Transcription

What is Marketing?

Hello and welcome. I’m guessing that you are quite excited about starting your learning journey,
right. But for us, this journey began a long time back. We started our journey by first designing
the syllabus, then creating the content, and after that marketing it. Think about it. Why did you
choose this program? You probably went online, spoke to several people, and then decided that
this program was the one you wanted.

What I'm basically trying to say is that probably you liked the marketing of this program. Perhaps
you were looking at doing an online course and felt that we met your needs and the way we
package the product and spoke to you about it, you felt like it would fit what you want. Let me try
explaining to you a little better with the help of an example. So, let us imagine that this course is
a product and you are a customer. So then, what is marketing exactly?

Well, marketing is the ability of a product to connect with the customer in such a way that demand
for the product is created or generated or an existing demand for a product is harnessed so that
the company can make revenue and profit for itself. So, this course met some needs that you, as
a learner had. So you decided to enrol in this course. And there are many, many examples like
this. Think about some famous products and services that met a need or desire of customers
recently.

First example, what are you currently using to watch this video right now? Chances are you are
using a Reliance Jio connection, right, or at least you know someone who uses Jio. So Jio realised
the need of customers to have unlimited data on their phones. So they got many new users in
such a short time.

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Now who doesn't know IPL, the Indian Premier League. When it was launched in 2008, it became
an instant hit, but why? This is because it combined the exciting T20 cricket format and popular
Indian cricketers with movie stars as owners. Now that is brilliant marketing. As a result, it is now
a very successful entertainment brand in the country. Even if you look at smartphones, like the
one you might be holding in your hand right now, which allows you to take cool pictures using the
camera along with regular phone functions, the product met a need or desire of the people. So
this is the importance of marketing, got it?

Don’t worry if you haven't. People often get confused between marketing and sales. Therefore,
we have professor Deshmukh with us, who will clear all your doubts in this module.

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Now, let’s talk about the scope of marketing. A lot of people say, arey yeh to marketing wala
banda hai, isko kya ayega.Toh, actually what they are talking about is not a marketing wala banda,
they are actually talking of somebody who is a sales person.

Now, there is a difference between a salesperson and a marketing person. Actually, there is a
difference between marketing and sales. Let’s explore that difference.

Now, sales is when the salesperson is actually going out to push the final few miles that are
required to convert a prospective customer into an existing customer. So the sales function is a
lot about pushing. Marketing on the other hand is a lot about pulling. It’s about creating or
harnessing demand.

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Now sales is a function, which exists within marketing. Marketing has many other sub-functions
sales is one. There is advertising, there is public relations, there digital marketing in all of its glory,
right. There is direct marketing, there is promotions, there is, you know, marketer also determines
what the price is or also the packaging of the product. So marketing actually involves a lot of
decisions, which are all around creating the demand, sales is just a sub-function. So the next time
when somebody says, arey yeh to marketing wala banda hai, you should go and correct him and
say, nahi bhai yeh to sales wala banda hai, he is a sales guy, not a marketing guy. Marketing
guy also knows how to generate pull. You should know how to do both. You should know how to
--- as a marketer you should know how to pull and you should know how to slightly push.

I thought my friend had sent me a WhatsApp, but it is an advertisement. Get 25% off. Come to
think of it, how many advertisements, SMS ads, email adds do you receive on a day-to-day basis?
Do you think movies are marketed? Do you think sporting events are marketed? You must have
seen IPL ads, and radio and TV promotions by movie stars.

And, do you think people market themselves? Like, how Instagram influencers market
themselves. And, what is marketed, and where is it marketed? Like, what are the different types
of markets that exist where marketing takes place? Aren’t there too many questions to answer?
See, this becomes one more question. But don't worry, Professor Deshmukh will answer all of
these questions patiently.

Hi. Now you can see that I have changed my look completely in this video. Now, the fact is that
you can say I have bought a new pair of specs, or I have actually worn a new t-shirt. But the ‘what’
perhaps sometimes is not a thing like a t-shirt or a pair of specs, but it could be the fact that it is
actually deeper than that. So, the ‘what’ that is marketed is a new look maybe, or the way in which
you come across, so it can be a new vision, a new look.

