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Submitted to :Mrs.

Komal Chopra Lecturer (Consumer Behaviour) NewDelhi campus

Submitted by:Abhishek Pathak

Preface
One of the main constituents of a successful organization in todays dynamic business environment is how well it handles its Consumers. The more an organization cater to the needs of its consumers as per their requirement and keeps them satisfied, the better it will be for the organization. It is said that a satisfied consumer is a loyal consumer. This is what consumer behaviour is all about? It is how well you master the art of knowing what your consumers want and than make them satisfied, the company, which masters this art, are the leaders and the rest are just its followers. This project deals with our research and analysis conducted on the backdrop of company with respect of its market segmentation targeting and positioning .We have also covered in brief how McCann Erickson is promoting the COKE with respect to segmentation, Target group and market positioning of it.
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Consumer behaviour is the one thing, which cannot be predicted. What attracts a consumer today might not attract him tomorrow, a consumers tastes and preferences changes every day in and day out. In the Soft drinks market in India the main Competition is between Coke and Pepsi, though through out the world Coke is leading ahead of Pepsi, but in India Pepsi has and Edge over Coke, hence we have tried to analyzed what steps are taken by the McCann Erickson so as to make Coke a much stronger brand than it was.

Acknowledgements

We would like to thank many people who helped me


significantly to make this industrial project. We would like to thank all the members of the office who helped me in spite of their stringent professional rules of not disclosing their private matters to outsiders. Though most of the staff at Coke as well as at McCann Erickson was not cooperative yet we would like to thank Mr.Kaisal Khan of ADDS PHOTOMEDIA for providing us with valuable information about the different promotional strategies adopted by McCann Erickson for making COKE a more popular brand in India. Consumer behaviour is not as attractive a subject as Advertising or Accounting, but we would certainly like to thank our Consumer behaviour lecturer Mrs. Komal Chopra for making such an uninteresting subject, an interesting one. Her lectures were very
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interactive and stimulation one, and though she might feel that we were a dumb class but, we know that we learned a lot from her which has helped us considerably in accomplishing this industrial project, Mrs. Chopra we all are indebted to you. Last but not the least I would like to thank my group members for always providing me with valuable inputs and gelling together and performing like a truly professional team, yes, we are a winning combination and we should be proud of ourselves.

Contents
Preface Acknowledgements 01 02

the beginning 04 Coke with Lowe Lintas 06 Coke with McCann Erickson 07 Coke and Pepsi war 09

Segmentation Defined 11 Segmentation process of Coke 13 Targeting of Coke 18 Selection of the target market for Coke 21 Positioning of Coke 22 Coke as brand personality 28 Relationship basis model 32 Film advertising and Coke 37 Thanda III-the story 39 Cokes advertisement spending 42 Bibliography 43

Developed in a brass pot in 1886, Coca-Cola is the most recognized and admired trademark around the globe. Not to mention the best-selling soft drink in the world. In India, however, it has had a chequered history. When Coke returned to India (after being shown the door by the Janata Government in 1977), it tried using 'nostalgia' as the communications peg. Much of its advertising, devised by McCann, was directed at the Coke consumer of yesteryear. However, this did not cut much ice as the Coke consumer had moved on in life - and outside the ambit of colas. And, of course, the younger generation was totally taken in by Pepsi's irreverence. After poking around in the dark for quite a while, Coke finally figured that there were two things that moved the Indian consumer - movies and cricket. Coke's first really concerted effort at addressing the Indian consumer happened during the 1994 Cricket World Cup, which was played in the subcontinent. It's 'Passion has a colour' campaign brought alive the beauty of maidan cricket, but was sadly drowned by Pepsi's 'Nothing official...' campaign. All this while, the one piece of advertising from Coke that got noticed was its Diwali promos. Meanwhile, Pepsi was running away with the ball when global realignment brought the Coke brand to Leo Burnett's door. One of the first efforts by Leo Burnett was its cricket-fan centric campaign... the one where fervent cricket fans run down Indian cricketers for not trying hard enough. The proposition was 'So much heat needs a lot of cooling.' When Pepsi upped the ante by pressing the charm of Shah Rukh Khan (who was always a Pepsi endorser), Kajol and Rani Mukherjee in action, in the second half of 1998, Coke roped in two entertainment celebrities for itself - Daler Mehendi and Karisma Kapoor. By that time the brand had changed agency and moved to Leo Burnett. Coke fired its first movie-centric salvo. This was followed by the Aamir Khan-Twinkle Khanna commercial, where, for the 6

first time, Coke got into the 'romance' angle. 'Pyaar, mohabbat, Coca-Cola' was the line. This was followed by the Aamir-Ash 'love over the Net' ad. Then came the Aamir-Jyotika commercial where love blossomed in the rain. And to put across the point, Coke went to great lengths to showcase the brand as a catalyst in the budding romance between Aishwarya and Akshaye Khanna in Taal.

