FUNDAMENTALS OF Presentation by

Ms. Anjali Goswami

MARKETING Assistant Professor

UNIT 1 SYLLABUS
Introduction :Nature ,Scope and Importance of Marketing
;Evolution of Marketing concepts ;Marketing
Mix ;Marketing environment ,Micro and Macro
environmental factors .
Consumer Behaviour :An Overview : Consumer buying
process ;Factors influencing consumer buying decisions .
MEANING AND DEFINITION
OF MARKET MEANING OF
MARKET
The word market is derived from the Latin word 'Marcatus' which means trade, commerce,
merchandise, a place where business is transacted. The common usage of market means
a place where goods are bought or sold. It is a medium or place to interact and exchange
goods and services. In simple words, the meeting place of buyers and sellers in an area is
called Market. The term market defined by different authors in different ways among them
the most important are given below.
Definition of Market
According to Pyle "Market includes both place and region in which buyers and sellers are
in free competition with one another."
ii. In the words of Clark and Clark :
"A market is a centre or an area in which the forces leading to exchange title to a particular
product operate and towards which the actual goods tend to travel."
NEED FOR MARKET
• To exchange (barter) goods and services.
• To adjust demand and supply by price mechanism.
• To improve the quality of life of the society.
• To introduce new modes of life.
• To develop product by enhancing market segment
CLASSIFICATION OF
MARKETS
On the basis of different approaches markets have been classified on the basis of Area,
Nature of Goods, and Economic view, Transaction, Regulation, Time, Volume and
importance. The detailed classification is presented in the following chart.
I. On the Basis of Geographical Area:
Family Market: When exchange of goods or services are confined within a family or close
members of the family, such a market can be called as family market.
Local Market: Participation of both the buyers and sellers belonging to a local area or
areas, may be a town or village, is called as local market. The demands are limited in this
type of market.
For example, perishable goods like fruits, fish, vegetables etc. But strictly speaking such
markets are disappearing because of the efficient system of transportation and
communication. Even, then, in many villages such markets exist even today.
ON THE BASIS OF
GEOGRAPHICAL AREA:
National Market: a certain type of commodities has demand throughout the country.
Hence it is called as a national market. Today the goods from one corner can reach
another corner with ease as the communication and transportation facilities are
developed well in India. This creates national markets for almost all the products.
International Market or World Market: World or international market is one where
the buyers and sellers of goods are from different countries i.e., involvement of
buyers and sellers beyond the boundaries of a nation.
II. ON THE BASIS OF
COMMODITIES/GOODS
Commodity Market: A commodity market is a place where produced goods or
consumption goods are bought and sold. Commodity markets are subdivided into:
Produce Exchange Market: It is an organised market where commodities or
agricultural produce are bought and sold on wholesale basis. Generally it deals with a
single commodity. It is regulated and controlled by certain rules. e.g. Wheat Exchange
Market of Hapur, the Cotton Exchange Market of Bombay etc.
Manufactured Goods Market: This market deals with manufactured goods. e.g.,
Leather goods, manufactured machinery etc. The Leather Exchange Market at Kanpur
is an example of the same.
Bullion Market: This type of market deals with the purchase or sale of gold and silver.
Bullion markets of Mumbai, Kolkata, Kanpur etc., are examples of such markets.
ON THE BASIS OF
COMMODITIES/GOODS
Capital Markets: New or going concerns need finance at every stage. Their financial
needs are met by capital markets. They are of three types:
Money Market: It is a type of market where short term securities are exchanged. It
provides short term and very short term finance to industries, banks, government’s
agencies and financial intermediates.
Foreign Exchange Market: It is an international market. This type of markets helps
exporters and importers, in converting their currencies into foreign currencies and
vice versa.
The Stock Market: This is a market where sales and purchases of shares, debentures,
bonds etc., of companies are dealt with. It is also known as Securities market. Stock
Exchanges of Mumbai, Kolkata, Chennai etc., are examples for this type of market.
III. ON THE BASIS OF
ECONOMICS
Perfect Market: A market is said to be a perfect market, if it satisfies the following
conditions:
• Large number of buyers and sellers are there.
• Prices should be uniform throughout the market.
• Buyers and sellers have a perfect knowledge of market.
• Goods can be moved from one place to another without restrictions.
• The goods are identical or homogenous. It should be remembered that such types
of markets are rarely found.
ON THE BASIS OF ECONOMICS
Imperfect Market: A market is said to be imperfect when
• Products are similar but not identical.
• Prices are not uniform.
• There is lack of communication.
• There are restrictions on the movement of goods.
IV. ON THE BASIS OF
TRANSACTION
Spot Market: In such markets, goods are exchanged and the physical delivery of
goods takes place immediately.
Future Market: In such markets, contracts are made over the price for future delivery.
The dealing and settlement take place on different dates
V. ON THE BASIS OF
REGULATION
Regulated Market: These are types of markets which are organised, controlled and
regulated by statutory measures. Example: Stock Exchanges of Mumbai, Chennai,
Kolkata etc.
Unregulated Market: A market which is not regulated by statutory measures is called
unregulated market. This is a free market, where there is no control with regard to
price, quality, commission etc. Demand and supply determine the price of goods.
VI. ON THE BASIS OF TIME
Very Short Period Market: Markets which deal in perishable goods like, fruits, milk,
vegetables etc., are called as very short period market. There is no change in the
supply of goods. Price is determined on the basis of demand.
Short Period Market: In certain goods, supply is adjusted to meet the demand. The
demand is greater than supply. Such markets are known as Short Period Market.
Long Period Market: This type of market deals in durable goods, where the goods
and services are dealt for longer period usages
VII. ON THE BASIS OF
VOLUME OF BUSINESS
Wholesale Market:
In wholesale market goods are supplied in bulk quantity to dealers/ retailers. The
goods and services are not sold to customers directly.
Retail Market: In retail market the goods are purchased from producer or wholesales
and sold to customers in small quantities by retailers.
VIII. ON THE BASIS OF
IMPORTANCE
Primary Market: The Primary producers of farm sell their output or products through
this type of markets to wholesalers or consumers. Such markets can be found in
villages and mostly the products arrive from villages
Secondary Market: In this market, the semi-finished goods are marketed. Here
finished goods are not sold. The commodities arrive from other markets. The
dealings are commonly between wholesalers or between wholesalers and retailers.
Terminal Market: It is a central site that serves as an assembly and trading place for
commodities in a metropolitan area. For agricultural commodities, these are usually
at or near major transportation hubs
CONCEPT OF MARKETING
Philip Kotler explained the core concept of marketing in his book – “Marketing
Management”.
According to him, every human being has endless needs and demands. There are
many products which can satisfy human wants and demands. These wants and
demands can be fulfilled by the exchange of goods and services. Marketers try to
increase demand by making products more attractive, affordable and easily available.
A market is a place where goods and services are exchanged. Marketing means all
those activities that take place in relation to the market. Hence, marketing is a social
process by which individuals and groups obtain what they need and want through
exchanging products and values with others.
DEFINITION OF MARKETING?

According to American Marketing Association," 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."

According to Philip Kotler," Marketing is human activity directed at satisfying needs and wants through
exchange processes."
OR
A societal process by which individuals and groups obtain what they need and want through creating,
offering, and freely exchanging products and services of value with others.

According to William Stanton," Marketing is a total system of business activities designed to plan, price,
promote and distribute want satisfying products to target markets to achieve organizational objectives."
Marketing refers to any actions a company takes to attract an audience to the company's
product or services through high-quality messaging. Marketing aims to deliver
standalone value for prospects and consumers through content, with the long-term goal
of demonstrating product value, strengthening brand loyalty, and ultimately increasing
sales.
THE PURPOSE :
Marketing is the process of getting people interested in your company's product or
service. This happens through market research, analysis, and understanding your ideal
customer's interests. Marketing pertains to all aspects of a business, including product
development, distribution methods, sales, and advertising.
•Traditional Marketing
Traditional marketing has been around for decades and involves using various offline
methods to reach potential customers. These include print ads in newspapers,
magazines, and billboards, television and radio commercials, and direct mail campaigns.
Traditional marketing techniques tend to use a one-way communication model, meaning
the message is delivered to a broad audience, and there is little or no interaction between
the advertiser and the customer.
One of the advantages of traditional marketing techniques is that they are widely
recognized, and customers are familiar with them. However, they can be expensive, and
there is no guarantee that the message will reach the intended audience. Additionally,
traditional marketing techniques do not allow for targeted advertising, making it
challenging to track the return on investment (ROI).
Modern Marketing
Modern marketing, also known as digital marketing, emerged with the advent of the
internet and the rise of digital technology. It involves using digital channels to reach
potential customers, such as social media platforms, search engine optimization (SEO),
pay-per-click (PPC) advertising, email marketing, and content marketing. Modern
marketing techniques focus on a two-way communication model, enabling businesses to
interact with customers and tailor their advertising campaigns to specific audiences.
One of the advantages of modern marketing techniques is their flexibility and
adaptability. Unlike traditional marketing, which can be expensive and requires long
lead times, digital marketing campaigns can be launched quickly and can be easily
modified or adjusted. Additionally, modern marketing techniques allow businesses to
target specific audiences, which can increase the effectiveness of their campaigns and
improve the ROI.
NATURE OF MARKETING
(a) Marketing is customer oriented: Marketing begins and ends with the customer.
The job of marketing is not only to satisfy the consumer but even to delight him/her.
All the activities of an organization must be directed and focused towards the
consumer.
Organisations cannot ignore emerging technologies, materials, instruments and new
ways of organizing things but with consideration of consumers. Therefore, marketers
must allow their customers to dictate product specifications and standards regarding
quality. This job can only be performed if consumers’ needs are continuously
monitored.
(b) Marketing is the delivery of value: when a consumer derives satisfaction from
a particular product on the basis of the product’s overall capacity and performance is
known as the value in the consumer’s perception. Consumers today make a trade-off
between cost and benefit of the product and they consider the product’s value and
price before making a decision. At times they will have to give up a particular
product to obtain the other one since the first one involves a big cost. Thus, he will
choose the product that gives him more value per rupee.
According to De Rose, “Value is the satisfaction of customer requirements at the
lowest possible cost of acquisition, ownership, and use”. Thus, the organisations’
strategies must be aimed at delivering greater customer value than that of their
competitors.
C)Marketing is a network of relationships: The customer is at the centre stage and the focus
of all marketing activities. From the 1990s onwards the focus is not only to identify the needs
and deliver it to customers but is shifting towards relationship marketing. According to Philip
Kotler “Relationship marketing is the practice of building long-term satisfying relations with
key parties like customers, suppliers and distributors in order to retain their long-term
preference and business”. The marketers who are smart enough to maintain their relationships
by delivering high quality products in time, better services and fair prices in comparison with
their counterparts.