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So, what we have to understand is that you can either market a product, a service, an experience.
So, if you look at Starbucks, you can sell the coffee or you can sell the experience of being in
Starbucks with somebody special, or you can actually sell the service. The service is also very
interesting because, you know, you are called by your name and the rest of it.

If you take Cafe Coffee Day, well, you will get a different product, service, or even an overall
experience. So, the ‘what’ that is marketed is all about these intangible things.

Now, if I have to break it down and make it slightly deeper, what we have to understand is, you
can either market the features, like a pair of specs has this kind of number, this kind of frame, and
the rest of it, or you can market the benefits of it. Hey! If you wear this you will look cool, you will
look more like a professor or stuff like that. That is the benefit.

So, just remember, the feature is in the physical word, the benefit is in the mind. So, the ‘what’
that is marketed can be a product, a service, or an experience. Also, you can segregate it in a
completely different way, which is feature and benefit.

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Now, let’s talk about the different kinds of markets. We have talked so much about the function,
the scope, the what and the who that is marketed, but now it’s time to turn our attention to the
marketplace. How can we look at markets from a marketing perspective?

So, the first thing to do is to understand that there are various ways in which you can segregate
and understand the market. So, one way is to actually look at a primary market, a secondary
market, and a tertiary market. Now, what does that mean?

It means that it allows you to prioritise what comes first, what comes second, and what comes
third in the line of importance. So, your primary market is where your hottest prospects lie. After
that, a little less hot and after that even less hotter.

So, the fact is, let's take an example so that you will understand it a little more. So, let's assume
you are sending a candy. So, let’s say that you are selling Pulse.

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Now, the first primary market for the pulse would be perhaps the metro cities in India, because
that’s where, you know, the launches will meet with success and that’s where people are looking
for this sort of thing, and there are more paanwala and the rest of it, where Pulse can be put. So,
that's why you have chosen to put the primary market as all the metros in mini metros in India.
Now, that's one primary market.

The secondary market can be the mofussil towns and the Tier-2 and Tier-3 cities, or something
like that. And the tertiary market can be, well rural India. So that is the definition of primary,
secondary, and tertiary.

Now, Pulse is a mass market product, which means that what they are trying to do is that they
are not actually trying to figure out that I am going to look at only a certain part of the population
that I am defining, either geographically, demographically, or psychographically, which means I
am making it very small. What it means essentially is that I am looking at people across ages and
across genders and across geographies because I want to reach a wide scale.

Niche market, on the other hand, is the exact opposite. A niche market is, let’s take an example
again, Harley-Davidson. So, Harley-Davidson is very clear that it does not want to sell to
everybody. What Harley-Davidson is doing is, saying, hey, this is the type of person I want to sell
it to. This type of person actually exists in very small quantities here and there, but that is what I
will do. So, that’s the difference between a mass market and a niche market.

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Another way of segregating markets is a very interesting way. You have to look at the way in
which the people are responding to your product. So, there might be an immediately addressable
market and there might be the overall market.

What does that again mean? It means that you can define the overall market as a much larger
entity which actually includes all the kinds of people who can buy your product, service, or
experience. But on the other hand, you have an immediately addressable market, people who are
recognizing your product, service, or experience immediately. They are already connected.

So, here is an example. When smartphones came first into the market, there were people who
were eagerly waiting for smartphones, and that target audience belonged to a certain, specific
kind of population. So, it was the youngsters, it was the college goers, or it was the young
professionals, or whatever. So, you had this bunch of people. Today, everyone is using a
smartphone. So, that is the overall market size.

So, you look at addressable market size, which is the immediate thing you are going to address
in the next one year or maybe two years, and then there is the overall market size that you are
going to capture over the next 10 years or 15 years.

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Till now, you have been introduced to the basics of marketing, you can differentiate between the
marketing and sales person. You are also aware of what are the things you can market and
where you can market it. But why do we do marketing? What do we aim to achieve from
marketing?