Then, of course, Hrithik happened. And though Pepsi too lobbied hard to get the hunk to endorse the brand, Coke eventually won. Coke's first ad with Hrithik loosely based on Kaho Na Pyaar Hai - got a mixed response. However, the latest Coke film where Hrithik tap dances his way into the woman's heart has apparently been a stupendous success - with Coke finally edging past Pepsi in terms of ad recall. Now, as Coca-Cola is poised to enter the portals of Lowe Lintas & Partners, the task seems to be cut out for the new agency and the new team at the helm of Cokes Indian operations.

account to move to Lowe Lintas & Partners


In the wake of global realignment, the advertising for the Coca-Cola brand in India is set to move from the Rs 197-crore Leo Burnett India to Lowe Lintas & Partners. The Coke account, estimated to be worth Rs 30 crore, switched hands in April 2001. According to a senior executive at Leo Burnett, the agency was aware of the threat since mid-December 2000. The Interpublic Group of Companies had pitched for and won the account (with effect from December 01, 2000), but in India, the company was waging a valiant battle for us, he says. However, Atlanta(head office of coca cola) put its foot down, and the local management was forced to comply. In India, the Interpublic Group is represented by five agencies McCann-Erickson, Lowe Lintas & Partners, Enterprise Nexus, SSC&B and Quadrant Communications. Coke officials say, In India, the choice was really between McCann and Lowe Lintas, and the company has opted to go with Lowe Lintas. Apparently, worldwide, McCann-Erickson is likely to benefit the most from this realignment, as it would be in charge of the account in most markets. When contacted, Coke officials were quick to point out that we are extremely happy with the work done by Leo Burnett and that it is only because of the global realignment that the brand was pulled out of the agency. They insist that, It was only the Coke brand that was up for review, and that too globally. We were on a good wicket as for the first time starting December 2000, Coke had inched ahead of Pepsi on different advertising parameters, says the rueful Leo Burnett executive. However, he points to the fact that the Thums Up and Maaza accounts are still very much with Leo Burnett. And just last week, we have won another Coke business, a new beverage brand which is being launched in May 2001, he adds.

reshuffles portfolio: McCann gets Coke; Leo Burnett wins Sprite

The euphoria at Lowe Lintas & Partners had yet to fully die down. But it appears that Coca-Cola India couldnt wait to pull another rabbit out of the hat. So, just over a month after the beverage giant appointed Lintas to handle the communications business of the Rs 35-crore Coca-Cola brand in India, the company has once again moved the Coke account to roster agency McCannErickson. In corresponding moves, Leo Burnett which had originally forfeited the Coke business to Lintas has been awarded the Sprite business, which moves from McCann. And O&M, the other agency in Cokes roster, has added the Kinley account to its portfolio. Kinley too moves from McCann. Post this reorganization, Coca-Cola Indias agency portfolio will read like this: McCann will have Coke, Diet Coke and orange drink Fanta; Leo Burnett will have Thums Up, clear lemon drink Sprite and the mango-flavoured Maaza; and O&M will handle the cloudy lemon brand Limca and mineral water brand Kinley. another developmental brand from Cokes international portfolio has been assigned to Leo Burnett. Confirming these movements, a senior marketing official at Coca-Cola India said, We have intimated all the concerned agencies about this realignment this morning itself. And we have made this move because we wanted to ensure that all our agencies had a decent and sizeable portfolio. But why Lintas was removed from Coca-Colas consideration set that too a mere month after the agency was given the Coke business is a bit of a mystery. A senior executive with Lintas tenders a plausible explanation. Internationally, it was the Interpublic Group that pitched for and won the Coke business. In India, the Interpublic Group is represented by five agencies McCann, Lowe Lintas, Enterprise Nexus, SSC&B and Quadrant Communications. Here, it was basically a toss-up between us and McCann, says the Lintas executive. And we got the account because it was McCann which launched Coke in India and failed to make any impact. Coke obviously did not want to go back to McCann. His point is that this time round, some severe compulsions must have prompted the client to go to McCann. On the face of it, this train of reasoning seems fairly sound. After all, Coca-Cola India had lobbied hard and unsuccessfully to keep the Coke business with Leo Burnett. And when the move became inevitable, despite the fact that internationally, it was McCann that handled the Coke brand (post-realignment),

in India, the company chose to go with Lintas. In fact, even now, some senior ad folks insist that Atlanta has forced Coca-Cola India to embrace McCann. However, both McCann and Coke officially maintain that, The brand has moved from Leo Burnett to McCann. Sorab Mistry, chairman and CEO, McCann-Erickson India, said, As far as we are concerned, the Coke brand moves from Leo Burnett to McCann. On the criticisms that Coke was not happy with McCann, Mistry said, I wish speculators their own destiny. And I wish them well. Mistry is decidedly happy with the development. He says, I was aware that there has been a shift internationally, and I was hoping that I keep my own brands. Nonetheless, Im extremely pleased that Coke has placed faith in us. I have CocaCola in my veins, having serviced the brand in four countries, including India. In fact, McCanns success in India is largely a reflection of the success of Coke. Besides me, the key players on the Coke account will now be Nikhil Nehru (president), Santosh Desai (executive vice-president) and Sanjay Nayak (senior vice-president and general manager). Rahul Kansal, deputy managing director, Leo Burnett, is also a happy man. When the Coke account went out of our hands, the company promised to compensate us, simply because it was very reluctant to move Coke but just had to. And even though people were a bit cynical about Cokes reassurance, we believed in the client. Sprites coming to us is a vindication of the good work we have done for Coke and Thums Up.

