MBA204 Final Book
MBA204 Final Book
MBA204 Final Book
Chavan
Maharashtra
kmZJJm KamoKar Open University
MARKETING MANAGEMENT
NATIONALADVISORY BOARD
Production
Shri. Anand Yadav
Manager, Print Production Centre Y. C. M. Open University, Nashik- 422 222
The information contained in this book has been obtained by authors from sources believed to be reliable and are correct to
the best of their knowledge. However, the publisher and its authors shall in no event be liable for any errors, omissions or
damage arising out of use of this information and specially disclaim any implied warranties or merchantability or fitness for
any particular use.
Introduction to
UNIT 1 INTRODUCTION TO Marketing Management
MARKETING MANAGEMENT
NOTES
Structure
1.0 Introduction
1.1 Unit Objectives
1.2 Marketing Management
1.3 Marketing is Commitment
1.4 Definition of Marketing
1.5 Marketing Planning and Process
1.6 Association of Needs and Offerings
1.7 Selling and Marketing
1.8 A complete Scenario through a Marketers Imagination
1.9 Consumer Behaviour and Buying Decision Process
1.10 Marketing Mix
1.11 Marketing Research
1.12 Customer Relationship Management
1.13 Sales
1.14 Production to production of technology to production of other goods
1.15 Marketing Mix with a comprehensive perspective
1.16 Holisitic Marketing Dimensions
1.17 Marketing Environment
1.18 Summary
1.19 Key Terms
1.20 Question & Exercises
1.21 Further Reading and References
1.0 Introduction
A true marketer at the onset acknowledges all the human beings as part of a
market and then looks at products and services as a spectrum of offerings analyzing a
foreseen customers desire for those offerings on the basis of value criterion the cus-
tomer possesses relatively matching his value proposition with same on the basis of
value criterion he possesses. Finally its a matter of values which derive value out of a
market transaction.
This unit is the most important unit and gives a wide view of perspective and
definition of marketing management. Readers must read this slowly building up a
spectrum in their minds. Marketing Management : 1
Introduction to This unit focuses on bringing all the elements of marketing together and then
Marketing Management unfolding it in the subsequent units.
Few examples are taken in a story form which also will keep unfolding during the
course and will be discussed all through to sustain continuity and build up the case.
NOTES
MBA109
Introduction to Women were enrolled as groups under this scheme and trained to become small
Marketing Management entrepreneurs. By virtue of their training they used to produce several things like:
achaars (pickles), murabbas, chickan saris, carpets etc. amounting to the levels of more
than 300 items.
NOTES
Because of the fact that the training provided had customization associated, they
had different abilities, raw material chosen by them was their own choice, they had
different design and taste, orientation they were producing differentiated products. The
number of trained women was in thousands, so here in the situation where you had a
large cumulative produce without any uniformity and consistency. Therefore if you
imagine the complete marketing process and have to generate a marketing plan the
questions raised are
Check Your Progress What are you marketing?
Answer all the questions What are the segments of the market you are addressing?
raised at the time of How would you segment the market?
developing a marketing Which segment would you target and why?
plan with the help of your
How would you position these products?
experience before
proceeding for further What are the components of marketing mix which you foresee in this case?
reading. What would be the competition for these products?
How would you analyze future growth?
How would you imagine the life cycle of these products?
Are there other factors to be understood?
What about Buyers behaviour models which you wish to see and analyze viz a
viz the situation?
Do you have to understand the complete supply chain system for these products
and then steer it with marketing understanding?
How would you create, communicate, deliver and exchange value with the
customer as the definition requires?
And the answer to the previous question will generate the preceding questions in
its entirety will generate a flow to enable us in understanding marketing management.
1.4.1 Marketing is a Committed reflex of Values
Also in the end we would realize that realizing this process and requirement of
the definition we would understand another definition would seem to have emerged
i.e.
Marketing is a committed reflex of values expressed through the transactions
to bring prosperity and sustainability to the human race.
Why would we realize these definitions subsequently is because of the reasons
that creating, communicating, delivering and exchanging value would require
Devotion
Marketing Management : 4 Dedication
Consistency Introduction to
Credibility Marketing Management
Integrity
Clarity NOTES
Learning
Team spirit
Leadership
All of which converges into commitment largely (can you identify a single
character around you with these traits)?
Whereas commitment gets reflected through an established value system propelling
values and deriving value which is the definitional objective to be achieved through
the entire marketing process.
So the preceding elaboration through a practical situation not only elaborates on
what marketing conceptually is but also puts forth various aspects associated with
marketing.
We have briefly gone through the definition of marketing span and scope of
marketing and especially value and commitment oriented perspective of marketing.
Further elaboration requires the following fundamentals associated with marketing
to be explicitly understood:
(a) Markets
(b) Basis of markets being termed as markets
(c) Roots of markets and marketing embedded in other subject areas
(d) What are the factors surrounding or encompassing a market and marketing
hence forth.
To initiate this discussion let me deliberate on few scenarios and structurally put
forth a discussion on marketing process.
Look around yourself. You find a combination of
Check Your Progress
(a) People How far do you agree with
(b) Things the definition?
(c) Places (Marketing is a
(d) Structures and committed reflex of
values) Can you put
(e) Actions and activities
necessary factors
For example we may start with recalling most of things since we may remember, associated with this
like do you recall when you were a little child and followed your mother around the definition so as to create a
house who had all the worries associated with household chores for example picture for your self to
(i) What to serve the family members and especially you which gives you proceed further?
nutrition
(ii) What kinds of clothes would you wear and for how long? Marketing Management : 5
Introduction to (iii) From where to procure those clothes and how to clean them?
Marketing Management (iv) All the goods in the house kitchen appliances, utensils some of which are
still there.
Marketing Management : 8 (c) Now as I had a large list of many products with me, I tried to categorize them
according to their class (You will get to learn the details of a Product Family Introduction to
in later Units) along with foreseeing customers who could be wanting a Marketing Management
particular product from a class or many product from many classes
(d) As even the similar products were being produced at highly dispersed
NOTES
locations and were having different quality, there was a question of
categorizing customers accordingly as well. Therefore,
(e) Before going ahead I conducted a customer survey or market survey as a
pact of a marketing research exercise ,wherein I interviewed customers of
similar products i.e. my potential customers as well as non-customers in an
unstructured as well as structured manner to understand their perspective
about a possible combination of 4Ps I may offer.
(f) This research enabled me to segment the market for my products. But as I
mentioned quality was highly disparate and production was also inconsistent.
I had to be very careful while targeting a segment so I targeted multiple
segments parallelly.
(g) But a major question is how to position such products.
The answer is primarily to position them with their generic context for
example you say you have an array of carpets. You must have visited a saree
shop with huge variety as they say.
(h) Subsequently a combination of 4Ps emerged which was again followed by
marketing research to keep on developing it and furthering it in right direction.
1.5.1 Process Across the Definition of Marketing
Now lets try to put the process I followed across the definitions of marketing.
As 2007 American Marketing Association definition says Marketing is the Check Your Progress
activity, set of institutions and processes for creating, communicating, delivering and Explain Marketing
exchanging offerings that have value for customers, clients, partners and society at Planning and Process
large.
(i) I tried to categorise the products as best as possible and because quality is
relative. Conceptually I tried to project and match my categorization with
the multiple targets I chose.
Also I tried to communicate with producers assuring upgradation and consistency
in products with perspective of quality and supply.
Further effort was made to simultaneously establishing and enhancing sales and Check Your Progress
distribution of the products along with efficiently structuring an Integrated Marketing Observe the definition of
Communication exercise including all the possible components of IMC such as: marketing and enumerate
Advertising the components of the
Sales promotion same
Public relations and publicity
Events and experiences
Direct and indirect marketing Marketing Management : 9
Introduction to Word of mouth marketing
Marketing Management Personal Selling
This communication mix also had considerations of cost which had to be absorbed
NOTES in the price itself.
(3) Effective distribution channels were further established and this we refer to as
channel management
(4) The objective as we tend to understand is generating value.
1.5.2 Value as a Key and Perceived Factor
Now lets focus on the concept of value as it is the objective of the whole process
and revisit another definition we discussed earlier which says Marketing is a committed
reflex of values expressed through the transactions to bring prosperity and sustainability
to human race.
Furthering this and associating it with our objective of deriving value we
understand that it is achieved when a reflex of values takes place. I will further expand
the concept of reflex of values in other sections as well.
But just to brief you here that if marketers understand the customer would
experience value in the offering by the marketers is because of the aspect that at some
stage values would be working and would match in the terms of value derived.
Further establishing the perspective of marketing planning and process lets refer
to few examples:
Gyanesh Pandey
Narayan Hrudayalaya
Himachal Tourism
Private Universities
Offerings
Check Your Progress
Bring in some live Structurally associating all the needs with offerings we get:
examples to establish the 1.6.1 Goods
defnition given and Offerings with physical Attributes generally termed as Goods which may range
justify those examples from food & clothes to books and vehicles to communication equipment etc.
with context to reference
of the definition.
1.6.2 Services
These do not hold physical attributes and are intangibly provided but hold value
and are felt with regards to the quality. Services can be standardized but have an intense
relationship with intensity and integrity of the provider for example a doctor may well
treat you but may not treat you well.
1.6.3 Experiences
Whenever you find yourself saying that it was an experience good or bad is relative.
For example the train journey in Rajasthan called Palace On Wheels where you feel
Marketing Management : 10 royal as treated and pass through historical places and scenic beauty overwhelm you.
Another example is, if someone visits Elephant Orphanage in Sri Lanka. You will Introduction to
find hundreds of wild tuskers passing through in front of you playful though disciplined Marketing Management
and all the humans would stand still as there is no other option. But the sight in
mesmerizing especially when the elephants bath and play in the sea.
NOTES
1.6.4 Events
India, recently hosted mega sporting event the Common Wealth Games formula1
racing event in National Capital Region. Can examinations such as competitive
examinations be termed as events?
1.6.5 Places
Check Your Progress
Recently you must have seen/viewed Gujarat being marketed through an Explain the concept of
advertisement showing Indian Cinemas megastar Amitabh Bacchan telling various Offerings in terms of
features of Gujarat as a tourism destination. Goods, Services,
1.6.6. Information and Ideas Experiences, Events,
Places, Information and
Price information, weather information, statistical information and ideas like
Ideas,
children teaching adults or ideas like making children ambidextrous in literal sense or
ideas like e-books are marketable and well be translated in value terms as well. Have
you heard of Chotu Kool the small refrigerator by Godrej & Boyce. This a product
based on an idea, which has immense marketability.
Properties, persons, organizations, courses and many things have value to offer
and may genuinely be termed as offerings and the most important part is that each
offering has an association with some human need at the core and does hold an alternative
sometimes substitutes also.
An important question? (Answer to be found in subsequent units).
Where do you keep congregations like Kumbh Mela as an offering is concerned?
NOTES
1.8 A Complete Scenario Through Marketers Imagination
This is an effort to consolidate the discussion we have gone through till now.
1.8.1 Offerings to needs or Needs to offerings
Marketers initiate by thinking of need and then matching it with an offering or
vice versa as they might have an offering at hand and they reach a need for that offerings.
For example as a teacher (a marketer) I have an offering in terms of my knowledge and
I may address the need of students (a customer) for gaining knowledge.
1.8.2 Marketing Research
Check Your Progress Why and how well the needs and the offerings would meet and should meet?
Marketing research is also done at various other stages.
Develop a complete
scenario of the process of 1.8.3 Production
Marketing through a Though not directly responsible for this activity but understands and foresees the
marketer's perspective associated factors because he makes commitments and has to fulfil those commitments
through expected production.
Further, his future planning and forecasting is also associated with this aspect
intensely. I would deliberate in further sections that a marketers plan for expanding or
reducing product line and width or largely product mix is quite intensely associated
with his understanding of production and production lines.
1.8.4 Segmenting targeting and positioning
Marketers do this exercise however complex the situation is i.e. even if a segment
includes large number of people from various demographics but marketers do find
some consistency in their behaviour or vice versa to justifiably meet the need and
offering match criterion. Then they target a particular segment and position the product
or products amongst targeted customers. For example it became imperative for me to
market the products I mentioned to multiple targets simultaneously but many products
because of being associated with a particular Socio economic class in a family situation
of lets say a family of four were targeted at them. (I will disclose the SEC and family
in the end of this section).
Now the questions related to Product, Price, Promotion and Place have to be
addressed by the marketer. For example which we are pursuing there are questions
related to quality, design, features, packaging warranties and returns (other components
being product variety, Brand name, sizes, services etc.) as far as Product the P is
concerned.
1.10.1 `P the Product
I revealed earlier that the main component of the marketing challenge I had with
those products was that Marketing Management : 13
Introduction to Being produced by groups of women having different business orientation, profit
Marketing Management and profitability concerns, different training background and scattered in a very large
geographical area. These differences percolated into major forms i.e.
(i) Inconsistent supply of finished goods
NOTES
(ii) Inconsistent quality
Check Your Progress (iii) Disparate quality in goods produced by different groups
1. Explain Marketing Mix (iv) Difficulty of monitoring the production
2. Explain with examples (v) No communication amongst groups
'P' the Product, Place,
But if you may look positively at this situation from a marketers side/perspective
Price and Promotion.
you would realize that
(a) You have a huge volume ( no. of goods at hand)
(b) Product variety is high
(c) Quality has a range to accommodate many targets (SEC in this case) if
you like
(d) Design has a strong association with the background of the producers and
has regional impression
(e) Features one can categorize and crystallize
(f) Packaging can be worked upon.
The questions those would remain to be addressed were warranties and returns
where one has to take a call that if things do not work as positioned?
1.10.2 P the Price
As you may have realized by now that once you have set the target, have been
working upon this targets consumer behaviour/behavioural aspects and have been willing
to position the products with the matching of values perspective you very well have a
price in front of you because:
(a) Costs are evident and clear
(b) You understand the offering and the value proposition of the offering
(c) You have an idea of values of producers and customers
(d) You understand how much a customer would wish to pay in the light of
(i) elasticities and in elasticities of demand associated with the products offered.
(ii) Competition direct, indirect and share of pocket based
(e) You also understand about how much the producer wishes to charge for
looking at his understanding and perception of all the above mentioned
aspects.
1.10.3 `P the Place
`Place is one of the most important marketing mix. Place strategy is important
and it incorporates the distribution through which company provides its product and
services. The customer should get products or service where they want and place too
Marketing Management : 14
affects all other tools of marketing. Introduction to
Marketing Management
1.10.4 P the promotion
Positioning though has component which are not only related to creating an image/
picture in the minds of the customers but also associated with how that picture gets NOTES
established and sustains itself as a promise, which may further be interpreted in terms
of branding. But the big questions are how to convey, what to convey and who would
convey so as the process of desired positioning gets initiated and promotion gets into
being.
Promotion which has components ranging from sale force, advertising sales
promotion, public relations and direct marketing and is executed through actionable
steps which compositively is termed as Integrated Marketing Communication.
But as we see that the first thing is what is to be communicated? And the answer
is value and the subsequent question is how one justifies this value and the answer is
through expressing and communicating values.
As suggested in earlier sections also that values and commitment go hand in hand
here it is imperative to understand the most important resultant of values based
commitment is HOPE which is expressed through proposal and scope for HOPE.
For example:
Zindagi ke saath bhi Zindagi ke baad bhi , you remember LIC being suggestive
of its commitment.
Dar ke aagey Jeet Hai Mountain Dew
Kit Kat Break Banta Hai Kit Kat (Nestle)
Khushion Wali Maggi Maggi
Now referring back to the case we have been taking along I started organizing
exhibitions and events as I revealed earlier and started projecting the products with
regards to their handmade and effortful value expressing uniqueness in every single
product even of the same category. You see here you have to train your sales force to
associate and attach uniqueness, history and story of process attached with almost
every product at hand except for very small products which are not price sensitive and
could be sold in batches.
For example, when you have carpet at hand you express all the nitigrities and you
have pickles you suggest purity and preparation and when you have woollen Jackets
you mention effort and when you have saris you mention beauty and regional aesthetics
and again if you are selling glassware from Firozabad you mention brightness of glass
and brightness of life- for example I bought a bell made of glass and its sound was
music to my ears. I Started telling it to many and this is how word of mouth (one of
the major components of Integrated Marketing communication) spread and the bell
became one of the fastest selling goods in that particular exhibition cum sale.
This is an inevitable and a very natural aspect which has to be addressed to
Marketing Management : 15
physically reach the customer. Where and How are the key words.
Introduction to For example have you heard of boat hospitals/clinics on Brahmaputra river
Marketing Management providing health services to the people in remote areas. You must have heard of boat
departmental stores in back waters of Kerala.
Marketing Management : 16 Now at every stage you have to ask questions as you have those in mind inevitably.
And to whom would you ask those questions? Off course your foreseen customer. Introduction to
This is Marketing Research. Marketing Management
How would you ask those questions? And analyze the data is the marketing research
process where you have to choose NOTES
(a) Research approach
(b) Research Design
(c) Sample Design
(d) Collection mode for Data
(e) Analysis tools
And so on.
Before initiating this you definitely look for any existing research i.e. secondary
data, because what you do is primary research.
1.13 Sales
Marketing Management : 24
Introduction to
1.15 Marketing Mix with a Comprehensive Perspective Marketing Management
Product Place
Product variety Channels
Quality Target market Coverage
Design Assortment
Features Locations
Brand name Inventory
Packaging Transport
Sizes Price Promotion
Services List price Sales promotion
Warranties Discounts Advertising
Returns Allowances Sales force
Payment period Public relations
Credit terms Direct marketing
NOTES with lot of industry interaction and delivered through visiting faculty.
