Marketing I Session 3

07-08-2020
1. People can apply marketing principles to finding a job. If
the person looking for the job is the product, describe the
other 3 P’s.
Marketing Can be Performed by Individuals and
Organizations

Retailer
(Sells PCs & Consumer B
monitors)
B2C
B2B C2C
Manufacturer
(Makes Consumer A
monitors)

ETSY Website
What Is Customer Value?

May mean
• low price
• receiving what is desired
• receiving quality for what is
paid
• or receiving something in
return for what is given
Value Value
Creation Capture

Product Price

Place Promotion

Value Value
Communi-
Delivery cation
 Capturing value
The manner in which you design your products such that it gives maximum value
(product/ benefit) to the customer using it. The value delivered to customers can
be in the form of products, benefits, attributes etc
Creating value
Occurs with the addition of actual or perceived value to a customer for a superior
product or service. The objective is to create additional value where none existed
before.
Delivering value
Occurs through changes in the distribution of value i.e to capture more of the value in
the supply chain. Direct marketing, vertical integration, producer alliances and
cooperatives. Producers who package or market their production directly to
consumers.
Communicating value:
Involves communicating credibly, in monetary terms, the differentiating benefits of
your product
Revision Exercise

How’s Haldiram
1. Creating Value
2. Capturing Value
3. Delivering Value
4. Communicating Value
for Customers?
 THE MARKETING MIX
Features, packaging,
Service quality, range

Product:

Advertising, publicity, sales Price levels, credit terms,

Price discounts, price changes
promotion, personal selling
Promotion

Place

Inventory, channels of distribution,

no. of intermediaries-
 From Marketing 1.0 to Marketing 3.0

MARKETING 1.0 WERE CENTERED ON THE PRODUCTS, OR SIMPLY SAID

THE PRODUCT-CENTRIC CONCEPT. FORD T-MODEL, MYOPIC VISION LED TO
BIG LOSS.
MARKETING 2.0 ALL ABOUT 'CONSUMER IS KING' & BECAME EAR-FRIENDLY
AT THE TIME.
EVERY PRODUCT PRODUCED MUST BE IN LINE WITH WHAT BECOMES THE
NEEDS AND WANTS OF CUSTOMERS

MARKETING 3.0.-INNOVATION AND CREATIVITY FORCED FIRMS TO PRODUCE

PRODUCTS THAT CAN DELIVER VALUE FOR CONSUMERS. THIS IS VALUE-
DRIVEN CONCEPT OF MARKETING.
 The Six Components Of Value

2.
Warranty

1. Utility • The service must be as 3. Overcoming Barriers

of Customer Perception
secure as the customer
• If it is a car wash, the expects Customers may buy on:
car has to end up • Perception of reliability, through
personal experiences and/or word of
clean. mouth.
• Price.
• Capacity, or the comfort of the interior.
• Speed
 5. Strategy and
Marketing are two
different concepts
• Strategy is ‘Value Proposition’
i.e deciding what you will offer that is of
value to potential customers, how that
value will be delivered
4. Perceptions of the
customer are what • Marketing is communicating the strategy
makes or breaks the and value proposition
transaction that
exchanges value for
money

• Selling boils down to finding 6. Pursuing

what the customer wants that positive returns
they consider to be of value

• The customer must perceive that

the total value of the service is
higher than its cost.
Segmentation, Targeting, and
Positioning
Market Segmentation Strategies
⚫ Mass Marketing Strategy

⚫ Market Segmentation
⚫ Multisegment Strategy
⚫ Market Concentration Strategy
⚫ Niche Marketing Strategy
⚫ Customized Marketing Strategy
 Mass Marketing Strategy

Product

Price Distribution

Promotion

Single Marketing Mix All Customers

in the Market
 India – Urban & Rural Strategy (Mass Market?

