Marketing Management

Module 1 : Fundamentals of Marketing

MARKETING touches our
life. Every day !
 Marketing

1900 edition of the Webster’s

Dictionary never had the word
“Marketing”!
This word first appeared in 1910
edition
Defining Market
What is Market?

A market is any place where the sellers of a

particular good or service can meet with the
buyers of that goods and service where there
is a potential for a transaction to take place.
The buyers must have something they can offer
in exchange for there to be a potential
transaction.
I. Defining Marketing
What is Marketing?
Some Interesting Firsts in Marketing

The first Newspaper ad was in the year 1657 in England for a ‘coffee’.

The world’s first legally registered brand still exists….it is

What is Marketing?
Definitions

Marketing is the social process by which individuals and

groups obtain what they need and want through creating and
exchanging products and value with others. (Philip Kotler)

Marketing is not only much broader than selling; it is not a

specialized activity at all. It encompasses the entire
business. It is the whole business seen from the point of view
of the final result, that is, from the customer’s point of
view. (Peter Drucker).

Marketing consists of actions taken to build and maintain

desirable exchange* relationships. (Philip Kotler and
Gary Armstrong)

* Exchange here is defined as the act of obtaining a desired object from someone by offerning something in return.
What is Marketing?
Understanding Marketing
Management
Understanding Marketing Management

Is Marketing Management all about promoting the Product?

Is Marketing all about making the communications about your products?

Marketing is all about understanding the requirement from the customers and delivering
the products which will meet their requirement
 So What is Marketing Then?

Attract new customers by promising

better value to them

Grow current customers by ensuring that

they are constantly delighted
Marketing is all about delivering
Value
Benefits – Cost = Value
Understanding Value
Starbucks Delivers Unique Value Through
Superior Experience
 Starbucks Delivers Unique Value Through Superior Experience

Consumers could get a cup of coffee at a reasonable price from any of the

coffee shops or hotels then why do they pay so much to Starbucks?

Why do they come back to Starbucks café again and again and willing to pay

so high?
 Starbucks
The Answer remain Delivers
simple…… Unique Value Through Superior Experience

The customers are not just gulping a cup of coffee, they are enjoying the delightful of

experience in the café in the form of relaxation and ambience of their liking.

They love the experience of visiting café as it displays a remarkable commitment and

unique value which they deliver.

 Starbucks
They achieve Delivers
superior Unique Value
engagement Through
with Superior Experience
customers.

 Starbucks create a great atmosphere in terms of human connection and engagement creating

communities in the third place between home and work.

 Superior engagement is the main competitive advantage that they are enjoying as a brand.

 Starbucks does not vote for quick service of delivering the coffee in two minutes rather it prefer

to engage the customers and encourages them to hand around in the café.

 Starbucks provides a reasonable private and comfortable seating, offers free wifi connection,

charging point, hosts mini concerts and encourages them to rejoice in a comfortable environment.
 Starbucks
Meticulous Delivers
attention to theUnique Value Through Superior Experience
Process

 Starbucks assigns meticulous attention to every step in the preparation of the

coffee which ensures high consistency.

 Every cup of coffee that is been ordered is tested with the flovor, thickness,

temperature and sweetness.

 It does through the thorough training of the staff.

 They urge the customers to complain if the drink was not perfect.
Value Delivery-Virgin Atlantica
 Starbucks
Virgin Atlantica- Delivers
Customer FocusedUnique
Airline Value Through Superior Experience

 Virgin Atlantica- brought many innovations to the industry of

airlines.
 It offered premium economy class that offers more leg space and
broader seat width at slightly higher price and provides a good
travel experience thereby making him a loyal customer.
 Starbucks Delivers
Typical AV advertisement of Virgin Unique Value Through
Atlantica- Superior Experience

VA picks me from home,

Hands over my boarding pass at my car window, I go straight to a VA lounge
In flight, I can get my hair cut done, shoes polished
I am asked how I want my mean, and when I want it, served accordingly
When I get off, I am picked up
I don’t have to queue for the taxi in a strange place
Oh! That’s slightly higher fare which is immaterial!....
Virgin Atlantica-Starbucks Delivers
Value Delivery Unique Value Through Superior Experience

VA customers do not base their decision on price alone. They want a

hassle free, comfortable travel, with several add on’s so that they
reach their destination fresh and ready to work.
The premium economy class invested by VA was later copied by
several other airlines, even in economy class they have different
attraction including such as 43kg baggage allowance.
Virgin Atlantica-Starbucks Delivers
Success mantra Unique Value Through Superior Experience

Give the customer what he needs and charge the price that they are ready
to pay, if he wants affordable travel offer that and charge accordingly if he
wants comfortable and luxury travel charge the due price for the value that
he seeks for.

Value is the worth that the customers finds in your offer, he is interested in
only one question:“ am I getting my money’s worth.
Toyota puts Value into Etios
 Toyota offersStarbucks
value in theDelivers Unique Value Through
form of Etios Superior Experience

 Having burnt its hand in the plank of quality the company carefully crafted a strategy based on quality
from etios the new offering from Toyota.

 Etios was created keeping 100% quality in mind.

 Its marketing communication too highlighted the quality hallmark of the etios.

 Infect the etios campaign used Q for Quality by a word.

 They claimed that their engineers have worked very hard on the new etios and tested it thoroughly.
They belived that the car that were going to be sell will meet the quality demand of Indian Customers.
 Toyota offersStarbucks
value in theDelivers Unique Value Through
form of Etios Superior Experience

 Toyota found that Indian families like to travel together, so special emphasis was given to storage space
from generous leg and shoulder holder.

 Etios the first offering in the entry level sedan category in India has so far been sucesasful.

