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Why Study Marketing ?
What really is a “business”?
• Is it about money ?
[including investing & managing money] • Is it Advertising & Marketing?
[including brand building & promotion ) • Is it Production?
[including design / materials management / conversion / manufacturing]
• Is it about people?
[including training & development]
BOTTLE OF SHAMPOO AV 3/10/2012 5 . 100 /.Case CASE STUDY OF A RS.
.Selling and Marketing Selling • Selling starts with seller & is preoccupied all the time with the needs of the seller • Emphasizes on saleable surplus available with the company • Seeks to convert products in to cash • Views business as – goods producing process • Selling views the customer as the last link in the business Marketing • Marketing starts with the buyer and focuses constantly on the needs of the buyer • Emphasizes on identification of market opportunity • Seeks to convert customer needs in to products • Views business as – a customer satisfying process • Marketing views the customer as the very purpose of business.
Evolution of Indian Retail Importance of Point of Purchase 2000’s Exclusive Brand Outlets Hyper / Super Markets Department Stores Super Malls 1990’s 1980’s 1960’s Khadi Stores Cooperatives Specific Stores Convenience Stores(Mom & Pop) Kiranas Weekly Markets Village Fairs Melas AV1 .
Winning at Point of Purchase .
& Tertiary 3/10/2012 Shrirang Altekar 9 . Secondary.Definitions ( contd ) : Shopper : Who influences the brand choice at the POP Consumer : The End User of the Product Buyer : Who finances the purchase of the Brand Customer : The level in the Trade Distribution Chain which is serviced directly by the Marketer – categorized into Primary.
Understanding The Importance of POP Activation Consumer Shopper There is a need to recognize the Shopper and Consumer as different entities Need to understand shopper behavior & category shopping insights .
Consumer to Shopper Facts 40 % of TV advertising goes WASTE 60 % of purchase decisions can be influenced at the POP Hence what is important for a brand is… Interaction with Shopper on the shelf & Interaction with Consumer on usage .
experience our brands.Building Brands Through Shoppers : The P & G – FMOT & SMOT Communication Shopping Usage • • • One of the last marketing mediums that consumers are willing to be marketed from An environment where they really want to touch. Arc WW. compare & contrast : does this brand meet my need ? The ‘moment of truth’ for consumers to exercise their belief in our brand message…if we are relevant 3/10/2012 Shrirang Altekar Source: Marketing Contact Audit Meta-Analysis. 2005 12 .
Consumers have already made their purchase decision and are using the products .Distinguishing Shoppers and Consumers Shopper Vs Consumer • • The ‘mindset’ of a shopper and a consumer are fundamentally different. it has been stated that 70% of all purchase decisions are made at the shelf – the point of purchase • • • 3/10/2012 Shrirang Altekar 13 . In Modern Trade.they want it to work or they won't buy again. Shoppers are in-store. Proctor & Gamble have described these states of mind as the first and second moments of truth. have a need or problem and are trying to navigate their way through a complex variety of different products to find a solution. – They are on a mission.
How are Marketers seeking to achieve the FMOT ? • Till some years back. Being there is not enough – being preferred by the shopper who will ultimately purchase you is what matters Winning at the point of purchase is equal to “being preferred” over a competitor • • • 3/10/2012 Shrirang Altekar 14 . the battle at the marketplace was about • Availability and • Distribution The battle has shifted from being merely about availability and distribution to winning within the retail environment.
basic visibility and media on air and in print Interest Generated by superior eye catching visibility.The AIDA(S) model: Awareness Generated by availability.How Shoppers Behave . presence on the shelf and point of sale materials Desire Generated by promotions and experiencing the brand (touching with either or all the five senses) Action When the shopper actually buys (prefers) the product / brand 3/10/2012 Shrirang Altekar 15 .
Marketers’ Strategy for the Customers Leveraging Brands for the customer Customer as a communication channel Shopping = brand experience 3/10/2012 Shrirang Altekar 16 .
Wanted to reinforce family values. not something to get excited about.Marketers’ Strategy for the Consumer – an example Wanted to find a way to create news and excitement in the laundry category. Shopper insights “Shopping for household staples like laundry detergent is just a part of daily life. Customer Objective Surf Excel Surf Excel stood for modern parenting “go ahead.” Sf Xl is the category leader and needed to drive excitement and news. but I tend to be focused on other things. I might try something new if it really caught my eye.” 3/10/2012 Shrirang Altekar 17 . get dirty.
