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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