN MPARKETING
www.mahendrapublication.org
Age: Consumer needs and wants change with age although they may still wish to consumer the
same types of product. So Marketers design, package and promote products differently to meet
the wants of different age groups. Good examples include the marketing of toothpaste (contrast
the branding of toothpaste for children and adults) and toys (with many age-based segments).
Gender: Gender segmentation is widely used in consumer marketing. The best examples include
clothing, hairdressing, magazines and toiletries and cosmetics.
Income: Another popular basis for segmentation. Many companies target affluent consumers with
luxury goods and convenience services. Good examples include Coutts bank; Moet & Chandon
champagne and Elegant Resorts - an up-market travel company. By contrast, many companies
focus on marketing products that appeal directly to consumers with relatively low incomes. Examples
include Aldi (a discount food retailer), Airtours holidays, and discount clothing retailers such as TK
Maxx.
Social class: Many Marketers believe that a consumers “perceived” social class influences their
preferences for cars, clothes, home furnishings, leisure activities and other products & services.
There is a clear link here with income-based segmentation.
Lifestyle: Marketers are increasingly interested in the effect of consumer “lifestyles” on demand.
Unfortunately, there are many different lifestyle categorisation systems, many of them designed
by advertising and marketing agencies as a way of winning new marketing clients and campaigns!
Psychographic segmentation
Psychographics involves using sciences like psychology and demographics to better understand
consumers. Psychographic segmentation divides consumers according to their lifestyles,
personality, values and social class. Consumers within the same demographic group can exhibit
very different psychographic profiles.
Behavioral segmentation
Behavioral segmentation divides consumers into groups according to their knowledge of, attitude
towards, use of or response to a product.
Segmentation by occasions
Segmentation according to occasions relies on the special needs and desires of consumers on
various occasions - for example, for products for use in relation with a certain holiday. Products
such as Christmas decorations or Diwali lamps are marketed almost exclusively in the time leading
up to the related event, and will not generally be available all year round. Another type of occasional
market segments are people preparing for a wedding or a funeral, occasions which only occur a
few times in a person’s lifetime, but which happen so often in a large population that ongoing
general demand makes for a worthwhile market segment.
Segmentation by benefits
Segmentation can take place according to benefits sought by the consumer or according to
perceived benefits which a product/service may provide.
MASTER IN MARKETING 28 Mahendra Publication Pvt. Ltd.
www.mahendrapublication.org
CHAPTER 7
MASTERBrand
IN MARKETING
Equity 30 Mahendra Publication Pvt. Ltd.
www.mahendrapublication.org
Brand equity is a phrase used in the marketing industry which describes the value of having a well-
known brand name, based on the idea that the owner of a well-known brand name can generate
more money from products with that brand name than from products with a less well known name,
as consumers believe that a product with a well-known name is better than products with less well
known names. Some marketing researchers have concluded that brands are one of the most
valuable assets a company has, as brand equity is one of the factors which can increase the
financial value of a brand to the brand owner, although not the only one. Elements that can be
included in the valuation of brand equity include (but not limited to): changing market share, profit
margins, consumer recognition of logos and other visual elements, brand language associations
made by consumers, consumers’ perceptions of quality and other relevant brand values.
Consumers’ knowledge about a brand also governs how manufacturers and advertisers market the
brand. Brand equity is created through strategic investments in communication channels and
market education and appreciates through economic growth in profit margins, market share, prestige
value, and critical associations.
CHAPTER 8
CHAPTER 9
PRODUCT STRATEGY
Product Levels
The Consumer Value Hierarchy
? Core benefit: The customer in search of a hotel room demand only rest and sleep from a marketer.
? Now the marketer must turn the core benefit into Basic product. For example customer need
basic things like bed, bathroom, chair, fan etc.
? At the third level marketer must prepare for the expected product of the clients. For example if
bed, bathroom, fan are the basic product, then clean bed sheet, neat and clean bathroom are the
expected products.
? At the fourth level, the marketers prepare an augmented product that exceeds customers
expectations. For example, beautiful wall hanging, lovely balcony, Television set etc. In western
countries particularly in USA and UK, marketers focused more on augmented product relatively
different to the Brazil and Indian counterpart.
? At the fifth level stands the potential product that the marketer needs to search for the future
operation. For example high speed internet, telephone line etc.
Product Classification
Durability and Tangibility: The marketers classify products into three groupsaccording to durability
and tangibility.
? Durable Goods: A durable good or a hard good is a good that does not quickly wear out, or more
specifically, one that yields utility over time rather than being completely consumed in one use.