In schools also virtual classrooms, contents delivery through lot of
practical aids based on student exposure has been becoming a prominent
feature.
(D) Brand Name: Structured flow of integrated elements of marketing mix, not
only Product quality design etc. but also price, promotion and place
develops(establishes) the brand name inevitably.
(E) Price Promotion and Place: Price if one would realize actually emerges on
the basis of cost component on the one hand and on the other hand Quality
and brand perception of the customer along with other elements like
competition and the economic concepts comprising of quantity demanded,
Check Your Progress elasticity, income, share of pocket allocations and the reasons allocated by a
Conceptually Explain with person (customer) to the purchase of a service or product. Here, promotion
examples Marketing Mix and place also play an important role by justifiably reaching out to the
with a comprehensive customer.
perspective
For example- there is an interesting simulation one of my management students
prepared on the basis of market perception of management education students. The
simulation specifically categorizes about the price preferences in combination with
other features and Marketing Mix Components, whereas, it is an input for the marketer
to support his marketing logic as well.
Marketing Management : 26
Introduction to
1.16 Holistic Marketing Dimensions Marketing Management
Internal Integrated
Marketing Marketing
Holistic
Marketing
Socially Relationship
Responsible Marketing
Marketing
Kotler Keller Koshi and Jha in their book Marketing Management, a South Asian
Perspective 13th Edition, have explained Holistic Marketing Concept. They say that,
Holistic marketing recognizes that everything matters in marketing and that a broad
integrated perspective is often necessary. Further, the authors have provided a schematic
overview of four broad components characterizing holistic marketing i.e.
(a) Relationship Marketing
(b) Integrated Marketing
(c) Internal Marketing and
(d) Socially Responsible Marketing
1.16.1 Relationship Marketing
This component suggests development of relationships with the key constituents
(organizations and people) associated with the success of a firms marketing activities,
hence building a strong marketing network.
Indeed, for example, the story of thousands of women producing Hundreds of
product categories we have been following since the beginning of this text if logically
seen and infused with this component we would realize that fundamental success of
ensuring a synchronized production, quality and distribution was a must in this case
Marketing Management : 27
and this was one of the steps we took. First of all, we started developing institution
Introduction to based relationship, subsequently converted into informal trust based relationships with
Marketing Management the local village heads, government officials (disbursing loans and channelizing sales
proceeds to the producers) and the producers themselves connecting them into a network
as much. Further, as I revealed earlier we started developing their interconnectivity
NOTES
along with bringing in relevant NGOs as channel partners first. Next step was, exhibitions
all around which brought in perspective customers and the network became composite.
But , the most important thing as the concept also puts it is that the relationship
development justifiably should suggest benefits to all and there we had to struggle
because of the reason that products produced were large in number of categories and
every category was produced in small quantities in pockets across where training the
producer on universal quality standards was costly. Another example is of management
educational institutions and you would realize that all of them bearing fruits of success
have strong emphasis of developing relations with industry, academia, and students (
alumni as well as prospects).
1.16.2 Integrated Marketing
This component is suggestive of integrating marketing programmes for creating
communicating and delivering value to the customers. This, the authors say should be
done by integrating activities of a marketing programme. Such activities seen as the
components of 4Ps of McCarthy should have a seem less relational logic.
For example when I teach the course of Rural Marketing I have to make sure that
the students look at their future in association with this course, they understand rurality
and rural marketing, they must find a radical difference between urban marketing and
rural marketing approaches on the hand and industry should also feel that rural marketers
may create difference.
For example recently we have also been designing special courses for students
who would belong to rural marketing approach, pricing the modules as such, specifically
promoting and positive those and delivering those in relevant settings.
1.16.3 Internal Marketing
If I say that every person in a school must like and love children, all the actions
and functions they are involved into must be directed towards the development growth
and betterment of the children, we all would feel that yes this is right but how to do it
is associated with how we think on a universal platform and all cohesive in not only
maintaining this thought but integrate all our functions to practically realize the same.
This you may interpret as internal marketing.
1.16.4 Performance Marketing
Check Your Progress Remember the definitions discussed in earlier sections especially the composite
Conceptually Explain with definition by American Marketing Association given in 2007, which is suggestive of
examples Holisitic marketing being responsible to the society at large. Therefore the description of
Marketing Dimensions performance marketing as given in Marketing Management, a south Asian perspective,
13th edition elaborates on the correlation of marketing and its actions on everything
i.e. every aspect it touches. It is suggestive of the marketing actions being answerable
Marketing Management : 28
to marketing environment not only in terms of financial accountability terms but also Introduction to
in terms of socio-environmental accountability. Here marketing calls for complete Marketing Management
transparency, hence to be further defined as
A transparent Commitment. NOTES
For example visit the website www.tata.com and you may find a history of
transparent commitment. Also visit- (Each case link Vinay Sharma).
-Please appreciate that Holistic marketing concept supports the integration of
value amongst all the participants of a marketing process and as discussed earlier as
well this can be seen with the perspective of integration of values all concerned with
a particular marketing process. Recently we have been conducting a research on
management education in India about management- its relevance, rise and direction
and the major aspect which emerged is that direct benefits of management education
could only be realized if and only the values of all concerned i.e. students, academia
and industry are integrated into a value system. Marketing Environment (in continuity
with examples discussed till now)
1.18 Summary
NOTES
1.20 Questions and Excercises
1. Discuss the concept of marketing. How is marketing orientation relevant to
business?
2. Several competing philosophies such as the Selling concept, Production concept
and Product concept exist. How are these different from one another? How are
these different from the marketing concept?
3. Define marketing management in present content
4. Distinguish between marketing and selling as the basis of
(a) Meaning
(b) Objective and
(c) Scope
5. Explain any six facilitating functions of Marketing.
6. What are the functions of marketing? Explain all with suitable examples.
7. Define and explain different principles and objectives of Marketing Management.
8. Define & explain the concept of marketing management in present content.
9. Distinguish between marketing and selling as the basis of Definition, meaning,
Objectives, Importance and Scope .
10. What are the Similarities and Differences between Selling and Marketing?
11. Marketing and selling are synonymous terms. Do you agree? Give reasons.
12. Marketing is something more than just selling. Do you agree? Justify.
13. Marketing mix is the instrument that can keep the organization successful, though
its product may rise & decline in their respective life cycles. Discuss quoting
examples.
14. What are the factors affecting on Marketing Mix.
15. What are the reasons for extended Marketing Mix for Services?
16. Explain Extended Ps of the marketing mix with suitable corporate examples.
17. Define labeling and Explain functions of labeling.
18. Design a Marketing Mix for following products. Justify your answer. (Make
Assumptions wherever necessary)
a) Portable MP3 player.
b) Branded wheat flour (Ata).
19. The important role played by 4Ps in a competitive environment. Discuss.
20. Explain how marketing mix should be changed during various stages of the PLC.
Marketing Management : 34
Introduction to
1.21 Further Reading and References Marketing Management
Marketing Management : 35
Developing Marketing
Strategies and Plans UNIT 2 DEVELOPING MARKETING
STRATEGIES AND PLANS
NOTES
Structure
2.0 Introduction
2.1 Unit Objectives
2.2 What does value implies literally?
2.2.1 Value offered has to justifiably match with the value perception of
customer
2.3 Value and Value Chain
2.3.1 Focus- Value Chain and Value
2.3.2 Enhancing Value throughout
2.4 Planning-Span, Scope and Attributes
2.4.1 Span
2.4.2 Scope
2.4.3 Attributes/ Components of a Marketing Plan
2.5 Summary
2.6 Key Terms
2.7 Questions & Exercises
2.8 Further Reading and References
2.0 Introduction
What does value implies literally - its origin and perspective
Value propositions are the derivatives of the values of the customers as well as
the producers because it is quite an understood fact that none of the educators would
even have tried to teach their students with utilities and text which is considered im-
moral. No doctor however calculative about his services would ever tell patients that
he would harm them i.e. if soft drink marketers say that they are quenching thirst
customer must have values associated with thirst being quenched through such prod-
ucts.
Language Publications
Gujarati 152
Telugu 123
Oriya 94
English 76
Bangla 89
Marathi 97
Tamil 60
Kannada 72
Assamiya 9
Malyalam 2
Nepali 2
Urdu 2
Punjabi 2
Another example is of a publisher called Geeta Press which publishes religious
books and has a vast distribution network coupled with a strong trust and reliability
Marketing Management : 40 level they have achieved due to the justice they have been doing through publishing
unbiased, honest and well researched scriptures with a very appropriate pricing. You Developing Marketing
see though the religious scriptures are fundamentally possessions but still the customer Strategies and Plans
expects a low and genuine pricing with a high quality printing and publishing which
this publication has been maintaining.
NOTES
The other day (during monsoon season), we were roaming in the fruits and the
vegetables market and I inevitably compared the pricing and proposition of two products Check Your Progress
i.e. one Dhaniya (coriander) which was being sold for Rupees 100 per kilo and people
Explain the following
were buying that with a very resentment (though it has a flavour and a decorative
statement, 'Value offered
value) on the other side Guavas were being sold for Rs 40 a kilo and people were
has to justifiably match
unhappy saying that how come Guava can be sold for such an exorbitant price though
with value perception of
we all know the nutritious value of a Guava and its vitamin C content and its contribution
customer'.
to our immune system.
)LUP,QVIUDVWUXFWXUH
^
$FWLYLWLHV
6XSSRUW
+XPDQ5HVRXUFH0DQDJHPHQW
0
DU
JLQ
7HFKQRORJ\'HYHORSPHQW
3URFXUHPHQW
(source and copyright) value chain model proposes for a business to be seen with
the logic of value and cost creating primary and support activities. One of the strengths
of this simple but effective approach is that it refers to value creation and costs
simultaneously, which enables us to understand the role of costs and value creation in
Marketing Management : 41
association with each other and also to visualize the extent of costs for maximizing
Developing Marketing value. For example- A very luxurious hospital and a clean and good hospital both are
Strategies and Plans having appropriate equipment and equally qualified team.
As can be seen from the figure, that the primary activities from inbound logistics
NOTES to Service are associated with execution and delivery and have a scope of directly
being addressed, while having an immediate effect on the business. Here action, control
and monitoring are the key words. Support activities are specialized in natural and
have a dual role of visualization and analysis on the one hand, and strategic role of
deciding the course of primary activities by augmenting their path from inception till
end. For example, lets look at primary education in India. One may appreciate the
structure, the delivery, the process, the result a decade back and now. Further, let us
discuss on a pertinent example of refrigeration manufactured and marketed by Godrej
for rural markets in India called chotukool. If one looks at the products, its inception
and reasons for inception, production, positioning and the complete marketing process
one realizes the relevance of Michael Porters Value Chain concept. Chotukool is
Check Your Progress conceived with two important aspects at the backdrop one customers need of having
Explain the concept of such a product and two constraints of electricity and price associated with such a product/
Value Chain with need. The complete design, technology, even colour chosen for this innovative product
reference to Value, is associated with provision of value through creating value throughout the value chain
especially highlighting the of this product. Please read about this product through other web sources and analyze
aspects of reliability and the information and details with the reference of the Value Chain figure.
trust.
2.3.1 Focus-Value Chain and Value
It is very important and pertinent to understand that there is a limitation to what
an organization can do effectively throughout the Value Chain. This limitation not
only is because of the technological or other constraints but also due to the orientation
of its human resource which can also be expressed in terms of focus of an organization.
For example, in case of even highly established organizations offering renowned
products like Fiat in India, you would find that they found difficulties in terms of
distribution, Marketing and Sales and Service despite of the fact that they had good
products, design and tried and tested technology. Therefore, they joined hand with
Tatas to sell their products.
The areas where an organization has limitations may bring in additional costs,
therefore, it is always desired and advisable for the organizations to focus on the areas
of their strength to take competitive advantage on the one hand and maximize the value
throughout the value chain so as to maximize the value in the end.
The focus area in due course may expand where in all along the process of value
provision the organization acquires competency in other areas as well and sometimes
may change its focus areas altogether. For example, Ghari detergent a famous detergent
in northern India established its competences in production and then acquired
competency in marketing and sales strongly focus on distribution and reaching out to
people while creating trust and releasing strong messages on the same, remember Pehely
istemal karein phir vishwas karein their tag line (first use it and then trust it).
Marketing Management : 42
2.3.2 Enhancing Value throughout Developing Marketing
Now look at the scenario comprehensively once again. Strategies and Plans
Values!value!value exchange
Values!value perception!value !value exchange NOTES
Values!value perception!value (throughout the value chain) !value exchange
Looking at this evolving process what we may comprehend here is that because
of the fact that values had a match or have to have a match in the initial most stages
when the producer or service provider has an offering the roots of value enhancement
are embedded in the strengthening of the values which would give the right impetus to
value perception and motive to enhance value throughout the chain facilitating value
exchange where in customer not only pays the price but also feels satisfied is loyal and
becomes the brand ambassador of the product for example ASICS. Visit their website,
learn about their process and one realizes the practicality of value exchange.
Another example is Lego toys and specifically the blocks they produce. Lego has
been named the toy of the century and one realizes that a company manufacturing
around 1.7 million bricks an hour has to have a strong assurance of almost automatic
sales so as to complement their completely automatic manufacturing and inventory
management.
Let me elaborate the concept of enhancing value throughout with the help of an
example. A builder/developer ( not specifically by profession) was doing something
else in life when in his mid-50s he realized that elderly people and couples who have to
retire and settle down alone because of their children working far away, must have a
society of their own wherein they feel physically, mentally and spiritually comfortable
and assured of help and care. He designed a colony wherein he designed comfortable
homes complimented by housekeeping, cooking and health maintenance, security,
spiritual experience, mental happiness, calm and tranquillity and provided emergency
bells, electronic gadgets and other equipment backed up by a strong human resource Check Your Progress
support system attending the residents at all times delicately and professionally. The Give examples to
residential area sold out immediately and he too integrates it with other residential elaborate upon aspects of
complexes now becoming a specialized builder and developer. Another futuristic Enhancement of Value
example can be production of devices reading books to you whenever you feel like throughout.
think about it and try and prepare a B-plan on this.
Kotler Keller Koshi and Jha, Marketing Management, 13th edition, Pearson
Publication
Therefore, we may observe that a marketing plan has two types of components:
(a) The components which are large and a plan has to synchronize itself in
consonance with these;
(b) The components which are executed in a marketing plan
Larger components requiring synchronization from the side of a marketing
plan are:
(a) Vision of the organization itself;
(b) Policy structure of the organization;
(c) Culture of the organization;
(d) Structure of the organization, wherein, though we must remember that the
structure follows strategy in general but marketing plan requires several
adjustments with reference to the organizational structure itself;
(e) Industry growth phase/stage;
(f) Organization own life cycle stage. For example, a relatively new organization
still has to gain larger trust of its stakeholders as in its suppliers and channel
partners.
(g) Organizational positioning. For example, organizations known for a particular
reason have to justify that reason and positioning in whatever they do.
(h) Product/ service own life cycle;
(i) Competition- direct, indirect, and share of pocket;
(j) Resources- financial, human, technical, etc.;
(k) Readiness of the organization to propel innovation. Innovation in process,
research and market.
The components which are executed in a marketing plan are:
(a) Clearly stated objectives which are explicit in terms of
i. What business we are into?
ii. Segmentation, targeting and positioning- why and how?
iii. All the attributes associated with product, price, place, promotion- what
and how? For example, if an organization decides to deliver a particu
Marketing Management : 45
lar model of a washing machine in a particular city then they must have
Developing Marketing all the reasons for it apart from the basic reason of customer being there,
Strategies and Plans i.e. would they be able to provide after sales service, for example.
Another is that if a marketer is marketing a refrigerator which requires
continuous electricity supply to hold cooling to a particular place where there
NOTES
are lot of power cuts then it definitely would harm them.
(b) External and internal environmental analysis- this is simultaneously done
and carried on throughout planning because it not only helps in developing
and augmenting objectives but also for finding opportunities weighing them
Check Your Progress
across strengths, weaknesses and threats throughout the value chain.
Explain the two types of
(c) Then comes in projections in terms of market share benchmarked on the
components of a
basis of market potential, financial projections and brand development
marketing plan.
projections.
(d) Finally, a system which may suggest the time for augmentation called as
monitoring and control mechanism. The backbone for this mechanism is
customer feedback which should be structured and intense.
2.5 Summary
Please revisit the stages of marketing plan and planning and the major components
which we have discussed i.e. the large components and the executed components. The
questions those primarily come to the mind are:
(a) What is that a company should understand? and
(b) What is that a company should know?
Trying and finding answers to these is that a company should understand:
(i) The factors associated with it at macro level. For example, where the economy
would head to? Would it be more service oriented or else?
(ii) What is the socio-political environment and policy structure indicating? For
example, yesterday i.e. 15th march 2013, I was watching discussion on 12th
five year plan at 5:00 p.m. and there are specific indicators pointing at the
growth and support from the side of government and education quality is one
of those which can be interpreted in a scope for building greater attraction of
trainers/ educators to join in the field on the one hand and on the other hand
greater impetus would be given on the training of the educators.
