Introduction To Marketing Analytics

Introduction to Marketing
Analytics
What is Marketing Analytics?
• Use of data, information technology, statistical analysis, quantitative
methods and mathematical or computer-based models to aid business
managers gain insights about their business operations.
Using Data to Gain Business Insights.

• Who are Netflix’s most profitable customer?
Frequent Movie In-Frequent Movie

Viewer Viewer
6
• Who do you provide the best customer service to?
Your most Or your less

profitable profitable
customers? customers?
7
Netflix annual revenue
• Netflix annual revenue growth - from $ 5
Million in 1999 to $ 20 Billion in 2019
• 2019 was $20.156B, a 27.62% increase from
2018.
2017.
2016.
• Analytics: Movie recommendation engine.

• Analytics to measure Buying Patterns
• Paying for distribution rights of DVDs (look at success of
related movies)
8
Question ?
• What is a major challenge for Netflix’s in the future ?

What analytic information could help Netflix ?
9
Why Marketing Analytics
• Determine best solutions

• Validating business needs
• Evaluating the benefits of the solution they analyze
• Marketing trends
• Understand their customer group
• Analyze and solve business problems and opportunities

Evolution: Where are we now?

• Still in emerging stage.
• 97% of companies (over $100M) use BA.
• Mainly reporting and spreadsheets.
• Intuition still drives most business decisions.
• Cautious Adaptation.
• Companies desire: bottom line impact.
• Roadblocks to adaptation
• DATA (accuracy, consistency, access, volume)
• Lack of analytic talent.
• Role of culture.
Analytics still in emerging stage.

Version 1.0 Fall 2013 11

Importance: Aids Business Performance
✓Strong relationship between business analytics

and business performance.
Importance
✓Understanding data supports better business

decisions.
✓Fast pace of change: information becoming

more vital for businesses to remain competitive.
Better understanding : Better decisions. 12
 
Importance: Tsunami of Data
• “Every two days now

we create as much
information as we
did from the dawn
of civilization up
until 2003,
according to
Schmidt. “
– Eric Schmidt, CEO of
Google
Tsunami of Data. 13
 
Importance: Profitable
•$10.66 : "In a
recent report, Nucleus
Research found that for
every dollar a company
spends on analytics, it
gets back $10.66."
• Source: Nucleus
Research
High Rate of Return. 14

 
 
Application : Customer Relations
•14 : the average

number of reward tags
a person in the US has.
• Understand customer
patterns to better
serve customers.
High Rate of Return.


 
Application : Marketing: Cross Selling
•Suggest :
Most have experienced
being the target of cross
selling on websites
whether is Amazon or
Netflix.
High Rate of Return.

Version 1.0 Fall 2013
 
16
Application : Pricing
•3,700 :
properties in 70 countries,
Marriott International
offers global travelers
hospitality choices across
18 brands.
•~65% :
occupancy rate. Data
Driven pricing strategies
can deliver major results.
Dynamic Pricing, Web Content.

 
Application : Entertainment
• Pain Threshold Harrah’s :

knows your specific pain threshold and
at what point you’ll have lost enough
to quit.
• Harrah’s staff in the back room tracks
everything and when the computer
flags someone coming close to their
limit, a member of Harrah’s floor staff
approaches the soon-to-give-up
gambler and intervenes, offering a free
steak dinner, or another $15 credit or
even tickets to a show that evening.
The result: the gambler keeps
gambling.
Real Time Customer Data to Drive Results.

 
Application : Product Placement
• Product Placement :
• Milk ?
• Health Food?
• Pancake Syrup?
• Picnic Items?
• High Profit Margin Items?

 
Example 1.1 Retail Markdown
• When to markdown
Seasonal Inventory?
• What Factors to consider?
• What Data would you
desire?
Student Input

 
Application : Staffing
• Number of Employees,
Skills (Technical Support),
Hours of Work :
• Provide special level of service
for most profitable customers?
• What is an acceptable wait time
for customers?


Application : Supply Chain
•$43B : Value of
WalMart inventory. 1%
improvement = $430 M.
•90% : Percent of
American who live within
15 minutes of a WalMart.
(US accounts for about
60% of global sales)
Large opportunity as small % improvements = big savings.


