The Definition of Marketing i Definition: Marketing is the activity, set of institutions, and processes for creating, communicating, and delivering and exchanging offerings that have value to customers, clients, partners and society at large (NEW)The Scope of Marketing What all do we Market? Examples / Explanation | Goods | Cars, Refrigerators, Televisions sets, Packaged Food, others | Services | Air travel, Hospitality, Medical Services, Professional services [ Events Miss Universe, The World Cup, The Olympics, others | Experiences | Walt Disney's Magic Kingdom, A Light and Laser Show, Others | Persons | Donald Trump, Shahrukh Khan, Politicians, Others | Places | Taj Mahal, Las Vegas, Others | Properties | Real estate, Farms | Organizations | Reliance, ABG Ltd, Pantaloons, Shoppers Stop [ information | Books, Encyclopedias, CD ROMs, Dial me Services, Colleges, Others Embedded in every Marketing offering is an idea Rajeev Chawla 2Company Orientation towards the Marketplace ————————————————————_>_—_—_——_——__————S The Production Concept = Consumers prefer products that are widely available and inexpensive The Product Concept = Consumers favor products that offer the most quality, performance or innovative features The Selling Concept "Consumers will buy products only if the company aggressively promotes/sells these products The Marketing Concept = Focuses on needs/ wants of target markets & delivering value better than competitors The Holistic Marketing Concept * It is based on the development, des marketing programs, processes, an breadth and interdependencies ig and implementation of activities that recognizes theirHolistic Marketing Holistic Marketing: It is based on the development, design, and implementation of marketing programs, processes, and activities that recognizes their breadth and interdependencies Products & Channels Communications Services ow = z Senior other Management Departments Marketing Department Sales Revenue Brand’& Customer Equity Ethics é 4 Community Environment LegalThe Marketing Mix: The Marketing Mix The set of marketing tools the firm uses to pursue its marketing objectives Product Product Variety Quality Design Features Brand Name Price List price Discounts Allowances Payment Period Credit Terms Place Channels Coverage Assortments Locations Inventory Promotion eee Advertising Sales Promotion Personal Selling Direct Marketing Public Relations Event Marketing Word of Mouth Marketing Interactive MarketingThe Marketing Mix The Marketing Mix: Services The set of marketing tools the firm uses to pursue its marketing objectives People Employees Customers Communicating culture and values Employee meatal NN ane —_ Product Variety Channels Quality Coverage Design Assortments Festwen Locations Brand Name Inventory Packaging Promotion Transport Price Advertising fa List price Sales Promotion Warranties Discounts Personal Selling Retums Allowances Direct Marketing Payment Period Public Relations Credit Terms Event Marketing Word of Mouth Marketing Interactive Marketing Rajeev ChawlaThe Marketing Mix: The aa Product Product Variety Quality Design Features Brand Name Packaging Sizes Services Warranties Returns = The Marketing Mix / / Price List price Discounts Allowances Payment Period Credit Terms Rajeev Chawla et of marketing tools the firm uses to pursue its marketing objectives Place Channels Coverage Assortipents \ Locations \ Inventory Promotion “Traniepert Advertising Sales Promotion Personal Selling Direct Marketing Public Relations Event Marketing ‘Word of Mouth Marketing Interactive MarketingThe Marketing Mix The Marketing Mix: Services The set of marketing tools the firm uses to pursue its marketing objectives People Employees Customers ‘Communicating culture and values Employee Research -_ Product Product Variety Quality Design Features Brand Name / Packaging Sizes Price Services List price Warranties Discounts Returns Allowances Payment Period Credit Terms Rajeev Chawla Physical Evidence Facility design ‘Signage Equipment Employee Uniform Other Tangibles Place Channels Coverage Assortments Locations Inventory Promotion —_ Transport Advertising Sales Promotion Personal Selling Direct Marketing Public Relations Event Marketing Word of Mouth Marketing Interactive Marketing 20The Marketing Mix The Marketing Mix: Services The set of marketing tools the firm uses to pursue its marketing objectives Physical Evidence Facility design eee eur on So 1m Communicating Sear ingtiee culture and values Employee recent Place Product Product Variety Coverage Quality Assortments Design Locations Brand Name , Transport cane Promotion Transport ackagit pike Advertising Se [le poe oes Warranties Discounts Flow of Activities Direct Marketing Returns. Allowances Level of Customer