D) Marketing as a separate discipline: There used to be the days when marketing was
treated as a part of economics. But now it is recognised as a full-fledged separate discipline. It
is not the time when we just talk of sales and purchase or the quality of the product or the
monopoly. With the emergence of modern marketing concept, the issue of green marketing and
environmental protection have come up and regarding that various laws have been framed.
When we talk of knowing consumer behaviour, it leads us to an entirely new world of human
behaviour and for that matter, a marketer must possess the knowledge of psychology. Why a
particular product is preferred by a consumer and others decline it to use? The answer has in
the study of culture. Therefore, marketing has emerged as a separate discipline and got its
strength from related areas like law, psychology, anthropology, sociology and statistics etc.
E)Marketing is business: When it is said that marketing is business, the contention
is that all activities start from marketing i.e. through knowing consumer and end up
on the consumers i.e. knowing consumer dissonance. It means the entire business
revolves round the marketing. According to Peter F. Drecker, “Marketing is so basic
that it cannot be considered as a separate function. It is the whole business seen from
the point of view of its final result, that is, from the customer’s point of view.
Business success is not determined by the producer but by the customer”. So, bthe
usiness seeks customers because they are the business providers and ultimately
marketing is business.
FUNCTIONS AND SCOPE OF
MARKETING
The functions or scope of marketing in business can be categorized into three parts:
1.Research Functions

2.Exchange Functions

3.Physical Supply Functions

4.Facilitating Functions
1. Research Functions:
(i) Marketing Research:
This is a primary function of marketing. In developing world economy, we can not survive without
market research and analysis. In marketing research, we predict the buyer’s behavior, habits, taste,
preferences, other substitute products, different income groups in society, etc.
It provides much essential information about products in the market to the marketing manager. So, In
this way, marketing research helps in to take a decision for the pre-production stage of any product.

(ii) Product Planning and Development:

The growth of any marketing division depends upon the nature of the product demanded by the buyers.
The product must be so developed and designed that it meets the requirements of the buyers.

In this way, marketing research mainly focused on knowing the needs of customers and according to
these, we can ensure planning, growth, and development of the product.
2. Exchange Functions:
(i) Buying and Assembling:
Firstly, resources are purchased for production by the industrial businesses and finished goods are
purchased for resale by the commercial businesses. The essential role of marketing development is to
supply the necessary information regarding the preferences and needs of customers.

In the process of purchasing, it makes coordination between marketing officials and purchasing
officials to purchase the right resources at the right time in the right quantities.

(ii) Selling:
Selling is a kind of routine activity. It consists only the physical movement of goods and services. It
stresses upon maximization of profits through maximization of sales.
3. Physical Supply Functions:
(i) Standardization, Grading, and Branding:
In standardizing process, marketers establish a basic measure to which products must have to be
designed. Grading is the process of separating the goods according to established specifications to
determine the grades. When producers supply their goods by well-defined names is called branding.

(ii) Packaging and Labelling:

The packaging protects goods from unnecessary problems and also provides necessary information to
our buyers. Labeling is a part of the packaging. Through labelling, a manufacturer communicates grade,
brand, weight, and other things about the product.

(iii) Storage:
Storage helps to store the goods in an optimum quantity and also provide the full safety to our
manufactured goods.

(iv) Transportation:
Transportation helps our manufacturer to transfer their goods or material
4. Facilitating Functions:
(i) Financing:
Financing is a term by which the company can run our business because it provides the working structure to the company.
With the proper fund of finance, the company can easily purchase the raw materials and can pay the expenses.Various
commercial banks, industrial banks, co-operative institutions, consumer-credit co-operative centers, etc., provide financing
facilities for dispersion of working capital.

(ii) Salesmanship:
Without the art of salesmanship, we cannot sell any product sequentially. Through various techniques of salesmanship like
demonstrating, personal selling, sample distribution for measuring qualities of a product and taking feedback of customers,
a salesperson finds out what his buyers need and does his best to meet it.
(iii) Advertising:
Advertising is an important term of marketing. Through advertising, a seller communicates a message about the product
and promote its sale. A seller uses various modes of advertising like magazines, newspapers, hoardings, radio, television,
and so on.

(iv) Marketing Information:

Marketing managers require a lot of correct and accurate information. This information becomes the foundation of many
decisions in marketing.

Marketing information makes a seller know when to sell, at what price to sell, who are the opponents, etc. In the modern
business environment marketing information is the primary source for making business decisions in marketing.
SCOPE OF MARKETING
In recent years, the scope of marketing has increased to a greater extent. There are various areas where
the concept of marketing can be applied. Let us discuss some of these areas as follows:
• Products
• Services
• Events
• Experiences
• People
• Places
• Property
• Information
• Ideas
Products
Physical or tangible products constitute a major share in an economy’s production and marketing.
Organisations are involved in the production of billions of products under various categories, such
as food, automobiles, machinery, etc. These products need to be marketed to their target
consumers.
Services
Services are intangible offerings offered to consumers for consumption. It includes various
business verticals such as hotels, airlines, banking, healthcare, education, software programs,
consultants and many more. The service sector constitutes a major share of the economy.
With the advancement of economies, countries have shifted from production of goods to the
orientation of services. Marketing covers both the manufacturing and service sectors.
Events
Marketing covers events, like tradeshows, organisation’s anniversary, award shows, festivals,
health camps and other such events.
For example, if an organisation hosts global sports events, like Olympics or Commonwealth
Games, it would need marketing to get the audience and spectators.
Experiences
Much of marketing is around creating a memorable experience for customers. Marketers try to entertain
their customers by providing an in-depth experience with products/services. For example,
entertainment parks give customers a delightful experience of rides and games.
This type of marketing is called experiential marketing, which focuses on marketing strategies that
influence the purchasing decisions of customers.
People
Many a time, people also need to market themselves to gain publicity. This includes the likes of
artisans, musicians, politicians, sports personalities, bollywood celebrities, etc. These people market
themselves to show their talent to gain a brand image in society. This type of marketing is called
celebrity marketing.
Places
Geographical places such as cities, states, regions and historical places also need to market themselves
to attract tourism and trade. Many a time, the marketing or endorsement of these places is done by
well-known personalities or celebrities.
For example, the marketing of State of Gujarat is done by Shri Amitabh Bachchan.
Property
Real estate properties and financial assets also need to be marketed to their target consumers.
Marketing enhances the possession utility of these properties. With the rise in income level, people
have become interested in investing money in real estate, bonds and stocks. Marketing builds trust and
confidence among investors and plays a vital role in buying and selling of these properties.
Information
Marketing also encompasses the marketing of information-based products and services such as
educational institutions, encyclopaedias, non-fictional books, specialised magazines and newspapers.
Media revolution and rise in literacy level have also increased the need for marketing information. The
packaging of the product is a critical carrier of information about the product, from the marketer to the
consumer.
Ideas
Sometimes ideas also need to be marketed to the consumers. These ideas are intellectual thoughts that
can benefit customers. Ideas include concepts and philosophies on various issues.
For an organisation, an idea can be in the form of a blueprint of a business plan/project. In the social
context, an idea may aim at creating awareness about issues, such as AIDS or family planning.
 IMPORTANCE OF MARKETING
The importance or significance of marketing in business can be explained as under:
1. Helpful in Communication between Manufacturer and Customers:
Through marketing activities, a seller collects various information regarding customer taste and their
preferences and changes in customer behaviour from time to time.

On the other hand, marketing gives necessary information regarding product quality, place, price,
product quantity to buyers. In this way, buyers come to know about the new products.

2. Helpful in Profit Maximization:

Profit maximization is the main task of every business firm. Marketing makes easier to availability of
products are reduced cost at each level.

It creates demand for products through sales promotion and advertisement activities. All these efforts
create a maximum profit of the firm.

3. Helpful in Decision-Making:
In modern changing economy a seller collects information and takes accurate decisions regarding the
business. All over the marketing activities deeply concerned with are of decision-making. On the
basis of various information seller able to take the right decision.

4. Provides Employment:
Marketing activities require the services of various enterprises such as insurance, finance, production,
transportation, research, wholesaler, warehousing, advertising, and retailers. These services require a
large number of individuals and it provides employment to society.