 
Application : Financial: Fraud
•~ $190B
Merchants in the
United States are
losing a year to
credit card fraud
Source: according to a 2009
Lexis Nexis


 
Example 1.1a Fraud Example
• Tom lives in Raleigh

• Tom often travels to
Toronto.
• Tom often makes large
purchases on his credit
card.
• What else would you want
to know about Tom’s
purchasing habits?
Student Input
 
Scope : Degree of Complexity
Addressing three areas of Analytics.

Scope : Descriptive
• Descriptive analytics
• Uses data to understand past and present.
• Allow the data to describe the situation.
Scope
• Example: The class average on the last exam was a

81%.
Descriptive (describes), Predictive (predicts), Prescriptive

(advises)

Scope : Predictive
• Predictive analytics
• Analysis of past performance.
• Use past performance to forecast future
performance.
• Example: Make sales calls on customers who have
Scope
recently purchased product. Predictive analytics

might indicated that recent customer are more
likely to make additional purchases vs. customers
who have not visited your firm for a long time.

(advises)
Scope : Prescriptive
• Prescriptive analytics
• Use of optimization techniques.
• Analysis of what should be done vs. what is
happening.
Scope
• Use data to arrive at a mathematical optimal

solution.
• Example: What route and frequency a bank should
visit its ATM machines.

(advises)
Analytics area
• Spreadsheet Modeling
• Accounting Analytics
• Marketing Analytics
• Financial Analytics
• Business Statistics
• Applied Regression
• Principles of Management Science
• Data Mining
• Forecasting and Modeling
• Business Analytics Strategy

Useful links
• Data Types and sources - https://whatworks.org.nz/data-types/
• THE DATA EXPLOSION & WHAT IT MEANS - http://
www.denovogroup.com/2015/08/31/the-data-explosion-what-it-
means/
• The A To Z Of Analytics: The Complete List Of Analytics Terms - https://
analyticstraining.com/z-analytics-complete-list-analytics-terms/

Creating Competitive
Advantage
Objectives
● Learn how to understand competitors as well
as customers via competitor analysis.
● Learn the fundamentals of competitive
marketing strategies based on creating value
for customers.
● Realize the need for balancing customer and
competitor organizations in order to become a
truly market-centered organization.

Definition
● Competitive Advantage
● An advantage over competitors gained by offering
consumers greater value than competitors offer.
● Competitive Analysis
● The process of identifying key competitors;
assessing their objectives, strategies, strengths
and weaknesses, and reaction patterns; and
selecting which competitors to attack or avoid.

Competitor Analysis
Steps in the Process: ● Firms face a wide
● Identifying Competitors range of competition
● Assessing Competitors ● Be careful to avoid
● Selecting Competitors to “competitor myopia”
Attack or Avoid ● Methods of identifying
competitors:
● Industry point-of-view
● Market point-of-view
● Competitor maps can
help
Competitor Analysis
● Identifying Competitors ● Determining
● Assessing Competitors competitors’ objectives
● Selecting Competitors to ● Identifying competitors’
Attack or Avoid strategies
● Strategic groups
● Assessing competitors’
strengths and
weaknesses
● Benchmarking
● Estimating competitors’
reactions
Competitor Analysis
● Identifying Competitors ● Strong or weak competitors
● Assessing Competitors ● Customer value analysis
● Selecting Competitors to ● Close or distant competitors
● Most companies compete
Attack or Avoid
against close competitors
● “Good” or “Bad” competitors
● The existence of
competitors offers several
strategic benefits

Competitor Analysis
● Designing Competitive Intelligence Systems
● A Well-Designed CI System:
● Identifies types and sources of competitive
information
● Continuously collects information
● Checks reliability and validity of information
● Interprets and organizes information
● Distributes information to decision makers and responds
to queries
Competitive Strategies
● Approaches to Marketing Strategy
● No single strategy is best for all companies
● Marketing strategy and practice often passes
through three stages:
● Entrepreneurial marketing
● Formulated marketing
● Intrepreneurial marketing

● Basic Competitive Strategies: Porter
● Overall cost leadership
● Lowest production and distribution costs
● Differentiation
● Creating a highly differentiated product line and
marketing program
● Focus
● Effort is focused on serving a few market
segments
Porter’s Competitive Strategies