challenges Pepsi on taste


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Its an old Coca-Cola strategy, even on the global level. And it goes like this: Never pitchfork Coke in a direct confrontation with Pepsi, irrespective of whatever potshots the No. 2 cola takes at Coke. Instead, use the other soft drink brands in the portfolio to hit back. And internationally, Coca-Cola has been using Sprite to this end with good effect. Of course, in that sense, Coca-Cola India has a distinct advantage. For not only can it use Sprite, it also has another flanker in local cola brand Thums Up. And in the past, Coca-Cola India has used Thums Up towards this end. Remember the Dont be a bandar and Dont be a machchar ads? Coke has again taken the fight to the streets with Thums Up. And by playing the Pepsi-tastes-sweet card, it is looking to reposition Pepsi as a drink for kiddos. So, a couple of weeks ago, TV channels were full of swaggering Salman Khan asking viewers if they had grown up to Thums Up. Well, that was the teaser campaign. On Friday night, the real stuff happened. The commercial, which broke Friday night, is as follows. Salman Khan is seen conducting a blind test in what appears to be a college campus. He gets a volunteer, of whom he asks what his favourite drink is. The reply is sound blocked, but, of course, nobody is nobodys fool. Salman than asks the teenager what constitutes a kids drink. Something thats sweet, the teenager grimaces. Salman then asks the volunteer to sample the two colas, and then asks him which is the drink with thunder. The teenager points to one of the colas, which turns out to be Thums Up. Surprise, surprise, eh? The other cola in the test is well, never mind. And just in case the viewer still hasnt got the drift of the communication, Salman seals the issue by ribbing the teenager, Dil maange more? Actually, one viewer who saw the ad had a good idea he said, The line should actually have been Still maange more?. That would have been more tongue-in-cheek. (Anyone at Leo Burnett listening?) Of course, being tongue-in-cheek has not been Thums Ups forte. Even the bandar and machchar commercials were quite crude. In fact, even slapdash. Tongue-incheekiness and wit have been Sprites bailiwick. One cant forget the work that McCann did on Sprite after the Shah Rukh-Kajol-Rani ad went on air. In fact, after Pepsis Preity Zinta-Jaggu commercial broke, there was this one-off press ad for Sprite that took the pants off Pepsi. The ad had a visual that showed mans evolution from chimp to Neanderthal to modern-day man. The modern man was shown to be drinking Sprite, and the ad talked about how Sprite was the easiest way to progress from Jaggu to gentleman. Man ki suno, monkey ki nahin was the

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tagline. Maybe Coca-Cola India should have persevered with this line of thinking. Thums Up is a very rum-and-cola drink, and its imagery has always been very macho, says an ad industry veteran. Pepsi and Sprite, on the other hand, are both cheeky and irreverent brands. And when you have cheeky brands, theres an intrinsic fun in comparative advertising a lot of enjoyable one-upmanship and brownie points. Thums Up doesnt quite fit the bill on these terms, so I dont think Thums Up should get into a comparison war with Pepsi in the first place. As you can see, the Thums Up campaign is too serious. We tried our level best to get an official angle to the Thums Up campaign, but despite many promises from Coke to the effect that you shall get all the answers, all we came up with was silence. And, of course, Leo Burnett would not talk without a nod from Coke. One fact that we gathered is that the Thums Up campaign has its foundation in some market research conducted by an independent agency. Of course, it doesnt take genius or research, for that matter to figure out what the average consumer thinks about Thums Up. Nine out of 10 are likely to say Thums Ups distinctiveness is its strong taste. Interestingly, the commercial carries a disclaimer, which says that the ad was developed on the basis of market research. Seeing how serious Thums Up sounds about the whole thing, maybe Coke should have actually made candid camera commercials of the blind test, says the industry veteran. That would have looked a trifle more convincing.

