MARKETING AND SALES

MARKETING VS SALES

The definition for marketing as per The American Marketing Association is ‘The activity, set
of institutions and processes for creating, communicating, delivering and exchanging
offerings that have value for customers, clients, partners and society at large.’

Marketing and Sales are terms that are frequently used interchangeably. But experts state
that there are key aspects that separate the two activities from one another. Marketing is the
process of creating an interest in a particular product or service, which then leads to sales.
Peter Drucker said, “The aim of marketing is to make Selling superfluous”.

Marketing activities include :

• Identifying customer needs through customer research

• Product development to fill any actual or potential gaps in the market
• Brand establishment through promotion and advertising activities
• Optimization of pricing of the product or service for sustained financial success.

Sales, on the other hand, encompasses :

• Converting potential clients into actual ones

• Communication and Interaction with the potential clients
• Goals that are set in the short term

Sales typically target individuals or small groups of potential customers, while marketing
targets the general public. Sales follows an inside out approach. The factory is where it all
begins, and from there, existing products of the company and requires intensive marketing
and sales efforts to generate revenue.

An external viewpoint is used in the marketing concept, that is an outside in approach.

Profitability is achieved through the creation of satisfied customers, and the process begins
with a clearly defined market, an emphasis on customers' needs, and the coordination of all
activities that will affect them.

WHAT IS A MARKET?

A market is a commonplace for doing business. It is where the activities of buying and selling
of goods, products, commodities, transactions or services takes place. The exchange of goods
in return for money is called a transaction.
SEGEMNTATION, TARGETING AND POSITIONING

To visualize the above three concepts let’s take the help of an example. Think of a product,
let’s say a Smartphone. What are the brands that first come to mind? It may be Samsung,
OnePlus, iPhone, Google Pixel to name a few. Now think about where these products are
advertised and who are the people that utilize these products?

SEGMENTATION
Market segmentation involves dividing a market into smaller markets with similar but distinct
customer bases by using factors like location, age, income, marital status, education, and
lifestyle.

TYPES OF MARKET SEGMENTATION

DEMOGRAPHIC

GEOGRAPHIC

BEHAVIOURAL

PSYCHOGRAPHIC

DEMOGRAPHIC SEGMENTATION
In this segmentation, the market is broken down along socioeconomic lines, such as education
level, income, marital status, occupation, age, number of children, race, and religion. Because
of its widespread applicability in a variety of industries and the prevalence of standard data
collection methods, it has become a popular segmentation tool. Therefore, it allows us to
efficiently segment a broad clientele without breaking the bank. By combining it with other
segmentation tools, you can further refine your search for profitable niches.

For example – Companies like Bournivita and Complan offer age-specific products for kids and
mature groups.
GEOGRAPHICAL SEGMENTATION
This form of market segmentation is aimed at a niche audience that exists solely within a given
country, region, or other such geographically defined area, as the name suggests. Weather,
population, ethnicity, religion, culture, language, and urbanicity/rurality are just a few of the
factors that influence how and what consumers want in different parts of the world.

Geographical segmentation is a key determinant when buying tendencies depend on

customer’s region. Customer needs vary by region because of differences in climate and other
environmental factors. As a result, brands can better tailor their advertising and promotions
to meet the needs of their target demographics through the use of geographical targeting. In
addition, it provides businesses with new opportunities for growth and insight.

For example – Instant noodles company Maggie sells flavours based on regions. Some oriental
countries have flavours like Me Goreng and Hong Kong spice and India has flavours like
Chatpata masala.

BEHAVIOURAL SEGMENTATION
Consumption patterns, brand loyalty, and customer interactions all play a role in this type of
customer segmentation.

Knowledge and experience with the product are factors in Behavioural Segmentation because
they affect a consumer's tendency to purchase. In this way, it is possible to determine
whether a consumer has ever used the product before, is considering using the product for
the first time, is currently using the product, or has never used the product before.

Customers can be "brand-loyal," "brand-neutral," or "rival-loyal," depending on how they

engage with the brands. Market information can be extracted with the help of consumer
feedback forums, review portals, or third-party records. This is a necessary first step in
correctly identifying different types of market niches. By learning more about their customers'
preferences and habits, businesses can tailor their advertising and promotions to each
individual.

For example – Smartphone products like Blackberry was targeted specifically towards the
business population and the promotional strategy used helped in giving the product that
exclusivity.

BENEFITS OF BEHAVIOURAL MARKETING

Improved Personalization of products

Easier to predict future customer behaviour

Better management of campaign budget

PSYCHOGRAPHIC SEGMENTATION
Differences between psychographic and behavioural segmentation boil down to the former's
emphasis on customers' identities and the latter's appreciation of their actions.

Psychographic segmentation divides markets based on customer attitudes and preferences,

but is highly subjective. Given the subjective nature of the factors at play in this subsegment,
pinpointing them can be challenging. It is not data-driven like the demographic and
geographic segments, and it is challenging to interpret consumers' subjective feelings and
thoughts. Customers' personality types, tastes, value systems, beliefs, lifestyles, motivational
drivers, worldviews, and other intangibles are the fuel for psychological segmentation.