● Basic Competitive Strategies: Value
Disciplines
● Operational excellence
● Superior value via price and convenience
● Customer intimacy
● Superior value by means of building strong
relationships with buyers and satisfying needs
● Product leadership
● Superior value via product innovation
Competitive Strategy
Competitive Positions ● Expanding the total
● Market Leader demand
● Finding new users
● Market Challenger ● Discovering and
promoting new product
● Market Follower uses
● Market Nicher ● Encouraging greater
product usage
● Protecting market share
● Many considerations
● Continuous innovation
● Expanding market share
● Profitability rises with
market share
Competitive Positions ● Option 1: challenge the
● Market Leader market leader
● High-risk but high-gain
● Market Challenger ● Sustainable competitive
● Market Follower advantage over the leader
is key to success
● Market Nicher
● Option 2: challenge firms
of the same size, smaller
size or challenge regional
or local firms
● Full frontal vs. indirect
attacks
Competitive Positions ● Follow the market
● Market Leader leader
● Market Challenger ● Focus is on improving
profit instead of market
● Market Follower
share
● Market Nicher ● Many advantages:
● Learn from the market
leader’s experience
● Copy or improve on the
leader’s offerings
● Strong profitability
Competitive Positions ● Serving market niches
● Market Leader means targeting sub-
segments
● Market Challenger
● Good strategy for small
● Market Follower firms with limited
● Market Nicher resources
● Offers high margins
● Specialization is key
● By market, customer,
product, or marketing mix
lines
Direct Marketing
Objectives
■ Learn about direct marketing and its
benefits to customers and companies.
■ Know the major forms of direct
marketing.
Direct Marketing
■ Benefits of Direct Marketing to Buyers
■ Convenient
■ Easy to use
■ Private
■ Access to a wealth of information
■ Immediate
■ Interactive
Direct Marketing
■ Benefits of Direct Marketing to Sellers
■ Powerful tool for building relationships
■ Allows for targeting of small groups or
individuals with customized offers in a
personalized fashion
■ Offers access to buyers that couldn’t be
reached via other channels
■ Low-cost, effective alternative for reaching
specific markets

Direct Marketing
■ Customer Databases & Direct Marketing
■ Databases include customer profile, purchase
history, and other detailed information
■ Databases can be used to identify prospects,
profile customers, and select customers to receive
offers, and to build relationships
■ Database marketing requires substantial
investment in hardware, software, personnel

Forms of Direct Marketing

■ Face-to-Face Selling
■ Telemarketing
■ Direct-Mail Marketing
■ Catalog Marketing
■ Kiosk Marketing
■ Online Marketing
■ Direct-Response TV Marketing
Direct Marketing
■ Telephone Marketing
■ New legislation and technological advances
threaten the future of telemarketing
■ Direct-Mail Marketing
■ New trends include fax mail, e-mail, and voice mail
■ Catalog Marketing
■ Many cataloguers have migrated to the web
Direct Marketing
■ Direct-Response Television Marketing
■ Direct-response advertising
■ Infomercials
■ Home shopping channels
■ Kiosk Marketing
■ Integrated Direct Marketing
■ Public Policy and Ethical Issues
■ Irritation, Unfairness, Deception, and Fraud
■ Invasion of Privacy
Business to Business Markets

Objectives
□ Understand the nature of the business
market and how it differs from the
consumer market.
□ Learn how institutions and government
agencies buy.
□ Identify the different buying situations faced
by organizational buyers.
□ Identify the participants in the business
buying process and the various influences
impacting business buying decisions.
□ Understand how business buyers make their
decisions.
Organizational Buying
□ Organizational buying is:
“the decision-making process by which formal
organizations establish the need for purchased
products and services and identify, evaluate, and
choose among alternative brands and suppliers.”
□ Compared to Consumer Markets, Business
Markets have . . .
■ Fewer buyers
■ Larger buyers
■ Geographically concentrated buyers
■ Close relationships with their supplier-customers
Business Market Characteristics

□ Fluctuating demand □ Multiple buying
□ Derived demand influences
□ Inelastic demand □ Multiple sales calls
□ Professional □ Direct purchasing
purchasing □ Reciprocity
□ Leasing
The Business Market

