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1
Definition of marketing
Marketing is an integrated communications-based process through which
individuals and communities discover that existing and newly-identified
needs and wants may be satisfied by the products and services of others.
Marketing is defined by the American Marketing Association as 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. The term developed from the original
meaning which referred literally to going to market, as in shopping, or going to
a market to buy or sell goods or services.
The Chartered Institute of Marketing defines marketing as The management
process responsible for identifying, anticipating and satisfying
customer requirements profitably.
Marketing practice tended to be seen as a creative industry in the past, which
included advertising, distribution and selling. However, because
marketing makes extensive use of social sciences, psychology, sociology,
mathematics, economics, anthropology and neuroscience, the
profession is now widely recognized as a science, allowing numerous
universities to offer Master-of-Science (MSc) programmes. The overall
process starts with marketing research and goes through market
segmentation, business planning and execution, ending with pre and post-
sales
promotional activities. It is also related to many of the creative arts. The
marketing literature is also infamous for re-inventing itself and its
vocabulary according to the times and the culture.
A common set of conditions are present in the marketplace, viz.,
1) Buyers outnumber sellers
2) Any individual buyer is weaker than any individual seller economically, but
3) The total economic power of even a fraction of the buyers is enough to
assure the existence of, or to put out of business, most sellers or groups
of sellers, and
4) Consequently, the sellers compete to sway the largest number of buyers
they can to their, rather than another sellers (competitors) offerings.
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Finally and intriguingly,
5) The sellers in their attempt to meet competition and attract the largest
number of buyers, are influenced as well, regularly modifying their
behaviours so they will have more success, with more buyers, over time.
Definition of Marketing
After understanding the Market in the last chapter, now let us understand what
the marketing is. In market, the sellers and buyers exchange ideas,
goods, services and information for money. The ideas, goods, services and
information possess a value for the customer. Every organization or
firm has to create a value for its product or service and this is very much
essential for its survival.
The economists call this value utility. Utility is the want-satisfying power of
a good or service. The utility is of four kinds- form utility, time utility,
place utility and ownership utility.
Form utility is created when the firm converts raw materials and component
inputs into finished goods and services. Any firms production function
is responsible for creating form utility and marketing provides important inputs
that specify consumer preference. Marketing creates the other three
utilities, time utility, place utility and ownership utility. Time and place utility
occur when consumers find goods and services available when and
where they want to purchase them. EBay and other online retailers have a
24X7 format. This format emphasizes the time utility. Cola vending
machines at malls and complexes focus on providing place utility for people
buying snacks and soft drinks. Similarly, dial a pizza creates place
utility. ATMs in banks also create the place utility. The transfer of title to goods
or services at the time of purchase creates ownership utility.
Utility is created by marketing. The firms determine what products or services
may be of interest to customers. In simple words, the strategy to use
in sales, communications and business development is called marketing.
Marketing is an integrated process through which a firm creates value for
customers and builds strong customer relationships in order to capture value
from customers in return.
Just like transaction is central to a market, customer is central to marketing.
Marketing involves identifying, retaining and satisfying the customer.
Marketing is not an isolated process. it is an integrated process which involves
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the planning, execution, pricing, distribution, promotion and after
sales service. The American Marketing Association as has defined the
marketing as:
Marketing is the process of planning and executing the conception, pricing,
promotion and distribution of ideas, goods and services to
create exchanges that satisfy individual and organizational objectives
The latest definition of Marketing by AMA in October 2007 was revised as:
Marketing is 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.
The Chartered Institute of Marketing defines marketing as the management
process responsible for identifying, anticipating and satisfying
customer requirements profitably
ABC Method

ABC method: ABC method refers Attention, Benefits and Close. Its a sales
method, where the customers attention is attracted, the salesperson
then shows the benefits of the product to the customer, and finally closes the
deal.
It is different from ABC analysis which is a technique that has been used in
business management for a long time is the categorization of large data
into groups.