 It is car with the large space and fuel efficiency.

 It is a car that’s unique to India, it can be driven in extreme climatic conditions, can with stand heavy
braking, high ground clearance, can overtake in the low speed.

 Toyota launched the diesel version too with the petrol prices going high.
McDonald’s Goes Veg-Only
 Starbucks
Giving the Customer Delivers
What Unique Value Through
he want’s. Superior Experience

 In 1996 when McDonald’s entered India for the first time, It eschewed the trademark of beef
burgers.
 It indianised its whole offerings and made it suitable for the local needs and tastes with the menu
including McAloo Tikki burgers, Mcveggies, Potato wedges etc.
 McDonald’s has been this flexible with its menu in India as it was anle to see that giving value to
customers.
 Starbucks
Giving the Customer Delivers
What Unique Value Through
he want’s. Superior Experience

 McDonald’s earnestly started wooing the vast vegetarians and non beef segments and vegetarian
fare now accounts for more than half of its menu and sales.

 Sixteen years later after the entry into Indian market McDonald’s open its pure vegetarian
restaurants in Katra in the state of Jammu,Vishno Devi and also one near golden temple Amritsar.

 McDonald’s maintains a separate food lines for veg throughout procurement, cooking and serving.

 McDonald’s has seen that such a value delivery is in the interest of both the customers and the
chain.
II. Scope of Marketing
Scope of Marketing
What gets Marketed?
Scope of Marketing

1. Marketing of Goods
From packaged food and
personal hygiene products
to…….
……Vehicles, machine tools
Earth Movers and Large
aircrafts…..

Watches, Cosmetics, Mobile

Phones

…All forms of goods require

marketing.
What gets Marketed?
Scope of Marketing
1I. Marketing of Services

From packaged Financial

Institutions and Airline Service
providers to…….

……Housekeeping services and

hair cutting salons…..

…All forms of services require

marketing.
What gets Marketed?
Scope of Marketing
1II. Marketing of Experiences

Think of it….

……what is Disneyland or tour

operates offering Bungee Jumping
doing?

…They are marketing

“experiences” to us.
What gets Marketed?
Scope of Marketing
1V. Events

From Sporting events and Award

Ceremonies....

……to trade shows like Vibrant Gujrat

and Auto Expo….

…we witness Events being marketed

all the time.
What gets Marketed?
Scope of Marketing
1V. Persons

Ab ki baar Modi Sarkaar….

..‘Master Blaster’ Sachin

Tendulkar..

‘King Khan’ Shah Rukh

..These are names and titles we recognize

because of active marketing of ‘Persons’.
What gets Marketed?
Scope of Marketing
V. Places
Places are marketed as….

Attractive tourist destinations..like

Incredible India.

Or on the basis of distinctive

capabilities of the place…like
German Techonology, or Swiss
Chocolates etc.
What gets Marketed?
Scope of Marketing
VI. Properties
Properties could be…

…tangible like Real Estate..

…or intangible like Financial properties

(Stocks/ Shares , bonds etc).
What gets Marketed?
Scope of Marketing
VII. Organizations
From NGOs like WWF and CRY….

…to large Businesses like Intel and Tata

Steel….

…indulge in Marketing of their

‘Organization’ or ‘Corporate’.
What gets Marketed?
Scope of Marketing
VIII. Information
Universities and Educational Institutions..

..News Agencies like Thomson Reuters and

search engines like Google..

Tom McCausland CEO of Siemens

Healthcare says we are not just X-ray or
MRI machine we are Information
…are engaged in marketing information.
What gets Marketed?
Scope of Marketing
IX. Ideas
Social messages like “Say no to drugs”,
“don’t drink and drive”, “save the
environment” are all ‘ideas’ that are
marketed.

Some days on the calendar are

dedicated to certain ideas, like “world
hear day” is dedicated to the idea of
maintaining a healthy heart,Valentines
Day the idea of love etc.
What gets Marketed?
Scope of Marketing

Goods Services Experiences

Events People Places

Properties Information Ideas

Evolution of Marketing
Evolution of the Marketing Concept
The Production Concept : Sasta banao, Sab The Product Concept : “Sundar aur tikaoo
jagah pe becho to bahut saara apne aap bikega” banao, to bahut saara apne aap bikega”
This concept assumed that the Consumers This concept assumed that Consumers buy the
are mostly interested in the product being highest quality, the best performance & most
available at low prices. Thus the focus is to features. Thus the focus is to keep adding to
achieve cheap, efficient production and quality and features of the product, whether or
intensive distribution not the consumer is really looking for it.

The Marketing Concept : “Pata karo kya

The Selling Concept : “Bechoge to hi bikega”
chahiye, use sundar aur tikaoo banao aur sahi
daam par becho” This concept assumed that the Consumers if
left alone will not buy enough of a Firm’s
Find out the needs and wants of a specific
product.The firm must undertake aggressive
target market and deliver satisfaction levels
selling and promotion effort and that
better than competition. “Make what you can
consumers need to be coaxed into buying.
sell, don’t try and sell what you can make”.
 1910-
1930 1930-
Sales Era
1970

Production Era

1970-2000

Marketing Era Relationship

NOW
Marketing Era
IV. Core Marketing Concepts
A) Types of Market
‘Market’
The term ‘market’ is often used to cover various groupings of customers.

I need to
I need to
lose
find a job
weight

Examples of
“Needs”
markets
‘Market’
The term ‘market’ is often used to cover various groupings of customers.

The The
apparels automobile
market market

Examples of
“Products”
markets
‘Market’
The term ‘market’ is often used to cover various groupings of customers.

The The ‘HNI’

‘Youth’ or affluent
market market

Examples of
“Demographic ”
markets
‘Market’
The term ‘market’ is often used to cover various groupings of customers.