Product

Price Distribution
Urban
Promotion

Product

Rural Price Distribution

Promotion

More Than One

Market Segment
 Discussion Question:
What is Segmentation?
Netflix (Movie rental company)
Actor: Kavin Spacy
Director: David Fincher

Netflix’s chief content officer Ted

Sarandos said –
There is no such thing as a ‘Netflix
show’. Our brand is
personalization.
Defining Selecting Attacking
Segmentation, Targeting, Positioning Process

Step 1 •Strategy or Objectives

Segmentation

Step 2 •Segmentation Methods

Step 3 •Evaluate Segment Attractiveness

Targeting

Step 4 •Select Target Market

Step 5 •Identify and Develop Positioning Strategy Positioning

Step 1: Establish Overall Strategy or Objectives

Derived from mission

Check Yourself
and current state

Any strategy must be consistent

with the firm’s mission statement
and be based on the current
assessments from SWOT analyses
 Step 2: Segmentation Methods

Segmentation Method Sample Segment

Geographic North America, Asia , Europe, Africa North,
(Regional preferences & needs) South, West, East India,
Demographic Age, Gender , Income
Psychographic Life style, self concept, self-values (goals for life)
(How consumers describe themselves)
Benefits Convenience, Economy, Prestige
Behavioral Occasion, Loyalty
Activity

Choose either a manufacturer or national retailer.

Describe their segmentation method and then
evaluate whether or not it is the best segmentation
method for that firm.
Geographic Segmentation

Global- i30 Local- i20 American Super Market Chain

 Same Tea, 3 Different Blends

1. PUNJAB

Tea blends are stronger

because people make tea
with more milk

3. MUMBAI
Red label tea sold is
different from what is sold
in other states
2. ODISHA & KERALA

Red label available as both

leaf and dust teas
Demographic Segmentation

Most Common
Segmentation ©Stockbyte/Getty Images

Strategy
 Google’s Project Glass
What segments are Google
targeting with this ad?

•Should Google make their

Glasses compatible with the
iPhone as well as Android
phones? Why or why not?

(https://www.youtube.com/watch?v
=v1uyQZNg2vE)
Marketing I Session 4
11-08-2020
Yasir Ansari

⚫ Ma'am, there's one more thing that I

wanted to ask. Can you give me one-one
examples of 1. Value creation 2. Value
capture 3. Delivering value 4.
Communicating value? It'll be a great help
for me to understand the whole concept ?
 CREATING VALUE CAPTURING VALUE
● Premium Quality Coffee -and • Direct control in supply chain -
unique customer satisfaction. Justifies the price of the product by
delivering the quality.

● Unique Offering - diversified • Premium pricing- Starbucks coffee

menu, scribble the name of the maintains a fairly inelastic demand
customer etc. curve, and a small price increase
can have a huge positive impact on
their margins without decreasing
demand for beverages.

● Ambience- provide customer to

have a casual meeting to a
formal meeting.
 COMMUNICATING
DELIVERING VALUE
VALUE

● Substantial number of outlets- ● Social Sponsorship- contribute in

available at premium upscale charity, recycling & reduce waste.
location of metropolitan city.

● Online presence - also available ● Public Relation- collect data to

in delivery site like Zomato and remind customers about their
Swiggy, etc. offers.

● Own App - to track rewards and ● Tea and Coffee community-

offers. invested in Swastha established
by Tata.
Psychographic Segmentation
(How consumers describe themselves)

Psychographic Self-values

Self-concept Lifestyles
JOCKEY

WORKOUT COMFORTABLY FROM

HOME

What Segmentation Method

Used Here?

PREVENTIVE HEALTHCARE,
fresh foods and household
care among others
JetBlue –Superior Service

To improve customer service

JetBlue equipped flight
attendants with handheld
devices to improve inventory for
beverages
Psychographic Segmentation

Using lifestyle segmentation, Harley Davidson has 4 main target markets.

1. Core segment Men > 35 years.
2. Young adults (both genders 18-34 years)
3. Women > 35 years
4. Diverse (men, women older than 35 yr)
Benefit Segmentation- (Convenience, Economy, Prestige)

Appliance Manufacturers can segment their

market into:
•Customers who are price conscious
•Customers who don’t mind paying extra for
Toothpaste market targeted at benefit segments
quality and options
• Fresh breath •Customers who want to buy professional
• Teeth whitening products
• Tartar controlled
• Cavity protection.
Benefit Segmentation (Prestige)
Ishaan is criticised
by his parents for his What emotions are evoked with the movie
poor academic Trouble With The Curve?
performance and is
sent away to a
boarding school. Bollywood & Hollywood are a constant and
Ram, an art teacher, effective practitioner of Benefit segmentation
however, realises he Want to cry and then feel warm & fuzzy?
has dyslexia and
helps him uncover “Trouble with the Curve” - Emotions are evolved
his potential. by the movie
Benefit Segmentation- Activity

Activity: Identify products that provide each type of benefit.