Labeling: It is Display of information about a product on its container, packaging, or the product
itself. For several types of consumer and industrial products, the type and extent of information
that must be imparted by a label is governed by the relevant safety and shipping laws.
CHAPTER 10
cost of the food served but also has to calculate a price for the ambience provided. The final price
for the service is then arrived at by including a mark up for an adequate profit margin.
? Place: Since service delivery is concurrent with its production and cannot be stored or transported,
the location of the service product assumes importance. Service providers have to give special
thought to where the service would be provided. Thus, a fine dine restaurant is better located in a
busy, upscale market as against on the outskirts of a city. Similarly, a holiday resort is better
situated in the countryside away from the rush and noise of a city.
? Promotion: Since a service offering can be easily replicated promotion becomes crucial in
differentiating a service offering in the mind of the consumer. Thus, service providers offering identical
services such as airlines or banks and insurance companies invest heavily in advertising their
services. This is crucial in attracting customers in a segment where the services providers have
nearly identical offerings.
The final three elements of the services marketing mix - people, process and physical evidence -
are unique to the marketing of services.
? People: People are a defining factor in a service delivery process, since a service is inseparable
from the person providing it. Thus, a restaurant is known as much for its food as for the service
provided by its staff. The same is true of banks and department stores. Consequently, customer
service training for staff has become a top priority for many organizations today.
? Process: The process of service delivery is crucial since it ensures that the same standard of
service is repeatedly delivered to the customers. Therefore, most companies have a service blueprint
which provides the details of the service delivery process, often going down to even defining the
service script and the greeting phrases to be used by the service staff.
Physical Evidence: Since services are intangible in nature most service providers strive to incorporate
certain tangible elements into their offering to enhance customer experience. Thus, there are hair
salons that have well designed waiting areas often with magazines and plush sofas for patrons to
read and relax while they await their turn. Similarly, restaurants invest heavily in their interior
design and decorations to offer a tangible and unique experience to their guests.
Mahendra Publication Pvt. Ltd. 41 MASTER IN MPARKETING
www.mahendrapublication.org
CHAPTER 11
MANAGING RETAILING, WHOLESALES AND LOGISTICS
Retailing
Retail is the sale of goods and services from individuals or businesses to the end-user. Retailers
are part of an integrated system called the supply chain. A retailer purchases goods or products in
large quantities from manufacturers directly or through a wholesale, and then sells smaller quantities
to the consumer for a profit. Retailing can be done in either fixed locations like stores or markets,
door-to-door or by delivery. Retailing includes subordinated services, such as delivery. The term
“retailer” is also applied where a service provider services the needs of a large number of individuals,
such as for the public. Shops may be on residential streets, streets with few or no houses or in a
shopping mall. Shopping streets may be for pedestrians only. Sometimes a shopping street has a
partial or full roof to protect customers from precipitation. Online retailing, a type of electronic
commerce used for business-to-consumer (B2C) transactions and mail order, are forms of non-
shop retailing.
CHAPTER 12
MARKETING COMMUNICATIONS
Marketing communications are messages and related media used to communicate with a market.
Marketing communications is the “promotion” part of the “marketing mix” or the “four Ps”: price,
place, promotion, and product. Marketing communications is focused on the product/service as
opposed to corporate communications where the focus of communications work is the company/
enterprise itself. Marketing communications is primarily concerned with demand generation and
product/service positioning while corporate communications deal with issue management, mergers
and acquisitions, litigation, etc.
Marketing Communications Mix
The marketing communications mix consists of eight major modes of communications:
? Advertising- Any paid form of non-personal presentations and promotion of ideas, goods or services
by an identified sponsor.
? Sales promotion- A variety of short-term incentives to encourage trial or purchase of a product or
service.
? Public Relations and Publicity- The professional maintenance of a favorable public image by an
organization or a famous
person.
? Direct Marketing- A form of
advertising in which physical
marketing materials are
provided to consumers in order
to communicate information
about a product or service.
Types of direct marketing
materials include catalogs,
mailers and fliers.
? Interactive Marketing-
Interactive Marketing refers to
the evolving trend in marketing
whereby marketing has moved
from a transaction-based effort
to a conversation.
? Word-of-mouth Marketing-
Word-of-mouth marketing also
called word of mouth
advertising, is an unpaid form
of promotion—oral or written—
in which satisfied customers tell other people how much they like a business, product, service, or
event.
? Personal Selling- Face-to-face selling in which a seller attempts to persuade a buyer to make a
purchase.
? Events and Experiences- Company Sponsored activites and programs designed to create daily
or special brand related interactions.