Public Relations Payment Period involvement Event Marketing Credit Terms Number of Steps Word of Mouth Marketing Interactive Marketing Rajeev Chawla 20Consumer want Products and needs Promotion Communication _ Newarewiewing Rejeew chowisssercen MIMI a The Marketing Mix ‘A-company will only sell what the consumer specifically wants to buy. So, marketers should study ‘consumer wants and needs in order to attract them one by one with something he /she wants to purchase. Price is only a part of the total cost fo satisfy 0 wont or a need. The total cost will consider for example the cost of time in acquiring a good or a service, a cost of conscience by consuming that or even a cost of guilt “for not treating the kids. reflects the total cost of ownership. Many factors affect cost, Including but not limited to the customer's cost to change or implement the new product or service ond the customer's cost for not selecting @ competitor's product or service ‘While promotion is “manipulative” and from the seller, communication is “cooperative” and from the buyer with the aim fo create o dialogue with the potential astomers based on their needs ond lifestyles I represents a broader focus. Communications can include advertising, public relations, personal selling, viral advertising, and any form of communication between the organization and the In the era of Internet, catalogues, credit cards ond phones people neither need to go anyplace to satisfy @ want or a need nor are limited to a few places to satisfy them. Marketers should know how the target market prefers to buy, how to be there and be ubiquitous, in order to guarantee convenience {0 buy. With the rise of Internet and hybrid models of purchasing, Place is becoming less relevant Convenience takes into account the ease of buying the produc, finding the produc, finding information ‘about the produc, and several other factors Rajeev Chawla 25How do you get men to pee straight? CC —O—————LLLLLL E7HR Es * Here is a picture of the urinals. Look carefully and you'll see that each urinal has a little picture of a fly in it = And guess what men, focused that they are, try to do when they see this fly? That's right. They try to hit the fly with their pee Ih Amaterder, hte under Shiphats naif ‘ould pa japeaton in an bpemting room {0K harden ara the fv turns into the black sutine of fy etches Bu noeocynotees_ sie erecta. ‘orcelai. ‘notice frat ecch ural as ai i Itimproves the aim. ta man seo a fly, he alms a Flynt! research fourd that etchings recuce spillage Of GO%. Ihe 18 uy something to think about. Thats the perfect example process contri Rajeev Chawla 33Brands & Customer IntimacyCustomer Insights - A Search Guide ‘aso an neat any espe ae! og sor Os aeament nthe stones buses + Anunderang ef your Cues competion 1+ An derstandg you Catone comenerboes hte sot nyt 20 on Cama gh, the gun ad orc cna re 1 wt yt het rcpt da tye on Compe 2 white tat ta Compton does eter tha tem andy? 3. what atta eet atone sp abst an? 4 Wy ots yur Chet customer bye em? 5 bneyour hat neat pga predic sere een aay ne ih gee tare the 3 hg tat your Cet etme miss an warts fom yer Cts oes?x wore -[w =] a a sosvcen: ABDC AaBDG |sssecco: avabeeoe AaBbCE ae | eae eed ‘ovat tng Veg? [00a] img toese [| Geen Whe the se st my Camere she gus aed ‘chy cn od ee 1. wha you hat ae Compt ad ae thy abate th Cette 2. what nt Conga oe beet an he 2d wy? 4 ny doe yu cents etna by rem an? | bves yur ned ope i dcr ec vn td ne wth compte ate he ngs tht yo Chen ata int nd wtf or ets poostoe? 2 nthe ba oe of yet ts usw el hacer sot ht 1 candy th scars pan as? 9, Tae ow on te tet cin of managed tee 2s wr te Nor ube tan Sn, ang, resco, ae, ‘none HH SS — rr —Market Segment Targeting —_—__—_———S Lae One the firm has identified its market-segment opportunities, it has to decide how many and which ones to target Rajeev Chawla a2Market Segment Targeting One the firm has identified its market-segment opportunities, it has to decide how many and which ones to target To be useful, market segments must rate favorably on 5 key criteri Measurable The size, purchasing power and characteristics of the segments can be measured Substantial The segment should be large and profitable enough to serve Accessible The segments can be effectively reached and served Differentiable The segments are conceptually distinguishable and respond differently to different marketing-mix elements and programs Rajeev Chawla aMarket Segment Targeting One the firm has identified its market-segment opportunities, it has to decide how many and which ones to target To be useful, market segments must rate favorably on 5 key criteria: Measurable The size, purchasing power and characteristics of the segments can be measured Substantial The