(iii) Then there are aspects associated with trade policy. For example, IKEA
furniture is about to enter into the country with a large business plan backed
up by the foreign investment policy structure which is attractive enough for
them. This indicates market growth on the one hand and on the other hand
and competition for companies like Godrej, who have long been doing well
in the furniture market.
(iv) A company must also understand the changes which socio-culture structure
Marketing Management : 46 of the market would be going through.
(v) The technological changes which may come especially in the longer run Developing Marketing
especially in context to the changes they may bring in the processes of Strategies and Plans
production and distribution and what they would be the integrated (cumulative)
effect of such changes. For example, if a company is into travel facilitation
NOTES
business i.e. travel agency kind of business it should have imagined that the
process of planning travel would become automated like SOTC, Thomas cook
and other large agencies imagined and either started integrating services and
rationalizing prizes or diversifying their portfolios.
Now, here comes in the need for a company to find out answer to the second
question and to enlist the things that they should know become this only would enable
actions. The things that a company should know are:
(a) Demography i.e. age, income and other indicators with respect to the flow and
growth of these indicators. For example, how the age of the country and specifically
the segment they have been foreseeing in morning. For example, a cycle
manufacturer like Hero Cycles always has an eye on these aspects so as to think
about the changes in the product offerings beforehand.
As the demographic data says that a large portion in India's population is young
below the age of 35 years and this says a lot.
But remember this aspect should be known beforehand so that appropriate
changes in STP and McCarthy's 4 Ps could be brought in the appropriate time.
(b) Concurrent flow of income with respect to inclination towards the spending. For
example, as we know income levels in India have been rising but there are associated
aspects.
(a) Income is supported more by the growth in service sector
(b) Urbanization as job seekers see larger opportunity in cities hence
(c) Spending on fast food, transport, rents along with mobile communication,
entertainment and so on.
(d) Further a larger tilt towards say gadgets like smartphones despite of the price.
This though has a backdrop in economic principles but as a marketer one has
to understand the socio-culture aspect behind it and know the number of those
would get associated with these kinds of purchases.
Marketing Management : 49
Capturing Customer Insights
UNIT 3 CAPTURING CUSTOMER
INSIGHTS
NOTES
Structure
3.0 Introduction
3.1 Unit Objectives
3.2 Marketing research, analysis and forecasting
3.2.1 What is that a company should understand?
3.2.2 How should companies get to know and learn?
3.3 Information gathering and analysis a synchronized approach
3.4 Marketing Research
3.4.1 Definition, relevance and process of marketing research
3.4.2 Marketing research process
3.4.3 Research planning (research approach and research in methodology)
3.4.4 Types of research design
3.4.5 Data collection
3.4.6 Sample size
3.4.7 Analysis
3.5 Forecasting
3.5.1 Demand Forecasting methods and Logic
3.6 Understanding Consumers and Customers to achieve their Satisfaction and Loyalty.
3.6.1 Factors influencing Consumer Behaviour
3.7 Decision on Buying
3.8 Summary
3.9 Key Terms
3.10 Question & Exercises
3.11 Further Reading and References
3.0 Introduction
What is that a company should understand? and
What is that a company should know?
Have you ever heard someone saying that what is your problem? and suddenly
you realize that yes there is some problem but the question remains what is that?
A marketing research process starts with clearly defining a problem and the
objectives of the research.
Broadly there are two approaches to marketing research or research for that matter
Marketing Management : 50
in management, marketing and social sciences. Those are qualitative and quantitative
research approaches. Capturing Customer Insights
The prime objective of this unit is to emphasize on the need and fundamentals
associated with the market research and forecasting because of the simple reason that
rational forecasting brings in profitability.
NOTES
The Times of India, New Delhi, Thursday, March 7, 2013, Page 10- under the
heading In Gujarat, KFC, Subway go vegetarian says and quotes a statement suggestive
of marketing strategy on the basis of marketing research of a multinational fast food
chain called Subway. It says, we carried out a survey in Gujarat and sent a proposal to
the US headquarters to open an all-veg outlet with a pure Jain counter in Ahmedabad.
We will now add more vegetarian items on the menu in Gujarat, which is the only state
that contributes 60% of the total sales from vegetarian food.
Notice the keywords in this quoted statement
(a) Survey
(b) 60 % of the total sales from vegetarian food
(c) A pure Jain counter
(d) Proposal
Assimilation the interpretation of these key words, and the statement we understand
the reasons, relevance and process of marketing research.
Reason : every organization wishes to move forward according to the vision,
mission, and objectives they have. But future has to be foreseen and unknown customer
along with his behaviour has to be visualized i.e. predicting and forecasting as precisely
as possible because of the reason of not only averting risk and losses but also maintaining
speedy growth in an era of fierce competition. Appropriately imagining the unknown
enables a company to prepare, plan and strategize, hence establishing the need of
marketing research as this is the only means of interpreting about how and why things
may turn up in a certain fashion so as to enable a company to think about what should
be done? For example, the action and strategy of subway developing all vegetarian and
Jain outlets in Gujarat is the result of their marketing research/ survey as they say.
3.4.1 Definition, Relevance and Process of Marketing Research
According to the October 2004 definition of marketing research by American
Marketing Association Marketing research is the function that links the consumer,
customer and public to the marketer through information- information used to identify
and define marketing opportunities and problems; generate refine and evaluate marketing
actions; monitoring marketing performance; and improve understanding of marketing
Marketing Management : 54 as a process. Marketing research specifies the information required to address these
issues, designs the method for collection process, analyses the results, and communicates Capturing Customer Insights
the findings and their implications.
The definition above emphasizes on
(a) Marketing research being a function that links the consumer, customer and NOTES
public to the marketer through information.
(b) It further describes/ qualifies the said information which can be / or is used to
identify and define marketing opportunities and problems.
(c) Information that may be used to generate refine and evaluate marketing
actions,
(d) Information which is used to monitor marketing performance and improve
understanding of marketing as a process.
(e) Further, as a process marketing research
(i) Specifies the information required
(ii) Designs the method for collecting information
(iii)Manages and implements the data collection process
(iv) Analyses the results and
(v) Communicates the findings and their implications.
Points (a) and (b) as you may appreciate are the objectives of marketing research.
Points (c) and (d) describe the relevance of the marketing research and point (e)
Through points (i) to (v) defines marketing research as a process.
Keywords from the definition those emerge are:
Consumer, customer, public, information, marketing, opportunities and problems,
marketing actions, performance.
Task : Just reiterate and remember what we discussed while understanding value
chain and providing value to the customer. Now go back to the porters value chain
diagram/ figure and try and look at it with the perspective of role of marketing research
at every step of value chain whether the support activities or the primary activities and
one realizes that marketing research starts at the stage of conceiving the market goes
along while segmenting it plays a prominent role in targeting, positioning and all through
the Ps of marketing along with assuring value based linkage between the components
of value chain as discussed while re-emphasizing its role at every stage of a products
life cycle, because of the reason that whenever you have problems, questions have to be
answered and those only would be answered by the consumers/ customers/ people.
Answers to the questions bring solutions and that enables achievement of the objectives.
Did you read somewhere that in 2012-2013 Nokia did not do well in comparison
to its competitors Blackberry despite of its steady growth in past lost many of its
customers in 2012-2013?
Hero motors for example has been facing reduced growth along with other
manufacturers like Bajaj and TVA as per SIAM (Society for Indian Automobile
Manufacturers) since April 2012, while Honda in two wheelers segment has seen a
Marketing Management : 55
growth of 33%.
Capturing Customer Insights 3.4.2 Marketing Research Process
Have you ever heard someone saying that what is your problem? and suddenly
you realize that yes there is some problem but the question remains what is that?
NOTES A marketing research process starts with clearly defining a problem and the
objectives of the research. For example, generally speaking reducing sales in an indicator
or reducing market share may be an indicator as in the previous example of SIAM
report about 2 wheeler manufacturers but what are the reason for this is the research
problem or problem statement. Why those reasons have to be found would constitute
the objectives of the research?
For example, while finding the reasons of reducing sales we came across fuel
price as a reason then solution may be more fuel efficient cars which not only would
address the reducing sales but also address the objective of research if company wishes
to generate new marketing actions in the coming years.
3.4.3 Research Planning (Research Approach and Research in
Methodology)
Broadly there are two approaches to marketing research or research for that matter
in management, marketing and social sciences. Those are qualitative and quantitative
research approaches. As the name suggest in crispy quantitative terms, where data is
collected in such a manner that the output nos. have a strong scope of statistical analysis
hence bringing out numbers to be interpreted. Qualitative research is radical and
unstructured at large. Here approach to the data is with the backdrop of finding answers
to the radical questions or even for establishing answers themselves i.e. defining
problems.
There are several methodologies associated with both the approaches which have
been used to satisfy the needs. Methodologies are actually the sets of procedures chosen
for conducting research and are constituted for
a. Choosing data sources
b. Extracting data
c. Assimilating data and
d. Analysing and interpreting the analysis
Here while defining a methodology under the chosen research approach one should
define a research design to be chosen which subsequently is associated with logically
integrated sets of steps [here it is imperative to suggest that though any of the research
approaches may effectively be used in consonance with a logically viable research in
design but depending upon the research objectives and identified problem(s) many times
there is a natural fit between an approach and a design.
3.4.4 Types of Research Design
There are three types of research design at large
(a) Exploratory research design
Marketing Management : 56 This design is associated with situations where a problem is not defined
or a problem is identified and as we understand no problem no solution. Capturing Customer Insights
(b) Descriptive research design
This design has a peculiar association with a defined problem and need
for understanding or observing or analysing phenomenon is there. NOTES
c. Causal research design
This design is associated with generation of a cause and monitoring of the
effect i.e. generating a phenomenon to be understood along with its effects.
3.4.5 Data Collection
It is almost natural to research for existing data which is termed as secondary data
and has been gathered or exists because of some or the other reason. Secondary data
helps in creating a boundary or frame of further research wherein the depth and span of
primary data (data to be collected with specific research objective) gets established.
Primary data is collected through
(a) Observation- by observing phenomenon, people and process
(b) Interviews- structured or unstructured
(c) Focus group discussions or brainstorming
(d) Surveys
Research /data collection instruments:
(a) Questions asked through questionnaires or otherwise
(b) Devices- mechanical, electronic or other scientific devices. For example
cameras in shopping malls support observation method of data collection to
support observation method of data collection to analyse behaviour f customers.
3.4.6 Sampling Size : (unit, size and procedure)
The most important now comes is about the composition of the sample i.e.
who are those people, lets say their demographic attributes. For example,
education scenario of the country requires to be understood with the perspective
of educators as well as the educated.
Then comes in the aspect of the number of people. How many? There are
several statistical techniques suggestive of an appropriate size, but it depends
on two important aspects also,
a. The fundamental research objectives and problem
b. The procedure followed by the researcher i.e. a researchers discretion
is important.
Now comes in sampling procedure where in depending upon above two points
and the research design one may think of probability to be involved or to
work with judgement and convenience i.e. non probability then if probability
is to be involved; should there be stratification or clusterization within the
sampling unit chosen?
These questions suggest two major types of sampling procedures: Marketing Management : 57
Capturing Customer Insights (a) Probability sample where there are:
(i) Simple random sample- every member of the population has an equal
chance of solution.
Then when we weigh this hypothesis to be dealt specifically with a research process
we feel that if it is a problem then is it a problem even at the levels of best of the
institutions because relatively they also are struggling with quality level and output.
Next we feel no faculty may be a problem but the major problem is segmentation,
targeting and positioning of MBA student but then the question arises that is process not
doing any justice to improve the quality of students. The situation keeps becoming
complex because identification of problem is itself a problem here.
Then in such a scenario a researcher inevitably starts talking to people
associated with the management education. Here, it is important to understand
that this can be done through quantitative procedures as well but then opinions
and radical questions require discussions and if you wish to learn it with an
historical perspective then you have to talk to people who have been with
MBA and management education all through hence justifying a qualitative
research approach, which is targeted towards problem identification hence
associated with an exploratory research design which inevitably requires non-
probabilistic sampling and judgemental in this case because you just cannot
randomize it as judgement and randomization do not go hand in hand.
Further say the problem that emerges is that management education is not
seen with the perspective of a knowledge earning mode and strong academic Marketing Management : 59
Capturing Customer Insights orientation.
Then emerges definite hypothesis. But remember we have to keep monitoring
the objectives of the research deducted at the initiation which were understood
NOTES as say the relevance of management education and MBA programme.
Once the hypothesis comes in we have a population in mind and sampling
technique and data collection instruments may be chosen along with the
Check Your Progress
analysis tools.
Explain the definition,
But remember interpretation is always required which a researcher does in
relevance and the process
the light of everything that has been learned and understood in due course.
of Marketing Research
with examples. As you have seen since the emergence of hypothesis the research design that
comes to fore in descriptive research design accompanied with probability
sampling precisely stratified random sample in the case where in you talk to/
ask questions to students, faculty, industry representatives, owners, education
leaders or random.
If one experiments with answering the emerged problem through a cause and
effect relationship and focus on education delivery and then monitor the
response in due course of time it is causal research design i.e. you organize
an institution as an experiment with controlled factors of education
delivery, develop students and then let them work with industry for a period
and then again interpret the data collected from them and the industry about
the effect.
3.5 Forecasting
Forecasting have an intense broad look at the discussion we have had about
marketing research till new and the key words those merge as the resultant are:
a. direction and
b. target and objectives
Both of these things are associated with marketing research enabled Forecasting.
The reasons are understandably obvious that no organization wishes to feel blind or
over confident in moving ahead and commit mistakes which averse the customers on
the one hand and on the other hand gives a natural advantage to the competitors. Further,
if specifically crafted marketing plan supported by meticulous marketing research is
executed profitably tends to be high and in the end it is profitability which propels an
organization through justifying every aspect if a value chain.
3.5.1 Demand Forecasting Methods and Logic
Whenever a company analyses its segment, competition and customer come
together in the picture. Customer comes to fore in the form of characteristics based on
demographic profile, behavioural profile and psychographic profile whereas the
competition may be thought of in terms of direct, indirect and even share of pocket
Marketing Management : 60 (depending upon the factors a company chooses to acknowledge the competition) for
example mobile phones may have competition with motorbikes if they focusing on young, Capturing Customer Insights
middle income based, undergraduates. Further this picture when has to be sharpened
marketing research as a tool is used which gives a four faceted outlook suggestive of:
a. industry potential
NOTES
b. industry stage
c. company potential
d. company profile
i.e. where does the particular industry actually stands and what potential it has. For
example, fast food industry which has a range of fast food vendors selling samosa and
jalebi and burger or rolls at the two ends and where McDonalds stand and what does is
the potential that it holds. Do they have to focus on getting market share from within the
industry or they getting market share from within the industry or they can grow with the
growth of the industry.
Let me elaborate on this
For example people associated with McDonalds target segment are growing in
number then their thought process in terms of 4Ps and positioning would be different.
But if they have to attract consumers / users of other products and the market is not
growing steadily then they have to offer Rs.20 burger to attract customers. In both the
cases potential and stage analysis with number outcomes must be done.
Forecasting Methods: logically speaking if one analyses about the positive means
of forecasting demand on the basis of four parameters those should be stated first in the
first place as discussed in the preceding paragraphs, some methods emerge. But most
important aspect which underlines all the possible methods is knowledge about customers
perspective and desire.
Perception and desire that may have been expressed through past purchases or a
companys past sales, the trend that emerges in a response to the efforts in terms of 4Ps
accompany makes.
A company may choose to analyse its sales hence its efforts in terms of industry
comparison and then ask questions to the current buyers and the potential buyers which
may help in estimating brand recall, recognition and strength along with projection of
future response of the customer i.e. future demand.
Check Your Progress
Asking questions to the buyers, potential buyers and the people like sales force, 1. How is forecasting
dealers etc. who are in touch with them termed as surveys and opinion surveys associated with
corroborated with expert opinions, past analysis and market testing give a number which marketing research?
then is adjusted on the basis of its sensitivity to unprecedented possibilities gives a 2. Explain demand
possible forecast. forecasting methods and
This may look complex but becomes simple if continuously pursued throughout a Logic.
marketing programme and the data in terms of answers and feedback is continuously
analysed quantitatively as well as qualitatively.
For example despite of sales growth on the decreasing side two wheelers Marketing Management : 61
Capturing Customer Insights manufacturers in India according to SIAM (The society of Indian automotive
manufacturer) have planned to raise their production capacity in 2013.
Profiling customer may start with demographic data but why customer would
choose to buy a particular product is answered by understanding customer.
Here to initiate with I would refer to the consumer i.e. buyer purchasing goods
directly to use/ consumer first
To understand a consumer one has to understand consumer behaviour.
Then to understand a consumers behaviour or consumer behaviour in general
one has to understand what is behaviour and the factors constituting ones
behaviour and factors influencing behaviours.
American marketing association dictionary says that
a. Behaviour is the overt acts or active of consumers that can be directly
observed.
b. Consumer behaviour is the dynamic interaction of affect and cognition
behaviour and the environment by which human beings conduct the exchange
aspects of their lives.
c. Cognition is the sum total of an individuals beliefs, attitudes, perceptions,
needs, goals and learned reactions about some aspect of individual world or
the mental process of interpretation and decision making, including the beliefs
and meanings they create.
d. Affect is the feelings a person has towards an attitude object such as a brand,
advertisement, salesperson etc. affect is growing in importance in attempts
to understand and predict consumer behaviour or the affective responses
include states such as emotions, specific feelings and moods that vary in
levels of intensity and arousal.