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Everybody wants the best treatment and attention be it our house, school, class or at any social gatherings. This is practically not possible as it is not always possible for us as well as for others to give us special attention. For example in our College the MBA batch of 2003-05 has 500 students, it would not be possible by faculties to give each and every student same attention and also to teach all of them same subjects together. To facilitate this the class is further divided in according to the subjects. On the same philosophy, as the business or the organization cannot meet the needs of each and every individual in the market the market is divided in to meaningful, relatively similar and identifiable groups, the purpose of which is to enable the marketer to tailor marketing mixes to meet the needs of one or more specific groups. the concept of segmentation is based on this concept only. The method of identifying a group of consumers, within a broader market, that has similar characteristics and needs. Segments can be identified by examining demographic, Psychographic, and behavioral differences. Thus a car manufacturer may identify different types of consumers preferring different styles of cars, so they will segment their car buying markets accordingly. Perhaps identifying those younger car buyers, with high incomes, will be more likely to buy a sports car, while an older population of car buyers may be more apt to purchase a town car. Once these segments are identified, marketers can develop different marketing mixes that target each segment. Again, the marketer may identify a number of specialty magazines that the young, affluent market reads, thus they will run their advertisements for sports cars in these magazines. Individuals with diverse product needs have heterogeneous needs. Market segmentation is the process of dividing a total market into market groups consisting of people who have relatively similar product needs, there are clusters of needs. The purpose is to design a Marketing Mix(s) that more precisely matches the needs of individuals in a selected market segment(s). A market segment consists of individuals, groups or organizations with one or more characteristics that cause them to have relatively similar product needs. The total market for a good or service consists of all the people and/or organizations that desire it, have resources to make purchases, and are willing 13

and able to buy. Firms often use market segmentation i.e.dividing the market into subsets of customers that behave similarly. The development of a target market strategy consists of three general phases: 1. Analyzing consumer demand, 2. Targeting the market, 3. Developing the marketing strategy. 1. The firm determines demand patterns, establishes bases of segmentation, and identifies potential market segments. 2. The firm targets the market through undifferentiated marketing (mass marketing), concentrated marketing, or differentiated marketing (multiple segmentation). 3.The firm then positions its offering relative to competitors and outlines the appropriate marketing mix. Meaningful product differentiation is essential. Criteria needed for segmentation For segmentation to occur: 1. Segments must have enough profit potential to justify developing and maintaining a Marketing Mix. 2. Consumer must have heterogeneous (different) needs for the product. 3. Segmented consumer needs must be homogeneous (similar) 4. Company must be able to reach a segment with a Marketing Mix. For example, how do marketers for coca cola reach youth? Parties College canteens Cinema halls Disco Look at how media has changed recently due to changing demographics etc. and therefore the need of marketers to reach these groups. Media must respond because they are essentially financed by the marketers or at least heavily subsidized. 5. Must be able to measure characteristics & needs of consumers to establish groups.

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Market segmentation process

There are several important reasons why businesses should attempt to segment their markets carefully.These are summarized below. Better matching of customer needs - Customer needs differ. Creating separate offers for each segment makes sense and provides customers with better solutions Enhanced profits for business - Customers have different disposable income. They are, therefore,different in how sensitive they are to price. By segmenting markets, businesses can raise average prices and subsequently enhance profits Better opportunities for growth - Market segmentation can build sales. For example, customers can be encouraged to trade-up after being introduced to a particular product with an introductory, lower-priced product Retain more customers - Customer circumstances change, for example they grow older, form families, change jobs or get promoted, change their buying patterns. By marketing products that appeal to customers at different stages of their life (life-cycle), a business can retain customers who might otherwise switch to competing products and brands Target marketing communications - Businesses need to deliver their marketing message to a relevant customer audience. If the target market is too broad, there is a strong risk that (1) the key customers are missed and (2) the cost of communicating to customers becomes too high / unprofitable. By segmenting markets, the target customer can be reached more often and at lower cost Gain share of the market segment - Unless a business has a strong or leading share of a market, it is unlikely to be maximizing its profitability. Minor brands suffer from lack of scale economies in production and marketing, pressures from distributors and limited space on the shelves. Through careful segmentation and targeting, businesses can often achieve competitive production and marketing costs and become the preferred choice of customers and distributors. In other words, segmentation offers the opportunity for smaller firms to compete with bigger ones.

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ANALYZING CONSUMER DEMAND DETERMINING DEMAND PATTERNS A. Demand patterns indicate the uniformity or diversity of consumer needs and desires for particular categories of goods and services. A firm would face one of three demand patterns, as mentioned below, and shown in the figure. 1. Homogeneous demand is when consumers have relatively uniform needs and desires for a good or service category. 2. With clustered demand, consumer needs and desires for a good or service category can be classified into two or more clusters, each with different purchase criteria. 3. With diffused demand, consumer needs and desires are so diverse that clear clusters cannot be identified. A firms marketing tasks are more difficult because product differentiation is more costly and harder to communicate. ESTABLISHING POSSIBLE BASES FOR SEGMENTING It is widely thought in marketing that than segmentation is an art, not a science. The key task is to find the variable, or variables that split the market into actionable segments There are two types of segmentation variables: (1) Needs (2) Profilers The basic criteria for segmenting a market are customer needs. To find the needs of customers in a market, it is necessary to undertake market research. Profilers are the descriptive, measurable customer characteristics (such as location, age, nationality, gender, income) that can be used to inform a segmentation exercise.The most common profilers used in customer segmentation include the following: Profiler Examples A Demographic Age, sex, family size Income, occupation, education Religion, race, nationality B Geographic Region of the country Urban or rural C Behavioral Product usage - e.g. light, medium, heavy users Brand loyalty: none, medium, high Type of user (e.g. with meals, special occasions) D Psycho graphic Social class Lifestyle type Personality type

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Now, let us explain these bases for segmentation, one by one.