segment should be large and profitable enough to serve Accessible The segments can be effectively reached and served Differentiable The segments are conceptually distinguishable and respond differently to different marketing-mix elements and programs Actionable Effective programs can be formulated for attracting and serving the segments Rajeev Chawla 25-Patterns of Target Market Selection Ml M2 M3 PL P3 Single-segment concentration P - Product M - Market5-Patterns of Target Market Selection M1 M2 M3 M1 M2 M3 Pl Pl P2 P2 P3 P3 Single-segment Selective concentration specialization P - Product M - Market5-Patterns of Target Market Selection Mi M2 M3 Mi M2 M3 ML Pl P3 Single-segment Selective Product concentration specialization specialization P - Product M - MarketPL P3 Pl P3 5-Patterns of Target Market Selection M1 M2 M3 Single-segment concentration Ml M2 M3 Market specialization PL Ml M2 M3 Selective specialization ML PL P3 Product specialization P - Product M - Market5-Patterns of Target Market Selection Ml M2 M3 Ml M2 M3 M1 PL PL PL P2 P2 P2 P3 P3 P3 Single-segment Selective Product concentration specialization specialization Ml M2 M3 Ml M2 M3 PL P - Product P2 M - Market P3 Market Full market specialization coverageSegment-by-Segment Invasion Plan saaSegment-by-Segment Invasion Plan Customer Grou: cs Railroads Airlines Large computersSegment-by-Segment Invasion Plan Customer Group Large computers Company A BY Company B ES Company cProduct Positioning After segmenting and targeting its product, a company positions its offering so that the target market recognizes the company’s distinctive offering and image Positioning is the act of designing the company’s offering and image to occupy a distinctive place in the mind of the target market. The goal is to embed the brand in the mind of consumers to maximize the potential benefit to the firm Positioning results in the creation of a customer-focused value proposition Ex: * M&M's Scorpio — “the luxury of a car and the thrill of a SUV” * Indica — “More car per car” * Domino's Pizza - “A good hot pizza, delivered to your door within 30 minutes of ordering, at a moderate price Rajeev Chawla 60——- °° ° °° °° Product Positioning Al Ries & Jack Trout coined the word POSITIONING: Po: ning starts with the product. A piece of merchandise, a service, a company, an institution, or even a person....But positioning is not what you do to a product. Positioning is what you do to the mind of the prospect. That is, you position the product in the mind of the prospect Positioning as per all approaches requires that similarities and differences between brands be defined and communicated. Specifically, deciding on a positioning requires determining a frame of reference by identifying the target market and the competition, and identifying the ideal points-of-parity and the points-of-difference brand associations Rajeev Chawla 61The Product Life Cycle - Introduction _ —SSS___ INTRODUCTION STAGE: * Period of slow growth * Initial market acceptance is in doubt The product is obviously not profitable * High marketing and other expenses too Marketing strategy in this stage is based on combinations of product, price, promotion and distribution STRATEGY: Price and promotion are used to generate the following strategy alternatives: Name Price Promotion Category High Skimming Heavy Low Skimming High Low High Penetration Low Heavy Rajeev Chawla 28The Product Life Cycle - Introduction SS INTRODUCTION STAGE: * Period of slow growth * Initial market acceptance is in doubt * The product is obviously not profitable * High marketing and other expenses too Marketing strategy in this stage is based on combinations of product, price, promotion and distribution STRATEGY: Price and promotion are used to generate the following strategy alternatives: Name Promotion Category High Skimming Heavy Low Skimming Low High Penetration Heavy Low Penetration LowThe Product Life Cycle - Growth GROWTH STAGE: * There is substantial profit improvement * Product acceptance ible in markets * Retail feedback is positive as customers are buying * Competition counters with new offerings STRATEGY = Product Improvement New feature addition New models introduction Development of new market segments Addition of new market channels Selective demand stimulation Price reductions to bring in new customers Rajeev ChawlaThe Product Life CycleThe Product Life Cycle - Patterns style Fashion Sales Sales Time Time Rajeev Chawla Sales Fad Time 41Perspectives of The Product Life Cycle Introduction Growth Maturity Decline Low sales Rapidly rising sales Peak Sales Declining Sales High Cost per customer Average cost per customer Low Cost per customer Low Cost per customer Negative Rising profits High profits Declining