5. Provides Standard of Living:

Marketing provides the best goods and services to the people in the society according to their needs
and expectations. Marketing generates, increases and maintains the demand for an existing product
and new product and improve the standard of living of the society.
IMPORTANCE OF MARKETING TO THE SOCIETY
1) Increase in Standard of Living
The prime objective of marketing is to provide goods and services to the customers to satisfy their needs. Paul
Mazur defined marketing as, “The delivery of standard of living to the society“
Marketing helps to identify the needs of the customers and take an initiative to provide quality goods at
cheaper prices. This will help to increase and maintain the standard of living of the customers.
In modern times, large-scale production of goods and services reduced its prices due to which even the poorer
sections of society can attain a reasonable level of living.
2) Provides Employment
Modern marketing is a total system that covers almost all functions of organization such as buying, selling,
financing, transport, warehousing, risk bearing, research, and development, etc.
To run this system there is a need of people. Thus, marketing gives job opportunities to people. In the modern
era of automation, lesser employments are available in the production function and the role of marketing has
widened. It gives more opportunities of employment in marketing.
Converse, Huegy, and Mitchell have rightly pointed out that “In order to have continuous production, there
must be continuous marketing, only then employment can be sustained and high level of business activity can
be continued“.
3) Decreases Distribution Costs
Marketing activities help to provide cheap goods and services to society. Effective
utilization of channel of distribution can help in reducing the cost prices of the products
and services.
Reduction of cost will help to increase the potential consumers for the products or
services. It also assures timely availability of the product.
4) Consumer Awareness
Marketing helps society by informing and educating consumers. The function of marketing
is to fulfill the needs of the consumers. Marketing helps consumers to know about new
products and services available in the market and its usefulness to the customer.
Marketing provides satisfaction to society by supplying relevant information, goods, and
services to the people of society according to their demands and taste. Marketing can also
include more practical information to assist in making a purchase, such as addresses,
phone numbers, product release dates, store hours, and Web addresses.
5) Increase in National Income
Every economy revolves around marketing, production, and finance to the industry. The scientifically
organized marketing activities help in the economic development of the country. Effective marketing of
products and services result into industrialization, more job, and makes the economy stronger and
stable. Marketing can bring about rapid development of the country by integration of agriculture and
industry.
6) Managing Consumer Expectations
Marketing research helps organizations to understand the needs of the consumers. It helps in
developing products that fulfill customers’ expectations. Customers’ reviews collected through
different sources can help the organizations to make necessary changes in the products.
Businesses use marketing to make consumers aware of major changes, such as mergers and transfers
in ownership that affect product offerings or seek to improve quality. Government regulations prevent
marketers from making false or misleading claims.
IMPORTANCE OF MARKETING TO THE CONSUMERS

1) Promotes Product Awareness:

Through different marketing activities, companies promote their products and services. This helps
consumers to know about different products and services available in the market. It helps the
consumer in making buying decisions.
It also creates awareness among the consumers about different brands and features of the product
available in the market. A consumer can compare product features, price, availability, and other
essentials because of marketing. Marketing helps to improve the quality of life of the consumer.
2) Provides Quality Products
There is increasing competition in the market. Consumers are getting easy access to information about
the products and services available in the market.
It creates moral pressure on businesses to provide quality goods to consumers. Supplying defective
products may create a negative image of the business which affects the consumer’s loyalty
3) Provides a Variety of Products
Marketing creates awareness among the consumers about the product. At the same time, it attracts consumers
to buy the same. With the customer population and preferences becoming wider, and the competitive options
becoming more available, market segmentation has become critical in any business or marketing plan.
In fact, businesses launch products keeping market segmentation in mind. A businessman needs to provide a
variety of goods to cater to the needs of the different market segments of the consumers. Variety may change
according to the price, size, and quality of the product.
4) Helps in Selection
A variety of products with different brands is available in the competitive markets. Marketing helps the
consumer choose the best products and services from the different options available.
5) Consumer Satisfaction
The first and foremost objective of any sound marketing policy is to satisfy the consumers with an assurance of
good quality products. When an offering meets the customer’s expectations, the customer is satisfied.
Marketing leads to consumer satisfaction through honest advertising, assurance of quality products, and
availability of innovative products. Thus, marketing takes every effort to satisfy the consumer.
6) Regular supply of goods
Through efficient distribution channel of marketing regular supply of goods is possible. It helps to maintain the
balance between demand and supply. It results into stable prices
EVOLUTION OF MARKETING
CONCEPTS AND
PHILOSOPHIES
Production Concept

Addressing marketing from this concept entails concentrating effort on increasing manufacturing
efficiency and guaranteeing the company’s goods and services everywhere possible via its distribution
system. Customers believe low prices and product availability are the main factors for them to perceive
goods and services as having higher value.

At this point, the demand for products typically outstripped the supply, and businesses had little trouble
finding consumers. As a result, they concentrated primarily on increasing production and distribution
efficiency.
Product Concept

The primary focus at this phase is on product quality. It implies that customer value is inextricably
connected to the availability of high-quality, high-performance goods. As a result, the marketing
function was to deliver goods that the firm thought was of the “best value” to the consumer.

This method focuses on product research and development, as well as continual change throughout
their life cycles, in order to keep potential consumers’ attention. Under the product concept,
management concentrates on developing high-quality goods that can be sold at a reasonable price while
paying low attention to what customers truly need and desire.
Selling Concept

Firms that use the selling concept believe that the organization’s success is a result of different strong
promotional methods intended at influencing consumers to choose the firm’s product or brand over
rivals’ products. As a result, no matter how wonderful a product is, consumers will not be able to
contemplate purchasing it if they are not made aware of it.

When examined closely, it is obvious that this strategy is not about achieving customer pleasure or
developing a positive and long-term connection with the client. It is about allowing the company to
earn as many sales as possible from the transactions. This is the main disadvantage of this concept.
Marketing Concept

A marketing concept is a business approach that focuses on producing goods that are designed to meet
the wants, needs, and expectations of customers, as well as product functionality and production
efficiency.

Logically, in order to satisfy target consumers, the firm must first determine their requirements and
desires and then build the marketing mix elements to suit those needs and desires more efficiently and
effectively than rivals.

Businesses research and analyze their market to understand their customers. Thereby gathering
information that will be handy in their marketing strategy.
Societal Marketing Concept

Much as the marketing idea appears to be beneficial to both customers and the firm, it falls short of
perfection if it fails to address social issues. The primary determinant of value in this marketing
strategy is sustainability.

This ideology is concerned not just with customer happiness, but also with consumer welfare or
societal welfare. Such social welfare speaks of a clean environment and a high quality of life.

As a result, a company producing a pack of cigarettes for consumers must provide not just the greatest
cigarettes but also pollution-free smokes; a car must be not only fuel-efficient but also less polluting.

As a result, it is not surprising that, in addition to providing products or services in the exact form that
customers will appreciate, using appropriate pricing, distribution, and promotion strategies, most
businesses now emphasize their level of environmental friendliness in order to attract customers.
Holistic Marketing

Holistic marketing is described as a marketing approach that examines the entire organization rather
than an interconnected entity, and in which all other corporate divisions collaborate to generate a
positive and cohesive business image in the eyes of customers.

Other marketing concepts such as production, product, selling, and marketing concept mingled and
found a new concept known as holistic marketing.

Holistic marketing connects the market around shared goals and visions, resulting in a strategy that is
inclusive, relationship-oriented, and socially responsible. Relationship marketing, integrated marketing,
internal marketing, and socially responsible marketing are all examples of this.
WHAT IS MARKETING MIX?

Marketing Mix is a set of marketing tool or tactics, used to promote a product or services in the market
and sell it. It is about positioning a product and deciding it to sell in the right place, at the right price
and right time. The product will then be sold, according to marketing and promotional strategy. The
components of the marketing mix consist of 4Ps Product, Price, Place, and Promotion. In the business
sector, the marketing managers plan a marketing strategy taking into consideration all the 4Ps.
However, nowadays, the marketing mix increasingly includes several other Ps for vital development.
PRODUCT IN MARKETING MIX:

A product is a commodity, produced or built to satisfy the need of an individual or a group. The product
can be intangible or tangible as it can be in the form of services or goods. It is important to do extensive
research before developing a product as it has a fluctuating life cycle, from the growth phase to the
maturity phase to the sales decline phase.

A product has a certain life cycle that includes the growth phase, the maturity phase, and the sales
decline phase. It is important for marketers to reinvent their products to stimulate more demand once it
reaches the sales decline phase. It should create an impact in the mind of the customers, which is
exclusive and different from the competitor’s product. There is an old saying stating for marketers,
“what can I do to offer a better product to this group of people than my competitors”. This strategy also
helps the company to build brand value.
PRICE IN MARKETING MIX:

Price is a very important component of the marketing mix definition. The price of the product is
basically the amount that a customer pays for to enjoy it. Price is the most critical element of a
marketing plan because it dictates a company’s survival and profit. Adjusting the price of the product,
even a little bit has a big impact on the entire marketing strategy as well as greatly affecting the sales
and demand of the product in the market. Things to keep on mind while determining the cost of the
product are, the competitor’s price, list price, customer location, discount, terms of sale, etc.,
Place in Marketing Mix:

Placement or distribution is a very important part of the marketing mix strategy. We should position
and distribute our product in a place that is easily accessible to potential buyers/customers.
Promotion in Marketing Mix:

It is a marketing communication process that helps the company to publicize the product and its
features to the public. It is the most expensive and essential components of the marketing mix, that
helps to grab the attention of the customers and influence them to buy the product. Most of the
marketers use promotion tactics to promote their product and reach out to the public or the target
audience. The promotion might include direct marketing, advertising, personal branding, sales
promotion, etc.
What is 7 P of Marketing:

The 7Ps model is a marketing model that modifies the 4Ps model. As Marketing mix 4P is becoming an
old trend, and nowadays, marketing business needs deep understanding of the rise in new technology
and concept. So, 3 more new P’s were added in the old 4Ps model to give a deep understanding of the
concept of the marketing mix.

People in Marketing Mix:

The company’s employees are important in marketing because they are the ones who deliver the
service to clients. It is important to hire and train the right people to deliver superior service to the
clients, whether they run a support desk, customer service, copywriters, programmers…etc. It is very
important to find people who genuinely believe in the products or services that the particular business
creates, as there is a huge chance of giving their best performance. Adding to it, the organisation should
accept the honest feedback from the employees about the business and should input their own thoughts
and passions which can scale and grow the business.
Process in Marketing Mix:

We should always make sure that the business process is well structured and verified regularly to avoid
mistakes and minimize costs. To maximise the profit, Its important to tighten up the enhancement
process.

Physical Evidence in Marketing Mix:

In the service industries, there should be physical evidence that the service was delivered. A concept of
this is branding. For example, when you think of “fast food”, you think of KFC. When you think of
sports, the names Nike and Adidas come to mind.
Marketing Mix Example:

This article will go through a marketing mix example of a popular cereals company. At first, the
company targeted older individuals who need to keep their diet under control, this product was
introduced. However, after intense research, they later discovered that even young people need to have
a healthy diet. So, this led to the development of a cereals product catered to young people. In
accordance with all the elements of the marketing mix strategy, the company identified the product,
priced it correctly, did tremendous promotions and availed it to the customers. This marketing mix
example belongs to Honeycomb, one of the most renowned companies in the cereal niche. Following
these rules clearly has managed to make the company untouchable by all the other competitors in the
market.
This makes Honeycomb, the giant we know and love today to eat as morning breakfas
 Marketing Mix Product

All products can be broadly classified into 3 main categories. These are :

1. Tangible products: These are items with an actual physical presence such as a car, an electronic
device, and an item of clothing or a consumer good.