A Market segmentation - demographic segmentation Demographic segmentation consists of dividing the market into groups based on variables such as age; gender family size, income, occupation, education, religion, race and nationality. As you might expect, demographic segmentation variables are amongst the most popular bases for segmenting customer groups. This is partly because customer wants are closely linked to variables such as income and age. Also, for practical reasons, there is often much more data available to help with the demographic segmentation process. The main demographic segmentation variables are summarized below: Age: Consumer needs and wants change with age although they may still wish to consumer the same types of product. So Marketers design, package and promote products differently to meet the wants of different age groups. Good examples include the marketing of toothpaste (contrast the branding of toothpaste for children and adults) and toys (with many age-based segments). Life-cycle stage A consumer stage in the life cycle is also an important variable. We can talk of the following products to talk of the life-cycle concept: Infants: Baby foods like Cerelac and Farex Young child: Leo toys, Barbie dolls (Again these can be segmented by gender basis for small girls and boys) Adolescent: Trendy products and services like Jeans, T-shirts, and Coffee shops,soft drinks(coca cola) Young Adults: Mobikes, music systems, mobile phones ,soft drinks(coca cola) Old people: Investment instruments, health packages for old . When you talk of segmentation based on life cycle, you need to specify exact age groups like for a young child, you might specify the segment as 3-12 years, old people as 55 years and above and so on. Gender: Gender segmentation is widely used in consumer marketing. The best examples include clothing, hairdressing, magazines and toiletries and cosmetics. You have footwear exclusively for males, females and kids. For example, you have Action School shoes exclusively for school-going children. You can talk of soft perfumes for women and deodorants for men. Kinetic scooters are targeted more at women. You have magazines dedicated to women like Femina.

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Income: You might have noticed that income is another popular basis for segmentation. Many companies target affluent consumers with luxury goods and convenience services. Good examples include Mercedes, Pizza Hut Pizzas, Ebony and Parker pen. By contrast, many companies focus on marketing products that appeal directly to consumers with relatively low incomes. You can have examples including Nirma, and Reliance phones besides others. Social class: Many Marketers believe that a consumer perceived social class influences their preferences for cars, clothes, home furnishings, leisure activities and other products & services. There is a clear link here with income-based segmentation. B Market segmentation - geographic segmentation Geographic segmentation tries to divide markets into different geographical units. These units include, Regions: e.g. in India, you can talk of North India, West India, as regions or zones and Delhi, Mumbai, Chennai as metropolitan cities and Jaipur, Lucknow and Baroda as smaller cities. Countries: perhaps categorized by size, development or membership of geographic regionCity Town size: e.g. population within ranges or above a certain level Population density: e.g. urban, suburban, rural, and semi-rural Climate: e.g. Northern, Southern Geographic segmentation is an important process - particularly for multi-national and global businesses and brands. Many such companies have regional and national marketing programmes that alter their products, advertising and promotion to meet the individual needs of geographic units. C Market segmentation - behavioral segmentation Behavioral segmentation divides customers into groups based on the way they respond to, use or know of a product. Behavioral segments can group consumers in terms of: Occasions: When a product is consumed or purchased. For example, have been marketed as a product to be consumed at DIWALI and other festivals also as a symbol of family joy. Kelloggs have always encouraged consumers to eat breakfast cereals on the occasion of getting up. More recently, they have tried to extend the consumption of cereals by promoting the product as an ideal, anytime snack food. In India, lots of home shopping takes place on the occasion of Diwali. TV sets sales goes up during world cup cricket.

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Usage: Some markets can be segmented into light, medium and heavy user groups Loyalty: Loyal consumers - those who buy one brand all or most of the time - are valuable customers. Many companies try to segment their markets into those where loyal customers can be found and retained compared with segments where customers rarely display any product loyalty. Those who love thumbs-up will stick to it and would not drink PEPSI if THUMBS UP is not available. Benefits Sought: You may note that this is a different and an important form of behavioral segmentation. Benefit segmentation requires Marketers to understand and find the main benefits customers look for in a product. An excellent example is the toothpaste market where research has found four main benefit segments economic; medicinal, cosmetic and taste. D Market segmentation Psycho graphic segmentation Lifestyle: Marketers are increasingly interested in the effect of consumer lifestyles on demand. Unfortunately, there are many different lifestyle categorization systems, many of them designed by advertising and marketing agencies as a way of winning new marketing clients and campaigns! A. Lifestyles are the ways in which people live and spend time and money. B. You can target final consumers by segmenting by social class and stage in the family cycle. C. A heavy-usage segment is a consumer group that accounts for a large proportion of an items sales relative to the segments size. D. Benefit segmentation groups consumers into markets on the basis of different benefits sought from a product. When you talk of lifestyle, you also talk of AIO. A- Activities: Work, hobbies, shopping style I- Interests: In food, fashion, recreation O- Opinions: About themselves, others, social issues

