• Customer value.

customer delivered value is the difference

between total customer value and total
customer cost.
• Total customer value.
customer expectation from a given product
or service.
• Total customer cost.
cost which incur in using a product or
service.
 The Indian consumer
 Demographic profile.
 920 million consumers in 1995.
 In 2007 more than one billion consumers..
 Geographical distribution.
 Diversity in language, religion and
social customs.
• Religious diversity.
• Linguistic diversity.
• Diversity in dress ,food habits etc.
• Diversity in literacy level.
• Diversity in density of population.
 Social class.
• Social class can be used as a base for
market segmentation and is usually “
measured” by a weighted index of several
demographic variables such as Education ,
occupation and income.
• The concept of social class implies a
hierarchy in which individuals in the same
class generally have the same degree of
status, while members of other classes have
either higher or lower class.
 Social class categories
• The most general categorization of
social class structure can be put under
three groups.
• Upper class.
• Middle class.
• Lower class.
• Where as middle class represents the
largest proportion of population and is
considered as the largest consumption
group.
• The middle class can be further be divided
creating a total of five groups of social class.
such a division can be more useful to
marketers for developing appropriate
products and services targeting specific
social class consumers.
• Upper class.
• Upper middle class.
• Middle, middle class.
• Lower middle class.
• Lower class.
 The upper class.
• The upper class of most societies is a varied
group of individuals who include the aristocracy,
the nouveau riches (the new social elite) and the
upper-middle class.
• Aristocracy consists of traditional old money
families who acquired great wealth and power
• E.g. : maharajas and business people.
 The middle class
• This class consists of primarily white –collar
workers at managerial levels.

• E.g. : doctors ,lawyers, medium sized

business.
• In India middle class is the largest consuming
class.
 The lower class.
• They are poor people and generally represent a
sizable population, particularly in the poorer
developing countries.
• E.g. : un represent farm workers ,un organized
labour , unskilled workers.
• Studies shown that consumers in different social
class vary in terms of values product preference
and buying habits.
Societal marketing concept.
 Societal marketing concept
• Holds that the organization task is to
determine the needs, wants and interests
of target markets and to deliver the
desired satisfaction more than its
competitors in a way that preserves or
enhances the consumers and the
society's well being.
• Societal marketing concept is based on
the following premises.
 The marketer has to fulfill the
customer demand and also to
contribute to the enrichment or quality
of life.
 The marketer shall not offer a
product to consumers if it is not in the
best interests of consumers.
 The marketer will offer long run
consumer and public welfare.
• Societal marketing concept calls upon
marketers to build upon social and
ethical considerations .
• Marketers have to balance on
• Profitability.
• Consumer satisfaction.
• Public interest .
• E.g. of successful companies using
societal marketing concept.
• Ben & jerry
• The body shop.
 Societal Marketing Concept

• Do what is good for society

• Who determines what is good for
society?
• Ethics
• Honesty–Trust
• Give back to the community
 cause related marketing
• cause related marketing is a form of
corporate philanthropy that links a
company’s contributions (usually
monetary) to a predesignated worthy
cause with the purchasing behavior of
consumers.
Relationship marketing.
• Aim of building long term relationship
with customers, suppliers.
• Marketing network consists of the
company and its supporting
stakeholders (customers, employees,
retailers ) with whom it has built
mutually business relationships.
• Rather competition between the
companies but with the networks.
• E.g. :Harley Davidson.
Process involved in the customer
relationship marketing.
• Suspects.
• prospects.>disqualified prospects.
• First time customers.
• Repeat customers. In active or

• Clients. Ex customers
• Members.
• Advocates
• Partners
• Win back-strategies.
• Suspects- everyone who might
conceivably buy the product or service.
• Prospects- company looks harder at the
suspects to determine who are the most
likely people who go for the buy.
• Disqualified prospects – are those
people in which the company rejects
because of the inability to pay.
• Converts many of qualified prospects to
first time customers.
• And then to convert the first time
customers to repeat customers.
• And the repeat customers when they go
for repeated purchase will turn to
clients.
• People whom the company treats very
specially.
• then the clients to members is the next
step in membership program –offers a
whole set of benefits to join.
• Members to advocates
• Advocates to partners where the
company and the customer work
together actively.
• Some customers will move out because of
dissatisfaction , bankruptcy
• Bring back the customers through
customer win back strategies.
Different levels of investment in
customer relationship building.
• Basic marketing.
• Re-active marketing.
• Accountable marketing.
• Pro-active marketing.
• partnership marketing.
• Basic marketing: the sales person
simply sell the product.
• Re –active marketing : the sales
person sells the product and
encourages the customer to call if he or
she has questions ,comments or
complaints.
• Accountable marketing : sales person
phone the customer after sometime
sale occur to check the product is
meeting expectations.
• Pro-active marketing:
the company sales person contacts the
customer from time to time with inviting
suggestions and any specific
disappointments.
partnership marketing:
the company works continuously with
the customer to perform better.
Marketing environment
• marketing environment comprises of
• Internal marketing environment (micro).
(objectives and resources)
• External marketing environment.
(macro).
• External marketing environment. (macro).
consists of
• Socio-cultural environment.
• Economic environment.
• Legal/political environment.
• Competitive environment & technological
environment
Environmental scanning.
• Environmental scanning is the practice
of keeping track of environmental
changes that can affect an organization
and its markets.
• These changes can occur in all
dimensions of external environment-
• Economic.
• Political.
• Legal.
• Social.
• Technological & competitive.
 economic