2. Intangible products: These are items that have no physical presence but can be felt indirectly. An
insurance policy is an example of this. Online items such as software, applications or even music
and video files are also intangible products.

3. Services: Services are also intangible products but they are the result of an economic activity that
does not result in ownership. It is a process that creates benefits for customers. Services depend
highly on who is performing them and remain difficult to reproduce exactly.
Importance of Marketing Mix
The marketing mix is a remarkable tool for creating the right marketing
strategy and its implementation through effective tactics. The assessment of
the roles of your product, promotion, price, and place plays a vital part in
your overall marketing approach. Whereas the marketing mix strategy goes
hand in hand with positioning, targeting, and segmentation. And at last, all
the elements, included in the marketing mix and the extended marketing mix,
have an interaction with one another.
Factors affecting Marketing Mix

The marketing mix, also known as the 4Ps (Product, Price, Place, and Promotion), is a set of
controllable variables that a company uses to influence customers' purchasing decisions. Several
factors can affect the marketing mix, including:

Target Market: The characteristics and preferences of the target market influence how a company
designs its marketing mix. Factors such as demographics, psychographics, and consumer behavior
patterns can affect the product features, pricing strategy, distribution channels, and promotional
activities.

Competition: Competitors' strategies and actions can significantly impact the marketing mix.
Companies need to consider the pricing, product differentiation, promotional tactics, and distribution
channels used by their competitors to position their offerings effectively and stand out in the market.
External Environment: Factors in the external environment, such as economic conditions, technological advancements,
legal and regulatory frameworks, cultural and social trends, and political factors, can affect the marketing mix. For
example, economic downturns may require adjusting pricing strategies, while new technologies may influence product
features and promotional channels.

Internal Factors: Factors within the company, such as organizational goals, resources, capabilities, and constraints, can
impact the marketing mix. For instance, a company's financial resources may determine its pricing strategy, while its
production capacity may influence the product offerings and distribution channels.

Product Life Cycle: The stage of the product life cycle can affect the marketing mix. In the introduction stage, companies
may focus more on product development and promotion to create awareness. In the growth stage, pricing and
distribution strategies may be adjusted to accommodate increasing demand. The maturity and decline stages may
require pricing and promotional tactics to retain market share or revitalize sales.

Consumer Preferences and Needs: Understanding consumer preferences, needs, and buying behavior is crucial for
shaping the marketing mix. Companies need to align their products, pricing, distribution, and promotion with what
customers want and value.
Marketing Environment

Definition: Marketing Environment refers to the various factors that guide and influence a company’s
marketing practices with regard to product promotion. These factors are internal or external to the firm.
The company’s marketing team has to remain well-informed about the competitors’ marketing
activities. This is important to maintain success.
 Dynamic: We all know that nothing remains the same forever, and things change in the blink of an
eye. The environment in which the company operates changes over time. There can be changes in
trends, technology, laws, government policies and customer tastes.

 Relative: The marketing environment is relative in nature. Also, it is distinct for each organization.
You might have observed that there are some products that get good responses in a particular country
while they fail in another. Do you know why this happens? This is because there is a change in the
marketing environment.

 Uncertain: The market is unpredictable, and so does the marketing environment. Even when the
company closely and constantly keeps a watch on the market, it faces unexpected threats.

 Complex: Interaction among different forces operating in the marketing environment makes it
complex.
Types of Marketing Environment
The marketing environment can be broadly classified into internal and
external environments. Some of these factors are controllable, while some are
uncontrollable. Further, they require business operations to change
accordingly. The marketing environment is classified into internal and
external environment
Internal Environment
It is all about those marketing factors that take place within the firm. They affect the overall business operations. These factors include:
 Labour Union
These are a part of the organization. Further, they affect the marketing decision and its relationship with
the customers. These factors are under the control of the firm.
External Environment

It is concerned with everything that takes place outside the firm. The external environment of the firm
has two further divisions:

Micro Environment

It includes all factors closely associated with the operations and influences its functioning.These factors
are controllable to some extent.
Customers: Every business revolves around fulfilling the customer’s needs and wants. Thus, each marketing
strategy is customer oriented. It focuses on understanding the need of the customers and offering the best
product that fulfils their needs.

Employees: They are the lifeblood of a business. This is because they contribute significantly to its success.
They are the ones who can make or break the company. Thus, Training & Development is crucial to impart
marketing skills to an individual.

Suppliers: They are the party from whom the firm purchases material. Using the material, the firm produces
finished goods. Hence, they are very important for the organization. It is pertinent to identify the suppliers
existing in the market and choose the best that fulfils the firm’s requirements.

Channel partners: Retailers and distributors are important to the success of marketing operations. As they
are in touch with customers, they can give suggestions about customers’ demand for a product and its
services. Also, they are the ones who remain updated about the increase or decrease in sales.
Competitors: We all know that competition leads to success. Keeping a close watch on competitors enables a company to design its marketing strategy accordingly.

Shareholders: They are the owners of the company. Every firm has an objective of maximizing its shareholder’s wealth. Thus, marketing activities should be
undertaken keeping in mind the returns to shareholders.

Government: The Government departments make several policies, viz.

o Pricing policy
o Credit policy
o Education policy
o Housing policy, etc.
These policies do have an influence on marketing strategies. A company must keep track of these policies and make marketing programs accordingly. This is
important to be in line with the prevailing laws and regulations.

General public: The business has some social responsibility towards the society in which it is operating. Thus, all marketing activities should be designed to increase
society’s welfare as a whole.
Macro Environment

It includes all those factors that exist outside the organization. Hence, they can not be controlled.
These factors majorly include Social, Economic, Technological Forces, and Political and Legal
Influences. These are also called as PESTLE framework.
 Political and Legal Factors: With the change in political parties, several changes are seen in the market. They
can be in terms of trade, taxes, duties, codes and practices, market regulations, etc. So the firm has to follow
all these changes. Further, the violation of this could penalize its business operations.

 Economic Factors: Every business operates in the economy. Therefore, it is affected by the different phases it
is undergoing. In the case of a recession, the marketing practices should be different from what is followed
during the inflation period.

 Social Factors: Since a business operates in a society and so, it has some responsibility. It must follow
marketing practices that do not harm the sentiments of people. Also, companies must invest in the welfare of
the general people. They can do so by constructing public conveniences and parks, sponsoring education, etc.

 Technological Factors: Technology is everchanging. So, the firms have to keep themselves updated so
customers’ needs can be met more precisely. The company can also integrate state-of-the-art technology in the
production of goods. This will lead to a reduction in the cost.
What is Consumer Behaviour?
Consumer behavior is the study of consumers’ action during searching for, purchasing, using,
evaluating and disposing of products and services they expect will satisfy their need. It helps marketers
in understanding consumer decision-making process.
Consumer behaviour can be defined as “activities people undertake when obtaining, consuming, and
disposing of products and services” is provided and detailed.

 Obtaining “activities leading up to and including the purchase or receipt of a product”.

 Consuming “how, where, when, and under what circumstances consumers use products”.

 Disposing “how consumers get rid of products and packaging”.

Consumer Behaviour Definition
Consumer behavior is the process whereby individuals decide what, when, where, how and from whom to purchase goods and services.

Walters and Paul

Consumer behaviour as “The dynamic interaction of cognition, behaviour and environmental events by which human beings conduct
the exchange aspect of their lives.

American Marketing Association (AMA)

Consumer behaviour refers to the actions and decision processes of people who purchase goods and services for personal consumption.

Peter D. Bennett, ed. Dictionary of Marketing Terms, 2nd ed. 1995

Consumer behaviour refers to “the mental and emotional processes and the observable behaviour of consumers during searching for,
purchasing and post consumption of a product or service.

James F. Engel, Roger D. Blackwell and Paul W. Miniard, “Consumer Behaviour” (1990)
Consumer Behaviour Meaning
The “consumer” more generally refers to anyone engaging in any of the activities (evaluating, acquiring, using or disposing of goods
and services) used in the definition of consumer behaviour.
Consumer behaviour is a decision process and physical activity individuals engage in when evaluating, acquiring, using or disposing of
goods and services.
Classification of Consumer Buying Decision Behavior
Different consumers follow different steps in making their choice of products and services.

here is a substantial degree of variation in the choice processes depending upon two key factors, namely the level
of involvement and degree of the perceived difference between different alternatives in the market.
There are basically 4 types of buying decision behavior which is discussed below:

Dissonance Reducing Buying Behaviour

Complex Buying Behaviour

Variety Seeking Buying Behaviour

Habitual buying Behaviour

Dissonance Reducing Buying Behaviour
Customer involvement in the purchase activity is high and customers cannot find a substantial differentiation among the alternatives.

The consumer is highly involved and sees little difference among brand alternatives. The consumer is highly involved and sees little
difference among brand alternatives.

Complex Buying Behaviour

Consumer is highly involved but he finds a substantial difference among the available brands.

In this case, the buyer develops beliefs about the product or service, then he develops a set of attitude towards the product and finally,
he makes a deliberate choice. This is a case when products are expensive, bought infrequently, risky and highly self-expressive.

Variety Seeking Buying Behaviour

This kind of behaviour is shown in some situations where the consumer shows low involvement behaviour but there is a significant
brand difference.

Consumers show a high level of brand switching behaviour.

Habitual buying Behaviour

This kind of behaviour is shown in some situations where the consumer shows low involvement behaviour but there is no/few
significant brand difference.
Consumer Buying Process

Stage of Problem Recognition

The recognition of a need is likely to occur when a consumer is faced with a ‘problem’. A buying process starts when a consumer recognises
that there is a substantial discrepancy between his current state of satisfaction and expectations in a consumption situation.

Stage of Information Search

After need arousal, the behaviour of the consumer leads towards a collection of available information about various stimuli i.e. products and
services in this case from various sources (personal, public, commercial, experiential) for further processing and decision-making.

Stage of Alternative Evaluation

Once interest in a product(s) is aroused, a consumer enters the subsequent stage of evaluation of alternatives.

When evaluating potential alternatives, consumers tend to use two types of information:

a list of brands (or models) from which they plan to make their selection (the evoked set)

the criteria they will use to evaluate each brand (or model).