Now look at the interpretation of points (c) and (d) i.e. cognition and affect to
further understand point (b) i.e. consumer behaviour. You would appreciate that for
example you wanted to buy a pair of shoes for yourself, the interpretation of youre the
sum total of your ( beliefs+ attitudes+ perceptions+ needs+ goals+ learned reactions=
cognition) with your (feeling + mood= affect) will be your consumer behaviour towards
the offerings.
Before I explain this further let me quote some more relevant definitions from the
dictionary of American Marketing Association.
i) Belief: a cognition or cognitive organization about some aspect of the
individuals world. Unlike an attitude, a belief is always emotionally or
Marketing Management : 62
motivationally neutral. Also a belief is synonymous with knowledge or
meaning in that all refer to consumers interpretations of important concepts. Capturing Customer Insights
ii) Goal: A concrete short term point of measurement that the business unit
intends to meet in pursuit of its objectives and an overall objective converts
into specific short run goals.
NOTES
iii) Perception: Based on prior attitudes, beliefs, needs, stimulus factors and
situational determinants, individual perceive objects events or people in the
world about them; perception is the cognitive impression that is formed of
reality which in turn influences the individuals actions and behaviour
towards that object.
3.6.1 Factors influencing Consumer Behaviour
Major influencers of consumer behaviour are:
a. Cultural factors
b. Social factors
c. Personal factors
d. Psychological factors
(a) Cultural factors
Culture pertains to customer of a society or a nation or a group of people per say.
Have your heard this line of song somewhere mehmaan jo hamara hota hai wohjaan se
pyara hota hai i.e. a guest is precious than life to us. This is what we may call a cultural
aspect. Marketers focus on cultural aspects in all the propositions or say that they strongly
consider cultural aspects in the combination of 4Ps they create/ design for their target
customer. For example, Indians have a strong orientation towards organizing marriages.
Marriage is a long thought off, well discussed, well organized event in India, where so
many people from both sides are involved and many types of rituals and customs are
met. Marriages are seasonal especially amongst Hindus and therefore are followed by
marketers specifically. Try and find out TVC specifically directed and oriented towards
marriages and you would find that almost all the companies some or the other time
would have released such advertisements,
(b) Social factors
Family is the unit of society as they say and then there are social reference groups
whom you refer to or affiliate to for consideration or you compare yourself with. For
example, McDonalds Happy Meal definitely is associated with family influencers where
children tend to influence whole of the family to go to their outlet and almost all find
something to eat. Another example is uski saree mere saree se safed kaisey or a motor
bike advertisement where two riders while waiting for the red signal light to go green
are comparing the features of their bikes along with the price and its a general
phenomenon otherwise also that whenever ones neighbour or someone from ones social
circle purchases something, comparison becomes inevitable. Another example could be
when you hear people saying that in one defence forces, this is how we think or for
example as they say that doctors keep their vehicles quite well maintained.
Marketing Management : 63
Capturing Customer Insights (c) Personal factors
Most important aspect of personal factors is personality. As per American
Psychological Association http://www.apa.org/research/action/glossary.aspx,
personality is the unique psychological qualities of an individual that influence a variety
NOTES
of characteristics behaviour patterns (both overt and covert) across different situations
and over time. This has a relationship with stimuli a person gets exposed to. Please
revisit the discussion on value chain where we discussed about matching of values of
the marketer and the customer. Here, again that discussion becomes pertinent because a
customers personality has context to his values and personality to synchronize not
only the segmentation, targeting and positioning effort but also to sustain the purchase
related satisfaction and gain loyalty at large. For example, SUVs are preferred by specific
consumers/ customers whose personality matches with SUVs brand personality. Another
example would be colour of shirts or apparels wherein some people may like brighter
colours and some may prefer darker shades.
Then comes the age and life cycle stage of a consumer which have a direct bearing
and relationship with personality and its traits. For example, a person of 40 years of age
and single may behave differently than a person of same age having family with two
school going children and so on. Another fundamental aspect is occupation which
definitely influences personality on the one hand and on the other hand has a relationship
with the reference group as far as social factors are concerned. For example, have you
noticed teachers and academicians and on the other hand try and analyse sales executives
now look at government officials, bureaucrats, and also look at chefs of known restaurants
and hotels and the difference is just evident so does the approach of marketers towards
them.
(d)Psychological factors
Again referring to APA (http://apa.org/research/action/glossary.aspx) psychology
is the scientific study of the behaviour of individuals and then mental processes.
Psychological factors those must be understood properly are:
a. Perception
b. Learning
c. Memory and
d. Motivation
(a) Perception
Please refer to the definition of perception by American Marketing Association in
the preceding paragraphs and you would appreciate that stimuli is the key word in the
definition which in relation to ones prior beliefs and attitude make a person react
accordingly.
Now refer to 4Ps once again and we may see that product, price, place, promotion
may be a stimulus independently or conjointly. For example, when marketers call
products as green products or they say that it is organic food, when special discounts
are being offered or when special kind of pricing is being consistently kept for prolonged
Marketing Management : 64 time duration like Borolene has kept its pricing quite consistent like coke in USA has
kept in pricing quite consistent and have you herd of Zindagi ke saath bhi zindagi ke Capturing Customer Insights
baad bhi a key line by LIC especially for its policy called Jeewan Anand which suggests
a long term promise and sum assurance after maturity as well as after the life of assured.
(b) Learning NOTES
According to American Marketing Association dictionary according to Hilgard,
learning refers to more or less permanent change in behaviour that occurs as a result of
practice. It is a process by which an activity originates or is changed through reacting to
an incountered situation, but does not include those changes induced by maturation,
genetic response tendencies or temporary situations such as fatigue or drug influence. It
includes such activities as the learning of facts and skills, brands, jingles, purchase
behaviour, beliefs and attitudes.
(c) Memory
APA, http://apa.org/research/action/glossary.aspx says that Memory is the mental
capacity to encode, store and retrieve information.
(d) Motivation
There are several theories in association with motivation which have largely been Check Your Progress
used and implemented in the field of human resource management. For example, 1. Elaborate on Consumer
Maslows needs hierarchy theory which has large span of applicability and is also Behaviour with its
fundamentally associated with consumer behaviour as well, where in marketers tend to important aspects and
address the stage of consumer as per the categorization given by Maslow that a person factors.
has lower order and upper order needs and first he tends to fulfil physiological needs, 2. Elaborate on the factors
then safety needs, then social needs, then esteem needs and then self-actualization needs. influencing Consumer
Further some theorists add and have analysed that in some socio-cultural and individual Behaviour
circumstances the order may merge or even change. Some have found the relationship 3. Elaborate on the
of these needs with age as well but the larger context is that the understanding of such components of the
theories helps marketers on addressing consumers with a relevant combination of 4Ps. Psychological Factors
For example, some insurance products/ companies focus on safety and social needs of of Consumer Behaviour
their plans focus on esteem needs by saying sar utha kae jiyo
According to APA http:// www.apa.org/research/action/glossary.aspx, motivation
is the process of starting, directing and maintaining physical and physiological activities;
includes mechanics involved in preferences for one activity over another and the vigour
and persistence of responses.
Therefore in simplistic terms a consumer has to be motivated. For example: march
24, 2013 Sunday times life, page 3 an article under the subheading of travel trend called
quest for simple life reads about the increasing charm for rural tourism, it say that it is
a stress buster, put you in touch with your roots and so on. It motivates people who
desire for such changes/ wants in their lives.
3.8 Summary
There are three types of research design at large:
a. Exploratory research design : This design is associated with situations where a
problem is not defined or a problem is identified and as we understand no prob-
lem no solution.
b. Descriptive research design : This design has a peculiar association with a de-
fined problem and need for understanding or observing or analyzing phenomenon
is there.
c. Causal research design : This design is associated with the generation of a cause
and monitoring of the effect i.e. generating a phenomenon to be understood along
with its effects.
Analysis : Now comes in the analysis part which requires tools (statistical and
analytical tools) software based or otherwise to be deployed and then interpretation to
be done.
Forecasting have an intense broad look at the discussion we have had about
marketing research till now and the key words those merge as the resultant are:
a. Direction and
b. Target and objectives
Marketing Management : 66
Capturing Customer Insights
3.9 Key Terms
Marketing research: Marketing research is the process or set of processes that
links the consumers, customers, and end users to the marketer through information NOTES
information used to identify and define marketing opportunities and problems; generate,
refine, and evaluate marketing actions; monitor marketing performance; and improve
understanding of marketing as a process. Marketing research specifies the information
required to address these issues, designs the method for collecting information, manages
and implements the data collection process, analyzes the results, and communicates the
findings and their implications.
It is the systematic gathering, recording, and analysis of qualitative and quantitative
data about issues relating to marketing products and services. The goal of marketing
research is to identify and assess how changing elements of the marketing
mix impacts customer behavior. The term is commonly interchanged with market
research; however, expert practitioners may wish to draw a distinction, in
that market research is concerned specifically with markets, while marketing research
is concerned specifically about marketing processes. Marketing research is often
partitioned into two sets of categorical pairs, either by target market:
Consumer marketing research, and
Business-to-business (B2B) marketing research
Or, alternatively, by methodological approach:
Qualitative marketing research, and
Quantitative marketing research
Consumer marketing research is a form of applied sociology that concentrates on
understanding the preferences, attitudes, and behaviors of consumers in a market-based
economy, and it aims to understand the effects and comparative success of marketing
campaigns. The field of consumer marketing research as a statistical science was
pioneered by Arthur Nielsen with the founding of the ACNielsen Company in 1923.
Thus, marketing research may also be described as the systematic and objective
identification, collection, analysis, and dissemination of information for the purpose of
assisting management in decision making related to the identification and solution of
problems and opportunities in marketing.
Source: http://en.wikipedia.org/wiki/Marketing_research
Reason: Reason is the capacity for consciously making sense of things,
applying logic, for establishing and verifying facts, and changing or justifying practices,
institutions, and beliefs based on new or existing information. It is closely associated
with such characteristically human activities as philosophy, science, language,
mathematics and art, and is normally considered to be a definitive characteristic of human
nature. The concept of reason is sometimes referred to as rationality and sometimes
as discursive reason, in opposition to intuitive reason.
Marketing Management : 67
Reason or reasoning is associated with thinking, cognition, and intellect. Reason,
Capturing Customer Insights like habit or intuition, is one of the ways by which thinking comes from one idea to a
related idea. For example, it is the means by which rational beings understand themselves
to think about cause and effect, truth and falsehood, and what is good or bad.
Marketing Management : 68 Example: information in one fair coin ip: log2(2/1) = 1 bit, and in two fair coin
flips is log2(4/1) = 2 bits. Capturing Customer Insights
Information, in its most restricted technical sense, is a sequence of symbols that
can be interpreted as a message. Information can be recorded as signs, or transmitted
as signals. Information is any kind of event that affects the state of a dynamic system. NOTES
Conceptually, information is the message (utterance or expression) being conveyed. The
meaning of this concept varies in different contexts. Moreover, the concept of information
is closely related to notions of constraint, communication, control, data, form,
instruction, knowledge, meaning, understanding, mental stimuli, pattern, perception,
representation, and entropy.
Source: http://en.wikipedia.org/wiki/Information
Marketing Opportunities: Newly identified need, want, or demand trend that a firm
can exploit because it is not being addressed by the competitors.
Source: http://www.businessdictionary.com/definition/market-opportunity.html
Problems: A problem is the relation between human will and reality. When will
and reality do not coincide, the resolution of this gap between reality and will is the
solution of the problem. A problem implies a desired outcome coupled with an apparent
deficiency, doubt or inconsistency that prevents the outcome from taking place.
Source: http://en.wikipedia.org/wiki/Problem
Designs: Design is the creation of a plan or convention for the construction of an
object or a system (as in architectural blueprints, engineering drawing, business
process, circuit diagrams and sewing patterns). Design has different connotations in
different fields (see design disciplines below). In some cases the direct construction of
an object (as in pottery, engineering, management, cowboy coding and graphic design)
is also considered to be design.
More formally design has been defined as follows.
(noun) a specification of an object, manifested by an agent, intended to
accomplish goals, in a particular environment, using a set of primitive components,
satisfying a set of requirements, subject to constraints;
(verb, transitive) to create a design, in an environment (where the designer operates)
Another definition for design is a roadmap or a strategic approach for someone to
achieve a unique expectation. It defines the specifications, plans, parameters, costs,
activities, processes and how and what to do within legal, political, social, environmental,
safety and economic constraints in achieving that objective.
Here, a specification can be manifested as either a plan or a finished product,
and primitives are the elements from which the design object is composed.
With such a broad denotation, there is no universal language or unifying
institution for designers of all disciplines. This allows for many differing philosophies
and approaches toward the subject (see Philosophies and studies of design, below).
The person designing is called a designer, which is also a term used for people
Marketing Management : 69
who work professionally in one of the various design areas, usually also specifying
Capturing Customer Insights which area is being dealt with (such as a fashion designer, concept designer or web
designer). A designers sequence of activities is called a design process. The scientific
study of design is called design science.
NOTES Designing often necessitates considering the aesthetic, functional, economic and
sociopolitical dimensions of both the design object and design process. It may involve
considerable research, thought,modeling, interactive adjustment, and re-
design. Meanwhile, diverse kinds of objects may be designed,
including clothing, graphical user interfaces, skyscrapers, corporate identities, business
processes and even methods of designing.
Source: http://en.wikipedia.org/wiki/Design
Marketing Management : 71
Connecting with Customers
UNIT 4 CONNECTING WITH
CUSTOMERS
NOTES
Structure
4.0 Introduction
4.1 Unit Objectives
4.2 Understanding Customers
4.3 Achievement of Satisfaction and Loyalty
4.4 Segmentation Targeting and Positioning
4.5 Basis of Segmentation
4.5.1 Geography
4.5.2 Demography
4.5.3 Psychography
4.5.4 Behavior
4.6 Business Market Segmentation
4.7 Summary
4.8 Key Terms
4.9 Questions & Exercises
4.10 Further Reading and References
4.0 Introduction
Now consider organizations and institutions as the point of concern. Lets try and
differentiate them with the direct consumers. There may be the channel partners, industrial
organizations using the products to finish their own products to be marketed (like auto
manufacturers buying tyres), manufacturer who require products to produce new
products, hence called raw material buyers, buyers who purchase products in bulk to
complement their services like airlines purchasing food for passengers.
The fundamental difference from the discussions about understanding consumer
behaviour we have had until now with the customers we are referring to here lies in
a. Bulk purchase
b. Direct contact i.e. scope for discussion and negotiation
For example, an automotive manufacturer has to buy tyres for all its
products, and then the situation has few special characteristics:
(i) Quality of tyres would definitely affect the response of automotive user.
(ii) Tyre production/ supply have to be aligned with automotive production.
(iii) Prices have to be in accordance with the purchase volume.
(iv) Terms and conditions are to be negotiated.
Because of such sensitivities involved there would be dedicated buyers from the
side of the customers and negotiations would be on one-to-one basis.
Here, scenario would change a bit if the bulk buyer is a reseller of the products
where manufacturer would be involved in the process of reaching to the consumer or
the user but factors (i) to (iv) above would persist in one form or the other.
You may refer to one of the case studies called JAUSS POLYMERS to understand
the context of customer/ business buyer buying decision making process and supplier
buyer relationship wherein you would learn that through Jauss Polymers has been one
of the initial most companies in the field of PET business in India but still had to go for
a process where:
a. Buyers important concerns was that of they would be able to supply right
product with right price at the right time, because for example, if they are
supplying to say an FMCG company then the supply of that FMCG company
to the distributor, retailer and its customer would be dependent in this PET
(Polyethylene Triathlete) plastic bottle/ Jar or packaging supplier without
which you may not reach to the market.
b. On the other side there is a consideration for Jauss Polymers that they cannot
go as far as they can to various parts of the country because of the transportation
cost as PET packaging is low margin product and acquires larger space. Marketing Management : 73
Connecting with Customers c. Another consideration of Jauss Polymers is that if the orders of their buyers
change their orders would change too.
Therefore all the above mentioned considerations are involved in the buying
NOTES decision process which is not actually a one sided process, it also involves the limitations
of manufacturing on the side of the supplier as well.
Check Your Progress Not to mention customer search for the manufacturers is through primary markets
What is that a company contact is often through websites, exhibitions (which are very popular), trade meetings
should understand about and forums. Another analogy and example in information technology based solutions
customers and how should where in organization which develop IT based tools for example ERP (Enterprise
that be done? Resource Planning) have to concerned about the needs of the clients they serve in lieu
with the customer of their clients. For example, McDonalds has a great importance of
inventory turnover of their raw material which has strong support in terms of their IT
systems and definitely an association with business understanding of their business by
their IT solutions partner. McDonalds on the other hand analyses how well their IT
solutions supplier may be able to understand their complete value chain system and
supply chain system management.
E-procurement, e-technology, e-transactions or in totality e-commerce has become
pertinent. Where in e-made not only synchronizes the complete supply chain on the one
hand but also starting from need/ problem recognition to negotiations and association is
done through robust, reliable and safe because of the banking and financial institutions
acquiring robust and strong systems including reliable and relentless connectivity.