profits Customers Innovators Early adopters Middle majority Laggards Competitors Few Growing number Stable number beginning to decline Declining number Marketing Create product awareness and trial Maximize market share Maximize profit while defending market share Rajeev Chawla Reduce expenditure and milk the brandPerspectives of The Product Life Cycle Introduction awareness and trial Growth Maturity while defending market share Decline expenditure and milk the brand Offer a basic product Offer product extensions, service warranty Diversify brands and models Phase out weak items Use cost-plus pricing Price to penetrate the market Price to match or beat competitors Cut price Build selective distribution Build intensive distribution Build more intensive distribution Go selective; phase out unprofitable outlets Build product awareness among early adopters and dealers Build awareness and interest in the mass market ‘Stress brand differences and benefits Reduce to level needed to retain hardcore loyalists Sales Promotion Use heavy sales promotion to entice trial Reduce to take advantage of heavy consumer demand Increase to encourage brand switching Reduce to minimal levelBRAND - Evolution of the Concept Brandr = “to burn” -An Old Norse word Brands were and still are means by which the owners of livestock mark their animals to identify them A Brand is a name, term, sign, symbol, logo or design, or a combination of them, intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competition -The American Marketing Association (AMA) The above different components of a brand that identify and differentiate it can be called brand elements Rajeev Chawla 93ung GoogleOS Google Rgebok Fagg: Do iBrand Elements Term Pee nie band Rajeev ChawlaBrand Elements Term i'm lovin’ it Rajeev ChawlaBrand Elements Term Deer yy TT sritan | be more Think different. Bee om Orla Rajeev ChawlaBrand Elements Ii be more Think different. Rr Rajeev ChawlaBrand Elements Symbol CoOMeoc LOM Dau D® Conn EY = sony gaan Q> oxnse (EB) cries C) ~or IN @ oe ila HISTORY OF sRANDING® B= a = eoue sue coe TOY ~ @s BH On — sm AA YE Gimevr 99 BW Rajeev ChawlaBrand Elements Symbol SOAs h VOM 4 Bau D® east ra — Wome NB) W§tHe HisToRY oF sRaNnoinc®, M2 D2 GOUe—omm ff oF BHO AB — stm AD f] Gimoor ooo @ CDs 2+ 2S > fond erie SMO sim wy S Rajeev ChawlaBrand Elements Symbol — JAGUAR my 7 EAN cS: | 9 ay Rajeev ChawlaBrand Elements SymbolBrand Elements Logo Cable — eS Google ae Youti mm “a 2 a= Wi EET flickr @ wav-mart pean 0) 2o@ (cm Rajeev ChawlaCustomer Based Brand Equity —————_ a= CBBE Model: The power of a brand lies in what customers have learned, felt, seen, and heard about the brand as a result of their experiences over time We need to link the right desired thoughts, feelings, images, beliefs, perceptions, opinions and so on with the brand CBBE: The differential effect that the brand has on consumer response to the marketing of that brand 1) The ‘differential effect’ 2) Brand knowledge and 3) Consumer response to marketing Rajeev Chawla ssBuilding a Strong Brand The 4 Steps: 4. Ensure IDENTIFICATION of the brand with the consumers and an association of the brand in consumer’s minds with a specific product class or customer need . Establish the totality of BRAND MEANING in the minds of customers by strategically linking a host of tangible and intangible brand associations with certain properties . Elicit the proper CUSTOMER RESPONSES to the brand identification and meaning . Convert brand response to create an intense, active loyalty RELATIONSHIP between customers Rajeev ChawlaServiceability emer Service Effectiveness, Efficiency and Empathy; Style and Design Lintory Inttteiee, Send xprertencee: Price Cc Identification Salience [edt blaniy Rajeev Chawla 92Channel Structures (Consumer Products - FMCG) Household Consumers Rajeev Chawla 218Channel Structures (Consumer Products - Consumer Durables) Rajeev Chawla 219Channel Structures (Industrial Products) Rajeev ChawlaChannel Structures (Industrial Products) Rajeev Chawla 220Multi-level Marketing Multi-level Marketing: * Multi-level Marketing is also called Network Marketing * Noteworthy companies who practice this Marketing are: Herbal Life, Avon Cosmetics, Amway, Tupperware, Japan Life, etc Companies dispense with the Distributor and high Advertising or Communication costs The Premise to this Marketing is that ‘The Consumer/Customer is also the Distributor’ In this method you develop your network of Distributors who are also Consumers to the products as individuals or families The success of this Marketing for both the principal company and the customer lies in ensuring that each channel member is monitored every single purchase cycle to ensure purchase Rajeev Chawla 191Fro 04:51 PM Adesh