MARKETING BASICS

Club BaCzar – The Marketing Club of JBIMS

 Definition
• “Marketing 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”
 What can be marketed?
• Goods : cosmetics
• Services : airlines
• Events : Olympics
• Experiences : amusement park
• Persons : high-profile lawyers
Needs
Basic human requirements such as food,
water, clothing and shelter. Also includes
needs for recreation, education and
entertainment.
E.g. : Need for food
 Places : Gujarat Tourism
 Properties : Real-estate agents
 Organizations : Tata
 Information : X-Ray Machines
 Ideas : creating awareness
Wants
Needs directed to specific objects that
might satisfy the need shaped by our
society.
E.g. : Want rice, chapattis and curry to
satisfy my hunger
 What can be marketed?
Demands
Wants for specific products backed by an ability to
pay.
E.g. : A person going to a fine-dining restaurant, who
has the ability and willingness to pay a high amount to
satisfy his hunger

Marketers do not create needs. Needs pre-exist

marketing. Marketing influences wants.
 Differentiation
“Process of distinguishing a product/ service from others, to
make it more attractive to a target market. It includes
creating competitive advantage for the seller”

New Unique New

Celebrity
Functional Unique Creating a Distribution Advertising
Endorsements
Features Packaging Ritual Channels Campaign
E.g.: Shah Rukh
E.g.: Galaxy E.g.: Kinder Joy E.g.: Oreo E.g.: Eureka E.g. Vodafone
Khan
smart phones Forbes Zoo zoos
 Segmentation
PSYCHOGRAPHIC
Values

‘The process of Attitudes

splitting a market into

Lifestyle

smaller groups with DEMOGRAPHIC

similar product needs

GEOGRAPHIC
Rural
Age

or identifiable
Urban Gender
Regional MARKET Education

characteristics, for the

All-India
Income
Local

purpose of selecting
Occupation

appropriate target BEHAVIORAL

markets’. Usage Frequency

Benefits Sought
Loyalty
Occasions
 Targeting
“An organization’s proactive selection of a suitable market
segment with the intention of heavily focusing the firm’s marketing
offers and activities towards this group of related consumers”

Offering: Frequent-flyer program of Jet Airways

Age Segmentation Company-type Segmentation

25-35 35-45 Above 45 MNCs SMEs Small-scale

Geographical Segmentation Frequency of travel Segmentation

Tier I Tier II Tier III Frequent Occasional Rare
 Positioning
“It is the target market’s perception of the product’s
key benefits and features, relative to the offerings of
competitive products ”
 • Adjusted until the right
combination is found

• Serves the needs of the

product’s consumers

• Generating optimum
income for the company

“A planned mix of the controllable elements of a product’s

marketing plan commonly termed as the 4 Ps: Product, Price,
Place and Promotion”
 Marketing Mix: Product
Actual offering by the company to its targeted customers
May be tangible (goods) or intangible (services)

Product Decisions include:

•Variety •Packaging
•Quality •Sizes
•Design •Services
•Features •Warranties
•Brand Name •Returns
Width
Product
No. of product lines that a company sells
E.g.: A company selling dish washing liquid and bar soap has a width of 2

Length
Total number of products or items in a company’s product mix
E.g.: A company has 2 product lines with 5 brands within each. Thus it has a length of 10

Depth
Total number of variations for each product. Can include size, flavour, etc.
E.g.: A company selling toothpastes in 2 sizes and 3 flavours, the particular toothpaste brand has
a depth of 6

Consistency
How closely related product lines are to one another- in terms of use, production and distribution
E.g.: A company selling health bars and health magazines in the same stores. But one is edible
and the other is not
 Product: Concepts

Brand FMCG SKUs

A unique name and (Fast-Moving Consumer (Stock-Keeping Unit)
image for a product in Goods)
the consumers’ mind. A distinct unit that is
Frequently purchased offered by a company
Means of differentiating essential or non-essential for sale
a product from that of goods such as food,
competitors toiletries, soft-drinks, Eg: Colgate has size
disposable diapers variations of 15/35/80
grams
 Marketing Mix: Place
• Place -> Distribution
o providing the product at a place which is convenient for consumers
to access.

