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MARKETING 101
S O U M YA S A R K A R
IIM RANCHI
Marketing Basics - Soumya Sarkar
Marketing Basics - Soumya Sarkar
Marketing Basics - Soumya Sarkar
WHAT IS MARKETING?
The activity, set of institutions, and processes
for creating, communicating, delivering,
and exchanging offerings that have value
for customers, clients, partners, and society
at large
Marketing Basics - Soumya Sarkar
MARKETING MANAGEMENT
The art and science
of choosing target markets
and getting, keeping, and growing
customers through
creating, delivering, and communicating
superior customer value
Marketing Basics - Soumya Sarkar
MARKETING SPECTRUM
What can be marketed?
O Products
O Services
O People
O Places
O Events
O Ideas
O Causes
Marketing Basics - Soumya Sarkar
Marketing Basics - Soumya Sarkar
Marketing Basics - Soumya Sarkar
Marketing Basics - Soumya Sarkar
EVOLUTION OF MARKETING
• Economic activity
– Production and movement of goods from producer to
consumer
– Use of branding marks – cattle
– Advertisement - 1704
• Information
• Promotion not needed
• Production orientation
– Customers sought for the products manufactured
– Little or no emphasis on customers
– Keep the plants loaded
Marketing Basics - Soumya Sarkar
EVOLUTION OF MARKETING CONTD.
• Sales orientation
– Sales volume focus
– Sell what the plants manufacture
– Advertising/promotional schemes
• Customer orientation
– Customer is central
– Product development process looked from customer perspective
– Appearance of consumer goods – branding/marketing
Marketing Basics - Soumya Sarkar
EVOLUTION OF MARKETING CONTD.
• Market orientation
– All activities aimed at customer
– CEO is the driver
• Relationship orientation
– Creation and maintenance of relationships with customers and
suppliers
– Value-addition
– Augmentation of product with services
Marketing Basics - Soumya Sarkar
PRODUCT VS. MARKET
ORIENTATION
Company
Product Definition
Market Definition
Railways
We run trains
We move people and goods
Xerox
We make copying equipment
We help improve office productivity
BPCL
We sell petrol and diesel
We supply energy
Paramount Pictures
We make movies
We market entertainment
Blue Star
We make air conditioners
We control climate at homes and offices
Marketing Basics - Soumya Sarkar
INTERNAL MARKETING
Task of
hiring, training, and motivating able employees
to serve customers well
Marketing Basics - Soumya Sarkar
NEW TRENDS
• Societal marketing: preserving/enhancing the
consumers’/society’s well-being
– Green marketing
– Sustainable marketing
• Cause-related marketing: promoting social issues
• CSR
• Ethical marketing
Marketing Basics - Soumya Sarkar
TYPES OF MARKETS
• Based on physicality
– Retail markets
– Internet: e-commerce
• Based on regularity
– Markets/malls
– Ad-hoc auctions
– Garage sales
• Based on products
– Consumer goods – consumer markets
– Intermediate goods – business markets
Marketing Basics - Soumya Sarkar
TYPES OF MARKETS CONTD.