3000 (CAGR is -3%) (Source:NRS’05) Consumer of tomorrow Youngest population profile High and Middle income population growing at a pace of over 10%* per annum over last decade (Source : NCAER) 3/10/2012 Shrirang Altekar 18 .MHI of >Rs.10.MHI less than Rs.The Changing Indian Consumer The Urban Consumer Getting exposed to international lifestyles Inclined to acquiring assets (Source: NCAER) The Top of the pyramid is growing at a faster rate 6% of the Indian HH .000 (CAGR 25% over ’00) 56% of HH have .
06 Prices) Source : NCAER 4% Global India 20% Seeking and Striving India 42% Aspiring India 34% Deprived India Shrirang Altekar 19 .Four Distinct Consumer Worlds in India – Learning from Nestle 3/10/2012 Income Per Capita •> INR 200000 •> INR 40000 •> INR 18000 •< INR 18000 Per Annum INR (2005.
class (Part of Seeking & Striving) to grow from less than 100 million to 250 -300 million by 2015 • Inclusive Economic Growth should sharply reduce Deprived India from 65% to approximately 34% in 2015 • A Young. large population – 540 million people below 25 Years (50% of India Population) 3/10/2012 Shrirang Altekar 20 .Global.Four Distinct Consumer Worlds in India • Most FMCG companies address . growing. Seeking & Aspiring India • Economic Progress Forecasts Middle .
Jam Target for Co. Officer/Supervisor in Organized sector/MNC/ mid level government Clerk.Indian Consumer Segmentation – Psychographic – (Nestle) Segment Global India Occupation HNI. High affordability Packaged Foods. Execs. Butter. Shop Owner. agri – labourers. small shop keepers/Shop floor Supervisor in small scale / unorganized sector/semi skilled Daily wage earners. Corp. Snacks etc Health Conscious. Owners of large businesses etc BPO Executive. Maggi Noodles Everyday. Half Maggi noodles Deprived India 17 % own a B & W TV Eclairs 3/10/2012 Shrirang Altekar 21 . construction workers Durables Food basket owned 100 % own a car Very health conscious. snacks. Nescafe Sunrise Seeking and Striving India 70% have a Two-Wheeler Aspiring India 47% have a Two-wheeler Health is a concern but cost prevails Packaged tea. Cost Cautious Health Drink. biscuits Cost is the only concern Unbranded products Munch. Nescafe.
Winning at POP Availability Visibility Attractive Display Change with changing times .
At Home 2. Pre-store 3.Appreciation of the Shopper-POP Levels of Engagement Buying Decision Process 1. In-store .
Consumer / Shopper Behavior & Buying Situations Monthly House-hold Purchases Impulsive Purchases Trial and variety seeking behavior Emergency Purchases Service Seekers Shopping as an experience .
Buying Occasions & Specific Channels Type of Outlet Consumer buying situations Groceries Monthly shopping by residents of the middle income groups upwards General Stores Trial and variety seeking behavior by middle income groups upwards is predominant. Purchases of floating population Chemists Impulse or variety seeking behavior is predominant Paan / Bidi Shops Emergency purchases of middle income group residents and trial purchases by lower income groups (80 % situations) .
Marketing Overview .
Northwestern University) or .The definition of Marketing used to be: “human activities directed at the satisfaction of needs and wants through exchange processes” (Kotler.
“Performance of business activities that direct the flow of goods and services from producer to consumer” (American Marketing Association) or .
Columbia University) why does it say customer and not consumer ? or . and communicating that conceptualization to the customer” (Howard.“the process of identifying customer needs. communicating the conceptualization to the appropriate laws of power in the organization. conceptualizing those needs in terms of an organization’s capacity to produce. conceptualizing the consequent output in terms of the customer needs earlier identified.
[Colorado State]) or . promoting. and pricing goods. distributing.Ferrell. services and ideas to facilitate satisfying exchange relationships with customers in a dynamic environment” (Pride [Texas A&M] .“the process of creating.
Is this enough? Is knowing what the customer wants enough when all of your competitors know it as well? Or is success based primarily on strategies and tactics? .
A better definition of marketing: Marketing is War! .
” (Karl von Clausewitz. which is also a conflict of human interests and activities.“War belongs to the province of business competition. On War) .
Not the satisfying of human needs and wants! .The true nature of marketing today involves the conflict between corporations.