■ The institutional market
□ Schools, hospitals, prisons, etc. with captive
audiences
□ Cost and quality standards drive purchases
■ The government market
□ Bidding process awards contracts
Buying Situations
□ Straight re-buy □ Routine reorders
□ Modified re-buy from approved
□ New task vendor list
□ Low involvement,
minimal time
commitment
□ Example: copier
paper
Buying Situations
□ Straight re-buy □ Specifications,
□ Modified re-buy prices, delivery
□ New task terms or other
aspects require
modification
□ Moderate level of
involvement and
time commitment
□ Example: desktop
computers
Buying Situations
□ Straight re-buy □ Purchasing a
□ Modified re-buy product or service
□ New task for the first time
□ High level of
involvement and
time commitment;
multiple influences
□ Example: selecting
a web site design
firm or consultant

Organizational Buying
□ Systems Buying
■ A single provider provides the total
package for the buyer’s needs
■ May involve turnkey solutions
□ Systems Selling
■ Manufacturers sell entire systems
■ Supplier provides all MRO items

Participants in Business Buying

Buying center members fill one or more
roles in the purchase decision process:
□ Initiators
□ Users
□ Influencers
□ Deciders
□ Approvers
□ Buyers
□ Gatekeepers
Major Influences
□ Environmental □ Demand level
□ Organizational □ Economic outlook
□ Interpersonal □ Interest rates
□ Individual □ Technological
change
□ Politics/regulations
□ Competition
□ Concerns for social
responsibility
Major Influences
□ Environmental □ Objectives
□ Organizational □ Policies
□ Interpersonal □ Procedures
□ Individual □ Organizational
structures
□ Systems
Major Influences
□ Environmental □ Interests
□ Organizational □ Authority
□ Interpersonal □ Status
□ Individual □ Empathy
□ Persuasiveness
Major Influences
□ Environmental □ Age
□ Organizational □ Income
□ Interpersonal □ Education
□ Individual □ Job position
□ Personality
□ Risk attitudes
□ Culture
Eight Buy-phases of Industrial

Buying
□ Problem recognition
□ General need description
□ Product specification
□ Supplier search
□ Proposal solicitation
□ Supplier selection
□ Order-routine specification
□ Performance review

Global Marketing
Objectives
• Understand how the international trade
system, economic, political-legal, and
cultural environments affect a company’s
international marketing decisions.
• Learn three key approaches to entering
international markets.
Objectives
• Understand how companies adapt
their marketing mixes for
international markets.
• Learn how to identify the three major
forms of international marketing
organizations.

Coca-Cola
• 1900: Coca-Cola was • Coca-cola now is present
available in foreign in India, China and
countries Indonesia
• Early branding efforts • Consistent positioning and
placed logo prominently taste worldwide
abroad • Ads and promotions are
• 1971: “I’d like to buy the adapted to local markets
world a coke” TV ad • Sprite: a global success
Definition
• Global Firm
– A firm that, by operating in more than
one country, gains R&D, production,
marketing, and financial advantages in its
costs and reputation that are not
available to purely domestic competitors.
Global Marketing
Current Scenario
• International trade is booming
• Many U.S. firms are successful international
marketers
• Global competition is intensifying
• Global companies face several problems
• Companies face six major decisions in
international marketing
International Marketing
Decisions
• Looking at the • Deciding How to
global environment Enter the market
• Deciding whether • Deciding the Global
to go international Marketing Program
• Deciding which • Deciding Global
markets to enter Marketing
Organization

Global Marketing
Environment
• The International Trade System
– Tariffs, quotas, embargos, exchange
controls, non-tariff trade barriers
– World Trade Organization
– Regional free trade zones
• European Union
• BRIC
• SAARC
• Other free trade areas
Global Marketing
Environment
• Political-Legal Environment
– Attitudes toward international buying
– Government bureaucracy
– Political stability
– Monetary regulations
• Counter-trade: barter, compensation,
counter-purchase