Marketing Management : 77
Connecting with Customers Look at apple i-phone 5, Samsung Galaxy S III, Hush Puppies shoes, Dabang II
(the movie), Burfi (the movie), NDTV
24*7 News, Doordarshan National News and regional news, VIP luggage, Relaxo
NOTES chappal (bathroom sleepers), Wheel, Nirma, Zee Mount Litera schools, Delhi Public
Schools, Nurture group, city Manterson school (school having largest number of students
in one school in a city), Haldirams, Bikaner, Hero cycles, Dabur, Geeta press, Meru
Taxi, Parle G biscuits, Uncle chips, Tiger biscuits, Kurkure and the list is endless.
What do we learn through the process these products/ brands address us? We
learn that
a. By virtue of products itself i.e. its association with a particular customer
because of its own tangibility and usage it may or may not tend to address a
combination of aspects (in a customer and all the similar customers) from the
table. For example almost all the children in India would have played Ludo
one or the other time.
b. By virtue of production limitation
c. By virtue of distribution limitation
d. By virtue of competition in terms of alternatives and substitutes
e. By virtue of changing marketing environment including socio-political
conditions, value system, culture organizations choose to address a type of
customer in a particular number and this choice is led by dividing the
population and then possible customers into segments. Segmentation
according to the American marketing association (AMA), The process of
subdividing a market into distinct subsets of customers that behave in the
same way or have similar needs. Each subset may conceivably be chosen as
a market target to be reached with a distinct marketing strategy. The process
begins with a basis of segmentation-a product-specific factor that reflects
differences in customers requirements or responsiveness to marketing
variables (possibilities are purchase behaviour, usage, benefits sought,
intentions, preference, or loyalty). Segment descriptors are then chosen, based
on their ability to identify segments, to account for variance in the
segmentation basis, and to suggest competitive strategy implications
(examples of descriptors are demographics, geography, psychographics,
customer size, and industry). To be of strategic value, the resulting segments
must be measurable, accessible, sufficiently different to justify a meaningful
variation in strategy, substantial, and durable.
Hence most important aspect is that marketers have to identify the segment to be
targeted accurately. While targeting the segment as we have seen there may be several
approaches which a marketer may utilize. For example
a. Coke and Pepsi or Rin like products they exercise a mass market approach.
b. Then another example is McDonalds Mac Aloo Tikki burger which is the
outcome of a localized approach
Marketing Management : 78
c. Sensodyne like toothpastes go with niche marketing approach wherein they Connecting with Customers
target a very special customer with very specific needs.
d. Another approach is associated with customization of products for/according
to the individual customers needs. For example, DC i.e. Dileep Chabaria a
NOTES
car and automotive designing company customizes needs and desires.
Mahindra and Mahindra have a programme for interactivity vehicles with
customers in case of their product called Quadra. Check Your Progress
1. Explain Segmentation,
4.5 Basis of Segmentation Targeting and
Positioning?
2. Explain the factors
The process of subdividing a market into distinct subsets of customers that behave
associated with the
in the same way or have similar needs. Each subset may conceivably be chosen as a
process and criteria of
market target to be reached with a distinct marketing strategy. The process begins with
segmentation.
a basis of segmentation-a product-specific factor that reflects differences in customers
requirements or responsiveness to marketing variables (possibilities are purchase
behaviour, usage, benefits sought, intentions, preference, or loyalty). Segment descriptors
are then chosen, based on their ability to identify segments, to account for variance in
the segmentation basis, and to suggest competitive strategy implications (examples of
descriptors are demographics, geography, psychographics, customer size, and industry).
To be of strategic value, the resulting segments must be measurable, accessible,
sufficiently different to justify a meaningful variation in strategy, substantial, and
durable.
4.5.1 Geographical Segmentation
For example you must have heard a designation called vice president marketing
for Asia and the Pacific. Now this implies that someone is looking after marketing of a
product for a particular geographic area. Another example is of the banks having rural
banking divisions. As we have discussed in preceding paragraphs, you must acknowledge
and remember that in geographic segmentation, geography is a point of concentration
and then further aspects of demography, psychology and behaviour are included while
targeting a customer. For example some banks may segment markets into rural and
urban but then target rural farmers having land holding of more than 5 acres.
4.5.2 Demographic Segmentation
Factors of age, income, gender, family size, occupation and education, sequentially
or solely in combination or else are pertinent in this kind of segmentation. But as in the
case of geographic other factors get associated and target is formed. For example, have
you seen this advertisement on television saying why should boys have all the fun?
next an advertisement saying mein retire hounga apne kaam se recent advertisement
showing Rhithik Roshan holding mountain dew in his hands and overcoming a fear
of sea diving. All these messages are prominent by targeting particular age group and
the first one is targeting gender with it and so on.
Marketing Management : 79
Connecting with Customers 4.5.3 Psychographic Segmentation
According to the American Marketing Association it is defined as, the process of
dividing markets into segments on the basis of consumer life styles. Here as you can
observe psychological aspects of consumers/ customers are observed in association
NOTES
with demographic aspects we have discussed personality earlier as well but just to
reiterate its a combination of unique qualities (psychological) of an individual, now
these unique qualities within age group with some commonality are important to the
marketer for example movie choices may have commonality within an age, so may the
automotive choices and there can be a stark difference also expressing the uniqueness
of personality. For example, choice of books, courses, colours and designs.
Further, if lifestyle aspects can be combined with personality within a demography
you may appreciate why Bajaj auto in advertising and focusing on (sporty looks of a
bike, with efficiently a regular person with a need and desire of some excitement in
daily life) BAJAJ AD
Source
Marketers by segmenting the market through psychographic concentration not
only enable themselves with more specific approach of developing and delivering the
value but also this aspect makes them think more intensely on buying decision process
on the one hand and on the other hand marketers combine this understanding with their
expression i.e. promotion of the products. Remember marketing research and the process
of understanding the customer keeps working over here. For example, you may appreciate
that many institutions and universities not only market the course content but also that
their promises are centrally are conditioned the quality of food which is served in the
hostels, entertainment facilities which they have for the students and so on. But the
important factor in psychographic segmentation is proper classification of people. A
whole lot of categorization is available which organization combines with continuous
marketing research to reach to the conclusion.
Another important and interesting example is exterior wall paint colour choices,
Marketing Management : 80 recently on 30th march 2013 I was on a visit to Orissa and we travelled by road to many
of the places wherein a very interesting fact came up about the exterior colour choice of Connecting with Customers
people there i.e. people in Orissa like beautiful and bright colours to paint their home.
Now this interesting fact can be sued as a targeting tool for paint manufacturers and
marketers.
NOTES
4.5.4 Behavioural Segmentation
Please reiterate the definition of behaviour from the receding unit and try and
associate that definitional background with the table being referred to in this unit and
then recall the advertisements shown with marriages as backdrop for example luggage
advertisement, cosmetics, insurance and so on, where in marketers do understand and
analyse markets with the perspective of marriage kind of special occasion. You may try
and gather information on how many kinds of products have utilized marriages as the
significant occasional point and one appreciates that largely all the product categories
have associated themselves with this important occasion in India one or the other time.
Mobile marketers have initially banked upon utility aspect of products, then they focused
upon utility aspect of products, then they focused on attitudinal segmentation and so on.
Another exercise you may do is to analyse that if all the manufacturers at some or
the other stage of their products life cycle prioritize user aspect i.e. user status and usage
rate to benefits to attitudinal exposition and so on. For example, resort marketers
marketing resort membership focus on attitude, benefits and then usage aspects of their
services. Whereas, if you visit Lake Chilika in Orissa, worlds largest salt water lake the
boatman taking you for a pleasure trip would tell you benefits first and then mould his
proposition according to your attitudinal exposition all other segmentation aspects
remaining static. For example, he would judge by expressions that if you are first time
visitor and then would categorize you as a benefit maximizing user, furthering his
proposition with guaranteed dolphin view, crab view and sea mouth view, further looking
at you reaction on the proposition he would mould his offering with the time you would
spend and pleasure you would gain. To elaborate on this try and visit Orissa tourism
website (www.orissatourism.gov.in).
4.7 Summary
This Unit is about understanding customer and segregating them into segments
i.e. sgementation which is based on geography, demography, psychography and
behavioural. These segmentation plays an important role in targeting and then positioning
its product or service accordingly. The proper alignment and implementation results
into effective marketing which help a marketer to reach customers and increase
acceptability of their products and services.
NOTES 7. The consumers attitude towards a product plays an important role in the evaluation
of alternatives. Explain.
8. What are the characteristics of habitual problem solving by consumers? What
strategies should a marketer adopt for such products where consumers exhibit
habit forming behavior?
9. Describe the relationship between consumer loyalty and profitability?
10. Discuss the significance of segmentation, targeting and positioning in a companys
marketing strategy?
11. How do customer centric companies build concern for their customers throughout
the company?
12. Are internally driven businesses geared to meet customer needs? Explain.
Marketing Management : 84
Building Strong Brands
UNIT 5 BUILDING STRONG
BRANDS
NOTES
Structure
5.0 Introduction
5.1 Unit Objectives
5.2 Positioning
5.2.1 Positioning Defined
5.3 Competition
5.4 Brand Identity
5.5 Brand Strength
5.6 Brand Equity
5.7 Product life cycle and positioning
5.8 Summary
5.9 Key Terms
5.10 Questions & Exercises
5.11 Further Reading and References
5.0 Introduction
What would you say when someone makes you recall the name of Kodak, HMT
watches, Campa orange, Dalda, Bush TV, Texla, Dynora, Murphy radio, etc? You defi-
nitely would acknowledge the brand name which can be termed as that the brand has a
recall. But if some of such products like Ambassador Car from Hindustan motor which
one still marketed are offered to you! Would you buy one, you may not. Here comes in
an analogous relationship of brand recall, equity, product life cycle and positioning.
Readers must have heard the word brand with various references and contexts.
What is branding and how and why brands are built? What purpose does brand
development solves and achieves? This unit carries the objective of presenting brand
and branding with context to marketing.
5.3 Competition
http://en.wikipedia.org/w/index.php?title=Brand_strength_analysis&printable=yes
Brand strength analysis
From Wikipedia, the free encyclopedia
Brand strength analysis describes efforts to determine the strength a brand has
compared with its competitors.
http://en.wikipedia.org/w/index.php?title=Brand_equity&printable=yes
Brand equity
From Wikipedia, the free encyclopedia
Brand equity is a phrase used in the marketing industry which describes the value
of having a well-known brand name, based on the idea that the owner of a well-known
brand name can generate more money from products with that brand name than from
products with a less well known name, as consumers believe that a product with a well-
known name is better than products with less well known names.
Some marketing researchers have concluded that brands are one of the most
valuable assets a company has, as brand equity is one of the factors which can increase
the financial value of a brand to the brand owner, although not the only one. Elements
that can be included in the valuation of brand equity include (but not limited to): changing
market share, profit margins, consumer recognition of logos and other visual
elements, brand language associations made by consumers, consumers perceptions of
Marketing Management : 90 quality and other relevant brand values.
Consumers knowledge about a brand also governs how manufacturers and Building Strong Brands
advertisers market the brand. Brand equity is created through strategic
investments incommunication channels and market education and appreciates
through economic growth in profit margins, market share, prestige value, and
NOTES
critical associations. Generally, these strategic investments appreciate over time to
deliver a return on investment. This is directly related to marketing ROI. Brand equity
can also appreciate without strategic direction. A Stockholm University study in 2011
documents the case of Jerusalems city brand. The city organically developed a brand,
which experienced tremendous brand equity appreciation over the course of centuries
through non-strategic activities. A booming tourism industry in Jerusalem has been the
most evident indicator of a strong ROI.
Brand equity is strategically crucial, but famously difficult to quantify. Many
experts have developed tools to analyze this asset, but there is no universally accepted
way to measure it. As one of the serial challenges that marketing professionals and
academics find with the concept of brand equity, the disconnect between quantitative and
qualitative equity values is difficult to reconcile. Quantitative brand equity includes
numerical values such as profit margins and market share, but fails to capture qualitative
elements such as prestige and associations of interest. Overall, most marketing
practitioners take a more qualitative approach to brand equity because of this challenge.
In a survey of nearly 200 senior marketing managers, only 26 percent responded that
they found the brand equity metric very useful
An important digression about competition:
One must understand that competition is inevitable because of the reason that
there is no segment which is not simultaneously addressed by more than one product/
company. For example, a family may think in terms of buying LED high definition
television or they may choose to take a package tour to Bangkok. Depending upon the
attractiveness of 4Ps combination a company may produce it may think in terms of
developing its market and enhancing its market share. There are few important factors
related to this fact:
a. How do you acknowledge your competition?
b. How do you measure the competition?
c. How do you monitor the competition?
A relevant exercise on this gives several models and tolls like BCG Matrix to
acknowledge your own situation and then there are models like:GE Nine Cell Matrix
and Porters Five Forces Model to acknowledge competition. Measuring competition
can be simplistically against the potential of the category then including substitutes and
then if one may include unrelated products as well. Further analysis of ones own strength
has to be done; here porters five forces model is equipped to guide the measurement
criterion and analysis- reference and chart description here.
If an organization/ company realizes that it is capable of committing resources
where it
Marketing Management : 91
Building Strong Brands a. Can develop and lead the market
b. Expand the market
c. Focus on direct, indirect as well as unrelated competition then
NOTES
Threat of
new
entrants
Bargaining COMPETITIVE Bargaining
power of
suppliers
RIVALRY power of
Buyers
Threat of
substitute
Products
MATURITY AND
SITUATION
GROWTH
PROFIT
DECLINE
LOSS TIME
Just to add to the detailed description of product life cycle we have has let me give
you an example of one of the worlds largest newspaper Dainik Jagaran with the
perspective of a products life cycle. Dainik Jagaran got initiated with a city based
circulation. Initial phase required a focus on circulation where in reaching the reader at
the right time in the days when distribution was an issue was important. News and
content had to be maintained, production was a tough call because of the technology.
Another important aspect is the printing cost because of the reason that the paper i.e.
newsprint is costly and prices had to be kept low to enhance circulation hence
advertisements had to be brought in to offset this cost and to earn profit, here agencies
have to be dealt with. Because of the localized readership/ circulation larger advertising
could not be achieved, hence circulation had to be enhanced. Situation till this stage is
termed as Inception stage. Then came the next phase when circulation and readership
Marketing Management : 94
was enhanced by focusing on other Hindi reading areas, here it is very important to Building Strong Brands
understand that a newspaper has consumers as readers and customers as advertisers and
secondary customers as advertising agencies. Number of readers, advertisers and agencies
had to be increased through enhanced circulation.
NOTES
Thus came in as a growth phase. Now came in a situation when the competition
started becoming intense because of many other competitors like Amar Ujala, Hindustan
and others growing though the readership not growing so much because of the English
dailies on the one hand increasing their foothold and television and internet increasing
its footholds. Here readership proportionately got dipped in comparison to the growth
potential which you may call as saddle effect (Chandrasekaran and Tellis (2011). Then
came in strategies further enhancing the readership and circulation by focussing on
content and advertising simultaneously while focusing in larger and genuinely new
content and expansion in whole of the Hindi belt which enabled Dainik Jagaran to
become one of the largest read newspaper. Here it is growth phase continued. Then has
to come saturation or maturity phase where in number of readers have to get stagnated
and advertising revenue too. This may lead to decline. There are other very important
aspects during every phase to be understood and considered:
a. Utilization of technology to increase quality production required by enhanced
circulation.
b. Promotion of the product itself, to develop, and establish the brand equity as
Dainik Jagran did, and called itself patra hi nahin mitra bhi.
c. Adding relevant supplements like Sunday, employment and others.
d. Adding avenues for getting more news
e. Bring product differentiation enhance the growth phase because as discussed
the saddle effect when comes in has to be dealt with strong life extending
product differentiation which not only averts competition but also keeps away
the maturity.
Sometimes maturity apparently comes because a products sales saturates due to a
reduction in the enthusiasm of the customer (especially non user) towards the product
and customer/ consumer acquisition becomes costlier, hence the requirement for a newer
version maintaining similar production, distribution and other aspects of value chain.
5.8 Summary
Its a matter of creating an image in the minds of consumers. Creating image
consists of few aspects like
a) Commitment standing by what you say
b) Suggesting that you are standing by your commitment
c) Creating messages about your commitment not just through integrated marketing
communication but also through every step throughout the value chain (please refer to
the value chain chart in preceding units) Marketing Management : 95
Building Strong Brands d) Exercising and justifiably suggesting you commitment meets competition which
may be direct, indirect or out of pocket i.e. within the product category, with substitutes.
With unrelated products and with any product of service extracting share of pocket of
the customer.
NOTES
e) Focusing on commitment and meeting competition relatively can be done
effectively through competition based view or through blue ocean approach i.e. pushing
the competition aside.
f) This further goes on to develop a product and a companys brand strength,
brand identity and brand equity.
This further reduces the cost of customer acquisition and companies may focus on
product innovation, marketing innovation, hence adding on value for the customer and
value response towards itself.
Brand: Brand is the name, term, design, symbol, or any other feature that iden-
tifies one sellers product distinct from those of other sellers[1] Initially, Branding was
adopted to differentiate one persons cattle from anothers by means of a distinctive
symbol burned into the animals skin with a hot iron stamp, and was subsequently used
in business, marketing and advertising. A modern example of a brand is Coca Cola which
belongs to the Coca-Cola Company.
A brand is often the most valuable asset of a corporation. Brand owners manage
their brands carefully to create shareholder value, and brand valuation is an important
management technique that ascribes a money value to a brand, and allows marketing
investment to be managed (e.g.: prioritized across a portfolio of brands) to maximize
shareholder value. Although only acquired brands appear on a companys balance sheet,
the notion of putting a value on a brand forces marketing leaders to be focused on long
term stewardship of the brand and managing for value.