The The
‘South’ ‘Americian’
market market

Examples of
“Geographic”
markets
‘Market’
The term ‘market’ is often used to cover various groupings of customers.

“Needs” “Products” “Geographic”

markets markets markets

“Voter” “Labour”
markets markets

ETC……
‘Market’
Marketplace

Marketplace refers to the ‘physical’ market places that one visits to buy things….ranging from the
local vegetable shops to the Stock Exchange markets
‘Market’
Marketspace

‘Marketspace’ refers to the digital markets, where in the new economy, you can buy everything
from vegetables to financial instruments.
Paradigm Shift in Marketing
IV. Core Marketing Concepts
B) Basic Terminology
Basic Terminology
Marketer and Prospects

Marketer : Prospect

A marketer is anybody who is seeking a Prospects are people from whom the marketer
response. A response in the form of…. is expecting the response in the form of….

Etc… Etc…
Basic Terminology
Target Market and Segmentation

If Marketers are people who are looking for a particular type of response, it is almost impossible
to get the desired response from EVERYBODY.

Marketers therefore start by dividing up the market by identifying distinct groups of consumers
who might prefer or require varying product and services mixes. The divisions are known as
“Market Segments”.

Market Segments can be identified by examining demographic, psychographic and behavioral

differences among consumers.

The marketer then decides which market segment to target. This forms their ‘target market’.
Basic Terminology
Needs, Wants and Demand

Needs : Wants : Demand :

Needs are basic Needs become wants, when A want becomes a demand
requirements like food, air, the are directed to specific when it is backed by the
water and shelter. objects to satisfy the need. ability to pay.
Requirements that required
to survive.
Basic Terminology
Value proposition, Offering and Brand

Value Proposition : Offering : Brand :

A set of benefits they offer to The intangible value A brand is an offering from a
customers to satisfy their proposition is made physical known source.
needs. by an offering, which can be
a combination of products,
services, information and
experiences.

Value Proposition : We McDonalds : Burger from

Offering : Burger
will fill your stomach. a known source
Basic Terminology
Marketing Channels

Communication Channels: Distribution Channels : Service Channels :

Communication channels Distribution channels are Service channels include
deliver and receive messages used to display, sell, or deliver warehouses, Banks (which help in
from target buyers. the product or service to the transactions), transport companies.
buyer or user.

ETC… ETC…
Basic Terminology
Marketing Program

Marketing Program refers to the

numerous decision that an company
takes to decide on the Marketing
Mix using various marketing Tools.
Basic Terminology
Marketing Mix (4 Ps of Marketing)

The concept of Marketing Mix is the MAINSTAY of this course. We will be looking at each aspect
of the marketing mix in detail over the next few months. Here is primer:
Marketing Mix
Product 4 Ps of Marketing
Place
- Product Variety - Channels
- Quality - Coverage
- Design - Assortments
- Features Promotion - Locations
- Brand Image Price - Sales Promotion - Inventory
- Packaging - Product Price - Advertising - Transport
- Sizes - Allowances - Sales force
- Services - Payment Period - Public Relations
- Warranties - Credit Terms - Direct
- Returns Marketing
Basic Terminology
Marketing Mix from Customer Perspective (4 Cs of Marketing)

The 4Ps of marketing represent the marketer’s point of view. These correspond to the customer
as:
4Ps 4Cs

Product Customer Solution

Price Customer Cost

Placement Convenience

Promotion Communication
V. The Marketing Process
The Marketing Process
A broad model of the Marketing Process

Understand the Make an integrated Build profitable Capture value from

marketplace and marketing program relationships and customers to create
customer needs and that delivers create customer profits and develop
wants superior value delight CLV
CORE MARKETING CONCEPTS
Need, Want, Demand
Fundamentals of Marketing
 To understand Better
Needs
Human needs are the basic requirements and include food, clothing and shelter. Without these humans
cannot survive.

For Example: if you Can consider Bathing as Need

Wants
Wants are a step ahead of needs and are largely dependent on the needs of humans
themselves. Need gets converted into a want when it gets specific.
Demands

When an individual wants something which is premium, but he also has the ability to buy it,
then these wants are converted to demands.

For Example : A person might demand for mysore sandal millennium soap which is costing
750/- INR.
NEED WANT DEMAND
NEED
Want
Demand
Scanning of Marketing Environment
Scanning of Marketing Environment

The SportzVillage team consists of people with a passion for sports, with backgrounds from
IIT/IIM/IRMA/Clemson/INSEAD and significant corporate experience across KPMG, Wipro,
Schlumberger & HCL. It has a presence in 5 cities across India
Scanning of Marketing Environment

• Nokia conducted a ethnographic and

long term user research in rural India to
scan the environment to come up with a
icon based phone for the Illiterates.
Scanning of Marketing Environment

Internal Records
1. The Order -to -Payment Cycle

2. Sales Information System

3. Data Warehousing and Data Mining

Scanning of Marketing Environment

Marketing Intelligence

Devoting Special attention in

the market to collect various
updated information to stay
ahead in the Market and
achieve the edge over the
others
Scanning of Marketing Environment

1. Train and motivate new sales

Marketing Intelligence people to spot and report new
developments in the Market.
2. Encourage and Motivate
intermediaries to pass on the
important information from
the market.
3. Hire experts to collect the
information
4. Develop good network
internally and externally.
5. Set up Customer advisory
panel members.
6. Take advantage of Government
data.
7. Purchase information from
agencies.
Scanning of Marketing Environment

Marketing Intelligence

1. Train and motivate new sales

people to spot and report new
developments in the Market.
Scanning of Marketing Environment