As a result, in-depth research methods are employed to collect data about the market,
including questionnaires, interviews, focus groups, case studies, and surveys. In order to
create successful marketing and advertising campaigns, businesses must use psychological
segmentation to categorise customers based on their attitudes and behaviours, such as "O"
for opinions, "A" for activities, and "I" for interests.

For example – Stores like H&M and Zara target populations based on lifestyles, targeting
customers looking to buy trendy designer clothes.

TARGETING
The second component of the STP marketing model is targeting. The primary objective here
is to examine previously created segments and identify those with the highest potential for
producing the desired conversions (depending on your marketing campaign, those can range
from product sales to micro conversions like email signups).

Market segmentation is the process of deciding which of the aforementioned groups to target
with a given offering.

Predictors of Success in Targeting :

• Market Size - Long-Term Viability

• Potential for development and expansion
• Position of the competition
• Reasonableness of the segment's price point and ease of access
• It must be consistent with the goals and resources of the company.
POSITIONING
How your product (item or service) is positioned in the marketplace and in the consumer's
mind determines how successful you will be.

A well-positioned product stands out from the competition and is more likely to be adopted
by consumers because of the value it brings to their lives. Positing the product well creates a
unique selling proposition (Unique selling proposition). A good positioning helps a brand or
product stand out in a crowded market where many others offer similar features and benefits,
allowing it to command a higher price without losing ground to the competition.

When a product or company has a solid footing in the market, they are better able to weather
economic storms. Flexibility in brand or product extensions, changes, distribution, and
advertising is another benefit of a strong position.

MARKETING MIX

The marketing mix is the collection of methods used to increase awareness of a company's
brand or product in the marketplace.

PRODUCT PLACE

PEOPLE PROMOTION

PHYSICAL
PRICE
EVIDENCE

PROCESS

THE SEVEN P’s OF MARKETING

The above mentioned Seven P’s of marketing, make up a typical marketing mix.

PRODUCT – It is something made or developed to meet the requirements of a market

segment. Products can be either intangible, like services, or tangible, like physical goods. The
success of your business hinges on offering consumers what they're looking for, so make sure
you deliver it. So, the marketer needs to investigate the product's life cycle thoroughly during
the development stage.

PRICE – Here, how you set prices to satisfy your clientele is discussed. In order to maximise
profits for the business, prices must be set so that surplus from consumers is effectively
extracted.

PLACE – The product you've chosen should be sold wherever your ideal customer is most
likely to go looking for it. In addition to traditional brick-and-mortar stores, there is also the
option of shopping online at an e-tailer.

PROMOTION – A company's communication tools include advertising, public relations, sales,

promotion, personal selling, and, more recently, social media. The right people should be
reached with the organization's message using these methods.

PEOPLE – The people who will be doing the work and providing the value to the customers
are the focus of this analysis. It can help pinpoint knowledge and skill gaps so that remediation
can be planned.

PROCESS – This entails actually performing the service in the presence of the customer. In
essence, it emphasises maintaining a consistent level of service and making it easy for
businesses to do business with you.

PHYSICAL EVIDENCE – Even if the majority of what a customer is paying for is intangible,
almost all services still have a physical component. It encompasses the totality of a client's
sensory experiences with a company. Your physical location, its layout or interior design,
packaging, and branding are all part of this.

SEVEN MAJOR TYPES OF PROMOTION

1. Advertising
2. Direct Selling
3. Public Relations
4. Special Offers and Promotions
5. Product Placement
6. Sponsorships and Endorsements
7. Guerrilla Marketing
SWOT ANALYSIS

SOURCE - https://www.wordstream.com/blog/ws/2017/12/20/swot-analysis

By analysing the strengths, weaknesses, opportunities, and threats facing a business, a SWOT
analysis can be conducted. Both internal and external factors must be considered when
formulating a strategy. External factors include possibilities and dangers faced by a company.
It's useful for both strategic thinking and making tough calls.

A product is "pushed" toward the consumer in a "push" strategy. To make the intermediaries
carry, promote, and sell the product to end-users, it takes into account the manufacturer's
sales requirements, trade and promotion expenses, or other means.

On the other hand, a pull strategy will entice buyers to find out more about the product. The
producer uses a variety of methods, including advertising, promotion, and others, to get the
word out about the product and increase demand from end users, who will then buy it from
distributors. This is a sound tactic as it encourages customers to stay committed to and be
more involved with the brand and make informed brand choices even before customers enter
the store.
PESTEL ANALYSIS
The macro-environmental (external marketing environment) factors that affect an
organisation are studied and tracked using a tool called PESTEL analysis. Supporting this
helps find the external factors influencing the market, and evaluate how they're affecting the
company. The SWOT Analysis's strengths and weaknesses can be further explored with this
analysis.