Cognitive evaluation: When the consumer uses objective choice criteria.

Affective evaluation: Using emotional reasons for evaluating the alternatives.
Stage of Purchase Decision
Finally, the consumer arrives at a purchase decision. Purchase decisions can be one of the three viz. no buying, buying later and buy now.

No buying takes the consumer to the problem recognition stage. A postponement of buying can be due to a lesser motivation or evolving
personal and economic situation. If positive attitudes are formed towards the decided alternative, the consumer will make a purchase.
 There are three more important considerations in taking the buying decision:

 Attitude of others such as wife, relatives and friends.

 Anticipated situational factors such as expected family income, expected total cost of the product and the expected benefits
from the product.

 Unanticipated situational factors, like accidents, illness etc.

Stage of Post Purchase Behaviour

Post-purchase behaviour refers to the behaviour of a consumer after his commitment to a product has been made.

So post-purchase behaviour leads to three situations, namely customer is satisfied; customer is delighted and the customer is
dissatisfied.

Cognitive dissonance: Buyer discomfort caused by postpurchase conflict.

Participant in Buying Process
Consumer behaviour is influenced not only by consumer personali- ties and motivations, but also by
the various participant in the buying process. Consumer decision making is an intricate process.

To understand how consumers actually take the decision to buy a product, it is important for
marketers to identify who makes and has input in the decision-making process. In a buying process
there are various participants involved, their roles are explained as follows:

 Initiator

 Influencer

 Gatekeeper

 Decider

 Buyer

 Users
Initiator
Initiator is the individual who determines that some need or want is not being fulfilled and hence initiates
a purchase. An initiator is a person who first identifies an existing problem or need that can be resolved by
making a purchase.

For example, in case of a family, a housewife can be the initiator. As housewife knows what is required in
the home.

Influencer
Influencer is a person who influences the buying decision, actual purchase or the use of product or
service. Influencer can be a technical expert, consultant or anyone who provides input for the buying
decision. For example, a salesperson might influence you to buy a product.

Gatekeeper
A gatekeeper is the one who Influences the processing of information. The gatekeeper may possess a
greater expertise in acquiring and evaluating the information.

For example, in a family a homemaker may be the gatekeeper who will disseminate information.
Decider
A decider may not have the formal authority to decide upon a purchase decision, but has
sufficient weight in the buying decision process of products or services. A decider is the
one who vets what to buy, how to buy, when to buy and from where to buy.

For example, in family generally it is the male head of the family who gives assent to buy.

Buyer
A buyer is the one who is involved in the physical activity of making a purchase and
conducts the final transaction or exchange. At the time of purchasing the buyer can
negotiate on the price.

For example, housewife may be the buyer who actually buys all the foodstuffs, rations and
toiletries of the family.

Users
They are the ones who are reaping the benefit of the product/service acquired. For instance,
the family members who use or consume a particular product or service.
FACTORS AFFECTING
CONSUMER BUYING
BEHAVIOUR
Factors Influencing Consumer Behaviour
The consumer decision process explains the internal process as well as individual behaviour for making
product or service decisions.

Cultural Factors

Social Factors

Personal Factors

Psychological Factors

Economic Factors
Factors Influencing Consumer Behaviour

Cultural Factors
Culture: The set of basic values, perceptions, wants, and behaviours learned by a member of society from
family and other important institutions.
Consumers live in a complex social and cultural environment. The types of products and services they buy
can be influenced by the overall cultural context in which they grow up to become individuals.

Below are some of the important cultural factors given:

 Culture

 Subculture

 Social Class
Social Factors
Social factors, in turn, reflect a constant and dynamic influx through which individuals learn different consumption
meanings. Below are some of the important social factors given:

 Family

 Reference Groups

 Roles and status

Personal Factors
A person’s consumption behaviour is shaped by his personal characteristics.
Below are some of the important personal Factors given:

 Age

 Income

 Personality

 Self-concept

 Occupation

 Lifestyle

 Gender
Psychological Factors
Psychological factors also influenced consumers. Internal psychological factors also direct the decision-
making process. These factors influence the reason or ‘why’ of buying.

Below are some of the important psychological factors given:

 Motivation

 Learning

 Attitudes and Beliefs

 Perception
Economic Factors
Economic factor also has a significant influence on buying decision of
consumer behavior.
Below are some of the important economic factors given:

 Personal and Family Income

 Income Expectations

 Consumer Credit

 Liquid Assets
IMPORTANCE OF CONSUMER BEHAVIOUR
It is important for marketers to study consumer behaviour. This helps marketers to investigate and understand the
way in which consumers behave.

Below are some of the importance of consumer behaviour is given below:

Identifying market opportunity
The study of consumer behaviour helps in identifying the unmet needs and wants of consumers. This demands
evaluating the prevailing trends in the marketplace, consumers’ lifestyles, income levels and emerging influences.

Selecting target market

A review of market opportunities often helps in identifying distinct consumer segments with very distinct wants
and need. Identifying these groups, learning how they behave and how they form purchase decisions enables the
marketer to design and market products /services particularly suited to consumers wants and needs.

For example, an FMCG company conducted a consumer behaviour study and found out that many existing and
potential shampoo users preferred buying low-priced sachets containing enough quantity for one or two washes
rather than big bottles of hair shampoo. Based on the research the company introduced shampoo sachets to gain
foothold in market.
Customer retention
Organisations lay emphasis on retaining customers than merely on customer acquisition. Customer
retention is the process of maintaining existing customers by catering to their needs and even
exceeding their expectations. Study of consumer behaviour helps to convert a casual customer into a
committed loyal customer.

Dynamic nature of market

Consumer behaviour lays emphasis on dynamic nature of the market. It helps the manager to be
dynamic and proactive in satisfying consumers ahead of its competitors. If the organisation is not
able to keep up with the current market trends it will find it arduous to survive in the industry.

Marketing-mix decisions
Once unsatisfied needs and wants are identified, the organisation has to evaluate the right mix of
product, price, distribution and promotion. In this context, consumer behaviour study is pivotal to
resolve many challenging questions.
Effective use of productive resources
The study of consumer behaviour assists the manager to make the organisational efforts consumer-
oriented. It ensures optimum utilisation of resources for achieving maximum efficiency.

Fulfil varied consumer preferences

With the onset of globalisation customers have wide range of alternatives in contrast to pre 1991 era.
So, in order to cater to diverse customer preferences, it is pertinent for marketers to study customer
behaviour.

For example, in the current scenario customers have various car manufacturers to choose from such as
Hyundai, Honda, Mercedes, BMW etc. Every automobile maker leverages a certain segment of
customers.

Address custom needs

Consumer opt for differentiated products that depict their special needs, personalities and lifestyles. The
study of consumer behaviour enables organisations to gratify the peculiar needs.

For example, when Onida 21 was first introduced, it was advertised on television ‘for the elite class’.
Likewise, Maggi introduced its tomato sauce with emphasis on “It’s different”.
UNIT 2 STP MODEL
UNIT 2:
Market Selection : Market Segmentation –concept ,importance and bases ;Target
market selection ;Positioning concept ,Importance and bases ;Product differentiation
vs. market segmentation .

Product :Meaning and importance ,Product classification ;Concept of product mix;

Branding, packaging and labelling ;After-sales services ;Product life-cycle;New
product development .
WHAT IS SEGMENTATION?

Segmentation refers to a process of bifurcating or dividing a large unit into various small
units which have more or less similar or related characteristics.

The aim of segmentation is to tailor marketing efforts to your ideal customer profile (ICP), i.e. the customers most
likely to buy your product or service.
For example, a customer at an organic food shop is likely to have some or all of these characteristics:
• Gender: Male or Female
• Age: 25-44
• Income: $100,000+
• Life stage: Home owner, no children
• Interests: Healthy eating, sustainability, sport
WHAT IS MARKET
SEGMENTATION ?
 Market segmentation is a marketing concept which divides the complete market set up into smaller subsets comprising
of consumers with a similar taste, demand and preference.
• Market segmentation involves dividing a large homogenous market of potential customers into clearly identifiable segments. Customers are
divided based on meeting certain criteria or having similar characteristics that lead to them having the same product needs. Segments are
made up of customers who will respond similarly to marketing strategies. They share common interests, needs, wants and demands.
• Most companies don’t have enough resources to target a mass market. Which is why they need to target the specific market segment that need
their product. They divide the market into similar and identifiable segments through market segmentation.

A market segment is a small unit within a large market comprising of like minded individuals.

 One market segment is totally distinct from the other segment.

 A market segment comprises of individuals who think on the same lines and have similar interests.

 The individuals from the same segment respond in a similar way to the fluctuations in the market.
WHY IS A MARKET SEGMENTATION
STRATEGY IMPORTANT?

The data collected using segmentation helps marketers personalize the campaigns. This also
helps you to utilize the time & resources efficiently. You can avoid offering products and
services that would never interest the audience. Thus saving brands from running unsuccessful
campaigns and wasting their resource.
It offers a suite of advantages and we have listed six important ones:
1.Creating appealing marketing campaigns.
2.Serving customers with personalized offerings.
3.Efficient use of time & resources.
4.Designing products that deliver value.
5.Better conversions.
6.Higher satisfaction and customer retention.
1. Create appealing marketing campaigns:
Segmenting target market can help you discover opportunities to create personalized
campaigns.
The data enables the firm to understand the needs, preferences, and reasons for
customer behavior. This way the firm can can build strategies that market towards
the need of different segments instead of a one-size-fits-all.
2. Serving customers with personalized offerings.
With a better understanding of your customers, you can focus on tailoring efforts
that satisfy a particular segment of customers. The firm can deliver the right
product/ service/ content to the right audience making their journey with you
smooth thus facilitating satisfaction.
3. Efficient use of time & resources:
Running 1 or 2 targeted campaigns is better than aiming at a broad population with
a one-size-fits-all campaign. Market segmentation helps you create effective
strategies that target the right segment and resonates with their needs. Thus saving
time and resources from offering products and services your customers don’t want.
4. Designing products that deliver value:
Having knowledge of each segment can help design better products. Your brand can
design a product that matches the demand and needs of each segment. Products
with high market potential can be personalized and targeted to cater to the specific
target market.
5. Better conversion:
Among all the other reasons better conversion is the top reason why market
segmentation is important among marketers.
With customers in specific segments, you can address their needs and deliver to their
expectations with a tailored approach. This is more likely to help improve the
conversion rate.
6. Higher satisfaction and customer retention:
Again segmentation is a good way to create a tailored experience and meet the
individual needs of the customers. This will help you build trust with your existing
customer and you will increase the loyalty base.
When you have a clear idea of what each customer segment needs can help you
devise a more informed action plan.
BASIS OF MARKET SEGMENTATION
Gender

The marketers divide the market into smaller segments based on gender. Both men and women have
different interests and preferences, and thus the need for segmentation.