Marketing Intelligence

2. Encourage and Motivate

intermediaries to pass on the
important information from the
market.
Scanning of Marketing Environment

Marketing Intelligence

3. Hire experts to collect the

information
Scanning of Marketing Environment

Marketing Intelligence

4. Develop good network internally

and externally.
Scanning of Marketing Environment

Marketing Intelligence

5. Set up Customer advisory panel

members.
Scanning of Marketing Environment

Marketing Intelligence

6. Take advantage of Government

data.
Scanning of Marketing Environment

Marketing Intelligence

7. Purchase information from

agencies.
Scanning of Marketing Environment

Collecting Marketing Intelligence on internet

1. Independent Customer Goods

and Service review forums.
Scanning of Marketing Environment

Collecting Marketing Intelligence on internet

2. Distributor or Sales agent

feedback sites
Scanning of Marketing Environment

Collecting Marketing Intelligence on internet

3. Customer Compliant Sites

Scanning of Marketing Environment

Collecting Marketing Intelligence on internet

4.Any other Public Blogs

Understanding the Market and Customers
B) The Company’s Macro Environment

The Company and all of the other actors operate in a larger macro environment of forces that share
opportunities and pose threats to the company.

The Company’s Macro-environment

Technological
Economic Forces Natural Forces Political Forces
Forces

Demographic
Company Cultural Forces
Forces
Understanding the Market and Customers
B) The Company’s Macro Environment
Demographic Environment : Demographics is the study of human population in terms of size, density,
location, age, gender, income level, occupation etc.

Structure of Population Changing Occupations

The aging Chinese In comparison, over 44% In 2007, the Service Sector surpassed the
population : by 2024, of Indians will be below Agriculture sector as the largest employer in the
58% of Chinese will be the age of 30. world.
above 40 years How does this difference in changing
How does this difference in the structure of structure of occupation affect
population impact marketers? marketers?
 Italy large portion of the Population is above 60 years

The restaurants in Italy mainly focus on the foods like calorie free, fat free, sugar
free and most of the restaurants makes their menu card in detail including the calorie
in-take per serve.

The interesting fact is that the font size of the menu card is comparatively large to
any other countries in Italy.
Scanning of Marketing Environment

Analyzing Macro Environment

1. Analyzing Need and Trend

2. Identifying the Major Forces

3. Population Growth

4. Population Age mix

5. Ethnic & Other Market

Scanning of Marketing Environment

Analyzing Macro
Environment

1. Analyzing Need and Trend

Example: The unhealthy food habits and the negative publicity about the junk & fast food

restaurants and also the increased government regulation has created and need for the

displaying of the nutritional information in their menu card.

Scanning of Marketing Environment

Analyzing Macro Environment

2. Identifying the Major Forces

Example: The implementation of GST made a axe cut on the customers visit to the high end

restaurants because of the high GST.

Scanning of Marketing Environment

Analyzing Macro Environment

1. Population Growth

Example: Companies tend to penetrate into the South Asian Market as it is growing in a

rapid way and Maldivies with the least population of4lakh doesn’t mean that it is not the

potential market.

Finding gold at the bottom of the Pyramid.

Scanning of Marketing Environment

Analyzing Macro Environment

4. Population Age mix

Example: There should be a separate strategy for different countries and places based on

the population age mix of the country/place.

Scanning of Marketing Environment

Analyzing Macro Environment

5. Ethnic & Other Market

Example: Understanding the Ethnic diversity of the Country /Place is important for any

company.

McDonald’s Pure Veg Restaurant in Vishnodevi

Scanning of Marketing Environment

Analyzing Macro Environment

6. Household Patterns
Example: The Decline of Joint family concept and increase in Nuclear families has serious

implications on the marketers.

The Demand for the Day care services has increased because of the nuclear families.
Understanding the Market and Customers
B) The Company’s Macro Environment
Economic Environment : The economic environment consists of factors that affect consumer purchasing
power and spending patterns.

Changes in Income levels Changing Consumer spending patterns

Fig 1.1 : Global Billionares

2000 $6.6 7
1637
Number of Billionaires

Wealth of Billionaires (USD

$5.4 6
1500 $4.7 1426
1226 5
4
1000
3

Trillion)
500 2
1
0 0
2012 2013 2014 (Jun)

US$ Trillion Number of Billionaires

As purchasing power goes up, consumption patterns
change from essentials to non-essential items / variants.
Scanning of Marketing Environment

The Economic Environment

1. Consumer Psychology

Example: The Consumer Spending's depend depends on the disposable income of the

individuals income and socio-economic profile.

Scanning of Marketing Environment

The Economic Environment

2. Income Distribution

Example: The Countries are been classified into 5 different income categories including
1. Very Low incomes
2. Mostly Low incomes
3. Very low & Very high incomes
4. Low, medium, High Incomes
5. Mostly Medium income.
For Instance Lamborghini will have no takes in the first two categories country which is
worth of 1.5cr
 Economic Condition in India in 2012

In recent times the fuel price in India is steadily increasing and duties & taxes on

cars are also going up. In the recent years due to the inflation and depreciation in

the money value this widely hit the car manufacturers who had relatively lesser

localization and higher importation of parts like Renault and Volkswagen were

affected.
Understanding the Market and Customers
B) The Company’s Macro Environment

Cultural Environment : The cultural environment is made of institutions and other forces that affect a
society’s basic values, perceptions, preferences, and behaviors.

The cultural environment is in a strange

state of flux – while there is a persistence of
cultural values on the one hand, on the
other there is a openess to try new things
from varied cultures.
Fusion foods to Fusion bridal wear are a one
of the marketing impacts of this
environmental force.