Evolution of Marketing

Marketing has changed over the centuries, decades and years. The
production centered system systematically changed into relationship era of
today and over the period; the specializations have emerged such as sales
versus marketing and advertising versus retailing. The overall evolution of
marketing has given rise to the concept of business development. Marketing
has taken the modern shape after going through various stages since last the
end of 19th century. The Production oriented practice of marketing prior to the
twentieth century was conservative and hidebound by rules-of-thumb and lack
of information. Science & technology developments and specially the
development of information technology have now changed the way
people live, the way people do business and the way people sell and
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purchase.
Following is a short summary of the various stages of evolution of marketing.
Production Orientation Era: The prevailing attitude and approach of the
production orientation era was -consumers favor products that are
available and highly affordable . The mantra for marketing success was to
Improve production and distribution. The rule was availability
and affordability is what the customer wants. The era was marked by narrow
product-lines; pricing system based on the costs of production
and distribution, limited research, primary aim of the packaging was to protect
the product, minimum promotion. Advertising meant,
Promoting products with a lesser quality.
Product Orientation Era: The attitude changed slowly and approach shifted
from production to product and from the quantity to quality. The
prevailing attitude of this period was that consumers favor products that offer
the most quality, performance and innovative features and the
mantra for marketers was A good product will sell itself, so does not need
promotion.
Sales Orientation Era: The increased competition and variety of choices /
options available to customers changed the marketing approach
and now the attitude was Consumers will buy products only if the company
promotes/ sells these products. This era indicates rise of
advertising and the mantra for marketers was Creative advertising and selling
will overcome consumers resistance and convince them to
buy.
Marketing Orientation Era: The shift from production to product and from
product to customers later manifested in the Marketing Era which
focused on the needs and wants of the customers and the mantra of
marketers was The consumer is king! Find a need and fill it. The
approach is shifted to delivering satisfaction better than competitors are.
Relationship Marketing Orientation Era: This is the modern approach of
marketing. Todays marketer focuses on needs/ wants of target
markets and aims at delivering superior value. The mantra of a successful
marketer is Long-term relationships with customers and other
partners lead to successes
The following sentences summarize the above evolution of marketing.
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1. Production era: Cut costs. Profits will take care of themselves
2. Product era: A good product will sell itself
3. Sales era: Selling is laying the bait for the customer
4. Marketing era: The customer is King!
5. Relationship marketing era: Relationship with customers determine our
firms future
Summary Notes -1

Q.1What is Utility in reference to marketing?
Utility is the want-satisfying power of a good or service. There are four basic
kinds of utility
1. Form Utility :
2. Time Utility
3. Place Utility
4. Ownership Utility.
Form utility is created when the firm converts raw materials and component
inputs into finished goods and services. Although marketing provides
important inputs that specify consumer preference,
the organizations production function is responsible for the actual creation of
form utility. Marketing function creates time, place and ownership utilities.
Time and place utility occur when consumers find goods and services
available when and where they want to purchase them. Online retailers with
24*7 format emphasize time utility.
Vending machines focus on providing place utility for people buying
snacks and soft drinks. The transfer of title to goods or services at the time of
purchase creates ownership utility.
Q 2. If you are a Marketing Manager of a Firm, How you will Create a
Customer?
creating a customer means identifying needs in the marketplace, finding out
which needs the organization can profitably serve and developing an offering
to convert potential buyers into customers. Marketing managers are
responsible for most of the activities necessary to create the
customers the organization wants, These activities include:
1. Identifying customer needs
2. Designing goods and services that meet those needs
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3. Communication information about those goods and services to prospective
buyers
4. Making the goods and services available at times and places that meet
customers needs
5. Pricing goods and services to reflect costs, competition and customers
ability to buy
6. Providing for the necessary service and follow-up to ensure customer
satisfaction after the purchase
Q 3. What is the meaning of Relationship Marketing ?
Relationship Marketing focuses on needs/ wants of target markets and
delivering superior value.
Besides it also means to develop Long-term relationships with customers and
other partners lead to success
Q 4. Which are the eras of Evolution of Marketing ?
There are five eras in the history of marketing the production era, the product
era, the sales era, the marketing era and the relationship marketing era.