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TARGETING THE MARKET

IDENTIFYING POTENTIAL MARKET SEGMENT :

develops consumer profiles after establishing bases of segmentation. These profiles identify potential market segments by aggregating consumers with similar characteristics and needs, and separating them from consumers with different characteristics and needs. You can understand from the following sections how coca cola identifies potential market segments and develop consumer profiles. CHOOSING A TARGET MARKET APPROACH You can see below a description and contrast of the three alternative approaches for choosing a target market. Undifferentiated Marketing (Mass Marketing) A. An undifferentiated marketing approach aims at a large, broad consumer market through one basic marketing plan. B. Use of this approach has declined in recent years due to the following: 1. Growth of competition(pepsi and other juices) 2. Stimulated demand by appealing to specific segments.(youngsters who are more health conscious are preferring juices as compared to cola) 3. Improved marketing research that pinpoints desires of different segments. 4. A reduction in total production and marketing costs because of segmentation. C. A major objective of undifferentiated marketing is to maximize sales. D. For successful pure mass marketing, a large group of consumers must have a desire for the same product attributes or consumer demand must be so

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diffused that it would not be worthwhile for a firm to aim marketing plans at specific segments. 1. A firm sells items through all possible outlets. 2. Both total and long run profits should be considered. Concentrated Marketing A. A concentrated marketing approach aims at a narrow, specific consumer group through one specialized marketing plan catering to the needs of that segment.like the Coke commercial of PAANCH featuring AAMIR KHAN was catered to the rural segment of north india B. If concentrated marketing is used, it is essential for a firm to do a better job than competitors in several areas. 1. The company needs to tailor its marketing program for its segment better than competitors. 2. Competitors strengths should be avoided and weaknesses exploited. C. The majority fallacy, appealing to a large segment that is laden with competition, should be avoided. D. A potentially profitable segment may be one ignored by other firms. E. Per unit profits can be maximized through market segmentation. Total profits are not maximized, because only one segment is sought. F. A distinct niche can be carved out for a particular brand.

Differentiated Marketing (Multiple Segmentation )


A. Differentiated marketing combines the best attributes of undifferentiated marketing and concentrated marketing. It appeals to two or more distinct market segments, with a different marketing plan for each. For Example :- Diet Coke is targeted towardsmodern day health conscious people while Rs.5 coke is for middle class or rural India. B. Company resources and abilities must be able to produce and market two or more different sizes, brands, or products. Costs vary, depending on modifications needed. As Coke Rs.5 is CHOTA COKE and Rs.40 is family size 2Liter one. 21

C. Differentiated marketing should enable the firm to achieve several objectives: 1. Sales maximization. 2. Recognition as a specialist. 3. Diversification. D. Differentiated marketing can be achieved without involvement in the majority fallacy. E. Two or more sizable and distinct consumer groups are necessary. The more clusters facing the firm, the greater the opportunity for differentiated marketing. F. Wholesalers and retailers usually find differentiated marketing to be desirable, because it enables them to reach different consumers, offers a degree of exclusivity, allows orders to be concentrated, and encourages private labels. G. Total profits should rise as the number of segments serviced increases. H. A firm must balance revenues obtained from selling to multiple segments against the costs. I. A company must be careful to maintain product distinctiveness in each consumer segment and to guard its image. Coke is keeping its Differentiation Between Coke and Thums-up, its other brand.

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SELECTING THE TARGET MARKET (S)

needs to make two decisions: 1. Which segment(s) offer the greatest opportunities? a. Coke should consider its objectives and strengths, competition, segment size, segment growth potential, distribution requirements, required expenditures, profit potential, company image, and its ability to develop and sustain a differential advantage. 2. How many segments should the firm pursue?

a.

decides whether to pursue one or more segments (or the mass market). Most likely, a firm new to an industry would start with concentrated marketing but coca cola can target different segments as it is a major player in the market.

Requirements For Successful Segmentation A. For concentrated marketing or differentiated marketing plans to succeed, the selected market segments have to meet these five criteria: 1. Differences among consumers. 2. Similarities within segments. 3. Measurable consumer attributes and needs. 4. Large size (to generate sales and cover costs). 5. Reachable in an efficient manner. Limitations of Segmentation A. Segmentation can be misused if: 1. Segments are too small. 2. Consumers are misinterpreted. 3. There are cost inefficiencies. 4. There are too many brands. 5. Firms become short-run, rather than long run, oriented.