Global Marketing
Environment
• Cultural Environment
– Impact of Culture on Marketing Strategy
• Cultural traditions, preferences, behavior
– Impact of Marketing Strategy on
Cultures
• Globalization vs. Americanization vs. Europe
vs. Chinese etc
Expanding in China
• Close the Cost gap
• Add Products and Channels – start at the top and
break into the mass market quickly – Coke 3
partnerships and 34 bottling plants
• Bring local brands on board- Colgate & Jiangsu
Sanxiao Group – leader in category
✓ Anheuser Busch & Harbin brewery – 4th Largest
✓ Gillette Duracell & Nanfu
✓ Danone (Dutch) & Bright Dairy Foods – China’s largest
Dairy

Deciding Whether to
Go International
• Not all companies need an
international presence
• Globalization may triggered by
several factors
• Risk and the ability to operate
globally must be carefully assessed

 
Deciding Which
Markets to Enter
• Define international marketing polices and
objectives, and sales volume goals
• Decide how many countries to target
• Decide on the types of countries to enter
• Screen and rank each of the possible
international markets using several criteria
– Market size, market growth, cost of doing
business, competitive advantage, risk level
 

Composite Indices
Brazil Russia India China
Growth 57 70 55 46
Competitiveness
Govt. Effectiveness 50 44.3 54.1 63.4
Corruption 59 90 90 71
perception
Risk perception 70 78 72 76
Institutional Voids
• Absence of specialized intermediaries
• Contract enforcing mechanism
• Lack of “soft” infrastructure –
Market research firms, credit rating
firms, end-to-end logistics providers,
search firms.

Advantage of investing in
Developing Countries
• Fastest growing markets for products and
services
• Low cost manufacturing – skilled labor available
at reasonable cost
• Successful global companies work around
“institutional voids”
• Customize their approach to fit institutional
context
• Avoid “herd instinct”
The 5 Context Framework

• Political & Social System
• Openness
• Product Markets
• Capital Markets
• Labor Markets
Political Social System

• Identify country’s power centers in
Bureaucracy & Media
• Figure out whether checks and
balances are in place
• Are politics and bureaucracy
independent of each other

Openness
• Response to FDI
• Legal system
• Industry readiness
Capital markets
• Credit rating agencies
• Investment Analysis
• VC Firms
• Merchant bankers
Product markets
• Market Research Firms
• Ad Agencies
• Consumer courts
• Advocacy Groups
• Consumer Activism
Labor Markets
• Search Firms
• Investment in educations Institutions
• Rating/Accreditation of these
institutions vis-à-vis international
ones

Applying the Framework

• Adapt strategies to “fit” institutional
context – overcome the “void”
• Change the context
• Stay Away

Deciding How
to Enter the Market
• Exporting
– Direct vs. indirect
• Joint Ventures
– Licensing, contract manufacturing, management
contracting, joint ownership
• Direct Investment
– Assembly facilities, manufacturing facilities
Deciding on the Global

Marketing Program
• Standardized Marketing Mix
– Same basic product, advertising, distribution,
and other elements of the marketing mix are
used in all international markets.
• Adapted Marketing Mix
– The marketing mix elements are adjusted for
each international target market


Marketing Program
• Product Strategies for the Global Market
– Straight product expansion
• Marketing the product with no changes
– Product adaptation
• Altering the product to meet local conditions or
the wants of the foreign market
– Product invention
• Creating new products or services for foreign
markets

 
 


Marketing Program
• Global Promotion Strategies
– Standardized global communication
• Advertising themes are standardized from
country to country with slight modifications
– Communication adaptation
• Advertising messages are fully adapted to
local markets


Marketing Program
• Global Pricing Strategies
– Companies face many problems
• Price escalation
• Pricing to foreign subsidiaries
• Recent economic and technological forces
• The Internet

Marketing Program
• Global Distribution Channels
– Whole-channel view
• Seller’s headquarters organization
• Channels between nations
• Channels within nations
• Numbers and types of intermediaries


Marketing Organization
• Managing International Marketing
Activities
– Step 1: Organize export department
– Step 2: Create an international division
– Step 3: Become a global organization
RURAL MARKETING
Learning Objectives
● Sources & patterns of incomes of rural consumers