A film star wants you to go and watch his movie. A travel website wants you to go on a holiday.
An ice-cream seller wants you to buy his ice-cream. The list goes on. What is important to
understand here is the objective behind each of these activities. So, let us listen to Professor
Deshmukh and learn more about the objectives of marketing.

Now that we've actually understood what marketing is, marketing's function, marketing’s scope,
let's understand marketing objectives. Now, here's where I would like to give you a small example.

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Let's assume that you've set-up a little ice cream shop for yourself. Now, this ice cream shop has
a lot of potential customers, a lot of existing customers also. You’ve put up a business, it’s been
running for a month. You've got your father, your mother, your brother, your sister, everyone to
help you. You are out there. You are trying to do marketing.

Now, if I have to say how will you get customers? The first thing would be that you will actually
acquire new customers, people walking down the road, you will start saying, hey get some ice
cream over here, it's a hot day and they will come and they will be your new customers. The
second thing you will do is that you will see this person bought ice cream from me about a week
back. Come here, do you want ice cream again, come on, I'll give you a nice small little discount.
That is meaning that you are actually retaining an existing customer.

What else are you doing? What you're doing is that, suppose somebody has bought one ice cream
from you, okay. You convince him to buy two more ice creams. So you are increasing usage.
What you're also doing is you're making sure that the people that are with you don't go to the
customer's side. You're saying you eat ice cream from me, third ice cream you will get free, okay.

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So now all of these things actually are marketing objectives. You are acquiring new customers,
you are retaining existing customers, you are getting existing customers to use more or to try
more, and what you are doing is you are also keeping your customers loyal. So acquisition,
retention, usage, and loyalty are four fundamental marketing objectives.

These objectives are the reason why a marketing person exists because whatever the marketing
person does is that he works on these objectives to generate both revenue and profit for his
company. Now, a lot of people are actually confused. They confuse the marketing objectives with
something else. They say --- they think that doing an advertising campaign is a marketing
objective or having a sales promotion is a marketing objective or doing a PR exercise is a
marketing objective. Actually, no, they are not. They are coming at the next level. They are coming
to make sure that the marketing objective is served.

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So if you are trying to acquire a new customer, you are running an advertising campaign is for the
acquisition of new customers, right. So it actually means that you need to figure out that
advertising, public relations, direct marketing, they're all activities that enable the marketing
objective to happen. You can do advertising both to get new customers as well as to retain existing
customers, right. So advertising cannot be an objective or running an ad campaign cannot be an
objective. Running an ad campaign is the next level activity, okay. Project that allows the
marketing objective to be fulfilled.

Now some of you might be wondering, fine, you are talking about a nice ice cream shop, but what
about these big brands, what about B2B and B2C.

First of all let me explain B2B and B2C. B2C is when you are selling directly to the customer. If
you go to the vegetable market and you buy something from the vegetable vendor and, you know,
that is B2C. B2B is when, you know, let’s take an advertising agency. What it’s doing is that it is
serving its clients, which is another company, which is then selling to its customers, that is B2B.

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Now, let’s think of a bigger example wherein we can talk about these objectives. Let’s take the
telecom sector. In the telecom sector, let’s take any company, like Vodafone or Jio or any other
company. Now, think about these companies and think about their objectives, aren’t they the
same? You know, as a telecom provider, you are trying to acquire new customers, okay. You are
trying to look at retaining existing customers. When you get that phone call saying sir, why don’t
you come over to Airtel from wherever Idea, don’t you understand that it is serving a marketing
objective, which is all about acquiring new customers.

Then when people are giving you discounts for making sure that you are using their data or giving
you free (1:24), don’t you realise that it is about retaining, it is about loyalty, okay. When people
say, okay, get this much data and get these many calls free, don’t you realise that it is about
increasing usage.

So actually when you come and think of it, each and every marketing activity whether it’s
promotion and all, you can trace it back to the marketing objective. We just did it with Vodafone
and which is a B2C thing or Idea or any other telecom player, but it can very well be a B2B thing.