The word brand is often used as a metonym, referring to the company that is
strongly identified with a brand.
Check Your Progress
Marque or make are often used to denote a brand of motor vehicle, which may be
Define Product Life Cycle
distinguished from a car model. A concept brand is a brand that is associated with an
Correlatively.
abstract concept, like breast cancer awareness orenvironmentalism, rather than a spe-
cific product, service, or business. A commodity brand is a brand associated with
a commodity. Got milk? is an example of a commodity brand.
Source: http://en.wikipedia.org/wiki/Brand
Product life Cycle: Product life cycle is a business analysis that attempts to iden-
tify a set of common stages in the life of commercial products, for example, introduc-
tion, promotion, growth, maturity and decline.
Source: http://en.wikipedia.org/wiki/Product_lifecycle
Marketing Management : 96
Positioning: In marketing, positioning is the process by which marketers try to Building Strong Brands
create an image or identity in the minds of their target market for its product, brand, or
organization.
Re-positioning involves changing the identity of a product, relative to the iden- NOTES
tity of competing products.
De-positioning involves attempting to change the identity of competing prod-
ucts, relative to the identity of your own product.
The original work on positioning was consumer marketing oriented, and was not
as much focused on the question relative to competitive products as on cutting through
the ambient noise and establishing a moment of real contact with the intended recipi-
ent. In the classic example of Avis claiming No.2, We Try Harder, the point was to
say something so shocking (it was by the standards of the day) that it cleared space in
your brain and made you forget all about who was #1, rather than making some philo-
sophical point about being hungry for business.
Source: http://en.wikipedia.org/wiki/Positioning_(marketing)
6.0 Introduction
NOTES
6.1 Unit Objectives
After reading this unit you should be able to :
1. Define Product, Service & Product Hierarchy.
2. Describe Product System & Product Mix.
3. Define Packaging, Labeling, Warranties & Guarantees and Pricing.
Potential product
Augmented product
Expected product
Basic product
Core
benefit
Personl Laundry Skin Hair Oral Deodorants Ayurvedic Personal Color Tea Coffee Foods Ice
Wash Care Care Care & Heath care Cosmetics Cream
Product- Lux Surf Fair & Sunsllk Pepsodent Axe Ayursh Lakme Brooke Brooke Kissan Kwality
Line Excel Lovely Naturals Bond Bond Walls
Length Lifton Bru
Lifeboy Rin Prods Clinic Close-up Rexona Annapurna
Liril Wheel Vaseline
Hamam
Breeze
Dove
Pears
Rexona
6.8 Packaging
6.10 Warranties
According to American Marketing Association (AMA) warranty is defined as,
A statement or promise made to the customer that a product being offered for
sale is fit for the purpose being claimed. The promise concerns primarily what the
seller will do if the product performs below expectations or turns out to be defective in
some way. The promise (warranty) may be full (complete protection) or limited (some
corrective steps), under terms of the Magnuson-Moss Warranty-Federal Trade
Commission Improvement Act (1975). It may also be expressed (orally or in writing)
or only implied, and it may have time restrictions.
6.11 Guarantees
According to American Marketing Association (AMA) guarantee is defined as,
the assurance, expressed or implied, of the quality of goods offered for sale. Expressed
guarantee, with definite promise of money back or other specific assurance, is often
used as a sales aid, especially in nonstore retailing.
6.13 Pricing
Economic analysis gives us a relationship of price and quantity and elasticity and
inelasticity is that respect. Economics also explain price of a product in correlation
with alternative and substitute products. Having these economic aspects associated
with prices and pricing of products the most important aspect is cost. Marketing Management : 109
Shaping the Market Offerings Marketers on the one hand do a cost analysis then market and competitors analysis
along with market potential analysis to reach a number. Along with the 3 parameters
above there are few factors associated with pricing, which can be explained through
following examples. Primary and secondary education should be priced high or
NOTES
moderately high or low after analysing the parameters is a major question. Institutions
tend to associate the pricing of education with the profile of the city and the infrastructure
but same schools when open up their branches with similar curriculum, teacher training
and other components price their education at a low price. This may technically be
seen as differentiated pricing or even going rate pricing.
Therefore, looking at pricing with the perspective of a consumers psychology
lower and higher prices can both be an attractions and detergents regardless of the
demographic segment. For example, in case of management text books students feel
that the books should moderately price whereas medical text books are generally priced
high. Another example is a large number of customers that a parking ticket should not
be priced high although it is for the safety of a vehicle costing a lot, same is the case of
insurance premium. Even low priced television was not such an attractive proposition
when Konka and TCL launched their TVs in India despite of the fact that Konka has
one of the established electronic majors.
6.13.1 Price and Quality Perception
Whenever you pass through an airport lounge you have mixed feelings about
price, relative quality and consumer psychology. For example, think of the time just
before one enters into an airport and one feels thirsty or hungry, the price bracket you
get outside and the price bracket you get inside is different. You may add additional
taxed levied inside but still the prices are high for the same products. Then you visit the
shopping lounge and try and analyse pricing of perfumes, wrist watches, fountain pens,
leather goods, books and novels, assortment of chocolates the questions those come to
your mind are:
a. Is the quality of their products related to the price tag?
b. Is there lot of extra premium associated with these products
And the answer is highly relative and situational which is justified for a person
who buys and not for the person who does not. The fact remains that price of product
has to justify itself before being accepted in normal economic circumstances and longer
run.
6.13.2 Broader Process of Setting Prices and Few Types of
Prices
Broader process of setting prices and few types of prices are as follows:
a. First the criterion for pricing is fixed i.e. how you wish to position the product
in terms of
i. Your target segment
ii. Competition
Marketing Management : 110
iii. Your product mix offering
iv. Market potential and growth Shaping the Market Offerings
v. Desire for profits
For example, McDonalds when came to India offered one of their burgers at
Rs.20, Maggi is offering their chotu (small) Maggi at Rs.5, Reebok in Bangladesh NOTES
offered one of their shoes for Rs.50, BSNL these days is offering PENTA a computer
for Rs.3200, Hush puppies is charging Rs.6000 for one of their shoes, Van Heusen is
pricing its shirts for Rs.2500 or above whereas Peter England is priced at Rs.800 and
above.
Criterion is based on objectives, market analysis and life foreseen for the product
for example McDonalds objective was market acceptance first whereas Hush Puppies
had product quality leadership in the view.
b. As discussed earlier as well elasticity and non- elasticity has to be considered
through research and product testing for example Apple when initially
launched its i-phone could not get the response they desired from the Indian
customer.
c. Cost analysis for self and competition (competition, direct, substitutes, indirect
and share of pocket): here segment analysis along with the production costs
are the important issues. Cost analysis also depends upon the technology
employed for example when few of the companies i.e. newspapers in India
started, glazed printing then it has to costly but to enhance the market share
it has to be done while keeping up the prices uniform. Another example is
when whirlpool initiated production for CFC (Chlorofluorocarbons) free
compressors and refrigerators in India, the cost on one hand was more and
on the other hand they did not have sales matching their production capacity.
Further cost analysis is peculiar when services are to be priced for example
consulting services, tourism services etc.
Another aspect of cost analysis when market has to be developed and research
and development cost has to accompany the cost analysis.
For example, today 7th April 2013 its a huge debate on the kind of pricing patented
drugs offer as the companies which hold patents claim for large research and Check Your Progress
development costs, but again the questions is that even if such costs are involved then 1. Define Pricing and
also should prices hold a larger premium component because of the reason that medicines Quality in relation to
have to reach the patients so shouldnt the disease get over before the breakeven in a each other.
complex question. 2. To be inserted Pg-55
Cost has also to be analysed with the perspective of long term resource Elaborate upon the
development. For example, management colleges may or may not charge for the reasoning and the usage
intellectual capital they are building in the long run. Cities developed far away from of some of the
metropolitans may charge for the peace of mind they might offer or it may be a part of important Pricing
their offering. Methods.
Medicities are building infrastructure and charging for the deprivations of building
Marketing Management : 111
Shaping the Market Offerings and equipment along with the cost of appreciable land as a part of the pricing from
their customers. Getting treatment is an experience.
6.13.3 Some Important Pricing Methods
NOTES Some important pricing methods are
a. Mark up pricing
b. Target return pricing
c. Received value pricing
d. Value pricing
e. Going rate pricing
f. Auction pricing
6.14 Summary
This Unit defined product as bundles of attributed, features, befefits and (use)
capable of exchange or use usually a mix of tangible and intangible forms. Then it
considered about different type of pricing like Markup, target return, received/per-
ceived value and value pricing. Definition of American Marketing Association has
been considered and various levels of products and customer value hierarchy as per
Kotler is taken, i. e. core benefit, basic product, expected product, augmented product
and potenial product. Classification of product on the basis of tangibility and durabil-
ity and other common aspects like convenience, shopper or specialty. 4Ps by McCarthy
and how to use them for steering the product life. Product mix: length and width are
explained. Packaging, labeling warranties and guarantees affects a product. A view of
services as offerings are taken and pricing and its various types and methods of pricing
is also explained.
Service: Service provision is often an economic activity where the buyer does not
generally, except by exclusive contract, obtain exclusive ownership of the thing pur-
chased. The benefits of such a service, if priced, are held to be self-evident in the
buyers willingness to pay for it. Public services are those society (nation state, fiscal
union, regional) as a whole pays for through taxes and other means.
Source: http://en.wikipedia.org/wiki/Service_(economics)
Price: In modern economies, prices are generally expressed in units of some form
of currency. (For commodities, they are expressed as currency per unit weight of the
commodity, e.g. euros per kilogram.) Although prices could be quoted as quantities of
other goods or services this sort of barter exchange is rarely seen. Prices are sometimes
quoted in terms of vouchers such as trading stamps and air miles. In some circum-
stances, cigarettes have been used as currency, for example in prisons, in times of
hyperinflation, and in some places during World War 2. In a black market economy,
barter is also relatively common.
Economists sometimes define price more generally as the ratio of the quantities
of goods that are exchanged for each other.
Marketing Management : 113
Shaping the Market Offerings Source: http://en.wikipedia.org/wiki/Price
7.0 Introduction
Reaching the customer. This short statement is true and holds importance for a
raw material supplier, a component supplier, a manufacturer, a clearing and forwarding
agent, a distributor, a retailer, a service provider and all of them who belong to a value
chain system. Therefore, looking at the big picture as they say value once created gets
materialized only when it is delivered to the right person at the right place and at the
right time.
How to reach the customers and what are the modes of reaching the customers
has to be understood for not only executing the marketing plan well but also to capitalize
the other four Ps of marketing.
Main objective of this Unit is to strengthen the knowledge of the readers with the
perspective of reaching to the customers.
Marketing channels
Marketing channel system
(Source: http://www.marketingpower.com/_layouts/Dictionary.aspx?dLetter=M)
Marketing Management : 117
Delivering Value A set of institutions necessary to transfer the title to goods and to move goods
from the point of production to the point of consumption and, as such, which consists
of all the institutions and all the marketing activities in the marketing process.
channel The actual impact that a channel member achieves on an associated channel
control channel members beliefs, attitudes, and behavior. power
channel The willingness of channel members to work together to
cooperation ensure important channel functions are performed.
channel A channel performance dimension based on how well the channel channel
effectiveness satisfies customer needs and wants, such as for lot size, delivery time, efficiency
location convenience, and assortment breadth. channel
productivity
channel
profitability
channel A channel performance dimension focusing on how well the firm
efficiency minimizes costs associated with performing necessary channel functions. channel
effectiveness
channel
productivity
channel
profitability
channel equity Refer to See Also column to the right.
channel The marketing functions performed by manufacturers, wholesalers, channel
flows retailers, and other channel members within the channel. Eight functions
universal channel flows that have been identified include physical and channel
possession, ownership, promotion, negotiation, financing, risking, specialization
ordering, and payment.
channel The job tasks or activities that need to be performed in the channel. channel flows
functions
channel The degree to which a channel relationship is stable, loyalty has been
member built, and each channel member is willing to make sacrifices to maintain
commitment the exchange.
channel A channel members need to maintain a particular channel relationship
7.3 Channels
As evident from the standard definitions and the conceptual explanation of the
terms explained and defined by American Marketing Association (Source: ____) in the
preceding paragraphs, goods and services
Check Your Progress a. Travel and transmit from one place to another
Elaborate upon some
b. Treated by various organizations, set of people (experts) and individuals
important concepts related
c. Pass through various process
to Distribution and
d. Change form, structure, shape or packaging on the way
Channel Management.
e. Linked to various price mechanisms
f. Promoted in various ways
Marketing Management : 126 g. Stored, kept and displayed and before finally being displayed
h. Are supported by various modes of transportation and transmission. Delivering Value
For example there is a valuable essay written by Reed Pencil (Lawrence W. Reed,
1958), http://www.fee.org /library /detail /i-pencil-audio-pdf-and-html#
axzz2QgyGN132) NOTES
This beautifully written essay justifiably express how a simple thing like a pencil
reaches its end customer most of all children.
Another expressive example is of a digestive tablet called Panchvati made in
Roorkee (http://www.panchwati.in/digestive_tablets.html). Looking at the production
and the capacity of the product a broad analysis is that around 100 million tablets are
produced in a production period say a year now looking at the requirement of the raw
materials, labour, machine, casting dies, and most of all distribution avenues for so
many tablets we definitely get a larger view of points (a) to (h).
7.3.1 Role and Type of channels
7.6 Summary
Reaching out to the customers is an art and it is one of the most important modes
which can be used as an important marketing strategy as well. One of the functions of
this aspect of marketing is to integrate and capitalize upon all the other Ps and the
decided segment.
NOTES Structure
8.0 Introduction
8.1 Unit Objectives
8.2 Integrated marketing communication
8.3 Advertising
8.4 Sales promotion
8.5 Public relations and publicity
8.6 Direct and interactive marketing
8.7 Word-of-mouth marketing
8.8 Personal selling
8.9 Direct Marketing
8.10 Brand Equity
8.11 Brand Awareness
8.12 Brand Images
8.13 Elements of the communication process
8.13.1 Steps of effective communication
8.14 Sales promotion
8.15 Personal form of communications
8.16 The sales force
8.17 Summary
8.18 Key Terms
8.19 Question & Exercises
8.20 Further Reading and References
8.0 Introduction
someone in addressing you about his products and services. You move out of the house
you see billboards, signboards, hoardings. You reach your destination and find someone
trying to contact you through mailers, in person. Someone is referring to some products
merits and demerits during discussions and you may be invited to some event show or
exhibition. Someone is contacting you on a companys behalf just providing you some
information.
Now look at the figure and table and we get to learn all the things which we have
Check Your Progress been referring to may be termed as advertising, direct marketing, personal selling, word
Zindagi ka saath bhi of mouth, public relations and events together called as marketing communications.
zindagi k baad bhi Now closely observe the components of any form of communications in the table
implies recall, which _ say advertising, print and broadcast ads and try and associate any print and broadcast
primarily is an important you remember say LIC Zindagi ka saath bhi zindagi k baad bhi with
objective. Explain with
a. Your recall or just recall
reference to context of the
b. Buying decision-especially the information and the evaluation stage
purpose of Integrated
Marketing c. Positioning of the product/organization/ service/ institutions
Communication especially d. Ask that are you one of the targets of this advertisement through the story
Advertising. board associated and the line said?
e. What is that you learn about the product, price, and the place associated with
the product?
f. Have you seen this advertisement anywhere else?
g. Has someone been talking about this product?
h. Did you ever search for an LIC agent to contact you in relation to this
advertisement?
Marketing Management : 138 i. Did anyone ever contact you for the sales of this product?
j. Have you ever been to an event associated with this product? Communicating Value
There are few important fundamentals which come to fore while we try and answer
these questions, which are as follows?
a. None of the modes of communications we say stand alone in terms of reaching NOTES
the customer and instigating a process of selling and buying.
b. Therefore there has to be a well thought of and specifically crafted set of
communications for materializing the sales.
c. This communications should be relevant to
i. The target customer
ii. Position the product rightly
iii. Must have a strong recall value
iv. Should be associated with the way the product would get associated
with a customers life for example a soft drink, must be chilled if you
say thanda matlab coca-cola.
Meaning thereby that
d. This integrated communication must be capable of enhancing the brand equity
i.e. (Brand awareness+ Brand Image + Brand Response+ Brand Relationship).
e. The components of the Integrated Marketing Communication (IMC) have to
be budget, timed and monitored for their desired and specified results.
f. IMC then has to be regularly accompanied with the continuous marketing
feedback and research so as to be re-crafted and re-associated with the
concurrent requirements of a marketing plan.
Before going for further discussion and analysis lets get familiar with few concepts
Advertising
Print and broadcast ads
Packaging Outer
Packaging inserts
Motion pictures
Brochures and booklets
Posters and leaflets
Directories
Reprints of ads
Billboards
Display signs
Point of purchase displays
Audio-visual material
Symbols and logos
Videotapes Marketing Management : 139
Communicating Value Sales promotion
Contests, games, sweepstakes, lotteries
Premiums and gifts
NOTES Sampling
Fairs and trade shows
Exhibits
Demonstrations
Coupons
Rebates
Low-interest financing
Entertainment
Trade-in allowances
Continuity programs
Tie-ins
Events and experiences
Sports
Entertainment
Festivals
Arts
Causes
Factory tours
Company museums
Street activities
Public relations and publicity
Press kits
Speeches
Seminars
Annual reports
Charitable donations
Publications
Community relations
Lobbying
Identity media
Company magazine
Direct and interactive marketing
Catalogues
8.3 Advertising
According to American Marketing Association, Advertising is defined as, The
placement of announcements and persuasive messages in time or space purchased in
any of the mass media by business firms, nonprofit organizations, government agencies,
and individuals who seek to inform and/ or persuade members of a particular target
market or audience about their products, services, organizations, or ideas.