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6. Media cannot be used. 7. Segments are too disparate. 8. Consumers are confused. 9. The firm is locked into a declining segment. 10. New product opportunities are sought out too slowly.

DEVELOPING THE MARKETING STRATEGY POSITIONING THE COMPANYS OFFERING IN RELATION TO COMPETITION If I say Cricket, what comes first to your mind probably you will say Sachin or India Pakistan Match or any other.And if I say THANDA what comes in our mind , Coke ,because of THANDA MATLAB commercial.But why is it that you have called out respective names only because that is how they have positioned themselves in your mind in terms of awareness. Positioning is defined as the act of designing the companys offering and image to occupy distinctive place in the target markets mind The main points that you should remember are: Positioning is the final part of the SEGMENT - TARGET - POSTION process Positioning is undoubtedly one of the simplest and most useful tools to marketers. Positioning is all about perception. As perception differs from person to person, so do the results of the positioning map e.g. what you perceive as quality, value for money in terms of worth, etc, is different to my perception. After segmenting a market and then targeting a consumer, next step will be to position a product within that market. It refers to a place that the product offering occupies in consumers minds on important attributes, relative to competing offerings. How new and current items in the product mix are perceived, in the minds of the consumer, therefore re-emphasizing the importance of perception!! New Productneed to communicate benefits

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Why is defining the positioning so important? Running a brand is like conducting an orchestra. Positioning is the heart of competitive strategy. The messages transmitted by everything from the advertising to phone calls with your customer care department all need to be kept in harmony and on brief. Without a clear, single-minded definition of what the brand is about the messages rapidly become discordant and confusing. The positioning statement is therefore a focusing device that helps brand management to keep everything sharp and relevant. Identifying where a specific brand is placed within the marketplace and its relationship to competitive brands, brand positioning is determined by defining the brands benefits to the consumer, opportunities for which the brand is best suited, the brands target audience, and who its main competitors are. For us to achieve the benefits of brand positioning, it is necessary to research indepth the market position (or lack thereof) of the brand. Brand maps and forms are created to profile the brand positioning, comparing the results with competitive brands ELEMENTS OF POSITIONING Evidence has shown that there are four distinct variables that affect the position of a given product. These are: (a) The product itself, (b) The company behind it, (c) The competition, and (d) The consumers. 1. The product. How important the product is or what meaning it has for the consumer and how he relates to it. The fact that a-product involves better ingredients or a process is a matter of indifference unless this knowledge offers distinct advantages to the consumer. There may be little point in lavishing sophisticated technology on certain packaging material if the customer consigns it to the dustbin as soon as he has unwrapped the product.Like earlier Coke and other soft drink manufacturers were providing the 2Litres of soft drink in glass bottles which were a costly stuff as compared to the plastic ones which are used nowdays. In other words, one needs requires judging the dimensions that are important to the customer. Conversely, packaging may be used to lend an aura of desirability to a product but its cost must finally be justified by its intensity of meaning to the customer. 2. The company. A product comes from a company and every company has its own history. Generally, the stronger the company profile the better the image of its products. For instance, consumers may perceive a better image of a product if it comes from a reputed house like Coke. Thus, first the company's own image lends weight to the product's positioning. Secondly, 25

where it does not, the company's name still plays a vital role in successfully launching the product and eventually creates the product position in the market. Like GORGIA tea in India has received good response from consumers being a product of Coke 3. The competition. Product positioning is invariably done in relation to various competitive offerings. In most cases, consumers have a tendency to judge a product in comparison to the dominant brand, e.g. Coke is always compared with PEPSI ,SPRITE WITH 7UP etc., all photocopiers are compared with Modi Xerox, all PCs with HCL, toothpastes with Colgate and so on. This can also be seen as a move to pre-empt the consumers own comparison as well as to educate the consumer. To that extent, leading brand enjoys some edge over others. It is therefore imperative to assess the various competitors while selecting a position. Proper positioning also enables a company to sidestep competitors. In other words, selecting a slot distinctly different from the competitors can avoid a direct confrontation with them. While segmentation serves this purpose by dividing the market into smaller groups, positioning goes a step further to establish a distinct niche in the consumer's mind. 4. The consumer. It should be reiterated that positioning is essentially based on consumer perceptions rather than factual evaluations. Hence, it becomes necessary to examine how the consumer views a product. Here the consumer's self-perception comes into play along with his cognitive and connotative factors. If he sees himself as modem and progressive, he will expect a more progressive product like he might prefer a DIET COKE . If, on the contrary, he sees himself as traditional and possessing a taste for permanence, then he is more likely to view changes as new fangled. Thus, it is important to know what kind of person the archetypal consumer is, his lifestyle, and his preferences. POSITIONING METHODS The nature of a product is found to have considerable impact on the method of positioning. In this sense, products can be broadly classified as (a) Impulse purchase items, (b) Daily use items, (c) Specialty items, (d) Consumer durables, and (e) Industrial products. 1. Impulse purchase items. Purchase of products like soft drinks and chocolates are generally made with little deliberation, were availability, brand awareness and positioning are the key factors. Therefore, choosing a simple memorable slogan assumes importance for positioning , e.g.,THANDA MATLAB or Gold Spot's-"the Zing thing". 26