Organizations need to have different marketing strategies for men which would obviously not work
in case of females.

A woman would not purchase a product meant for males and vice a versa.

The segmentation of the market as per the gender is important in many industries like cosmetics,
footwear, jewellery and apparel industries.
BASIS OF MARKET SEGMENTATION

Age Group

Division on the basis of age group of the target audience is also one of the ways of market
segmentation.

The products and marketing strategies for teenagers would obviously be different than kids.

Age group (0 - 10 years) - Toys, Nappies, Baby Food, Prams

Age Group (10 - 20 years) - Toys, Apparels, Books, School Bags
Age group (20 years and above) - Cosmetics, Anti-Ageing Products, Magazines, apparels and so
on
BASIS OF MARKET
SEGMENTATION
Income

Marketers divide the consumers into small segments as per their income. Individuals are classified into segments
according to their monthly earnings.

The three categories are:

High income Group

Mid Income Group
Low Income Group

Stores catering to the higher income group would have different range of products and strategies as compared to
stores which target the lower income group.

Pantaloon, Carrefour, Shopper’s stop target the high income group as compared to Vishal Retail, Reliance Retail or
Big bazaar who cater to the individuals belonging to the lower income segment.
BASIS OF MARKET
SEGMENTATION
Marital Status

Market segmentation can also be as per the marital status of the individuals. Travel agencies would
not have similar holiday packages for bachelors and married couples.

Occupation

Office goers would have different needs as compared to school/college students.

A beach house shirt or a funky T Shirt would have no takers in a Zodiac Store as it caters specifically
to the professionals.
WHAT TYPES OF MARKET SEGMENTS
CAN A COMPANY HAVE?

•Geographic – based on land, rural or

metropolitan area.
•Demographic – based on age, gender,
income, occupation, education, nationality.
•Psychographic – based on social status,
lifestyle-type, personality type.
•Behavioural – based on intensity of product
use, brand loyalty, user behaviours, price
sensitivity, technology adoption.
1.DEMOGRAPHIC SEGMENTATION:
THE WHO

This is the most common type of segmentation. A target audience is divided based on
qualities such as, age, gender, occupation, education, income and nationality.
Demographic segmentation is the easiest way to divide a market. Mixing
demographic segmentation with another type of market segmentation can help to
narrow your market down even further.
The information required for demographic segmentation is easy to gather and
doesn’t cost a company too much to obtain.
For example, a common product which is segmented based on demographics is body
wash. Generally, you’ll see body wash for women and body wash for men.
2. PSYCHOGRAPHIC SEGMENTATION:
THE WHY
Psychographic segmentation is the process of grouping people together based on
similar personal values, political opinions, aspirations and psychological
characteristics. It deals with characteristics that are related to mental and emotional
attributes.
For example, you can group customers according to their:
•Personality
•Hobbies
•Social status
•Opinions
•Life goals
•Values and beliefs
•Lifestyle
2. PSYCHOGRAPHIC
SEGMENTATION: THE WHY
Because these characteristics are subjective, psychographic is a harder segment to
identify – but it’s also the most valuable. The best places to gather data for
psychographic segmentation are through your audience analytic tools and social
media, but you should also use surveys, interviews and focus groups to strengthen
your customer understanding in this segment.
Through psychographic segmentation, you can get a deep insight into your
customers’ likes, dislikes, needs, wants and loves. You can then create marketing
campaigns that resonate with their psychographic profile.
3. GEOGRAPHIC SEGMENTATION:
THE WHERE

Geographic segmentation is the process of grouping customers based on where they

live and where they shop. People who live in the same city, state or zip code
typically have similar needs, mindsets and cultural preferences.
The real advantage of geographic segmentation is it provides an insight into what
your customers’ location says about a number of geo-specific variables, such as
their:
•Climate
•Culture
•Language
•Population density – (urban vs rural)
3. GEOGRAPHIC
SEGMENTATION:
THE WHERE
As with all market segmentation methods, we will need to analyze our data to
understand how each factor influences your customers’ shopping behavior. For
example, people living in colder climates are likely to be in the market for winter
clothing and home heating appliances.
One can also use geographic segmentation to solve practical problems. With
Yieldify, global fashion brand Nautica used geo-targeting to show different
customers when they could guarantee Christmas delivery. Customers in rural areas
had to order earlier than urban areas, so Nautica’s delivery countdown timers
adapted according to the customer’s location.
4. BEHAVIORAL SEGMENTATION:
THE HOW

Behavioral segmentation is the process of grouping customers based on common behaviors they
exhibit when they interact with your brand.
For this type of segmentation, you can group your audience based on their:
•Spending habits
•Purchasing habits
•Browsing habits
•Interactions with your brand
•Loyalty to your brand
•Product feedback
•For example, Spotify provides its users with curated daily mixes based on the types of genres and
artists they’ve listened to previously.
STEPS IN MARKET SEGMENTATION
Segmentation refers to the process of creating small segments within a broad market to select the
right target market for various brands. Market segmentation helps the marketers to devise and
implement relevant strategies to promote their products amongst the target market.

A market segment consists of individuals who have similar choices, interests and preferences. They
generally think on the same lines and are inclined towards similar products. Once the organizations decide
on their target market, they can easily formulate strategies and plans to make their brands popular amongst
the consumers.
 Steps in Market Segmentation

1. Identify the target market

The first and foremost step is to identify the target market. The marketers must be very clear about who all should be
included in a common segment. Make sure the individuals have something in common. A male and a female can’t be
included in one segment as they have different needs and expectations.

Burberry stocks separate merchandise for both men and women. The management is very clear on the target market and has
separate strategies for product promotion amongst both the segments.

A Garnier men’s deodorant would obviously not sell if the company uses a female model to create awareness.

Segmentation helps the organizations decide on the marketing strategies and promotional schemes.

Maruti Suzuki has adopted a focused approach and wisely created segments within a large market to promote their cars.

Lower Income Group - Maruti 800, Alto

Middle Income Group - Wagon R, Swift, Swift Dzire, Ritz
High Income Group - Maruti Suzuki Kizashi, Suzuki Grand Vitara

Suzuki Grand Vitara would obviously have no takers amongst the lower income group.

The target market for Rado, Omega or Tag Heuer is the premium segment as compared to Maxima or a Sonata watch.
2.IDENTIFY EXPECTATIONS OF
TARGET AUDIENCE

Once the target market is decided, it is essential to find out the needs of the target
audience. The product must meet the expectations of the individuals. The marketer
must interact with the target audience to know more about their interests and
demands.

Kellogg’s K special was launched specifically for the individuals who wanted to
cut down on their calorie intake.

Marketing professionals or individuals exposed to sun rays for a long duration need
something which would protect their skin from the harmful effects of sun rays.
Keeping this in mind, many organizations came with the concept of sunscreen
lotions and creams with a sun protection factor especially for men.
3.CREATE SUBGROUPS

The organizations should ensure their target market is well

defined. Create subgroups within groups for effective results.

Cosmetics for females now come in various categories.

o Creams and Lotions for girls between 20-25 years would
focus more on fairness.
o Creams and lotions for girls between 25 to 35 years promise
to reduce the signs of ageing.
4.REVIEW THE NEEDS OF THE TARGET
AUDIENCE

It is essential for the marketer to review the needs and

preferences of individuals belonging to each segment and sub-
segment. The consumers of a particular segment must respond
to similar fluctuations in the market and similar marketing
strategies.
5.NAME YOUR MARKET SEGMENT

Give an appropriate name to each segment. It makes

implementation of strategies easier.

A kids section can have various segments namely new born,

infants, toddlers and so on.
6. MARKETING STRATEGIES

Devise relevant strategies to promote brands amongst each

segment. Remember you can’t afford to have same strategies for
all the segments. Make sure there is a connect between the
product and the target audience. Advertisements promoting
female toiletries can’t afford to have a male model, else the
purpose gets nullified.

A model promoting a sunscreen lotion has to be shown roaming

or working in sun for the desired impact.
7.Review the behavior
Review the behavior of the target audience frequently. It is not
necessary individuals would have the same requirement
(demand) all through the year. Demands vary, perceptions
change and interests differ. A detailed study of the target
audience is essential.