Message
Message generation
Message evaluation and
selection
Message execution
Money
Social responsibility
Factors to consider:
review
Mission Stage in PLC Measurement
Sales goals Market share and Communication
Advertising objectives consumer base impact sales impact
Competition and
clutter Advertising
Media
frequency product
Reach, frequency, impact
substitutablity
Major media types
Specific media vehicles
Media timing
Geographical media
allocation
Marketing Management : 141
Fig 8.2 5Ms of Advertising
Communicating Value
8.4 Sales Promotion
According to American Marketing Association, Sales promotion is defined as
NOTES the media and nonmedia marketing pressure applied for a predetermined, limited period
of time at the level of consumer, retailer, or wholesaler in order to stimulate trial, increase
consumer demand, or improve product availability.
Events and experiences:
Definition not on AMA
NOTES
8.13 Elements of the Communication Process
Noise
Feedback Response
Models
Awarecess Exposure
Trial
Adoption
As we have seen and observed there are few elements of a communication process-
a. Sender
b. Receiver
c. Message
d. Media
e. Encoding
f. Decoding
g. Response
h. Feedback
Marketing Management : 144
i. Noise
Message encoding in an effective manner is an important marketing task because Communicating Value
it not only has to get associated with the right positioning but also has to bring in the
right response which we have seen is directly associated with brand equity development.
Now comes in the role of an effective combination of efficient media. This depends NOTES
upon the message itself, the characteristics of the receiver, the behavioural and the
value traits of the sender as well as the receiver, the allotted/ allocated budget and the
reach and effectiveness of media itself.
There are two important things which we must understand while referring to the
choice of media i.e.
a. Though there has been a lot of research done on the effectiveness and response
generated by separate media and in combination of other formulae as well
but there is not one single formula to explain the relationship of choice of
media, timing of this choice and level of response of the customer.
b. Its a matter of continuous learning and monitoring of ones on actions through
response and customer analysis which leads to a desired result.
8.13.1 Steps of Effective Communication
Identify target audience
Determine objectives
Design communications
Select channels
Establish budget
Measure results
References
Deepa Chandrasekaran, Gerard J. Tellis (2011). Getting a Grip on the Saddle:
Chasms or Cycles? Journal of Marketing: Vol. 75, No. 4, pp. 21-34.
1. Marketing management (A South Asian Perspective), 2009, 13th edition- chapter
15th, 15th, 16th, 17th.
2. Principles of Marketing (A South Asian Perspective), 2011, 13th editon- chapter
17th, 18th, 19th.
9.0 Introduction
New in itself is a motivating term and when associated with products, services
and customers brings in hope, strategy, innovation, span, scope and a larger picture,
which summarily means growth and execution and action of everything that is understood
and practiced.
Prime objective of this unit is to take readers to the culmination of the understanding
developed till now in the course and to expand the horizon of the view developed to the
universal and global levels.
Table 9.1
in suggestive of measurement outerion and points of all marketing programme
and plan. We gather from here that all the elements of marketing which we have least in
this course are to be benchmarked and monitored prut the most important point is that
the execuition at every level in done through appropriate marketing organizational
structure where functionalities are in coherence with the objectives and the complete
value chain ..... i. e. functions and functionaries (i. e. people) are linked with each other
and the customer.
But remember committment is strengthered with cause and cause must have
intensity. Therefore society, sustainability, Social responsibility cannot be seen as `other'
aspects but are well imbibed within the business and the marketing process itself.
For example it can be the Tctarri way that they empharized upon developing the
workforce from within the area they were producting or it can be AMULS way, HULs
way, Narayan Hrudayalaya's way, Arvind Eye cares way, Tata Steels, Hero cycles, Cipla,
companies produsing pine brickets, integrated sugar plants (working on cogeneration)
and hundreds of organizations are living upto be called as examples of committment
towards marketing / markets or proving marketing as committment'.
9.6 Summary
Marketing Management : 160
The unit about product development and how new products emerge and the process
of new product development is also dealt in detail and innovation is the key in each and Creating Long Term Growth
every step. The global markets function and new products are seen into it and about
holistic marketing which is the future of marketing.
NOTES
9.7 Key Terms
NOTES 1. Kotler Philip, Hermawan Kartajaya, Iwan Setiawan ``marketing 3.0, 2013,
John Wiley & Sons.
2. Sharma Vinay, ``Affordability for the Poor and Profitability for the Provider
2009, Verlag, Germany
3. Aakers David, ``Managing Brand Equity, 2nd Edition, 199, Free Press.
4. Dawn lacobucci, ``Kellogg on Marketing, 2001, John Wiley & Sons, New
York.
10.0 Introduction
This unit defines concept of rural marketing.The overall new way of looking at
market in a dichotomy.The comparison between rural and urban market is done.The
opportunity and why rural market are important for the economy and the business
world is discussed. The communication channels and the way it is established by the
example is elaborated in the unit. The different strategies that could be applied for
reaching,acquiring and keeping the customer in rural market is discussed in detail.The
distribution channel,Socio-Economic factors and others are elaborated in detail.The
four As of Rural Marketing is discussed and information technology role in rural
market is explained through examples which changed the dynamics of the rural market.
The major objective of this Unit is to familiarize the readers with rural marketing
meaning definitions and provisions so as to enable them to visualize that how these
are important for the business organizations to understand these things so as to steer
Marketing Management : 163
the businesses well.
Rural Marketing
10.1 Unit Objectives
NOTES
Although the rural market does offer a vast untapped potential, it should also be
Marketing Management : 168 recognized that it is not that easy to operate in rural market because of several problems.
http://www.mbaskool.com/business-articles/marketing/5690-rural-marketing- Rural Marketing
challenges-opportunities-and-beyond.html
A. Communication Barriers
a) Low Literacy Rate NOTES
b) Communication to be made in the local language
c) Lower facilities for communication
B. Seasonal Demand
a) Dependence on agriculture business
C. Transportation and Distribution
a) Poor transport infrastructure
b) Access limited to outer areas only
D. Buying Decisions
a) Cautious buyers hence slow in buying decisions
E. Availability of duplicate and cheap brands
a) Customers in rural India are very cost sensitive. Therefore the existence of
duplicate brands, which are quite common in rural parts, at lesser prices
gives considerable competition to the firms.
http://www.mbaskool.com/business-articles/marketing/5690-rural-marketing-
challenges-opportunities-and-beyond.html
Untapped Potential: It offers a great chance for different branded goods as well
as services for large number of customers.
Market Size and Potential: In India, rural household farm about 72% of total
household constitutes a huge market by any standard.
Increasing Income: Different programs undertaken have helped to improve the
economic the economic situation of the rural areas.
Accessibility Markets: The road network has facilitated a systemized product
distribution system to villages.
Competition in Urban Areas: The urban market is getting saturated and thus is
enable to provide the much needed market to many companies
Kumar, & Swamy, (2013)
Check Your Progress e) Increase in industrial population can be justified only in rural population s
What are the opporunity motivation and increasing the purchasing power to buy industrial goods.
in rural markets? http:// www.aau.in /sites /default /files /Unit%204% 20RURAL%
Why Rural market is 20DEVELOPMENT.pdf
important in todays
business world?
10.7 Socio Economic Changes in Rural India
Forget those images of ravaged villagers, kids with distended bellies and ragged
clothes and a future as grim as the cracked, sun-baked earth. Islands of poverty still
exist but most of rural India is transformed beyond imagination thanks to a host of
factors which has put unprecedented wealth into the hands of farmers across the country
and turned it into a huge consumer market.
http://indiatoday.intoday.in/story/Changing+face+of+rural+India/1/82472.html
A survey by Indias premier economic research entity, National Council for
Applied Economic Research (NCAER) indicates that rise in rural incomes is keeping
pace with the rise in urban incomes. The rural middle class is growing at 12 percent,
close to the urban middle class which is growing at 13 percent. Punjab, Kerala, Haryana,
Rajasthan, Gujarat, Andhra Pradesh and Maharashtra are considered highly prosperous
states, Kalotra, (2013). In recent years, rural markets have acquired significance in
countries like China and India, as the overall growth of the economy has resulted into
substantial increase in the purchasing power of the rural communities. On account of
the green revolution in India, the rural areas are consuming a large quantity of industrial
and urban manufactured products Singh, & Sharma, (2012).
This unit has defined concept of rural marketing.The overall new way of looking
NOTES at market in a dichotomous way. The comparison between rural and urban market is
done.The opportunity and why rural market are important for the economy and the
business world is discussed. The communication channels and the way it is established
by the example is elaborated in the unit. The different strategies that could be applied
for reaching,acquiring and keeping the customer in rural market is discussed in
detail.The distribution channel, Socio-Economic factors and others are elaborated in
detail.The four As of Rural Marketing is discussed and information technology role in
rural market is explained through examples which changed the dynamics of the rural
market.
10.13 References
8) Ajith, P. (2015). Rural to international : Blueprint for marketing. SCMS
Journal of Indian Management, 12(2), 5-16. Retrieved from http://
search.proquest.com/docview/1695027373?accountid=62831
9) Bijapurkar, R. 2003. But are Marketers Ready, Businessworld, 28
December: 2936.
10) Dogra, B. and K. Ghuman. 2008. Rural Marketing: Concepts and Practices.
New Delhi: Tata McGraw-Hill.
11) Gopalaswamy, T.P. 1997. Rural Marketing: Environment, Problems, and
Strategies. New Delhi:Wheeler Publishing.
12) Gulati, N. (2013) Strategies of Rural Marketing in India.
13) http://ajtmr.com/papers/vol1issue2/capturing-rural-market.pdf.
14) http://articles.economictimes.indiatimes.com/2014-08-27/news/
53284870_1_marketers-rural-fmcg-sales-upward-trajectory Marketing Management : 173
Rural Marketing 15) http://fmcgmarketers.blogspot.in/2006/01/itc-echoupal-case-study-
rural.html
16) http://indiatoday.intoday.in/story/Changing+face+of+rural+India/1/
82472.html
NOTES
17) http://managementstudiesentries.blogspot.in/2008/12/4-ps-and-4-as-of-
rural-marketing.html
18) http://marketingbloggers.in/2012/07/30/the-4as-roadblock-to-the-rural-
marketing-strategy/
19) http://marketingbloggers.in/2012/07/30/the-4as-roadblock-to-the-rural-
marketing-strategy/
20) http://marketinglessons.in/2015/04/08/product-strategies-for-rural-market-
indian-perspective/
21) http://pib.nic.in/feature/feyr2000/faug2000/f030820002.html.
22) http://shodhganga.inflibnet.ac.in:8080/jspui/bitstream/10603/7868/5/
05_introduction.pdf.
23) http://www.coolavenues.com/marketing-zone/rural-marketing%3A-are-
companies-finally-taking-the-rural-customers-seriously%3F
24) http://www.indianmba.com/Faculty_Column/FC1027/fc1027.html.
25) http://www.mbaskool.com/business-articles/marketing/5690-rural-
marketing-challenges-opportunities-and-beyond.html
26) http://www.scribd.com/doc/2462654/4-A-s-of-rural-market#scribd
27) http://www.yourarticlelibrary.com/essay/rural-marketing-in-india-definition-
and-features-of-rural-marketing/32335/
28) http://www.zenithresearch.org.in/images/stories/pdf/2011/Nov/ZIJMR/
9_ZIBERMR_VOL1_ISSUE%202.pdf.
29) https://mantrasmsalert.wordpress.com/case-studies/case-study-unilever-in-
india-rural-marketing-initiatives/
30) https://www.iimk.ac.in/academics/mdp/MDP2013/201314MDPOP67.html
31) Jha, M. 1988. Rural Marketing: Some Conceptual Issues, Economic and
Political Weekly, 23 (9): M8M16.
32) Kalotra, A. (2013). Rural Marketing Potential in IndiaAn Analytical
Study.International Journal, 3(1).
33) Kotler, P., K. Keller, A. Koshy and M. Jha. 2007. Marketing Management:
A South Asian Perspective. New Delhi: Pearson Prentice-Hall.
34) Krishnamacharyulu, C.S.G. and L. Ramakrishnan. 2002. Rural Marketing:
Text and Cases. Delhi: Pearson Education.
35) Modi, P. (2009). Rural Marketing Its Definition and Development
Perspective. International Journal of Rural Management, 5(1), 91-104.
11.0 Introduction
This unit is about the new venues created by technology and the changes in way
of marketing. These avenues are like Social media marketing,E-Marketing.The new
methods of search engine optimization,and other ways of revenues pay per click like
for blogging,product opinion sites,display advertisement .This unit also describe internet
based marketing in detail and its effectiveness, ethical and legal issues are also discussed.
The major objective of this Unit is to familiarize the readers with technology and
marketing meaning definitions and provisions so as to enable them to visualize that
how these are important for the business organizations to understand these things so as
to steer the businesses well.
Social media marketing programs usually center on efforts to create content that
attracts attention and encourages readers to share it across their social networks. The
resulting electronic word of mouth (eWoM) refers to any statement consumers share
via the Internet (e.g., web sites, social networks, instant messages, news feeds) about
an event, product, service, brand or company. When the underlying message spreads
from user to user and presumably resonates because it appears to come from a trusted.
https://en.wikipedia.org/wiki/Social_media_marketing
As an Internet marketing strategy, SEO considers how search engines work, what
people search for, the actual search terms or keywords typed into search engines and NOTES
which search engines are preferred by their targeted audience. Optimizing a website
may involve editing its content, HTML and associated coding to both increase its
relevance to specific keywords and to remove barriers to the indexing activities of
search engines. Promoting a site to increase the number of backlinks, or inbound links,
is another SEO tactic.
https://en.wikipedia.org/wiki/Search_engine_optimization
Search engine optimization is a methodology of strategies, techniques and tactics
used to increase the amount of visitors to a website by obtaining a high-ranking
placement in the search results page of a search engine (SERP) including Google,
Bing, Yahoo and other search engines.
It is common practice for Internet users to not click through pages and pages of
search results, so where a site ranks in a search is essential for directing more traffic
toward the site. The higher a website naturally ranks in organic results of a search, the
greater the chance that site will be visited by a user.
http://www.webopedia.com/TERM/S/SEO.html
Search Engine Optimization is the process of improving the visibility of a website
on organic (natural or un-paid) search engine result pages (SERPs), by incorporating
search engine friendly elements into a website. A successful search engine optimization
campaign will have, as part of the improvements, carefully select, relevant, keywords
which the on-page optimization will be designed to make prominent for search engine
algorithms. Search engine optimization is broken down into two basic areas: on-page,
and off-page optimization. On-page optimization refers to website elements which
comprise a web page, such as HTML code, textual content, and images. Off-page
optimization refers, predominantly, to back links (links pointing to the site which is
being optimized, from other relevant websites). (WORD 115)
http://www.whatisseo.com/
Online advertising, also called online marketing or Internet advertising, is a form
of marketing and advertising which uses the Internet to deliver promotional marketing
messages to consumers. It includes email marketing, search engine marketing (SEM),
social media marketing, many types of display advertising (including web banner
advertising), and mobile advertising. Like other advertising media, online advertising
frequently involves both a publisher, who integrates advertisements into its online
content, and an advertiser, who provides the advertisements to be displayed on the
publishers content.
https://en.wikipedia.org/wiki/Online_advertising
Marketing Management : 183
Technology and Marketing
11.6 Email Marketing
Email marketing can be an extremely effective way to reach out to new customers
NOTES and increase your conversion rates. We offer several ways to take advantage of this
simple and cost-effective method of marketing, including our popular Email Campaign
services. Get access to millions of potential new customers and build your email
campaigns quickly and easily online or have one of our email experts do it for you.
https://www.infousa.com/email-marketing/
Pay per click (PPC), also called cost per click, is an internet advertising model
used to direct traffic to websites, in which advertisers pay the publisher (typically a
website owner) when the ad is clicked. It is defined simply as the amount spent to get
an advertisement clicked.
https://en.wikipedia.org/wiki/Pay_per_click
PPC is an Internet marketing formula used to price online advertisements. In PPC
programs the online advertisers will pay Internet Publishers the agreed upon PPC rate
when an ad is clicked on, regardless if a sale is made or not.
With pay per click in search engine advertising, the advertiser would typically
bid on a keyword so the PPC rate changes. On single website or network of content
websites the site publisher would usually set a fixed pay per click rate. Also called
cost-per-click (CPC).
http://www.webopedia.com/TERM/P/PPC.html
Pay-per-click is calculated by dividing the advertising cost by the number of
clicks generated by an advertisement. The basic formula is:
Pay-per-click ($) = Advertising cost ($) Ads clicked (#)
https://en.wikipedia.org/wiki/Pay_per_click
Pay-Per-Click Marketing Is Good For Everyone:
a) Its good for searchers Research indicates that searchers click on paid
search ads more often than any other form of digital advertising.
b) Its good for advertisers - Advertisers are offered a unique means of putting
their message in front of an audience who is actively and specifically seeking
out their product.
c) Its good for search engines PPC enables search engines to cater to searchers
and advertisers simultaneously.
http://www.wordstream.com/pay-per-click
Gone are the days when Arts Marketers had to rely on television and print to
NOTES carry their message. Now, you can send your message directly to the consumer through
new techniques such as blogging, online video, RSS, podcasting, and more. http://
www.prarts.com/Lesson_View.aspx?LessonId=7.