● Identifying & Targeting relevant consumer segments in
rural India
● Consumer behavior of rural consumers
Definition
● Application of techniques & concepts of marketing to

the vast rural segment of Indian population in the
background of the sociological & behavioral factors that
affect the economy of rural markets
● Identifying & serving needs of consumers living in
villages
● Marketers need to understand the living conditions of
rural consumers before attempting to sell their
products & services to them
Facts
● 742 million people in over 6 lakh villages

● Growing at 5 times the pace of urban markets
● 8.6 million households with incomes above Rs.25,000
● Of the 2 million BSNL connections more than 50% are
in villages
Source: NCAER, IMDR 2002
Estimated Annual Size
● FMCG – Rs. 50,000 crores

● Agri- inputs & farm machinery – Rs.45,000 crores
● 2/4 wheelers – Rs. 8,000 crores
● Durables – Rs. 5,000 crores
Source: NCAER, IMDR 2002

Major Items of Consumption
Products Ranking Consumption in grams per

household per month
Toilet Soap 1 268

Washing Powder 2 950
Packaged Tea 3 268
Biscuits 4 302
Detergent Cakes 5 893

Challenges
● Distance from & accessibility to products & services

● Scattered & sparsely populated areas – insufficient to
attract companies
● Extra costs are created due to distance & sparse population
● Changes in rural economy – diversification, dependence on
monsoons, increasing external controls
● Illiteracy & poor educational facilities
● Lack of alternatives in careers/jobs, housing, transport,
recreation
● Primary source of rural income is agriculture
Marketing Strategy
● Diverse rural segments

● Cultural dimensions
● Lifestyles
● Literacy rates
● Consumption patterns
● Heightened role of peers & elders
4 A’s of Rural Marketing
● Affordability
● Awareness
● Acceptability
● Availability
Sources & Patterns of Income
● Primary source is agriculture

● No regular income - Cash at harvest time only
● Time of cash surpluses vary geographically as crop
patterns & harvest time vary in India
● Cash crops & services now lead to stable cash flows
through the year
● Marketers should keep track of time of year when
incomes are due

Target Segments
● Distinct segments in rural markets
● Very Rich – buy most expensive consumer products

● Consuming class – buy bulk of goods
● Climbers – own some durables like TVs & appliances
● Aspirants – possess most basics – radios, bicycles & aspire for more
● Destitute
● Rich farmers who own lot of land; Farmers who own some land; Daily wage
workers
● Visible changes in last group due to government policies and urbanization
● Uncertainty whether village consumers will grow richer or poorer
● Rural economy & community in flux
Consumer Behavior
● Villages are a close-knit community
● Average rural consumer very reluctant purchaser
● Value for money products are most popular and easily sold
● Rural consumers already have a settled way of life and marketers’

products & services not really needed
● Rich rural population - ostentatious customers
● Marketers’ products & services either have to change lives of rural

consumers in significant ways, or be very inexpensive to become
acceptable

Product
● Product for rural market must be built or modified to suit

the lifestyle and needs of the rural consumers .
● Product Strategies
1. New/Modified Product.
2. Utility Oriented Product
3. Avoiding Sophisticated Packaging
4. Application of Value Engineering.
5. Small unit packaging

Product
● Godrej recently introduced three brands of Cinthol, Fair Glow and Godrej in 50-gm
packs, priced at Rs 4-5 meant specifically for Madhya Pradesh, Bihar and Uttar
Pradesh
● Hindustan Lever, among the first MNCs to realize the potential of India's rural
market, has launched a variant of its largest selling soap brand, Lifebuoy at Rs 2 for
50 gm
● Coca-Cola has introduced Sunfill, a powdered soft-drink concentrate. The instant and
ready-to-mix Sunfill is available in a single-serve sachet of 25 gm priced at Rs 2 and
multi-serve sachet of 200 gm priced at Rs.15
 

 
Products
● Consumer Durable Products
● Lack of regular supply of electricity
● Consider such products to be ‘luxury’ -reluctant to buy durable
items
● Fast moving Consumer Goods
● Substitutes available & in use
● Products adoption slow - educative inputs needed
● Self sufficiency barrier to product purchase

Products
Services
● Large vacuum in rural service infrastructure
● Changes in social structure hastening requirement of
services
● Professional services emerging opportunity
● Large market for services like telecommunication, health,
education, transport, drinking water, housing & electricity
● Inefficiency and ineffectiveness of the government -
potential opportunities
Products
Farm Equipments & Products

● Obvious requirement of farming equipments -
opportunity for companies in farm mechanization
● Changing rural scenario presents very different
opportunities from the past
● Small farmers a captive market
● Enter profitable partnerships with farmers

Pricing
● Both edifices of self-sufficient economy & closed

community of villages crumbling
● Do more than just offer products at low prices
● Money normally controlled by the eldest male member
● Understand the revenue cycle & management of cash of
rural consumers
Place - Distribution
● Villages geographically scattered.