8.Size of the Target Market

It is essential to know the target market size. Collect necessary

data for the same. It helps in sales planning and forecasting.
5 REQUIREMENTS FOR EFFECTIVE
SEGMENTATION

1.Measurable
The size and purchasing power profiles of your market should be measurable,
meaning there is quantifiable data available about it. A consumer’s profiles and data
provide marketing strategists with the necessary information on how to carry out
their campaigns.
It would be difficult to create advertisements for markets that have little to no data or
for audiences that can’t be measured. Always ask whether there is a market for the
kind of product or service that your business wants to produce then define how many
possible customers and consumers are in that market.
2. Accessible
Accessibility means that customers and consumers are easily reached at an affordable
cost. This helps determine how certain ads can reach different target markets and how to
make ads more profitable.
A good question to ask is whether it’s more practical to place ads online, on print, or out
of house. For example, gather data on the websites a specific target market usually visits
so you can place more advertisements on those websites instead.
3. Substantial
The market a brand should want to penetrate should be a substantial number. You
should clearly define a consumer’s profiles by gathering data on their age, gender,
job, socio-economic status, and purchasing power.
It doesn’t make sense to try and reach an unjustifiable number of people — you’re
just wasting resources. However, you also don’t want to market the brand to a group
too small that the business doesn’t become profitable.
4. Differentiable

When segmenting the market, you should make sure that different target markets
respond differently to different marketing strategies. If a business is only targeting
one segment, then this might not be as much of an issue.
But for example, if your target market is college students, then it’s essential to create
a marketing strategy that both freshman students and senior students react to in the
same positive way. This process ensures that you are creating strategies that are
more efficient and cost-effective.
5. Actionable
Lastly, your market segments need to be actionable, meaning that they have practical
value. A market segment should be able to respond to a certain marketing strategy or
program and have outcomes that are easily quantifiable.
As a business owner, it’s important to identify what kind of marketing strategies
work for a certain segment. Once those strategies have been identified, ask yourself
if the business is capable of carrying out that strategy.
LIMITATIONS OF MARKET
SEGMENTATION
1. Limited Production:
In each specific segment, customers are limited. So, it is not possible to produce
products in mass scale for every segment. Therefore, company cannot take
advantages of mass scale production; scale of economy is not possible. Product may
be costly and affect adversely to the sales.
2. Expensive Production:
Market segmentation is expensive in both production and marketing. In order to
satisfy different groups/segments of buyers, producers have to produce products of
various models, colors, sizes, etc., that result into more production costs. In the same
way, the producers are required to maintain large inventory for different styles,
colors, and sizes of products.
3.Expensive marketing: Market segmentation also results into expensive
marketing. Due to different groups of buyers, the marketer has to consider all the
segments in terms of needs, interests, habits, preferences and attitudes. Marketer has
to formulate and implement several marketing strategies for different segments.
4. Difficulty in Distribution:
Company needs to make the separate arrangement for each of the products demanded
by different classes of customers. Salesman’s recruitments, selection, training,
payments, and incentives are more difficult and costly. Company has to maintain
separate channels and services for satisfying varied customer groups.
5 Heavy Investment:
Market segmentation leads to heavy investment. In order to satisfy different needs and
wants of various groups, a company has to produce variety of product lines and product
items. For the purpose, the company requires to invest more on technology and other
inputs that may demand heavy investment.
6. Promotion Problems:
Market segmentation also creates promotional problems and multiplies
promotional difficulties. It is obvious that different segments are made on the
basis of distinguished characteristics of buyers. Each group differs in terms of
advertising media, appeal or message. In order to influence various segments of
buyers, the company is required to prepare a separate advertising programme or
strategy. Similarly, personal selling and sales promotional activities become more
complex. Company needs to spend more to take benefits of specialization.
7. Stock and Storage Problems:
To meet needs and wants of different consumer groups, the company must
maintain adequate stock of various products on a continuous basis. This creates
problem of stocks, storage, and working capital. Most limitations reflect the impact
of situation and inability of manager to segment the market purposively and
meaningfully. But, limitations cannot restrict segmentation philosophy and
practice. These limitations can be overcome by segmenting market carefully and
objectively.
TARGET MARKETING - MEANING, BASIS AND ITS NEED

It is not possible for a marketer to have similar strategies for product promotion amongst all individuals. Kids do
not get attracted towards products meant for adults and vice a versa. Every segment has a different need, interest
and perception. No two segments can have the same ideologies or require a similar product.

Target Marketing refers to a concept in marketing which helps the marketers to divide the market into
small units comprising of like minded people. Such segmentation helps the marketers to design specific
strategies and techniques to promote a product amongst its target market. A target market refers to a group of
individuals who are inclined towards similar products and respond to similar marketing techniques and
promotional schemes.

Kellogg’s K Special mainly targets individuals who want to cut down on their calorie intake. The target market
in such a case would be individuals who are obese. The strategies designed to promote K Special would not be
the same in case of any other brand say Complan or Boost which majorly cater to teenagers and kids to help
them in their overall development. The target market for Kellogg’s K Special would absolutely be different from
Boost or Complan.

Jordan, a college student went to a nearby retail store to purchase a shirt for himself. The retailer tried hard to sell
a nice formal shirt to him, but somehow could not convince Jordan. Jordan left the store sad and empty handed.
PRODUCT POSITIONING PROCESS –

The process of creating an image of a product in the minds of the consumers is called as
positioning. Positioning helps to create first impression of brands in the minds of target audience. In
simpler words positioning helps in creating a perception of a product or service amongst the
consumers.

Example-

The brand “Bisleri” stands for purity.

The brand “Ceat Tyre” stands for better grip.

 STEPS TO PRODUCT POSITIONING

Marketers with the positioning process try to create a unique identity of a product amongst the customers.

1. Know your target audience well

It is essential for the marketers to first identify the target audience and then understand their needs and preferences.
Every individual has varied interests, needs and preferences. No two individuals can think on the same lines.

Know what your customers expect out of you.

The products must fulfill the demands of the individuals.

2. Identify the product features

The marketers themselves must be well aware of the features and benefits of the products. It is rightly said you can’t
sell something unless and until you yourself are convinced of it.

A marketer selling Nokia phones should himself also use a Nokia handset for the customers to believe him.
3.Unique selling Propositions

Every product should have USPs; at least some features which are unique. The organizations must create USPs of their
brands and effectively communicate the same to the target audience.

The marketers must themselves know what best their product can do.

Find out how the products can be useful to the end-users ?

Why do people use “Anti Dandruff Shampoo?”

Anti Dandruff Shampoos are meant to get rid of dandruff. This is how the product is positioned in the minds of
the individuals.

Individuals purchase “Dabur Chyawanprash “to strengthen their body’s internal defense mechanism and fight
against germs, infections and stress. That’s the image of Dabur Chyawanprash in the minds of consumers.

USP of a Nokia Handset - Better battery backup.

USP of Horlicks Foodles - Healthy snack

Communicate the USPs to the target audience through effective ways of advertising. Use banners, slogans,
inserts and hoardings.
4.Know your competitors
o A marketer must be aware of the competitor’s offerings. Let the individuals know how your
product is better than the competitors?
o Never underestimate your competitors.
o Let the target audience know how your product is better than others.
o The marketers must always strive hard to have an edge over their competitors.

5.Ways to promote brands

o Choose the right theme for the advertisement.
o Use catchy taglines.
o The advertisement must not confuse people.
o The marketer must highlight the benefits of the products.
6.Maintain the position of the brand
o For an effective positioning it is essential for the marketers to continue to live up to the
expectations of the end - users.
o Never compromise on quality.
o Don’t drastically reduce the price of your products.
o A Mercedes car would not be the same if its price is reduced below a certain level.
o A Rado watch would lose its charm if its price is equal to a Sonata or a Maxima Watch.
IMPORTANCE OF POSITIONING
In marketing, the positioning concept is followed after the market segmentation where the market is
broken down and a target group for their product is identified using targeting strategy, which is
collectively known as STP marketing strategy. After selecting a niche market, it helps to create an
impression in the customers mind.
Companies create a positioning statement for their brand, product or service which helps customers
identify with the business.

Types of Positioning
TYPES OF POSITIONING

Positioning is broadly classified into three types:

1. Functional
This is used when the brand or products provide solutions to problems and provide benefits to customers. It
focuses on the function, benefit or utility that it gives to the customer.
2. Symbolic
This is useful for creating a brand image which helps create brand equity, a sense of social belongingness and ego-
identification. It is when a customer has an affection, social connection, ego identification etc. with the product.
3. Experiential
This creates sensory and cognitive simulation in the minds of the customer. It is one of the basis of the experiences
which a customer can relate to.
Companies use a positioning process, which is step-wise method to place the product or service in the right way in
the consumer's mind. If a company decides to change the way people perceive a brand, then they revamp the logo,
slogan etc. of that brand. This process is known as repositioning of the brand, which helps create a different image
of the brand.
 KEY FACTORS OF POSITIONING STRATEGY
Positioning is critical for any brand, product or service to ensure an impression is created on the mind of the consumer.
The main factors considered by a marketer for creating a strategy for a brand or product are:
1. Product Features
Positioning can be done on how the product looks, feels, appears etc. The main features of the products can be used to highlight
the value and create the positioning around it.
2. Utility & Benefits
It takes into account the value which a product gives and which needs are solved. It should show the clear benefit in terms of
dollar value or number
E.g. 50% savings in electricity expenses can be a clear benefit to a customer.
3. Use Categories
This defines how the product can be used. All the different use cases and scenarios can be used to create a compelling
positioning.
4. Occasion
The time, event or the occasion when the product can be used. Association with an event like New Year can lead to strong
positioning in the minds of customer.
5. Competitive Comparison
Positioning can be done when compared to a competitive offering. This is done by a lot of companies to use existing competitive
positioning and make it better using points of parity or points of differentiation to create a better positioning.
POINTS OF PARITY (POPS)
The positioning is done on the basis of mostly similar elements compared to a competitor.
Points of Difference (PODs)
In this case, there is a clear difference in the product offerings vis-à-vis the competitor.
The above product positioning graph for laptop, i-pod, netbook and kindle shows the benefits in terms of
different parameters. This method of understanding positioning is also known as perceptual mapping or
brand mapping.

Examples of Positioning
Positioning examples of products can be understood on the basis of various parameters, characteristics and
features of products & services. Some key examples are:
1. Aspirational: Nike (Just Do It).
2. Emotional: Coca Cola (Open Happiness).
3. Price-Based: Rolls Royce (Trusted to Deliver Excellence).
4. Problem Solution: Head & Shoulders shampoo (Dandruff free hair).
5. Benefits: Colgate (Prevents cavity and fresh breath).
DIFFERENCE BETWEEN PRODUCT DIFFERENTIATION AND MARKET
SEGMENTATION

Product differentiation and market segmentation are two important marketing strategies that businesses
use to reach and attract their target customers. While both strategies aim to increase sales and revenue,
there are significant differences between the two. In this article, we will discuss the difference between
product differentiation and market segmentation, and when each strategy is appropriate to use.
What is Product Differentiation
Product differentiation is a marketing strategy that involves creating a unique product or service that is
different from competitors. The goal of product differentiation is to make the product or service more
attractive to customers, which can increase sales and revenue. Product differentiation can be achieved
through various means, such as design, features, performance, quality, and branding.
TYPES OF PRODUCT DIFFERENTIATION

There are several types of product differentiation that businesses can use:

1. Quality differentiation: This type of differentiation is based on the quality of the product or service.
For example, a high-end clothing brand might differentiate itself from its competitors by using high-
quality materials and superior craftsmanship.