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Now, think about an ad agency. An ad agency is doing the same thing, right. So an ad agency is
trying to get a new client, so it’s making a pitch, right. An ad agency is trying to protect an existing
client, so it’s trying to give the existing client some ideas, okay. An ad agency is trying to get the
existing client to spend more saying this is a nice idea and this is a new medium, so what it’s
doing, it’s increasing usage. An ad agency also gives free passes to a client, saying, idhar show
hai, aap jaye; it’s a damn good show and I’m giving it to you. Because of all of its contacts and
network, its increasing loyalty.

So whether you are B2B or whether you are B2C, you are still connected and how big a brand
you are, you are still connected essentially to these marketing objectives. And all of these
marketing objectives are designed in a way that you can generate both revenue and profit.

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Just to do a quick recap on marketing itself as you would have learned, marketing has two
primary objectives. One objective is to create awareness about the products and solutions that
are being offered, while on the other hand, it is about generating demand. Now, irrespective of
the type of organization for profit or not for profit, that holds true. What varies from one type of
business to another is the kind of marketing activities or efforts or the channels through which
those are conducted.

For example, pharma marketing to physicians is very different from trade led marketing for
industrial equipment firms. The same is very different for CPG firms, who primarily rely on mass
advertising. Similarly, the marketing KPIs, while there are a lot in common, for example, at a top
level, the marketing spends as a percentage of revenue or net revenue is the most important
KPI. But at the same time, many of the marketing KPIs underneath would vary from one type of
business to another.

What also varies and the factor that's most important for the application of marketing analytics in
a type of business is the kind of data, which is available. Now that data could be specific
consumer or customer data, it could be a lot of social media data. Obviously, there is a whole
reliance on the internal data about the products and the features, which are available and
essentially the whole four piece of marketing, which is about product, placement, pricing, and
promotion, and a lot of external other data such as macros.

Now, let's talk about all of these marketing objectives one by one. Let’s talk of acquisition first.
Acquisition is nothing but acquiring new customers. Now, you can acquire new customers in
different ways.

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You can either acquire them from competition by saying, hey, my product is better than that guy’s
product, which is called differentiating --- differentiation of your product or service from the other
person, okay, simple enough, or you can go to a new market, okay. You can go to a new
geography. You can actually look at, you are in Gujarat right now, you can go to Maharashtra,
from Maharashtra you can go to Tamil Nadu, so you are actually looking at entering a new
geography.

The third way of acquiring customers is essentially looking at expanding the category. So, let’s
take a really funny example or really tough example to swallow, but it happens. Let’s take
cigarettes. Now, when people realised that cigarette smoking was reducing --- the tobacco
companies realised that cigarette smoking was reducing in the developed markets, okay, then it
started moving towards the developing world, which was still open enough to accept, you know,
the Marlboros of the world. So it was again going to a new territory, yeah, but it was also looking
at new customers. It was not the same customer. So it was actually expanding the category of
customers. So you are looking at a certain kind of customer, you are looking at different kinds of
customer.

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Here is another example. If you look at say, for example, Starbucks or Cafe Coffee Day. It is, let’s
look at Cafe Coffee Day. It is looking at a certain kind of person to be buying its coffee or spending
time on it. Now, suddenly it realises, okay, I need to attract some other type of people in order to
expand my market. So then it suddenly says, okay, I’m going to try and connect to working
professionals, what can I do? Maybe I can give free wifi or something of that sort. So by creating
a nice promotion or something, some other marketing activity, what it’s doing is that it’s acquiring
a new set of customers.

So acquisition 2 or 3 ways of doing it, one is by going to a new geography, the second is by
getting it from competition, the third is by increasing or expanding the category.

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After looking at acquisition, let's look at retention. You are trying to retain the customers that
belong to you. Now, let us try to figure out how you can retain, which are the different ways in
which you can retain a customer.

A. You can give discounts, possibly. So you have your Flipkart sale, your Amazon sale, and so
many different ways, Big Bazaar sale. What you're doing is that you're giving discounts so that
you are making sure that your customer is connected to you behaviourally and is getting
discounts, okay.