to surajij From Rajeev Chawla to Everyone: Method to Set PRICING: Selecting the Price Objective Determine the demand Estimate the Costs Analyze the competition Select the pricing method Select the final Price I To: Everyone ¥ O File Type message here.MIO BC eee Select the final Price From Rajeev Chawla to Everyone: Selecting the Price Objective Survival Maximum Current Profit Maximum Market Share Maximum Market Skimming Product Quality Leadership Other Objectives: Partial Cost Recovery To: Everyone v O Fie Type message here... 05:03 PMsy cong ay fees opener put ltt me Tecpel sol compu theo (athens bone yan ty ‘here sd th net precy ht ‘Mepodats muadha ar quy sige ohana Bros amet be wo Bisset atte aan Dues sono cng th nj abs and sh rw ‘pet hie tad {utes nen ol psn mt esd ‘ceed ron oot te mine ieee met tet et ty eng tans imate dort dra th tangent of raion eablecons ry whpeaton ‘eho mtd rica then ped vere co au tari ator ‘ian be competion {er a eon ath ect ‘ng dcr a cy uy fain ao compton,- — From Rajeev Chawla to Everyone: Understand the factors that affect price sensitivity Conditions under which Customers are less Price Sensitive Product is more distinctive Buyers are less aware of substitutes Buyers cannot easily compare quality of substitutes The expenditure is @ lower part of buyer's total income The expenditure is small compared to the total cost Part of the cost is bore by another party The product is used with assets previously bought The product is assumed to have more quality, prestige, or excusiveness Buyers cannot store the product From Rajeev Chawla to Everyone: Conditions under which the demand is less elastic There are few or no substitutes Buyers do not readily notice the higher price Buyers are slow to change their buying habits and search for lower prices Buyers think higher prices are justified To: (Case D fie ge here,. Chat Buyers are less aware of substitutes Buyers cannot easily compare quality of substitutes The expenditure is a lower part of buyer's total income The expenditure is small compared to the total cost Part of the cost is bome by another party The product is used with assets previously bought The product is assumed to have more quality, prestige, or exclusiveness Buyers cannot store the product From Rajeev Chawla to Everyone: Conditions under which the demand is less elastic There are few or no substitutes Buyers do not readily notice the higher price Buyers are slow to change their buying habits and search for lower prices Buyers think higher prices are justified Estimate the Costs Types of costs and levels of production must be considered Accumulated production leads to cost reduction via the experience curve Differentiated marketing offers create different cost levels Te enone O fie Type message hereFo pctccuoes = os eT‘i Sing te Pex Ojecie Come an tet Cone rae compton Sse png on Settee Ba Sci eee Ove Nasr ee See Psat uty ei ‘ie Os: Parl ot ea nest he ans ht alt ce sens Poste tts Boyes wets one of ses os coma pn say of ates ‘rane hn po bes ta one ‘Pe eranter alone alo Pavan bom yan uy he rst sed wn ass rey opt ‘epost have ere ly, pes. oF eas sama othe prodet ‘pe mange OmeKey Pricing Terms Fixed costs: do not vary directly with changes in level of production Variable costs: vary with production Total costs: sum of fixed and variable costs at 2 given level of production Average cost: cost per unit at a given level of production From Rajeev Chawla to Everyone: Analyze the competition Firms must analyze the competition with respect to: Costs Prices Possible price reactions Pricing decisions are also influenced by quality of offering relative to competition 1m Rajeev Chawla to Everyone: Select the pricing method Price-setting begins with the three “C's” Select method: Markup pricing Target-retur pricing Perceived-value pricing Value pricing Going-rate pricing Auction-type pricing Group pricing To: Everyone + O Fite Type message here,4 P's of Marketing Mixih I ne! {dHHow Brand Communication Works Rajeev ChawlaHow Brand Communication Works Rajeev Chawla 3How Brand Communication Works4. Noise |3. Communication 2. Message 5, Receiver (enced) _ aM Geeies! [-—*| Customer, Agency I Prospects: Other Stakeholders Rajeev Chawla sCustomer Initiated IMC Message Rajeev Chawla 84Customer Initiated IMC Message Rajeev Chawla 84The 5M’s Model of Advertising Rajeev Chawla 195The 5M’s Model of Advertising Rajeev Chawla 295The 5M’s Model of Advertising Measurement + Communication impact + Sales impact Rajeev Chawla 195om Harsh Vardhan to Everyone: Good afternoon mam. From Rajeev Chawla to Everyone: Pre-call Preparation Prospecting (and the pre-approach) The Approach The Sales Presentation Handling Sales Objections The Sales Closing After Sales Service To: Everyone ~ Type mi