2. Design differentiation: This type of differentiation is based on the design of the product or service.
For example, a technology company might differentiate its products by creating a unique and
visually appealing design that stands out from competitors.

3. Features differentiation: This type of differentiation is based on the unique features and benefits of
the product or service. For example, a smartphone manufacturer might differentiate its product by
offering features such as a longer battery life, a larger screen, or a better camera.
4.Performance differentiation: This type of differentiation is based on the performance of the
product or service. For example, a car manufacturer might differentiate its product by offering a
more powerful engine or better fuel efficiency.

5.Price differentiation: This type of differentiation is based on the price of the product or service.
For example, a low-cost airline might differentiate itself by offering lower prices than its
competitors.

6.Brand differentiation: This type of differentiation is based on the reputation and brand image of
the product or service. For example, a luxury brand might differentiate itself by creating a strong
brand image associated with exclusivity and quality.
Overall, businesses can use a combination of these types of differentiation to create a unique
product or service that stands out from competitors and meets the needs of their target audience.
MAIN ADVANTAGE OF PRODUCT
DIFFERENTIATION

The main advantage of product differentiation is that it can help a business to stand out in a crowded
market and create a competitive advantage. By offering a unique product or service, a business can
attract customers who are looking for something different or better than what is currently available.
Product differentiation can also help to build brand loyalty, as customers are more likely to stick with a
brand that offers a unique and valuable product.

However, product differentiation can also be costly and time-consuming. Developing new features,
designs, or branding can require significant investment in research and development, production, and
marketing. Additionally, if a competitor is able to replicate or improve upon a differentiated product,
the competitive advantage may be lost.
IMPORTANCE OF PRODUCT
DIFFERENTIATION

Product differentiation is important for a number of reasons:

1. Competitive advantage: By differentiating their product from competitors, businesses can gain a competitive
advantage in the market. This can lead to increased market share and higher profits.

2. Increased customer loyalty: Differentiated products can create strong customer loyalty because they provide a
unique experience that customers value. This can lead to repeat business and positive word-of-mouth marketing.

3. Premium pricing: Unique products can often command a premium price because consumers are willing to pay
more for the added value they provide. This can increase profit margins for businesses.

4. Increased market share: Differentiation can help businesses attract new customers who are looking for unique
features and benefits that they can’t find with competitors. This can lead to increased market share and a larger
customer base.
CHARACTERISTICS OF A PRODUCT

Though product characteristics vary widely, a few basic ones are universal. A product is:

Intended for customers. This differentiates products from projects or anything else you may produce
for your own use or enjoyment. Products are typically created with the intent of being sold and
consumed by someone else — whether that is an individual consumer or a business.

Created to provide benefits to a market. Identifying a market need and meeting it can be challenging
— but at a base-level, a product should provide some sort of advantage to users.

Exchanged for value. The most typical value exchange is money — meaning, products have a price and
can be bought and sold. In some cases products will be offered in exchange for feedback, exposure, a
trade, or other forms of value.
TYPES OF PRODUCTS
Beyond physical, virtual, and hybrid, products can be classified in other ways. You can start by splitting
products among three major customer categories — consumer, business, and industry.
Consumer products

Consumer products, or business-to-consumer (B2C) products, are sold to end-users and intended for
personal use. The consumer product category is commonly broken down further by purchasing
behavior — as different characteristics can influence the way customers buy products. The table below
explains the four major consumer product types by purchasing behavior:
Purchasing behavior Description
Convenience Convenience products are purchased frequently and with
little planning or effort. They are widely available, easy to
obtain, and typically have a low price.
Example: Magazines, on-demand software and services
Shopping Shopping products are purchased less frequently than
convenience products and have a higher price. Buyers
compare attributes such as quality, style, and price before
making a purchasing decision.
Example: Clothing brands, airline tickets
Specialty Specialty or niche products have features that appeal to a
specific group of customers. This type of product requires
more targeted promotion to reach the right people.
Example: Vertical market software such as real-estate or
banking applications
Unsought Unsought products have little awareness or proactive demand
among customers. Because customers do not perceive an
immediate need for these products, the benefits must be
directly promoted to generate interest.
Example: Life insurance, reference books
BUSINESS PRODUCTS

Business products, or business-to-business (B2B) products, help other companies create their own
products or operate their business. Business products can also be referred to as horizontal market
products — present in multiple industries and supporting a wide range of business needs. Examples of
business products include raw materials, equipment, supplies, business services, and software.

Business software is a major sub-category of B2B products. Examples include accounting, customer
relationship management (CRM), human resource management, and product development software.
These applications can be further categorized by the size of the company that uses them (e.g.,
enterprise software).
INDUSTRY PRODUCTS

Industry products, or vertical market products, serve broad business sectors such as energy, healthcare,
financial services, or information technology. Rather than cater to a large variety of use cases, industry
products are tailored to meet the needs of a specific industry (e.g., a healthcare application for
managing patient data).
 Differences Product Differentiation Market Segmentation

Definition Product differentiation is a marketing Market segmentation, on the other hand,

strategy that involves creating a unique is a marketing strategy that involves
product or service that is different from dividing a larger market into smaller
competitors groups of consumers with similar needs,
wants, or characteristics.

Focus Product differentiation is more focused while market segmentation is more

on the product itself. focused on the customer.

Goal The goal of product differentiation is to The goal of market segmentation is to

create a competitive advantage by tailor marketing efforts to specific
offering a unique product or service customer segments.

Approach Product differentiation aims to create a Market segmentation aims to identify

unique selling proposition for a product the needs and preferences of specific
or service customer segments

Implementation Product differentiation involves creating Market segmentation involves dividing

a unique product or service through a larger market into smaller groups and
various means, such as design, features, developing marketing messages and
performance, quality, and branding products tailored to each segment.
 Suitability Product differentiation is more suited Market segmentation is more suited to
to businesses that have a unique businesses that have a larger and
product or service diverse customer base.
Cost Product differentiation can be costly and Market segmentation can also be complex
time-consuming, as it requires significant and time-consuming, as it requires
investment in research and development, significant research and data analysis.
production, and marketing.
Competitive Advantage Product differentiation can create a Market segmentation can create a
competitive advantage by offering a competitive advantage by tailoring
unique product or service, but this marketing efforts to specific customer
advantage can be lost if competitors are segments, which can lead to higher sales
able to replicate or improve upon the and customer loyalty.
differentiated product.
Customer Loyalty Product differentiation can help to build Market segmentation can also help to
brand loyalty, as customers are more increase customer loyalty, as customers
likely to stick with a brand that offers a are more likely to remain loyal to a brand
unique and valuable product. that understands and meets their needs.
Research and Data Analysis Product differentiation requires research Market segmentation requires even more
and data analysis to identify unique research and data analysis to identify and
features, designs, or branding. analyze different customer segments.
5.Reduced price sensitivity: When a product is highly differentiated, consumers may be less
price-sensitive because they are willing to pay more for the added value it provides. This can
make the product less susceptible to price wars and other price-based competition.
Overall, product differentiation is an important tool for businesses that want to stand out in a
crowded market and build strong relationships with their customers. By creating unique features
and benefits, businesses can gain a competitive advantage, increase customer loyalty, and attract
new customers who are looking for something special.
DIFFERENCES BETWEEN PRODUCT DIFFERENTIATION AND MARKET
SEGMENTATION

The main difference between product differentiation and market segmentation is that
product differentiation focuses on creating a unique product or service that is
different from competitors, while market segmentation focuses on dividing a larger
market into smaller groups of consumers with similar needs and preferences.

Product differentiation is more focused on the product itself, while market

segmentation is more focused on the customer. Product differentiation aims to create
a competitive advantage by offering a unique product, while market segmentation
aims to tailor marketing efforts to specific customer segments.

Product differentiation is more suited to businesses that have a unique product or

service, while market segmentation is more suited to businesses that have a larger
and diverse customer base.
TOP 10 DIFFERENCES BETWEEN PRODUCT DIFFERENTIATION
AND MARKET SEGMENTATION

Conclusion
In conclusion, product differentiation and market segmentation are two important marketing strategies
that businesses use to reach and attract their target customers. Product differentiation involves creating
a unique product or service that is different from competitors, while market segmentation involves
dividing a larger market into smaller groups of consumers with similar needs and preferences. While
both strategies aim to increase sales and revenue, they are fundamentally different in their approach and
goals. Understanding the differences between product differentiation and market segmentation can help
businesses to choose the most appropriate strategy for their specific needs and circumstances.
PRODUCT:MEANING AND DEFINITION

Philip Kotler defines a product as “anything that can be offered to market for attention, acquisition,
use or consumption that might satisfy a want or need. It includes physical objects, services, persons,
places, organisations and ideas.”

Product – Meaning and Definition

A product is often considered in a narrow sense as something tangible that can be described in terms
of physical attributes, such as shape, dimension, components, form, colour, and so on. This is
misconception that has been extended to international marketing as well, because many people
believe that only tangible products can be exported. But in broader sense, the concept of a product
(the total product concept) refers both to the tangible goods and intangible goods i.e. services that
accompany it.
IMPORTANCE OF PRODUCT
1.Element of marketing mix: The product is the most crucial element in the marketing mix. Other
elements like promotion, price, or the mix of places are influenced based on the product.
2.Initiates market planning: The product is the base and the centre of all marketing plans. Every
marketing activity, including advertising, sales promotion, and distribution, is determined by the product's
characteristics.
3.Competitive weapon: Product is an effective weapon for business owners to compete with market
competition. Businesses that can efficiently produce their products can provide superior quality and lower
prices that attract more customers.
4.Means of consumption and satisfaction: Product is the primary source of consumption and satisfaction
for customers. Customers purchase and consume various items to satisfy their many requirements.
5.Key to market success: The quality of the product is a critical factor in achieving success in the
marketplace. If a company can offer products that are in line with the needs of their customers, then the
product will be widely recognized. This will draw more customers and provide an opportunity for growth
for the business.
6.Essential from a social viewpoint: It is essential for society because it gives a lot of benefits to the
people who use it. It meets the needs of the society, enhances the standard of life for people and serves as a
job to a massive variety of people engaged in different processes that the item.