What are the other impacts of the

Cultural Environment on marketing?
Scanning of Marketing Environment

Socio Cultural Environment

1. High Persistence of Core Culture

Example: In a country like India the core belief of getting married and bringing up children is
considered to be the core cultural values.

The Marketers can take advantage of this and offer products and services to meet the same.
Scanning of Marketing Environment

Socio Cultural Environment

2. Existence of Sub Culture

Example: Each society contains subculture, groups with shared values, beliefs, preferences
and behavior.

The Marketers always love the teenagers because they are the trendsetters and also accepts
the new products easily.
Understanding the Market and Customers
B) The Company’s Macro Environment
Natural Environment : Involves natural resources that are needed as inputs by marketers or that are affected
by marketing activities.
Increased Pollution and Government
Shortage of Raw materials
Intervention

All natural resources are finite and are currently being With increasing pollution levels, governments across
stretched…air, water, oil, minerals…all resources are the world are creating a number of stringent
scarce and being stretched and squeezed. environmental control measures.
How does this impact marketers? How does this impact marketers?
 FMCG companies in India prepare
for the Contingency plans for a weak
monsoon
 Starbucks
FMCG companies in IndiaDelivers Unique
prepare for Value Through
the Contingency Superior
plans for a weak Experience
mansoon

 Mansoon position in the country in 2012 was a cause of worry to many business
in India & FMCG particularly.
 FMCG companies started thinking up of contingency plans to stem in any decline
of sales volume in case of deficit rain fall hit the crop yield, escalated food price
and impacted consumer spending's.
 Starbucks
FMCG companies in IndiaDelivers Unique
prepare for Value Through
the Contingency Superior
plans for a weak Experience
mansoon

 Contingency plans included putting off price increases, accelerating

the focus on smaller packs and allocating more spends on
consumer promotions in the affected areas.
Understanding the Market and Customers
B) The Company’s Macro Environment

Technological Environment : This is perhaps the most dramatic force impacting markets.

From tracking meteors to the milking Some of the most popular & valuable brands
cows, technology has changed the Technology increasingly available
today are Technology brands –indication of
world we live in. to all social-economic strata
impact of technology on the marketing world
 Marketing Myopia and too much
concentration on product killed Kodak
 Marketing Myopia and too much concentration on product killed Kodak

 Kodak Moment- King of Photography

 Kodak was considered to be the pioneer of photography

 Kodak suffered in its business since 2003

 It has to close down its 13 manufacturing units from then.

 The workforce of Kodak reduced from 1,45,000 to 47,000 since 2003

The Glory of Kodak

1. Kodak was the household name of every US house for

130 years enjoying the glory of being the pioneer and
the market leader.
2. Neil Armstrong took the pictures of the moon with
Kodak Camera
3. Kodak accounted for 94% market share in US in 1976
What went wrong with Kodak?

1. Marketing myopia and too much of confident on one product and ignored
the technological developments happening the market.
2. Kodak had assets to invest on new updated technology but their
obsolescence made them ignored the technological developments
happening in the surrounding.
3. Ignored the customer needs, customer buy the products for satisfying
their need when the moment they started getting different/better means
of satisfying their needs they said goodbye to their old products.
What went wrong with Kodak?
4. Failed to adapt to the digital age, Kodak realized it very late that hardly
anybody was loading films to their cameras because of the development of
the computer they used to upload the image clicked into their folder in the
computer rather taking a print of it.
5. Kodak’s failure happened as the results of its inability to contemporize its
product offering in tune with the changing technology and the changing
consumer needs.
6. The company which was considered to be the blue chip, pioneer and the
leader in camera has come down to hold just 13% market share today.
Understanding the Market and Customers
B) The Company’s Macro Environment

Political Environment : The political environment consists of laws, government agencies and pressure groups
that influence or limit various organizations and individuals in a given society.
Great Firewall affected the Internet
Industry
 Firewall affected the Google

Google has to move out of Mainland china in 2010 because of the Country’s Web
Censorship rules implemented by the new political party.

Google said there is no technical issue from their side, this is the government strategy to
block the website and made it look like a technical issue from Google itself.

Later google started doing a self censored activities and also falling in line with the
government rules and directing the web users to the unfiltered Hong Kong Sites.
CSE affects Fast Food Chains
The Center for Science and Environment ratings affects the food joints

Center for Science and Environment which tested products such as soft drinks, burgers,
French fries and fried chicken from leading multinationals and local companies like KFC,
McDonald, Pespsi Co and Haldiram accused that consumption of these products will lead
to the diseases like Obesity, high blood pressure, diabetes etc.

CSE claimed that these foods almost wiped out individual's daily permissible limit of bad
fat, salt and sugar in just one serving.

It sought out strong regulation and labeling rules for food products that will force
companies provide information to the public mandatorily.
The Center for Science and Environment ratings affects the food joints

It said that companies are claiming that their food contained zero trans fats even though the test showed
that they have heavy doses of it.

Companies Refused the Allegations:

Pepsi Co said They get their products regularly analyzed at globally reputed and government approved
laboratories.

McDonald’s said they use RBD refined (refined, Bleached, deodrised) oil which is naturally trans fat free.
They put efforts to ensure our foods is safe for customers with the stringent quality check.

Nestle Said as per the analysis of many years, trans fat level in maggi is wll within the international
standards and it can safely be consumed as a part of diversified balanced diet.

ITC said we comply with all Indian labelling and nutritional laws for all brands.
Evaluation of Market opportunities

What is Market Opportunity Analysis?