• How else might these products be segmented?
• Are you a loyal buyer of any single product, to the extent that you refuse to purchase a substitute?
® Products exist in multiple segments, just as consumers do
Behavioural Segmentation

Occasion
segmentation

Loyalty
Royalty-Free/CORBIS segmentation
Manyavar dresses for occasions
Behavioural Segmentation- (Occasion, Loyalty)

▪ Restaurants offer loyalty

programs because it is less
expensive to retain customers
than to attract new ones
CHECK YOURSELF
1. What are the various segmentation methods?
What Segmentation Method Used Here?
(Geographic, Demographic, Psychographic, Benefits, Behavioural)

Made exclusively for Target (8th. Largest retailer in the U.S)

 Rethinking Stereotypical Ideas
Social & Mobile Marketing- Is FB Over?
Marketing I Session 5
13-08-2020
Revision
(View from different angles and grasp the commonalities as well as the differences)
Segmentation Method Sample Segment
Geographic North America, Asia , Europe, Africa
(Regional preferences & North, South, West, East India,
needs)
Demographic Age, Gender , Income
Psychographic Life style, self concept, self-values
(How consumers describe (goals for life)
themselves)

Benefits Convenience, Economy, Prestige

Behavioral Occasion, Loyalty

Products exist in multiple segments, just as consumers do

Starbucks
 Segmentation
Type of segmentation criteria Starbucks target customer segment

It is specifically located near upscale location, offices, malls, college campuses to

target. In India, there are 140 outlets of Starbucks as of March, 2019. It has around
estimated 29,000 outlets in the US, Canada, Latin America, Europe, Middle East,
Region Africa, China and the Asia Pacific region.

Geographic Density Urban

•Main target market is men and women between the ages of 25-44, which accounts for
almost half (49%) of its total business.

•Young adults, aged 18-24, are the next large group that Starbucks targets. They bring
Gender and Age in about 40% of Starbucks' sales.

Education Graduates, Postgraduates, Well-educated individuals.

Occupation Students, employees, professionals, businessmen

Upper-middle class and well-off customers. Starbucks aims to create unique and
relaxing “experience” and “atmosphere” as customers within this range tend to have
high income and professional careers.

Demographic Social Class

 Lifestyle Professionals, Socially-oriented people

Psychographic Personality Easy-going, determined and ambitious

Regular, special occasions like business meetings, discussing assignments

Behavioural Occasion by offering such atmosphere in their outlets.

Premium and quality coffee, food on their menu, free Wi-Fi, free birthday
Benefits sought drink, ambience.

Regular as well as first-time users. There are many first -time users who
User Status visit the outlet due to its brand name and trend

Loyalty Status Strong, Hard-core loyal

 Segmentation, Targeting, Positioning Process

Step 1 •Strategy or Objectives

Which segments are
Segmentation
worth pursuing
Step 2 •Segmentation Methods
Then we discuss how to
choose the target market by
evaluating each segment
Step 3 •Evaluate Segment Attractiveness
attractiveness, and on the
Targeting basis of this evaluation which
segment or segments to
Step 4 •Select Target Market pursue
Finally we discuss how
Step 5 •Identify and Develop Positioning Strategy Positioning
a firm develops its
positioning strategy
Step 3: Evaluate Segment Attractiveness

2.
Substantial

1. 3.
Identifiable Reachable
SEGMENT
ATTRACTIVENESS

5. 4.
Profitable Responsive
Identifiable

⚫ Who is in their market?

⚫ Are the segments

unique?

⚫ Does each segment

require a unique
marketing mix?
Substantial
Too small and it is insignificant
Too big and it might need it’s own
store
• Gap Inc. segmentation, targeting and positioning
• identifies specific groups within the population to
• Sell their products
• Increases the attractiveness of its products
• This specific group of buyers.