Interest Exchange
income inflation recession
rate rate
• Recession is a period of economic activity
when income ,production and employment
tend to fall.
 Technology

Technologies
Technology Technology
For
for For
Products and
Nation business
services
 SOCIAL-CULTURAL
FACTORS

TIME
MULTIPLE
VALUES STRAVED
LIFESTYLES
CUSTOMERS
Market oriented strategic
planning
• Strategic planning is a stream of decisions
and actions which leads to help the firm
achieve its objectives.
• Strategic planning is a route map to the
firm.
• Strategic planning serves as a hedge
against risk and uncertainty.
planning is a formal framework to act
and it involves deciding the actions to
be perused well in advance.
planning occurs at three levels in an
organization.
top level management- long range
corporate strategic planning.
middle level management- planning of
marketing mix strategies, allocation of
resources , co-ordaining the activities of
operational units.
• Lower level management- operational
planning takes place at the bottom of
organizational structure i.e. day to day
weekly or monthly activities.
• Business unit strategic planning
consists of the following steps.
• Business mission
• Swot analysis.
• Goal formulation.
• Strategy formulation.
• Program formulation & implementation.
• Feed back and control.
 SWOT Analysis

STRENGTHS WEAKNESSES

OPPORTUNITIES THREATS

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• Goal formulation.
• After the swot analysis ,firm can proceed to goal
formulation.
• Every business is having a goal may be a mix of
goals .
• Objectives for profitability , sales growth , market
share improvement ,risk containment ,innovation
and reputation.
 Strategy formulation
The way to achieve goals is strategy.
Michael porter has condensed them into
three types of marketing strategies
 Cost leadership.
 Differentiation.
 Focus.
• Cost leadership
Business works for the lowest production
and distribution costs so that it can price
lower than its competitors
program formulation
once the business unit has developed its
strategies it must work out.
 strengthening r&d development
,training the sales force and develop ads.
• Implementation.
implementing the strategies in an effective
way is an important factor.
every company is having their own
strategies based on these they will
implement the same (employees hiring ,
training , assigning them the right jobs.
• Feed back and control
firm needs to track and monitor new
developments in the internal and external
environment.
Corporate and division
strategic planning.
• All corporate headquarters undertake
four planning activities.
• Defining the corporate mission.
• Establishing strategic business units.
• Assigning each resources to sbu
• Planning new business , downsizing
older business.
• Strategic business units.
• An sbu has three characteristics.
• It is a single business or collection of
related business that can be planned
separately from the rest of the
company.
• It has its own set of competitors.
• It has a manager who is responsible for
strategic planning and profit
performance and who controls most of
the factors affecting profit.
 Planning new business,
downsizing older business.
• When there is a gap between the
projected sales and current sales
corporate management have to develop
or acquire new business to fill it.
• How can it fill the strategic planning
gap?
• Three options are available.
• Further growth within the current
business (intensive growth strategies)
• Identify the business that are related to
the current business (integrative )
• Identify opportunities that are unrelated
to the company’s current business
(diversification )
• Growth strategies.
Two major growth strategies are intensive
growth strategies and integrated growth
strategies.
• Intensive growth strategies.
can be explained in terms of Ansoff’s
(1957) product /market matrix.
 market penetration strategy.
 market development strategy.
 product development strategy.
 diversification strategy.
• ANSOFF’S PRODUCT/ MARKET MATRIX.