It is a tool to identify and asses the attractiveness of business opportunity for the Organization.
Marketing Approach
Marketing Approach
Market Development

Market Development is approaching

new target market with the same
product.
Same Product to a new audience
Market Penetration

Approaching the same audience with

the same product with different
approaches
Product Development

Approaching the same target audience

with an updated/new/improved version
of the product
Diversification

Approaching New customers with a

New product
Market Development
Market Development
Market Development
Market Development
Market Development
Product Development
Product Development
Market penetration
Market penetration
Market Diversification
Market Diversification
McDonald’s has its presence
in more than 150 countries
and now planning to open its
new outlets in Malawi, Tunisia
and Armenia
McDonald’s has opned its
new formats including
Mc’Café, Mc’Stops, Mc’Hotels
 McDonald’s introduced
discount & offer price, speedy
service, happy meal concept.
 McDonald’s introduced
McPizza, Masala Grill, Royal
Panneer
Understanding Market Potential
Understanding Competition and Competitor Analysis
41% market 32% market
share share
Understanding Competition and Competitor Analysis

“Managers who don’t do competitive intelligence are

incompetent. It is irresponsible not to understand your
competitors”

--- Gary Costley

Understanding Competition and Competitor Analysis

The Best thing about the competition is , It is solving the customers

problem.
 DIRECT vs INDIRECT COMPETITION

DIRECT–similar products and services

INDIRECT –solving same problem for same target market with a different
product or service
DIRECT COMPETITION FOR UBER
INDIRECT COMPETITION FOR UBER
 Competitive Factors
What makes a customer choose one solution over another?
Price –cheaper
Service–faster, personalized, convenient
Quality -lasts longer, stylish, tastes better

At most, you can only compete

on 2 out of the 3
Why Big Bazaar over more super Market?
Why FedEx over DHL?
Why Titan plus over Lens Kart?
 Core Competences
Core competency that cannot be copied or
bought
-Deep domain expertise (Hard rock Cafe)
-One amazing hard thing (KFC)
-Authority -existing reputation in market (Nike)
-Dream Team (previous startup success; rock star)
Template for Competitor Analysis
Examples of Features
•Benefits
• Ease of Use
•Quality
• •Wow factor
•Durability
• •Location(s)
•Image/style
• •Distribution/Sales
•Service
• •Certifications
•Warranties
• •Endorsements
•Convenience
Woodland Shoes has edge over
their Competitors in terms of
Durability but woodland looses
its edge when it comes to its
Design and Varieties.
 Where do you find info about your Competitors?

1. Customer Discovery interviews

2.Advertising
3.Sales Brochure
4.Newspapers/Magazines
5.Website
6.Online sites that rate products/services
7.Your business and professional network
Examples of Formats for Analyzing the Competitors
Competitors Analysis for Car Companies
Development of Competitive Environment
1. Increased level & intensity of competition
2. Emergence of more & newer competitors who are more aggressive
3. More scope for International Business
4. Strategic alliances becoming more common
5. Faster pace of innovations
6. Co’s searching harder for the competitive edge
7. Price competition becoming more predominant & aggressive
8. Low priced/lower quality competition becoming a threat
Competencies and Competitive Advantage
Achieving Edge over Others….
 Achieving Edge over Others…. How do we do that!!!

Distinctive Competencies = Core Competencies:

They are firm specific strengths that allow company to differentiate its products
and/or achieve substantially lower costs than its rivals and thus gain competitive
advantage.
firm specific = difficult to imitate
3 main characteristics of core competencies:
1. It makes significant contribution to perceived customer benefits
2. It has application in wide variety of markets
3. It is difficult for competitors to imitate
Marketing Information System
Marketing Information Systems
What is Marketing information System?

The Marketing Information System refers to the systematic collection,

analysis, interpretation, storage and dissemination of the market information,
from both the internal and external sources, to the marketers on a regular,
continuous basis.
Marketing Information Systems
Developing needed information : Internal Database
Marketing Information Systems
Developing needed Information : Internal Database
Every marketing operation works in unison with the conditions prevailing both inside and outside the
organization, and, therefore, there are several sources

Internal Record Marketing Marketing Decision

Intelligence Research Support
• Sales data
• Sales • Through the • Using different
• Customer Data executives surveys programs and
base • Focus group softwares to
• Intermediaries interviews arrive at
• Data meaningful
warehouse of • Information information
company Agens
• Customers
Marketing Research
Marketing Information Systems
Developing needed information : Market Research
Market Research Process

Define research
problem & Develop the Collect the
Research research plan information
objectives

Present the Analyze the

Make the decision
findings information
Marketing Research
Developing needed information : Market Research
Market Research Process : 1. Defining the problem and the research objectives

The problems should not defined either too broadly or too narrowly. Too broad would to excessive wastage
of resources and too narrow would lead to lack of information to make the right decision.

1. What is to be researched? ( The content & scope )

2. Why is to be researched? ( the Decision that are to be made)
Marketing Information Systems
Developing needed information : Market Research
Market Research Process : 1. Defining the problem and the research objectives
There are 3 Main Types of Research Objectives
1. Exploratory 2. Descriptive 3. Causal
Marketing Information Systems
Developing needed information : Market Research
Market Research Process : 1I. Developing the Research Plan

The Research Plan outlines the sources of a)existing data, b)details of the research approaches, c) contact
methods, d) sampling plans and the instruments to be used to gather data.