What is the role of Marketing in a company? • Understand the customer and the target market • Understand the competition • Support the sales function • Create shareholder / stakeholder value • Determine what products a company can sell • Providing customer value • What else? .
Concepts Production Concept Product Concept Selling Concept Marketing Concept Societal Marketing Concept .
using a clearly defined set of actions! . what we can profitably sell.that we will offer to a given target audience.What do we mean when we use the term “Marketing Concept”? A view from the perspective .
t ) where v =( q.s ) .Define “Providing value to customers” • In terms of the Price/Value ratio • In terms of product features • In terms of product benefits V=f( c.v.
and Promotion directed at a particular target audience.What is the “Marketing Mix?” Marketing deals with Products. Together these elements form the Marketing Mix. . Place. Pricing.
Decisions Within the Four Elements of the Marketing Mix Product • Quality • Style • Options • Packaging • Features • Brand name • Guarantees/warranties • Services/spare parts Place • Numbers and types of middlemen • Locations/availability • Inventory levels • Transportation The target market Price • Discounts • Allowances • Credit terms • Payment period • Rental/lease • List price Promotion • Advertising • Personal selling • Sales promotion • Point-of-purchase materials • Publicity .
What is “relationship marketing?” Establishing a long-term relationship with a buyer that is mutually beneficial. Often the term “CRM” is used to describe this marketing process .
What leads to defeat in both War and Marketing? • Over-pessimism (Fear of Failure) • Over-optimism (Failure to Fear Failure) .
and cures of marketing failures . causes.We learn more from failures than success. Good Marketing professionals need to understand the nature.
Marketing Failures are never Single Point Most Common Marketing Errors • Failure to keep products/services up-to-date • Failure to estimate market potential accurately • Failure to gauge the trend of the market • Failure to appreciate regional differences in market potential and in trend of market • Failure to appreciate seasonal differences in your customers’ demand .
Most Common Marketing Errors • Failure to establish the advertising budget based on the job to be done • Failure to adhere to policies established in connection with long-range goals • Failure to test-market new ideas ( Innovation ! ) • Failure to differentiate between long-term strategies and short-term tactics • Failure to admit defeat .
Most Common Marketing Errors • Failure to try new ideas while a brand is climbing • Failure to integrate all phases of the marketing operation into the over-all program • Failure to appraise objectively your competitors’ brands • Failure to get the facts and interpret them correctly .
Based on perceived benefits provided.Differences Between Production-Oriented and MarketOriented Business activity or function Product offering Production orientation Marketing orientation Company sells what it can make. Based on production and distribution costs. Narrow. Market research. Broad. primary focus on functional performance and cost. . primary focus on customers’ needs and market opportunities. Product line Pricing Research Technical research. focus on identifying new opportunities and applying new technology to satisfy customer needs. Company makes what it can sell. focus on product improvement and cost cutting in the production process.
quality. a promotional tool. Emphasis on product features. Credit A necessary evil. minimize bad debt losses. a tool to attract customers. Designed for customer convenience. A customer service. Promotion . and price.Differences Between Production-Oriented and MarketOriented Business activity or Function Packaging Production orientation Marketing orientation Protection for the product. Emphasis on product benefits and ability to satisfy customers’ needs or solve problems. minimize costs.
Non Sequitur by Wiley Miller .
Goals and Objectives What’s the difference between a Goal and a Strategy? Goals are commitments. Inflexible. unwavering. Strategies can be changed. rigid. focused. modified or eliminated based on market conditions .
What does strategy mean? A fundamental pattern of present and planned objectives. resource deployments. and interactions of an organization with markets.Strategy Companies often talk about their strategies. . and other environmental factors. competitors.
Components of Strategy • Scope • Goals and objectives • Resource deployments • Identification of sustainable competitive advantage • Synergy .
Corporate Growth Strategies
Current products New products
Corporate Growth Strategies
Current products Market penetration strategies • Increase market share • Increase product usage • Increase frequency of use • Increase quantity used • New applications New products Product development strategies • Product improvements • Product-line extensions • New products for same market
Market development strategies • Expand markets for existing products • Geographic expansion • Target new segments
Diversification strategies • Vertical integration Forward/backward integration • Diversification into related businesses (concentric diversification) • Diversification into unrelated businesses (conglomerate diversification)
Contents of a Marketing Plan
Executive summary • Current situation (SWOT) and trends • Performance review (for an existing good or service only) • Key issues • Objectives • Marketing strategy • Action plans • Projected profit-and-loss statement • Controls • Contingency plans
. Opportunities. Weaknesses. and Threats.Strategic Planning What is a SWOT Analysis? An assessment of the company’s Strengths.