• Based on resources
– Labour
– Foreign exchange
– Shares
– Commodities
– Real estate
• Others
– Artificial markets – created out of legislation or derivatives
– Illegal markets
Marketing Basics - Soumya Sarkar
Marketing Basics - Soumya Sarkar
CONSUMER MARKET
• End-user
• Individuals and/or households
• Potential/active buyers of products or services
• Consumer products – directly fulfill the desires of
consumers; not intended to be used in the
manufacture of other products
Marketing Basics - Soumya Sarkar
Marketing Basics - Soumya Sarkar
BUSINESS MARKET
• Manufacturers, intermediaries, wholesalers
• Business customers – Business-to-business (B2B)
• Geographical proximity
• Derived demand
• Buying centre-based purchasing
Marketing Basics - Soumya Sarkar
CUSTOMER VALUE
• Customer Perceived Value (CPV) = Perceived
benefits – Perceived costs
• Perception matters - management
Functional benefits
Purchase price
Brand
benefits
Other
costs
Marketing Basics - Soumya Sarkar
Other benefits
CPV
VALUE CREATION AND DELIVERY
Assessing market opportunities and customer value
Choosing the value
Designing value
Delivering value
Communicating value
Growing and sustaining value
Marketing Basics - Soumya Sarkar
Value Chain
Tool for identification of ways to create more customer value every firm is a synthesis of primary and support activities in order to
design, produce, market, deliver, and support its product
Marketing Basics - Soumya Sarkar
MANAGING CPV
• Increase benefits
– Add new features
– Improve accessibility
• Reduce costs
– Reduce price
– Increase efficiency
• Combination of both the above
Marketing Basics - Soumya Sarkar
UTILITY
• Value that marketers hope consumers would attach to their
products/services
• Consumers decide on value
• Need – necessity to meet an urgent requirement
• Want – desire for something not too essential
• Demand – financial capacity to buy what a person wants
Marketing Basics - Soumya Sarkar
HIERARCHY OF NEEDS
• Stated need – explicitly expressed
• Real need – actually needed product/service
• Unstated need – assumed to be fulfilled
• Delight need – unspoken additional needs
• Secret need – some deep-lying desire, may not be related to the stated
need
Marketing Basics - Soumya Sarkar
DEMAND
• Negative
• Nonexistent
• Latent
• Declining
• Irregular
• Unwholesome
• Full
Marketing Basics - Soumya Sarkar
RELATIONSHIP MARKETING
Customers
Employees
Marketing Partners
Financial Community
Marketing Basics - Soumya Sarkar
RELATIONSHIP MARKETING
• Orientation on part of the firm to develop
relationships
• Commitment
• Elements
– Trust
– Communication
– Personalisation
– Customisation
Marketing Basics - Soumya Sarkar
CRM
• Activities used to establish, develop and maintain profitable
customer relationships
• External
– Connecting to the customers
– Technology – data capture
• Internal
– Management of information
– Technology – data mining
Marketing Basics - Soumya Sarkar
LOYALTY PROGRAMMES
• Future rewards
– Frequent flyer miles – Jet Privilege
– Cash back – ICICI Bank credit cards
– Points – Crossword bookstore
– Fuel – Indianoil
• Cash discounts on purchases
– Pantaloons Green Card
• Coalition programmes
– Payback
Marketing Basics - Soumya Sarkar
CONSUMER BEHAVIOUR
• Activities directly involved in obtaining, consuming and disposing
of products/services
• Including the decision processes that precede and follow these
actions
Marketing Basics - Soumya Sarkar
THEORY & REALITY
PROBLEM
RECOGNITION
INFORMATION
SEARCH
EVALUATION OF
ALTERNATIVES
PURCHASE
POSTPURCHASE
EVALUATION/
BEHAVIORS
Theory
Complications
Marketing Basics - Soumya Sarkar
Marketing Basics - Soumya Sarkar
Information
gatherer
Influencer
Decider
Purchaser
User
Over time
Products
Services
Ideas
Activities
By
Acquisition
Usage
Disposition
Offering
What?
Why?
How?
When?
Where?
How
much/often?
Consumption
Totality of decisions
SUMMARY
Hours
Days
Weeks
Months
Years
CONSUMER PSYCHOLOGY
• Motivation – energetic,
ready and willing to
engage in a goalrelevant behaviour
– Needs
– Perceived risks
Marketing Basics - Soumya Sarkar
PERCEPTION
• Sensing a marketing stimulus
– Visual – size, shape, colour
– Audio – music, noise
– Touch
– Taste, smell
• Perceptual organisation
– Figure and ground
– Closure
– Grouping
Marketing Basics - Soumya Sarkar
FIGURE & GROUND
Marketing Basics - Soumya Sarkar
GROUPING
Marketing Basics - Soumya Sarkar
ATTITUDES
• Overall evaluation that expresses liking/disliking for a
product/person
• Functions
– Guide thoughts – cognitive
– Influence feelings – affective