The second thing that you are also doing for retaining existing customers, which is more
important by the way, is increasing or enhancing the customer experience. So maybe again
take the Coffee Day example, Cafe Coffee Day example. What you are doing is when you go to
Cafe Coffee Day, you figure out that okay, I'm here and now they have suddenly put up some
really nice music, which wasn't there last time, okay. I'm going to come here more often, so that
is retention.

Now, also let's connect it to the third objective, which is loyalty. Now, loyalty and retention, there
is a very slight difference, but there is still a difference. The retaining is about retaining existing
customers by giving them some, you know, goodies or some promotions or some discounts.
Loyalty is when you realize that your product or service is being threatened by a competitor. So
what can you do, you know, to create something stronger so that you can ward off the competitor
threat? So this is when you create a loyalty program.

I also like this person because of the way in which he smiles at me whenever I go to his place.
The hospitality chain, especially the Taj group of hotels, does a wonderful job of building loyalty.
People who are loyal to maybe that group of hotels do not go any other place unless and until
there is no choice. So that is loyalty for you. It is slightly deeper than retention.

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Now, let's look at the fourth thing. The fourth thing is usage. Now, here is an interesting thing.
Let’s go back to our favourite Cafe Coffee Day example. If you're in Cafe Coffee Day and if you
are ordering a cappuccino every single time, what does Cafe Coffee Day say, oh, this person is
buying a nice cup of coffee, but how about I tempt him with a brownie along with his coffee and
see how it goes? So, how about if I create some kind of package deal which includes a coffee
and a brownie for a slightly lesser price if he had bought them individually they would have cost
more, but if he buys them together, it's wonderful.

Now what Cafe Coffee Day is doing smartly is that it's connecting one habit, which is me buying
the coffee to a new habit is me buying the brownie connecting them together to increase the
usage of each individual customer. So this is your fourth objective. You're looking at existing
customers and increasing the amount of money that is going out of their pocket and into yours as
a marketer.

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Now this completes us exploring all the marketing objectives for a little, you know, a deeper
exercise. So we've got your acquisition, you’ve got your loyalty, you’ve got your retention, and
you've got your usage. We've explored various ways in which these can happen.

After listening to Professor Deshmukh, I am really craving for some ice-cream! But, jokes aside,
one thing is clear for sure, and that is, whether you are a small company like an ice-cream shop
or big company like Vodafone or Jio, or you’re a B2B or a B2C company, to be able to generate
marketing demand one has to have ability to connect to their customers.

This session detailed the basic concepts of marketing which included the following topics:
● First, the importance of marketing, that is, meeting consumer needs by generating new
demand or harnessing existing demand.
● Second, the scope of marketing, which we understood by differentiating marketing from
sales, and the other sub-functions and channels of marketing.
● Third, what can be marketed? How products, experiences and services are marketed,
and whether they market the benefits or the features or both.
● Fourth, the different kinds of markets that exist, in terms of targets, popularity and
immediate and the long term buyers.
● Lastly, we covered the objectives of marketing. A marketing person works on the basis
of these objectives to generate both revenue and profit for his company.

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There are mainly four objectives of marketing.
1. First is to acquire new customers. Do you remember what I said at the beginning of this
module? If our course is the product then our objective would be to get new learners for
this course.
2. Second objective is to retain existing customers. So, once you join the course, I must
ensure that you continue, and that I can only do so by ensuring that you have a good
experience.
3. What do you think is the third objective? To increase usage. So, supposedly if you are
already doing one course, I could offer you a discount on a second course to ensure you
continue learning with us.
4. And the fourth and the last objective is to build customer loyalty. This I can do by
ensuring that you are so happy with this program that you recommend it took all your
friends. Then I can say that you are a loyal customer.

Hopefully, you have understood that all the objectives can be achieved through marketing. But I
bet you must be wondering there is so much to learn in marketing, so where do I really begin
from? Which processes do I need to follow? Don’t worry, all these questions will get answered.
Just keep watching.

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