Gap Inc. Segmentation includes

• Dividing population into groups according to certain characteristics
• Targeting implies choosing specific groups identified as a result of
segmentation to sell products
• Positioning refers to the selection of the marketing mix that is the
most attractive for the target customer segment.
 Reachable

Know the product exists

Understand what it can do

Recognize how to buy

What types of media influence the way you shop?
 Responsive

Customers must React positively to

firm’s offering Activity:
• Nike is very successful at
Move toward the firms selling sports related goods.
Would consumers accept
products/services
personal care products from
Nike? Why & why not?
Accept the firm’s value Develop a list of potential
proposition products from Nike
 Profitable(Eg. Start-up Lawn Service)
Home Owners Businesses
Segment size 75,000 1,000
Segment adoption percentage 1% 20%
Purchase Behaviour
Purchase Price Rs.100 Rs.500
Frequency of purchase 12 times 20 times
Profit Margin %age 60% 80%
Fixed cost Rs.400,000 Rs. 1,000,000
Segment Profit Rs.140,000 Rs.600,000
 Profitable Segments
⚫ Segment size = 60 million (<15 yrs)

⚫ Segmentation Adoption Percentage =

35%

⚫ Purchase Behavior = $500 x 1 time

purchase
©Comstock/PunchStock
⚫ Profit margin % = 10%
Is this segment profitable?
⚫ Fixed Cost = $50M
Step 4: Selecting a Target
Market
Hallmark looks at geographic segmentation
when building new stores.

Magna Publishing has several magazines focused

at different target markets
• In general, a company matches their
competencies with the attractiveness of target
markets.
 Segmentation Strategy

Differentiated

• Differentiated = ?
• Concentrated = ?
• Microtargeting = ? Undifferentiated
or
Targeting Concentrated
Mass Marketing Strategies

• What is an example of a Mass Market

Product? Micromarketing
or
One-to-one
 Mass Marketing Strategy

Product

Price Distribution

Promotion

Single Marketing Mix All Customers

in the Market
 India – Urban & Rural Strategy (Mass Market?

Product

Price Distribution
Urban
Promotion

Product

Rural Price Distribution

Promotion

More Than One

Market Segment
 The Emergence of Mass Market

• When car Model T was put to a conveyer belt, they cut

down
• Time taken to assemble the vehicle cut from 12 hours and
30 minutes in 1913 to just one hour and 33 minutes the
following year.
• Made the car a lot cheaper to build and opened up a
mass market for it.
• By 1918 its list price was down to $480, or just over 5
month’s pay for the average American worker, against the
equivalent of about a year and a half’s pay when the car
was launched a decade earlier
• Those days Ford Motor Co had their own rubber
plantations to manufacture tyres.
• Cars became a personal badge of status, and a badge of
national virility.
Ford Motor Co. Model T
“You can have it any colour so long it is in black”
Mass Market Brands
 Multi-Segment Strategy

Product

Price Distribution

Firms using the multi-segment

option (or differentiated Promotion
marketing) seek to attract
buyers in more than one
market segment by offering
multiple marketing mixes that Product
will appeal to more parts of the
total market. Price Distribution

Promotion

Multiple More Than One

Marketing Mixes Market Segment
Market Concentration Strategy

Product

Price Distribution

Promotion

Single Focused on a Single

Marketing Mix Market Segment
(Putting all eggs in one basket)
Niche Marketing Strategy

Product

Price Distribution

Promotion

Focused on a Small
Single Niche Market Segment
(narrows the market concentration approach even more and
Marketing Mix focuses all marketing efforts on one small, well-defined
market segment that has a unique, specific set of needs).
Customized Marketing Strategy
Product

Price Distribution

Promotion

Product

Distribution
Price

Promotion

Unique Individual
Marketing Mixes Customers
 P & G Segmentation - Detergent Market
53% market share of the $3.2 billion market

ARIEL - “tough ??? IVORY SNOW -

TIDE - “Tide’s in, cleaner” “mild, gentle soap
dirt out” for baby clothes

CHEER - “all DREFT - “a clean

temperature - you can trust”
Cheer”

SOLO - “liquid
BOLD - “cleans,
detergent with fabric
soften, and controls
softener
static”

GAIN - “freshens ERA - “built-in DASH - “attack OXYDOL - “makes

like sunshine” stain remover” tough dirt” clothes bright”
 Case Insight – Adani Wilmar Limited

* A $2bn company. 50:50 joint venture Wilmar International

of Singapore

⚫ Adani Wilmar* Limited (AWL)

is one of the largest edible oil
turned integrated agri-based
company.
Which types of segmentation strategies does Coca-
Cola use to categorize the cola beverage
market?
Coca-Cola uses a differentiated marketing strategy. It delivers a
unique plan (and subsequent marketing message) to its
segments. This strategy is effective in the market since each
segment has its unique needs that are significantly different.
Each is a completely different market.
What segmentation methods would you suggest
for a small entrepreneur starting her own
business selling gourmet chocolates? Justify why
you would recommend those methods