Strong IT base. e –data. MNYL etc Setting up research cell for creation of knowledge. Faculty attrition. L & T. Loss of key staff may happen due to shift to Lavale . ITC.schools positively State of the art technology in new campus will enable new teaching methodologies Strong Indian brand. leading to loss in teaching time. ( being remedied now ) Long term planning especially in HR and HR practices required.school collaborations with international partners or setting up of international campuses Sustaining internal capabilities. and corporate training programs Government interference in admissions process Rapid changes in IT may make current systems obsolete In case new campuses do not perform. Lower reach in East and comparatively as compared to North and West. high return to student stakeholders through excellent placements Overseas collaborations and tie. computer labs. corporate tie ups Moving to world class infrastructure Rich Library resources.SIBM – SWOT . Morale low due to compensation packages by other B. strong student loyalty to SIBM Strong support from Symbiosis Management. services. being rectified now.2007 strengths Strong visiting faculty base Physical location ( Pune ) Alumni base. now can be projected internationally Can target quality student input and corporate clients.schools Low top international collaborations ( being worked on ) Inadequate faculty training programs Threats Competition from other B-schools likely to increase for students. Extending campuses in Bangalore and Hyderabad opportunities Huge Market for corporate training Inability of competing B. academics. Pressure of 2 additional new campuses on brand equity Current infrastructure inadequate.schools to retain corporate clients Industry growth affecting B. wi-fi campus Multicultural student base. Quality experience in FMCG sector training can be leveraged for corporate clients New campuses will enable reaching out and accommodating new quality students Customized training programs for corporates Major opportunities available with existing clients : HUL. ideas being utilized by other B schools Other B. databases Strong Revenue generation through corporate training programs Strong brand equity. inability to attract top faculty on permanent basis. Society. involvement of corporates in education Reasonable fee structure. may affect brand value of SIBM Pune New technologies. especially in North & West India Strong innovation in teaching methodologies.ups. not just dissemination will improve quality of teaching as well as corporate education and training Enhanced brand equity for international tie -ups Weaknesses Low permanent faculty base. retention of existing faculty members.
Question Marks. Cash Cows. and Dogs? The four cells in the Boston Consulting Group growth share matrix .Marketing Jeopardy What are Stars.
Strategic Planning Product Portfolio Matrix High Stars Question Marks Market growth rate Cash Cows Dogs Low High Relative Market Share Low .
Environmental Analysis .
Key Macro Trends To Evaluate • Demographic environment • Socio .cultural environment • Economic environment • Political/legal environment • Technological environment • Legal Environment • Physical environment .
Shifts Occurring in Demographics Family Structure: Traditional is becoming less typical • Aging: Baby boomers dominate growth • Geographic Distribution: Increase in immigrants and migration of jobs and people to suburbs • Ethnic Composition: PoP strata becoming more diverse • What else? .
institutions Live to work Hero worship Expansionism Patriotism Unparalleled growth Industrial growth Receptivity to technology Self-fulfillment ethic Better quality of life Blurring of sex roles Individualized definition of success Alternative families Self-reliance Work to live Love of ideas Pluralism Less nationalistic Growing sense of limits Information/service growth Technology orientation .Shifting Values in Our Society Traditional values New values Self-denial ethic Higher standard of living Traditional sex roles Accepted definition of success Traditional family life Faith in industry.
Economic Environment • GDP gap has increased between rich and poor countries • World’s economic growth continues to increase ( though rate may vary ) • Developing countries are expected to have higher growth rates than developed countries .
Political/Legal Environment Potential Political Problems Confiscation • Expropriation • Domestication • Changes in exchange control • Local content laws • Import restrictions • Taxes • Price controls • .
Potential Technological Problems • Development of Fiber-optic Cables • Storage devices developed to handle the increasing volume of data • Use of flexible low-cost wireless transmission • Development of low-cost multimedia chip • Advances in biology • Progress in agriculture .
Physical Environment Depletion of valuable resources • Deserts growing • Forests shrinking • Lakes dying • Quality and quantity of groundwater declining • Rise in temperature • .
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