Rss Feeds, Blogging, and Podcasting is a great way to broadcast info to millions
of people. http://www.quistdesigns.com/rss-blog-podcast.html
a) A blog, short for web log, is an online journal or record of sequential postings
with news, commentary, or other material such as images and video. Typically,
blog entries appear in reverse chronological order and allow visitors to add their
own comments. For more information, see the Blog article in Wikipedia.
b) A podcast is a syndicated multimedia program broadcast over the Internet. Podcasts
can be ongoing (e.g., weekly audio taped radio shows), time limited (e.g., a series
of videotaped lectures from last year), or intermittent, and in most cases visitors
can play one program or subscribe to the full series. For more information, see
the Podcast article in Wikipedia. https://www.socialpsychology.org/blogs.htm
c) RSS is Really Simple Syndication i.e. it is the process for publishing content on
the Internet that facilitates moving the content into other environments.
http://www.knowonlineadvertising.com/advertisingdictionary/definition-of-rss/
Blog, podcast and RSS advertising are being driven by some of the same factors
boosting the growth of the overall alternative media sector: continued audience
fragmentation, the perceived ineffectiveness of traditional advertising, and the exclusive
but coveted 18-to-34-year-old demographic, said Patrick Quinn, president of PQ Media.
[They] have demonstrated an ability to reach younger demographics as well as
Check Your Progress influentials.
How advertising method
http://www.emarketer.com/Article/Blog-Podcast-RSS-Advertising-Surge-Ahead/
changed due to digital
1003936#sthash.WhSRfxkf.dpuf
marketing ?
What is Pay-per -click is Feeds are a way for websites large and small to distribute their content well beyond
calculated and revenue just visitors using browsers. Feeds permit subscription to regular updates, delivered
collection is done ? automatically via a web portal, news reader, or in some cases good old email. Feeds
also make it possible for site content to be packaged into widgets, gadgets, mobile
devices, and other bite-sized technologies that make it possible to display blogs, podcasts,
and major news/sports/weather/whatever headlines just about anywhere.
https://support.google.com/feedburner/answer/79408?hl=en
A business network is a type of business social network whose reason for existing
is business networking activity. There are several prominent business networking NOTES
organizations that create models of business networking activity that, when followed,
allow the business person to build new business relationships and generate business
opportunities at the same time. A professional network service is an implementation of
information technology in support of business networking.
https://en.wikipedia.org/wiki/Business_networking
Consider this: It wasnt until 1997 that the Internet reached 50 million users in
the United States. Facebook gained over 100 million users in the U.S. from January
2009 to January 2010, marking a 145 percent growth rate within one year, according to
research by digital marketing agency Strategy Labs. If youre a business owner that
hasnt embraced social media networking as a major component of your success strategy,
its due time to hop onboard.
http://www.inc.com/guides/using-social-networking-sites.html
The main purpose of the Social Business application is to develop a social network
aimed to business people who want to make their businesses known to other people
and find their business partners easily. Of course with a little imagination the Social
Business application can be transformed in a different kind of social network.
What is Social Business for: - for someone who wants to develop a business
community, a social networking or business networking - for people who own several
businesses - for a user who wants to keep track of the appointments they have.
http://codecanyon.net/item/social-business-social-business-networking/6994093
A review site is a website on which reviews can be posted about people, businesses,
products, or services. These sites may use Web 2.0 techniques to gather reviews from
site users or may employ professional writers to author reviews on the topic of concern
for the site. Early review sites included Epinions.com and Amazon.com.
Review sites are generally supported by advertising. Some business review sites
may also allow businesses to pay for enhanced listings, which do not affect the reviews
and ratings.
https://en.wikipedia.org/wiki/Review_site
Applying good ethical standards to the online world is a direct reflection of your
NOTES business online. Ethics affects all aspects of your business. It affects first and foremost
your companys brand image and subsequently how sales, marketing, and advertising
principles are applied to the task of making your company profitable for the long haul.
Ethics affects your employees, and how they represent your company online, on the
phone, in person, and all types of customer service and customer relations when dealing
with buyers, engineers, sales leads, and potential customers in both the business of
B2B and B2C, both of which covers the majority of business types in the world.
http://pwebs.net/i/internet-ethics/
The very nature of the Internet increases the complexity of tackling the above
problems. Internet involves diverse tools like telephone, television, print etc., and cuts
across national boundaries. Hence, Internet complicates the legal, ethical, business and
regulatory issues when compared to other media. Given these complexities and infancy
of Internet, Bush et al. in their study, traverse through these complex legal, ethical,
business and regulatory issues for Internet at three levels viz., societal, industry and
company.
https://chaturvedibraj.wordpress.com/2007/06/29/internet-marketing-some-
ethical-issues/
Ethics and Legal Issues
a) Ethics and law are closely related.
b) Ethics concerns the analysis of what is right and wrong and how we judge the
differences.
c) Modern technology presents a challenge to marketing ethics. Critical issues include:
I. Ownership of intellectual property
II. Freedom of expression
III. Use of data and its collection
IV. Status of children and digital networks
http://www.just.edu.jo/~tawalbeh/aabfs/ethics/presentations/ali.ppt.
11.16 Summary
Check Your Progress
What do you understand This unit is about the new avenues created by technology and the changes in way
by social networking? of marketing. These avenues are like Social media marketing,E-Marketing.The new
How social networking is methods of search engine optimization,and other ways of revenues pay per click like
creating new ways of for blogging,product opinion sites,display advertisement .This unit also describes
marketing? internet based marketing in detail and its effectiveness, ethical and legal issues is also
discussed.
Marketing Management : 190
Technology and Marketing
11.17 Key Terms
Social media marketing: Social media marketing refers to the process of gaining
website traffic or attention through social media sites. NOTES
http://mashable.com/category/social-media-marketing/
E-Marketing: e-Marketing is any marketing done online via websites or other
online tools and resources. e-Marketing can include paid services while other methods
are virtually free. A wide variety of eMarketing methods are at your disposal, including:
direct email, SMS/text messaging, blogs, webpages, banners, videos, images, ads, social
media, search engines, and much, much more.
http://northcarolinadeportal.com/eMarketing/what-is-emarketing/
#sthash.UWBvjYNC.dpuf
Email Marketing: Email marketing is directly marketing a commercial message
to a group of people using email. In its broadest sense, every email sent to a potential or
current customer could be considered email marketing. It usually involves using email
to send ads, request business, or solicit sales or donations, and is meant to build loyalty,
trust, or brand awareness. Email marketing can be done to either sold lists or a current
customer database. Broadly, the term is usually used to refer to sending email messages
with the purpose of enhancing the relationship of a merchant with its current or previous
customers, to encourage customer loyalty and repeat business, acquiring new customers
or convincing current customers to purchase something immediately, and adding
advertisements to email messages sent by other companies to their customers.
https://en.wikipedia.org/wiki/Email_marketing
Technology and Marketing: Technology has always changed how marketing
works. What is different today is the unprecedented rate of change in the both the
development of marketing tools and the escalation of expectations for better experiences
from customers.
http://www.forbes.com/ sites/ johnellett/2014/09/30/ technology- is-changing- the-
future-of-marketing-again/
NOTES
11.19 Books for Further Reading
1) Marketing High Technology by William H. Davidow, The free Press A
Division of Simon & Schuster Inc.
2) Packaged Pleasures How Technology and Marketing Revolutionized Desire
by Gary S. Cross and Robert N. Proctor, The University of Chicago Press
3) Marketing of High-technology Products and Innovations by Jakki J. Mohr,
Sanjit Sengupta, Stanley F. Slater, Pearson Education.
4) Fundamentals of High-technology Marketing: What Marketers Need to Know
by Ira S. Kalb, K&A Press
11.20 References
1) Boundless. Use of New Technologies in Marketing and
Research. Boundless Marketing. Boundless, 10 Jul. 2015. Retrieved 12 Jul.
2015 from https://www.boundless.com/marketing/textbooks/boundless-
marketing-textbook/the-marketing-environment-3/technology-32/use-of-
new-technologies-in-marketing-and-research-171-4044/
2) http://codecanyon.net/item/social-business-social-business-networking/
6994093
3) http://fita.org/aotm/0698.html
4) http://homebusiness.about.com/od/businessservicesbusiness/p/internet-
market.htm
5) http://pwebs.net/i/internet-ethics/
6) http://www.advertisepurple.com/default.asp.pg-AffiliateMarketing_02
7) http://www.emarketer.com/Article/Blog-Podcast-RSS-Advertising-Surge-
Ahead/1003936#sthash.WhSRfxkf.dpuf
8) http://www.eplusm.com/website_localization.html
9) http://www.inboundnow.com/10-online-marketing-trends-predictions-2015/
10) http://www.inc.com/guides/using-social-networking-sites.html
11) http://www.just.edu.jo/~tawalbeh/aabfs/ethics/presentations/ali.ppt.
12) http://www.knowonlineadvertising.com/advertisingdictionary/definition-of-
rss/
13) http://www.prarts.com/Lesson_View.aspx?LessonId=7.
14) http://www.quistdesigns.com/rss-blog-podcast.html
Marketing Management : 192 15) http://www.sovereign.co.in/Affiliate_Marketing.htm
16) http://www.webopedia.com/TERM/P/PPC.html Technology and Marketing
17) http://www.webopedia.com/TERM/S/SEO.html
18) http://www.whatisseo.com/
19) http://www.wordstream.com/pay-per-click NOTES
20) https://chaturvedibraj.wordpress.com/2007/06/29/internet-marketing-some-
ethical-issues/
21) https://coverageoneinsurance.com/affiliates/
22) https://en.wikipedia.org/wiki/Affiliate_marketing
23) https://en.wikipedia.org/wiki/Business_networking
24) https://en.wikipedia.org/wiki/Customer_relationship_management
25) https://en.wikipedia.org/wiki/Display_advertising
26) https://en.wikipedia.org/wiki/Online_advertising
27) https://en.wikipedia.org/wiki/Pay_per_click
28) https://en.wikipedia.org/wiki/Pay_per_click
29) https://en.wikipedia.org/wiki/Review_site
30) https://en.wikipedia.org/wiki/Search_advertising
31) https://en.wikipedia.org/wiki/Search_engine_optimization
32) https://en.wikipedia.org/wiki/Social_media_marketing
33) https://en.wikipedia.org/wiki/Website_localization
34) https://support.google.com/feedburner/answer/79408?hl=en
35) https://www.advertising.com/displayuniversity/display-fundamentals/what-
display
36) https://www.infousa.com/email-marketing/
37) https://www.socialpsychology.org/blogs.htm
NOTES Structure
12.0 Introduction
12.1 Unit Objectives
12.2 Marketing Ethics
12.3 Fundamental issues in the Ethics of marketing
12.4 Principles of Ethical Marketing
12.5 Specific issues in marketing ethics
12.6 Responsibilities of the Marketer
12.7 Ethical issues in Political Marketing
12.8 Ethical challenges of social marketing
12.9 Marketing in Synchronization and Synonimity with Social Relevance
12.10 Strategic Businesses with Social Relevance
12.11 Summary
12.12 Key Terms
12.13 Questions and Exercises
12.14 Books for Further Reading
12.15 References
12.0 Introduction
This unit is about familiarizing reader with ethics of marketing and what are
the responsibilities of marketers. This also discusses about social marketing, the way
in which marketing activities is synchronized with social relevance.
The major objective of this Unit is to familiarize the readers with marketing
ethics, meaning definitions and provisions so as to enable them to visualize that how
these are important for the business organizations to understand these things so as to
steer the businesses well.
Marketing ethics is an area of applied ethics which deals with the moral principles
behind the operation and regulation of marketing. Some areas of marketing ethics NOTES
(ethics of advertising and promotion) overlap with media ethics. https://en.
wikipedia.org/wiki/Marketing_ethics Marketing ethics is the systematic study of how
moral standards are applied to marketing decisions, behaviors, and institutions.
Marketing ethics is mostly focused on marketing behaviors that are not prohibited by
the law but perhaps should not be indulged due to certain moral considerations. And
thus, marketing ethics is often concerned with actions that are currently legal but still
might be judged improper according to some invoked moral standard. Laczniak, E.
(2008). Ethics is concerned with what is right and what is wrong. Many people assume
that only actions that violate laws are considered unethical. While it is true that illegal
activity is also unethical, a business activity can be unethical even though no laws are
violated. For instance, some consider it unethical for marketing companies to
aggressively promote unhealthy foods to children though such promotional practices
are generally not viewed as illegal. http://www.knowthis.com/what-is-marketing/ethics-
in-marketing. It promotes qualitative benefits to its customers, which other similar
companies, products or services fail to recognise. The concern with ethical issues,
such as child labour, working conditions, relationships with third world countries and
environmental problems, has changed the attitude of the Western World towards a
more socially responsible way of thinking. This has influenced companies and their
response is to market their products in a more socially responsible way. https://
en.wikipedia.org/wiki/Ethical_marketing
Ethical marketing expert Horowitz says despite Nikes reputation, its CSR activity
will help the brand: Its trying to do the right thing and that will ward off consumer
backlash and give Nike a stronger foundation to compete. Baveystock also believes
that while Starbucks is vilified for being a big nasty brand, if its CSR work is promoted
consistently and innovatively, it will eventually gain credibility. ETHICAL
MARKETING: A question of ethics.(2005)
Marketers must accept responsibility for the consequences of their activities and
make every effort to ensure that their decisions, recommendations and actions function NOTES
to identify, serve and satisfy all relevant publics: customers, organizations and society.
Marketers Professional Conduct must be guided by:
a) The basic rule of professional ethics: not knowingly to do harm;
b) The adherence to all applicable laws and regulations;
c) The accurate representation of their education, training and experience;
d) The active support, practice and promotion of this Code of Ethics.
http://web.csulb.edu/colleges/cba/marketing/code-of-ethics/
12.11 Summary
This unit is about familiarized reader with ethics of marketing and also described
about the responsibilities of marketers.This also discussed about social marketing,the
way in which marketing activities is synchronized with social relevance.
12.15 References
1) Brenkert, G. G. (2002). Ethical challenges of social marketing. Journal of
Public Policy & Marketing, 21(1), 14-25. Retrieved from http://
search.proquest.com/docview/211102312?accountid=62831
2) Drucker, Peter F. 1974. Management: Tasks, responsibilities, practices. New
York: Harper & Row.
3) ETHICAL MARKETING: A question of ethics.(2005). Brand Strategy, ,
24-27. Retrieved from http://search.proquest.com/docview/
224186008?accountid=62831
4) http://flexiblelearning.auckland.ac.nz/political_marketing/
40.html?t=1392702364.73
5) http://web.csulb.edu/colleges/cba/marketing/code-of-ethics/
6) http://www.amazon.in/Political-Marketing-Chartered-Institute/dp/
0750645377
7) http://www.answers.com/Q/What_ are_ the_ main_ ethical_ issues_ of_
marketing
8) http://www.knowthis.com/what-is-marketing/ethics-in-marketing
9) http://www.researchgate.net/publication/242347129_Political_marketing_-
Marketing Management : 202
10) http://www.studymode.com/essays/Fundamental-Issues-In-The-Ethics-Of- Marketing Ethics
879735.html
11) http://wwwdocs.fce.unsw.edu.au/marketing/amj_11_01_kearns.pdf.
12) https://en.wikipedia.org/wiki/Ethical_marketing
NOTES
13) https://en.wikipedia.org/wiki/Marketing_ethics
14) Laczniak, G. R., & Murphy, P. E. (2006). Normative perspectives for ethical
and socially responsible marketing. Journal of Macromarketing, 26(2), 154-
177.
15) Potincu, C. (2008). ETHICS LIMITS IN POLITICAL
MARKETING. Bulletin of the Transilvania University of Brasov.Economic
Sciences.Series V, 1, 81-86. Retrieved from http://search.proquest.com/
docview/209550696?accountid=62831
16) Waller, D. S. (2002). Advertising agency-client attitudes towards ethical
issues in political advertising. Journal of Business Ethics,36(4), 347-354.
Retrieved from http://search.proquest.com/docview/198194501? accountid
= 62831
17) www.answers.com/Q/What_are_the_main_ethical_issues_of_marketing)
18) www.marketing-schools.org/types-of-marketing/ethical-marketing.html
1. Kotler, P., Armstrong, Agnihotri and Haque ``Principles of Marketing, 13th
Edition, Pearson India.
2. Kotler, Keller, Koshi and Jha, `Marketing Management, 14th Edition, Pearson
India
Reference Reading :
1. Kotler Philip, Hermawan Kartajaya, Iwan Setiawan ``marketing 3.0, 2013,
John Wiley & Sons.
2. Sharma Vinay, ``Affordability for the Poor and Profitability for the Provider
2009, Verlag, Germany
3. Aakers David, ``Managing Brand Equity, 2nd Edition, 199, Free Press.
4. Dawn lacobucci, ``Kellogg on Marketing, 2001, John Wiley & Sons, New
York.