2. Daily use items. Daily use items like toothpastes and detergents often command brand loyalty and are bought by habit. Since elaborate comparisons of performance are rare, positioning efforts are aimed at promoting habitual buying of the same brand. 3. Specialty items. Buying of specialty items like shoes, garments etc. often involves much deliberation as consumers are looking for certain combinations of styles, features and price. Positioning here attempts to form a favourable prepurchase disposition by highlighting the product's desirable features. Alternatively, where objective comparisons are not meaningful, positioning attempts to build and emotive appeal by creating an aura around the brand. 4. Consumer durables. Products like refrigerators, washing machines, television sets are, by and large, infrequently purchased by most consumers, who invariably gather a fair amount of information prior to the purchase. Positioning tries to win over the consumer by projecting the brand's superiority over others on certain selected dimensions. 5. Industrial products. Of late, industrial product manufacturers have also begun to seek positioning slots. Industrial products can be broadly classified into seven categories, viz., raw materials, components, fabricated parts, processed materials, installation, accessory equipment and operating supplies. The positioning technique to be used will vary with the nature of the industrial product. Raw materials are mostly purchased on the basis of their ingredients or composition. Depending on the individual requirements of prospective buyers, TECHNIQUES OF POSITIONING The Indian marketing experience is, replete with instances of successful positioning strategies. While it is not possible to discuss an exhaustive list of such cases, a few distinguished positioning successes are recounted to focus understanding on the above conceptual outlines. The positioning techniques adopted in these situations can be broadly classified on the basis of their underlying key notions. 1. Positioning by specific product attributes. The most frequently used positioning method has been to highlight certain specific product features or attributes. Thums Up is positioned as a soft drink with strong taste . 2. Positioning by distinct benefit to users. Providing specific benefits or problem solving is another effective means of positioning products. The

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success of Vicks Vaporub, Ponds Cold Cream descried later in this section utilised this method of positioning. 3. Positioning by specific usage. A finer ramification of benefits is to position a brand by specific usage. Dettol soap and Maggi noodles are instances of such positioning 4. Positioning for a user category or application. Another emerging positioning strategy is to highlight the product usage for a particular group of users or new applications. Diet Coke is targeted towards health conscious people. 5. Positioning by product class association. This is effective especially when introducing a new product. The CHOTA COKE was positioned towards the middle class. 6. Positioning by price/quality. Marketers have been found to position their offerings in terms of price/quality. The legendary tussle between PEPSI and COKE on these counts is well known. 7. Positioning by lifestyle of users. In consumer products marketing especially in the case of items of conspicuous consumption, positioning by lifestyle has become a popular method, e.g., 'Charms-the spirit of freedom': Allwyn Watches- 'Time for a new generation' have capitalized on this concept. 8. Positioning by reference groups. The importance of reference groups even in purchase decisions has been accepted as a tool for positioning products. The Indian market has seen extensive use of sports personalities and film stars in the advertisements of many products for personal use. Similarly, when an industrial company mentions its clientele in its promotional material, to derive the advantage of endorsement, it is essentially using the concept of reference groups for positioning itself. Like AAMIR ,AISHVARYA HRITIK and now SEHWAG have been used by Coke.

Positioning by Packaging Of late, packaging has been used in the positioning of some products. In particular, the size, shape, type, colour and design of packaging has been carefully

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chosen to give the product a distinct identity. For instance, Coke and other soft drinks are available in glass bottles,plastic bottles and tin cans as well. This form of packaging also added to the shelf-life of the product and made it easy to store as well as carryThe new look of Coke packaging with different pictures of its brand ambassadors attracts more consumers towards it.. Another frequently applied packaging technique is economy size packaging, e.g. Coke and Thums UP 500 ml". The opposite method, i.e. products in very small sized packets, has also become a popular means of positioning the product for some special group of customers. The Indian market is today replete with cases where success can be attributed to smaller sized packages. Take the case CHOTA COKE. Another packaging oriented positioning is found in cases of reusable and convenience packaging. This form of packaging has attracted consumers who look for economy and/or convenience, e.g., Coke in reusable glass jars or disposable plastic bottles. Many other manufacturers of consumer products have resorted to this method of packaging. It has been observed that sometimes particular colours/ shapes of containers have been used to project a certain image. Knowing the preference for certain colours by customers, marketers have, for example, chosen pink for girls, blue for boys, deep colours for rural customers and so on.

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