– Affect behaviours – conative
• Consumer effort
– High – cars, insurance
– Low – toothpaste, magazines
Marketing Basics - Soumya Sarkar
AGE & LIFE STAGE
• Chronological age
• Cognitive age
• Age cohorts - Group of people born at roughly the same time in
the same place/country – experienced the same major
economic, political and social upheaval
• In India
– Midnight’s children (Rushdie)
– Liberalisation children
– Pre-Independence generation
– Midway children or Rajiv Gandhi age cohort (Bijapurkar)
Marketing Basics - Soumya Sarkar
Marketing Basics - Soumya Sarkar
Marketing Basics - Soumya Sarkar
REFERENCE GROUPS
• People whose values are shared by consumers, and
whose opinions are valued
• Direct / indirect influence on consumer thoughts
• Expertise & trustworthiness
• Types used in marketing
– Celebrities
– Expert
– “Common man”
– Executive/employee
Marketing Basics - Soumya Sarkar
SOCIAL CLASS
• Characteristics that distinguish
certain members of a society from
others
– Wealth
– Vocation
– Education
– Power
– Residence
– Ancestry
• SEC classification
Marketing Basics - Soumya Sarkar
IMPORTANCE OF SOCIAL CLASS
• Upper class
– Invest & save more
– Use product characteristics (not price) as indicators of quality
• Middle class
– Look towards upper class for social behaviour guidance - upward
mobility
• Working class
– Increased presence of women, esp. in service sector
– Shop in mass merchandising outlets
Marketing Basics - Soumya Sarkar
SOCIAL SYMBOLS
• Conspicuous consumption
– Keep up with the respected members
of that class
– Trade up
– Wastages - encyclopedia
• Materialism
• Status symbols
– Judging others
– Fraudulent symbols
Marketing Basics - Soumya Sarkar
Marketing Basics - Soumya Sarkar
GENDER ROLES
• Social expectations of appropriate attitudes and behaviours from
the genders
• Evolve and change over time
• Gender identity
• Media stereotyping
Marketing Basics - Soumya Sarkar
FAMILY
• First influencers
• Normative behaviour and distinct roles
• Family structure changing over time
– Joint  nuclear  single parent  DINKs  live-in
 same sex
• Role of spouses
• Role of children
– Princess syndrome
Marketing Basics - Soumya Sarkar
SEGMENTS
Mass
marketing
Customisation
Segments
Marketing Basics - Soumya Sarkar
SEGMENTATION
• Allows businesses to look at several different groups instead of one
mass market
• Identifies groups that have similar market responses
• A segment should be
– Homogeneous
– As diverse as possible from other segments
– Having a critical mass
– Having core similarities of attitude, behaviour, and economics
– Robust and replicable
Marketing Basics - Soumya Sarkar
SEGMENTATION BASE - CONSUMER
• Group of characteristics used to assign segment members
– Demographic
– Psychographic
• Lifestyle
• Class
• Personality
– Behavioural
• Attitudes
• Usage
• Life events
Marketing Basics - Soumya Sarkar
SEGMENTATION BASE - BUSINESS
• Demographic
• Geographic
• Benefits
– Service support
– Financing/credit terms
• Operating characteristics
• Purchasing approach
• Situational factors
– Size of order
– Urgency
Marketing Basics - Soumya Sarkar
TARGETING
• Evaluation and selection of the most viable segment to enter
• Selection criteria
– Attractiveness
– Size and growth potential
– Brand objectives
– Resources to form basis for competition
Marketing Basics - Soumya Sarkar
TARGETING APPROACHES
• Undifferentiated
– Market as a whole
– Focus on similarities – than on differences
• Differentiated
– Unique product/service tailored for each segment
• Niche
– Serving a small but well-defined segment
– Limited resources or exclusive products
Marketing Basics - Soumya Sarkar
POSITIONING
• Placement of a product/service offering in the mind of the target
consumer
• Development of marketing programmes to meet the
requirements
• Types
– Functional
– Symbolic
– Experiential
Marketing Basics - Soumya Sarkar
POSITIONING TOOLS
• USP
– Expression of the uniqueness of the brand in a succinct manner
– Commitment that others cannot match/imitate
• Value proposition
– Entire set of benefits that differentiate the brand
– Unique
– Specifically relevant to the target
Marketing Basics - Soumya Sarkar
SELECTING A POSITION
• Deliver a valued benefit to the target
• Be distinctive vis-à-vis the competition
• Offer a superior benefit that can be communicated easily
• Difficult for others to copy
• Affordable to the target
• Provide required revenues/profits to the brand
Marketing Basics - Soumya Sarkar
THANK YOU!!
Marketing Basics - Soumya Sarkar