How to reach
your target
market
Location of your Warehousing of
target market your stock

Location of your TARGET Transportation

Business MARKET of your stock
 Place: Concepts
• Indirect Distribution Channel
• The product/service moves through a series of intermediaries before it is made available
for purchase to the end consumer.
• The channel typically involve additional steps as it moves from the business
manufacturing units through distributors, wholesalers and retailers.
• Eg.: Hindustan Unilever- FMCG products

• Direct Distribution Channel

• The product/ service moves directly from the manufacturing units to the end consumers
or retailers.
• The intermediaries as present in the indirect distribution channel are eliminated.
• Eg.: Eurka Forbes water purifiers
 Place: Concepts
Indirect Channel Direct Channel
•Lesser control on the •Greater control on the
Manufacturer Manufacturer
distribution process distribution process
•Cost of distribution •Cost of distribution
Wholesaler
reduced significantly increased significantly
•Change of ownership of •No change of ownership of
the product/service at Retailer the product/service at
various levels before it various levels before it
reaches the end consumer Consumer reaches the end consumer Consumer
  Depending on the type of product,
a Distribution Strategy is selected
 Getting
Intensive the Right Product to the
Distribution
•Used commonly to distribute low priced or impulse purchase products like chocolates, soft drinks
Right
•Product Place
to be made at the
available Right Time
at maximum number of stores possible
Eg.: Pepsi from PepsiCo, Dairy Milk from Cadbury
 A distribution system may be very
Exclusive Distribution
unique
•Involves limiting some times
distribution to a and
singlemay
outlet be a
•The product is usually highly priced, and requires the intermediary to place much detail in its sell
Differentiation
Eg.: Honda parameter
City through an exclusive dealer

 In Distribution
Selective today’s world where businesses
•A small number of retail outlets are chosen to distribute the product
aredistribution
•Selective going global, Distribution
is common with products such as computers, televisions household appliances, where
consumers are willing to shop around and where manufacturers want a large geographical spread
becomes
Eg.: Sony Bravia LCDeven
TV more important

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Management Studies
 Marketing Mix: Price
 The amount a customer pays for the product

 Of
Factors allinto
taken theaccount
aspects
while of the pricing
deciding marketing mix,
strategy are:- Price is the one, which
•Fixed and variable costs
creates sales revenue - all the others are costs
•Competition

 Important
•Company objectives determinant of value of sales made -> Ultimately
•Proposed positioning strategies
•Targetdecides Profit to pay
group and willingness

 Determined by the perceived value of the product/service by the

There are various pricing strategies available, viz. Penetration Pricing, Skimming Pricing, Premium
customer
Pricing, Competition Pricing, Cost-based Pricing etc.

 Pricing policy of a company varies from time to time

Pricing Definition Example

Penetration Pricing •Low price initially to gain sales and market share Low initial price set by TATA
•After gaining market share, price is increased Sky to enter the satellite TV
market
Skimming Pricing •High initial price to skim profits from market layer Play Station 2 from SONY
by layer introduced at a high price
•Price lowered subsequently to make product initially
available to a wider market
Competition Pricing •Price set in comparison with the competitors Vodafone packs priced based
•A firm can set the price lower, higher or equal to the on competitors
competition
Premium Pricing •Higher price set to reflect the premiumness of the Cars from Lamborghini priced
product much higher than the average
market
Cost-based Pricing •Price set based on cost of production of goods Usual commodity items like
•A suitable markup added as decided by the firm Salt priced based on their cost
of producton
  Means by which firms attempt to inform, persuade, and remind
consumers-directly or indirectly-about the products or brands
they sell
 Establish a dialogue and build relationships with consumers
 Promotion techniques used:

Advertising Sales Promotion Events/ Experiences Public Relations

Direct Marketing Interactive Marketing Word-of-mouth Personal Selling

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Advertising: Sales-Promotion:
 Paid form of nonpersonal
presentation and promotion of
 Short-term incentives to
ideas encourage trial or purchase
 Method of mass-communications › Consumer Promotions
(samples, coupons)
› Print Media (newspapers & magazines)
› Broadcast Media (radio & television)
› Trade Promotions (advertising
& display allowances)
› Network Media (telephone & wireless)
› Business and sales force
› Electronic Media (Web Page & CD-Rom)
promotion (contests for sales
› Display Media (billboards & posters)
reps)

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Management Studies
Public Relations & Publicity:
 Variety of programs directed
 Face-to-face interactions
internally to employees or
externally to consumers, other
firms, government, and media to
promote or protect a company’s
image or its individual product
communications
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Personal Selling:
with one or more
prospective purchasers
for the purpose of making
presentations, answering
questions & procuring
orders
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Integrated Marketing
Communications (IMC):
 All brand contacts received by a
customer or prospect are
relevant to that purpose and
consistent over time
 Seamless integration of messages
over various touchpoints
Co-branding:
 2 or more well-known brands are
combined into a joint product or
marketed together in some fashion
 Mutual-benefit for both

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Management Studies
Bundling: Cross-selling:
• Encouraging a customer who buys a
 Marketing strategy that joins product to buy a related or
products or services together in complimentary product
order to sell them as a single
combined unit
 Products and Services are usually
related

Upselling:
• Seller induces customer to purchase
more expensive items, upgrades or add-
ons
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Management Studies
Above-the-Line: Below-the-Line:
 Promotional activities done at a  Done at micro-level
macro level  Forms part of non-media
 Creating a brand image of the communication
company and product  PR, Personal Selling, Sales
 Method of mass communication Promotions
 Print, Out-of-Home, Radio,  Used to generate loyalty and
Television repeat sales
 Used to generate mind-share

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Management Studies
Pull Strategy:
 Getting customers to come to you
 Motivating customers to seek your brand
 Advertising and mass media
 Customer relationship management
 If customers want a product, retailers
will stock it
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Push Strategy:
 Taking the product to the customer
 Ensuring customer is aware of the brand when
making a purchase
 Especially in FMCG products
 Eg: Trade show promotions, direct selling,
point of sale displays
 Setting up a distribution channels and
encouraging retailers to stock product
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Brand Equity:
 Added value endowed on
products and services
 Reflected in:
› Way consumers think, feel and act
with respect to the brand
› Prices, market share and
profitability that the brand
commands
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Supply Chain
Management:
 Procuring the right inputs
(raw materials, components &
capital equipment), converting
them efficiently into finished
products, and dispatching
them to the final destinations
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Modern Retail/ Trade:
 Hypermarkets/ Supermarkets, etc.
 Variety of products sold under a
single roof
 Retailers run their own promotions
 Multiple locations
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Mom & Pop Shops:
 Small, independent, family-owned
 Single location
 Provide credit facility/ other
services to customers to
differentiate themselves
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 Represents all the stages a product goes through in the market
 Positioning & differentiation strategies must change as
product, market & competitors change over time
 Divided into 4 stages:
› Introduction/ R&D
 Period of slow sales growth
› Growth
 Rapid market acceptance and substantial profit
improvement
 Increasing competition
› Maturity
 Achieved acceptance by most potential buyers
 Profits stabilize or decline
 Overcapacity in industry
› Decline
 Sales show a downward shift and profits erode
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Management Studies
BCG
ANSOFF
PORTER’S 5 FORCE
MODEL
BOP MARKETING
The Bottom of the Pyramid
(BOP) is a socio-economic
concept that allows us to
group that vast segment - in
excess of about four billion -
of the world’s poorest citizens
constituting an invisible and
unserved market blocked by
challenging barriers that
prevent them from realising
their human potential for their
own benefit, those of their
families, and that of society's
at large.
MR PROCESS
 PROMOTIONAL MIX
Person Public Adve
al Relatio rtisin
selling ns g

Direct Sales
Mark Prom
eting otion
 Factors affecting
consumer behaviour
All the best for summers!!!!!