● Predominant reliance on “local markets”
● Buy their products as they get exhausted, not for a
whole month, unlike urban India
● If product not available substitutes used. Purchase
postponement common
Place - Distribution
● To service remote village, stockists use auto-rickshaws,

bullock-carts and even boats in the backwaters of Kerala.
Coca-Cola, which considers rural India as a future growth
driver, has evolved a hub and spoke distribution model to
reach the villages
● LG Electronics defines all cities and towns other than the

seven metros cities as rural and semi-urban market. To tap
these unexplored country markets, LG has set up 45 area
offices and 59 rural/remote area offices.
 
Promotions
● Rural consumers deferential to elders, people in

authority & highly educated people
● Companies should engender word-of-mouth promotion
- crucial in rural markets
● Ensure that product reaches influential people in the
village
● Celebrity endorsements can be very useful
Some Examples
● Nokia developed affordable Mobile phones for rural markets with

unique features such as local language capabilities, present time/ call
limits etc.
● Philips developed a TV “ Vardaan” for rural markets that works on

90-270 volts.
● Philips developed “ Free Power Radio” priced at Rs.995. This radio

does not require power or battery. It runs on simple winding of level
provided in the set.
● LG developed CTV called “Cine Plus” for its rural market at a price of
Rs.5000
● Hyundai launched a scheme ”Ghar ghar ki pehchaan” in 2008 to touch

base with at least 58 per cent of Indian villages with a population of 500
or more.

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Introduction to Marketing

Using Data to Gain Business Insights.

Frequent Movie In-Frequent Movie

Your most Or your less

• Analytics: Movie recommendation engine.

• What is a major challenge for Netflix’s in the future ?

• Determine best solutions

Evolution: Where are we now?

Analytics still in emerging stage.

Importance: Aids Business Performance

✓Strong relationship between business analytics

✓Understanding data supports better business

✓Fast pace of change: information becoming

Better understanding : Better decisions. 12

• “Every two days now

High Rate of Return. 14

•14 : the average

High Rate of Return.

High Rate of Return.

Dynamic Pricing, Web Content.

• Pain Threshold Harrah’s :

Real Time Customer Data to Drive Results.

Real Time Customer Data to Drive Results.

Real Time Customer Data to Drive Results.

Application : Supply Chain

Large opportunity as small % improvements = big savings.

Real Time Customer Data to Drive Results.

• Tom lives in Raleigh

Addressing three areas of Analytics.

• Example: The class average on the last exam was a

Descriptive (describes), Predictive (predicts), Prescriptive

recently purchased product. Predictive analytics

Descriptive (describes), Predictive (predicts), Prescriptive

• Use data to arrive at a mathematical optimal

Descriptive (describes), Predictive (predicts), Prescriptive

Porter’s Competitive Strategies

Forms of Direct Marketing

Business to Business Markets

Business Market Characteristics

The Business Market

Participants in Business Buying

Eight Buy-phases of Industrial

The 5 Context Framework

Political Social System

Applying the Framework

Deciding on the Global

Deciding on the Global

Deciding on the Global

Deciding on the Global

Deciding on the Global

Deciding on the Global

● Sources & patterns of incomes of rural consumers

● Application of techniques & concepts of marketing to

● 742 million people in over 6 lakh villages

Source: NCAER, IMDR 2002

Estimated Annual Size

● FMCG – Rs. 50,000 crores

Source: NCAER, IMDR 2002

Major Items of Consumption

Products Ranking Consumption in grams per

Toilet Soap 1 268

Packaged Tea 3 268

Detergent Cakes 5 893