EXISTING NEW
PRODUCTS PRODUCTS

MARKET PRODUCT
EXISTING PENETRATION DEVELOPMENT
MARKET STRATEGY STRATEGY

MARKET
DIVERSIFICATION
NEW DEVELOPMENT
STRATEGY
MARKET STRATEGY
• Market penetration strategy:
a firm seeks increased sales volume
from its current products in the current
market through more aggressive
marketing efforts.
market development strategy:
a firm enters into new market with the
existing products. This is nothing but
expanding the market region.
e.g. : a firm operating in the domestic
market may decide to move in to
foreign market.
• Diversification strategy.
diversification is a strategic tool for
companies when further growth is
restricted or limited in a market.
diversification can be formulated in two
ways .
they are related diversification and
unrelated diversification.
 Diversification

Related Unrelated
diversification diversification

Through Through Through

Through
Taking over Merger with Forming
Forming
Another Another Strategic
Joint ventures
business Business Alliances.
• Product development strategy.
A firm develops new products to launch in
to the existing markets.
EG : MARUTI ZEN ESTILO
Integrative growth strategy.
• When there is a possibility of having a
strong growth future. A firm may adopt
integrative growth strategy.
• Generally there are three types of
integration exists.
• Backward integration .
• Forward integration.
• Horizontal integration.
 backward integration enable the
firm to have control over the supply
system.
(suppliers, components ).
 forward integration helps to have
control over the distribution system
(networks).
 horizontal integration either to
seek control over competitors or
ownership of the competitive firms.
Boston consulting group’s (BCG)
market growth /share matrix.
• The basic process for creating a
portfolio plan is to evaluate strategic
business units in the organizations
portfolio.
• Two techniques for evaluating the sbu’s
in a business portfolio management are
Boston's consulting group’s growth
/share matrix and general electric’s
industry attractiveness /business
strength matrix.
• The Boston consulting group was
founded in the middle of 1960 to
provide consultancy service to strategic
marketing planners in USA.
• BCG developed a simple but very
useful method which came to known as
BCG’s
business portfolio matrix on two
measures :market growth rate (low or
high) and relative market share (low or
high)
Boston Consulting Group Matrix

Relative Market Share

High Low

Product
D
High Product
A
Market Growth Rate

Product
E

Product Product
C B

Low

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• Stars.
• Cash cows.
• Dogs.
• Question marks.
• Stars – are leaders in their markets but
they have to focused on building sales
or market share. More cash is required
to finance their rapid growth. If the
market share falls , a star can be
changed in to a problem child.
.
• Question marks- they are also called
problem children products. The market
is growing at a high rate but the market
share is low.
• choice is to increase investment and
build market share to turn it to a star, or
to withdraw support by either harvesting
(raising prices while lowering marketing
expenditure) or divesting (dropping or
selling )
• cash cows – The market is growing at
a slow rate and business is high in the
form of market leader.
• The company’s objective is to hold
sales and market share. If the business
fails to hold on its market share , it will
be converted to dog.
• Dogs – the market is growing at a slow
rate and the market share of the business
is low.
• Company have to check by making
investments it can boost the business.
• If the business is weak company have to
take decision whether to harvest or divest.
• The company’s next task is to determine
what objective , strategy and budget to
assign to each sbu. Four strategies can be
perused.
• Build – here the objective is to
increase market share . It is appropriate
for question marks whose market
shares must grow if they are to become
stars.
• Hold –preserve the market share.
strategies are designed to retain
customers.
• Harvest – for weak question marks and
dogs managers may decide to harvest.
• Involves a decision to withdraw from a
business by implementing a program of
continuous cost retrenchment.
• Eliminating r&d expenditures ,reducing
advt expenses.
• Divest –
• The objective is to sell or liquidate the
business and used elsewhere.
• Appropriate for dogs and question marks
that are acting as a drag on company’s
profits.
 Peter Drucker’s (1973)
Seven Types of Business
Portfolios
  Business strength
 high  low
Tomorrows Developments
 Bread winners
high Sleepers
Ego trips
Market
Todays bread
attractivy Failure
winners Yesterdays bread
winners

low
• Today’s bread winners:
• Tomorrow’s bread winners:
• Yesterday’s breadwinners:
• Developments :
• Sleepers :
• Ego trips :
• Failures :
General electric’s ( G E)
approach
business strength matrix.
 high
sbu2
Market
Attrac- Sbu1
sbu3
tivitymedium

sbu4
low

Business strength
strong average weak
• Green zone consists of three cells at the
upper left indicating favorable industry/market
attractiveness.
• So it suggests the company to invest and
grow.
• Yellow zone consists of markets and
business are medium in over all
attractiveness.
• So the company decide to maintain the
shares.
• Red zone indicates markets/business are low
in attractiveness so decide to harvest or
divest.