PORTER’S FIVE FORCES MODEL

Strategic analysts frequently consult the Competitive Forces Model to assess market
competition. The model takes the following five factors it takes into account:

• competition,
• new entrant risk,
• buyer power,
• supplier power,
• and the possibility of substitute products or services.

As the sixth force, the power of complimentary goods and services, is included in this model.
The model aids a business in assessing the threats posed by its industry and making strategic
decisions in response to the level of competition present.
ANSOFF’S MATRIX
The Ansoff Matrix, also known as the Product/Market Expansion Grid, is a matrix tool used by
businesses for analysis, planning, and risk analysis of their growth strategies.

The Ansoff Matrix consists of the following four tactics:

• Market penetration - seeks to expand the share of an existing product within a given
market.
• Product development - The main goal of product development is to introduce novel
products to an already established market.
• Market Expansion - Market expansion is the process of breaking into a new market
with an already established product.
• Diversification - The goal of diversification is to expand into new markets with
innovative products.

SOURCE - https://blog.oxfordcollegeofmarketing.com/2016/08/01/using-ansoff-matrix-develop-marketing-strategy/
CONSUMER V/S CUSTOMER

Although they are frequently used interchangeably, "consumer" and "customer" do not
always refer to the same person. Consumers are the end users of products, while customers
are the ones who actually purchase them. As a rule, your marketing efforts should
concentrate on the end user, not the business.

Let's say, for the sake of argument, that you run a small company that creates and sells games
and toys for kids. Children may be the end-users of your product, but they are not your target
demographic. The children you're marketing to aren't the ones making purchases; it's their
parents.

One type of clientele we serve is consumers. Here, we'll use a Philips mixer as an illustration.
A restaurant is not a consumer if it purchases a Philips mixer grinder (blender) to make juice
to serve its customers. A consumer, however, is someone who goes out and purchases goods,
such as a Philips mixer grinder so that they can make juice for their kids at home.

BRAND AND BRANDING

Whether it's a company, a person, a place, or an item, a brand is made up of both observable
and unobservable characteristics that work together to make the target audience recognise
and favourably evaluate the brand in question. When viewed as a long-term strategy,
branding encompasses a wide variety of tasks, from new product development to advertising
campaigns.

An effective branding strategy seeks to reduce market saturation by developing distinctive

brands that consumers will be less likely to substitute. Brand differentiation results in high
brand equity, which in turn leads to low price elasticity of demand and higher prices and
profits for the business.

The availability of a recognised brand makes it easier for consumers to make a choice.
Gradually, shoppers narrow in on the brands that best meet their needs. Customers save
considerable time and energy when making purchases when they are familiar with a
particular brand.

In addition, they spare you the trouble of looking for said product. As long as they believe and
understand implicitly that the brand will continue meeting their expectations and performing
in the desired manner consistently, consumers will remain committed and loyal to the brand.

Customers are more likely to stick with a brand they've purchased before if they find value in
using it.
BRAND EQUITY
What we call "Brand Equity" is the added profit that a business makes off of selling a product
with a well-known brand name rather than a generic one. Brand equity is built when a
company's products are highly sought after because of their unique characteristics, high
quality, and dependability. Campaigns targeted at a large audience can also aid in building
brand recognition.

Brand equity can be seen in the premium that consumers are willing to pay for Coca-Cola soft
drinks as opposed to generic store brands.

Brand equity is the sum of a company's assets and liabilities, such as the goodwill associated
with the recreational use of Coca-Cola and the negative image associated with health and
sugar consumption.

BRAND POSITIONING
When we talk about "brand positioning," we're referring to the reasons why your target
consumers should choose to purchase your brand over others. It makes sure that all of the
activities associated with the brand have the same goal; they are guided, directed, and
delivered by the benefits or reasons to buy the brand. It places an emphasis on all of the
different points of contact with the customer.

The positioning of a brand needs to provide responses to the following questions:

• Is it unique/distinctive vs. competitors?

• Does it make a significant impact and provide motivation for the niche market?
• Is it applicable to the majority of the world's businesses and geographical markets?
• Is the proposition validated with products that are original, appropriate, and one of a kind?
• Is it sustainable; in other words, can it be delivered in a consistent manner across all of the
consumer's points of contact?
• Does it help the organisation achieve the financial goals it has set for itself? Is it able to give
the organisation the support and boost it needs?
• In order to carve out a unique space in the market, it is necessary to select a specific niche
market and impress upon customers the idea that they have a distinct advantage over their
competitors. The positioning of a brand is a method through which a company can
communicate to its clientele what it hopes to accomplish for them and what it intends to
signify to them as a whole.
• The positioning of a brand influences the perspectives and judgments of customers. It is the
lone characteristic of your service that differentiates it from the services offered by your rivals.
Take, for example, the Kingfisher, which represents both youth and adventure.
• It exemplifies the brand in its prime state.