The Research Plan should always be in written format and cover the following points:

Information Expected
Definition of the Research Cost of
to be final
Problem Objectives research
obtained outcomes

Primary Data Secondary Data

Secondary Data
Marketing Information Systems
Developing needed information : Market Research
Market Research Process : 1I. Developing the Research Plan

Secondary Data : Sources

Own Sources: External Sources: Online Database:

The Company’s own internal There is a wide range of There are organizations
database is a good starting information sources like which sell data for a price.
point. Several companies have commercial data sources, There are a number of
established consumer panels, government data sources websites selling information
the data from which is (e.g. censusindia.gov.in). currently.
updated frequently. Secondary data can even be
purchased from 3rd party
sources like ORG RSA.
Primary Data
Marketing Information Systems
Developing needed information : Market Research
Market Research Process : 1I. Developing the Research Plan

Primary Data : Overview

Research
*Observation *Ethno-graphic *Survey *Experiment
Approaches

Contact
*Personal *Mail *Telephone *Online
Method

Sampling Plan *Sampling unit *Sample Size *Sample procedure

Research
*Questionnaire * Mechanical Instruments
Instruments
Marketing Information Systems
Developing needed information : Market Research
Market Research Process : 1I. Developing the Research Plan

Primary Data : Overview

Research
*Observation *Ethno-graphic *Survey *Experiment
Approaches

Contact
*Personal *Mail *Telephone *Online
Method

Sampling Plan *Sampling unit *Sample Size *Sample procedure

Research
*Questionnaire * Mechanical Instruments
Instruments
Marketing Information Systems
Developing needed information : Market Research
Market Research Process : 1I. Developing the Research Plan

Primary Data : Research Approaches

1. Observational Research

Observational research involves gathering primary

data by observing relevant people, actions and
situations. E.g. Observing consumers as they shop at a
store.

- This form of research can obtain information that

people are unwilling or unable to provide.

- The shortcoming of this method is that we cannot

‘observe’ things like feelings, attitudes, motives etc.
Marketing Information Systems
Developing needed information : Market Research
Market Research Process : 1I. Developing the Research Plan

Primary Data : Research Approaches

1I. Ethnographic Research

To understand the un-seeable, companies are investing

in ethnographic research. Ethnography is the study of
human behavior in its most natural and typical
context.

Sometimes the best way to understand a new culture

is to experience it by living it. When a researcher
moves in with a tribe in the Amazon, living their
customs and ceremonial rites, he or she is
conducting ethnographic research
Marketing Information Systems
Developing needed information : Market Research
Market Research Process : 1I. Developing the Research Plan

Primary Data : Research Approaches

1II. Survey Research

Is the most widely used method for primary data collection especially
for descriptive information.
Key Advantage:
- Flexibility. It can be used to obtain many different kinds of
information in different situation
Key Dis-advantages
- Possibility of incorrect or no response as people cannot remember
or have not thought about what they did and why.
- Incorrect or no reponse to private or personal questions.
- Deliberately pleasing answers
- Incorrect answers given to sound ‘well informed’.
Marketing Information Systems
Developing needed information : Market Research
Market Research Process : 1I. Developing the Research Plan

Primary Data : Research Approaches

1II. Experiential Research

Experimental research is best suited for gathering Causal information i.e.

explains cause-effect relationship

Experiments involve
- selecting matching groups of subjects,
- giving them different treatments,
- controlling unrelated factors and
- checking for differences in group response
Marketing Information Systems
Developing needed information : Market Research
Market Research Process : 1I. Developing the Research Plan

Primary Data : Overview

Research
*Observation *Ethno-graphic *Survey *Experiment
Approaches

Contact
*Personal *Mail *Telephone *Online
Method

Sampling Plan *Sampling unit *Sample Size *Sample procedure

Research
*Questionnaire * Mechanical Instruments
Instruments
Marketing Information Systems
Developing needed information : Market Research
Market Research Process : 1I. Developing the Research Plan

Primary Data : Contact Methods

Parameter Mail Telephone Personal Online

Flexibility Poor Good Excellent Good

Quantity of data that can be Good Fair Excellent Good

collected
Control of sample Fair Excellent Fair Poor

Speed of data collection Poor Excellent Good Excellent

Response rate Fair Good Good Good

Cost Good Fair Poor Excellent

Marketing Information Systems
Developing needed information : Market Research
Market Research Process : 1I. Developing the Research Plan

Primary Data : Contact Methods

Low cost / respondent. No interviewer bias. Mail questionnaires are not very flexible. Low response
rate. No possible to control who fills up the questionnaire
Quick. Greater flexibility. Difficult questions can be explained. Higher response rates.
Cost/contact high. Interviewer bias involved. Interviewees may not want to answer personal questions

Individual interviewing involves talking with people in their homes, offices or in casual places. Interviews
are flexible. Show product demos, ads etc. and gauge reactions. Extremely expensive
Group Interviewing is when a trained moderator invites 6-10 people to speak about a product / service
or ad. This is also know as Focus Group Discussion.
High speed. Low costs. Instantaneous results. Eliminates travel, boarding & lodging costs. A good
medium to reach those who are hard to reach. However, can’t see & can’t gauge the person being
interviewed. Not as personal as a personal interview
Marketing Information Systems
Developing needed information : Market Research
Market Research Process : 1I. Developing the Research Plan

Primary Data : Overview

Research
*Observation *Ethno-graphic *Survey *Experiment
Approaches

Contact
*Personal *Mail *Telephone *Online
Method

Sampling Plan *Sampling unit *Sample Size *Sample procedure

Research
*Questionnaire * Mechanical Instruments
Instruments
Marketing Information Systems
Developing needed information : Market Research
Market Research Process : 1I. Developing the Research Plan

Primary Data : Sampling Plan

A Sample is a segment of the population selected to represent the population as a whole

A wrong sample could lead to disastrous A ‘Representative’ sample is more likely
results to give accurate estimates.
 Marketing Information Systems
Developing needed information : Market Research
Market Research Process : 1I. Developing the Research Plan

Primary Data : Sampling Plan

Designing a sample requires 3 main decisions

Sampling Unit Sample Size Sample Procedure

Who is to be surveyed. How many people will need to How should the people in the
E.g. In researching decision be surveyed? sample be chosen. Two types:
making on family car purchase,
who is going to be interviewed Larger samples give more
– The Husband, The wife, The reliable results than smaller ones Non-
Probability
dealer Probability
Marketing Information Systems
Developing needed information : Market Research
Market Research Process : 1I. Developing the Research Plan

Primary Data : Overview

Research
*Observation *Ethno-graphic *Survey *Experiment
Approaches

Contact
*Personal *Mail *Telephone *Online
Method

Sampling Plan *Sampling unit *Sample Size *Sample procedure

Research
*Questionnaire * Mechanical Instruments
Instruments
Marketing Information Systems
Developing needed information : Market Research
Market Research Process : 1I. Developing the Research Plan

Research Instruments : a) Questionnaire

The most popular. The most common. The most

flexible way to ask questions
Wording should be simple and unbiased.
Questions should be arranged in a logical
manner
Closed end questions : Include all possible
answers and the subject makes a choice

Open end questions allow respondents to

answer in their own words.
Marketing Information Systems
Developing needed information : Market Research
Market Research Process : 1I. Developing the Research Plan

Research Instruments : b) Mechanical Instruments

At times mechanical instruments are also used to map or

measure complex consumer behavior like television
viewing e.g. People Meters for TRP Ratings.
Marketing Information Systems
Developing needed information : Market Research
Implementation of Marketing Research Plan

Implementation involves data actual data

collections through Focus Group Discussions
(FGDs), Interviews etc. This is done either by
company staff or externally

AND

Analysis of the information gathered.

Note :The Implementation stage is the most delicate part

of the Market Research process, as the maximum
possibility of error is at this stage.
Marketing Information Systems
Developing needed information : Market Research
Interpreting and Reporting the Data

The same data can have various interpretations.

Majority of
Indian men don’t
like milk
Analysis The marketing manager in conjunction with the
reveals that Majority of researcher should come up with the best
70% of Indian Indian men like possible interpretation.
males prefer things which are
black tea black in color
Majority of The focus should be on reporting the important
Indian men don’t findings and not on statistical techniques
like milk in their
tea
Market Potential Analysis
Understand Consumer Needs & Wants

Research Consumers & Markets

Manage Marketing Information and Customer data
Positioning
Market Leaders

A market leader is a company with the largest market share in an industry that can
often use its dominance to affect the competitive landscape and direction the market
takes.
Market Challengers

A market challenger is a company which tries to expand its market share by

aggressively flooding the market with its products at competitive prices. A market
challenger is a firm or a company which is usually at the No.2 or No.3 position.
Market Followers
Market follower is a firm that replicates what a particular business does. It does not
take any risks, rather it waits and observes the others' strategies and implement only
the successful ones.
Market Nichers

Market Nichers are the marketers or companies who make specific products and/or
services which made for specific demand of customers which are not met by
otherwise available products. They produce highly customized and specialist products/
services which serve a narrow market range.
First Movers (Pioneers)

first mover is a business that obtains a competitive advantage by being first to market
with a product or service category.
Demand Forecasting
 Market Demand Forecasting

Understanding the marketing environment and conducting

research can help in identifying the market Opportunities.
 The Measures of Market Demand

The potential market

Set of Customers with sufficient level of interest in the market offer and it is not just enough unless they have
sufficient income and access to the product.
Available Market
The Set of customers who have interest, access & income to buy the product may be restricted by the government
for example: Alcohol, Cigarette etc.

Target market
The company decides the qualified available market to peruse. They might concentrate on developing economies.

Penetrated Market
The set of Customers who are buying the Company’s Product.
 Market Demand

The marketers first step in evaluating market opportunities is to estimate total market

demand. Market demand for a product is the total volume that would be bought by a

defined customer group, in a defined geographical area and in a defined time period in a

defined marketing environment under a defined marketing program.

 Company Demand

Company demand is the company’s estimated share of market demand at alternative levels of company

marketing effort in a given period of time. It depends on how the company’s products, services, prices and

communications are perceived relative to the competitors.

Marketing Model builders have developed sales response function to measure how the company’s sales

are affected by its marketing expenditure level and marketing mix.

End of Module
 Caselet - 1
Raymond’s Made to Measure
Traditionally, customers would rely on local tailors who
specialize in stitching custom-made dresses for their
clients. However, with increasing preference for readymade Questions :
garments, customer started adjusting to standard size of Q1. What are the consumer ‘needs’ and ‘wants’ that
garments rather than adjusting the garments’ fit to you identify for Raymond’s made-to-measure
variations in individual sizes. services? Also trace the Value Proposition, Offering
and the Brand.
As an alternative, Raymond’s started Made-to-measure
services in the company’s flagship outlets in various Indian Q2. Trace the traditional 4ps for this product. (You
may want to visit a Raymond’s store, or gather more
cities. At its retail points, customers select the fabric they
details on the Internet to answer this question).
like and the measurements are taken. This data is
transmitted to a central manufacturing location where the Q3. What are the pros, cons, and risks associated
garment is stitched according to the specifications. The with Raymond’s marketing strategy for offering
custom-made garments reach the shop on pre-specified made-to-measure services?
dates. The advantage of this service offer is that the
garments have the finish of readymade garments, but are
made to suit individual measures.
Caselet - 1
Raymond’s Made to Measure

Questions :
Q1. What are the ‘needs’ and ‘wants’ that you identify for Raymond’s made-to-measure
services? Also trace the Value Proposition, Offering and the Brand.

Q2. Trace the traditional 4ps for this product. (You may want to visit a Raymond’s store, or
gather more details on the Internet to answer this question).

Q3. What are the pros, cons, and risks associated with Raymond’s marketing strategy for
offering made-to-measure services?