Q 5. What was the focus of marketing in production Era?
In the production era, the production orientation dominated business
philosophy. Indeed business success was often defined solely in terms of
production victories. The focus was on production and
distribution efficiency. The drive to achieve economies of scale was dominant.
The goal was to make the product affordable and available to the buyers.
Q 6. What was the focus of Marketing in Product Era?
In the product era, the goal was to build a better mouse trap and it was
assumed that buyers will flock the seller who does it. However, a better
mousetrap is no guarantee of success and marketing history
is full of miserable failures despite better mousetrap designs. Inventing the
greatest new product is not enough. That product must also solve a perceived
marketplace need. Otherwise, even the best- engineered. Highest quality
product will fail.
Q 7. What did the firms attempt in Sales Era?
In the sales era, firms attempted to match their output to the potential number
of customers who would want it. Firms assumed that customers will resist
purchasing goods and services not deemed essential and that the task of
selling and advertising is to convince them to buy. But selling is only one
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component of marketing.
Q 8. Describe the marketing Era of Marketing History:
During marketing era the company focus shifted from products and sales to
customers needs. It can be explained best by the shift from a sellers to a
buyers market one with an abundance of goods and services. The advent
of a strong buyers market created the need for a customer orientation.
Companies had to market goods and services, not just produce them. This
realization has been identified as the emergence of the marketing concept.
The keyword is customer orientation. All facets of the organization must
contribute first to assessing and then to satisfying customer needs and wants.
Q 9. What is the meaning of Relationship Marketing?
Organizations carried the marketing eras customer orientation one step
further by focusing on establishing and maintaining relationships with both
customers and suppliers. This effort represented a major shift from the
traditional concept of marketing as a simple exchange between buyer and
seller. Relationship marketing, by contrast, involves long-term, value-added
relationships developed over time with customers and suppliers.
Q 10. The statement Customer is King comes from which era of
marketing History ?
Marketing Era
Q 11. Today Marketing is Customer Oriented or Product Oriented or
profit oriented?
Customer oriented
Q 12. What is the center Point of Marketing Concept?
Customer
Q 13. Which will you keep in modern marketing concept? Make & Sell
or Sense & Respond ?
Sense & Respond
Features of Marketing

The marketing Management refers to planning, organizing, directing, control
of the activates which facilitate the exchange of goods and services between
the producersto end consumers. Firms today need to spend money to create
time, place and ownership utilities .The main features of modern marketing
are as follows:
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1. Marketing is a science as well as art: Marketing has evolved from the
economics but it has a closer relationships with social and
behavioral sciences. Marketing is closely associated with streams of science
as well humanities and subject lines such as Economics, Law,
Psychology, Anthropology, Sociology, Information Technology etc. Marketing
heavily depends upon the demographic features of the target
market, political environment, philosophy, mathematics, statistics etc.
2. Exchange is essence of marketing: Marketing revolves around
commercial exchange. This also involves exchange of technology,
exchange of information and exchange of ideas.
3. Marketing is Goal Oriented: The ultimate goal of marketing is to generate
profits through the satisfaction of the customer.
4. Marketing is a continuous process: marketing is not an isolated, static
process but is a complex, continuous and interrelated process. It
involves continuous planning, implementation and control. It is an important
functional area of the management.
5. Marketing is Consumer Oriented: All firms exist because of their
business to satisfy the human needs, wants and demands. The ultimate
objective of marketing is to find out what the consumer wants and how to fulfill
consumer need. This leads to production of the goods and
services as per the needs of the customer.
6. Marketing starts with consumer and ends with consumer: Marketing is
consumer oriented and it is very important to know what the
consumer wants.
Functions of Marketing
The ultimate aim of marketing is exchange of goods and services from
producers to consumers in a way that maximizes the satisfaction of
customers needs. Marketing functions start from identifying the consumer
needs and end with satisfying the consumer needs. The universal
functions of marketing involve buying, selling, transporting, storing,
standardizing and grading, financing, risk taking and securing marketing
information. However, modern marketing has some other functions such as
gathering the market info and analyzing that info. Market planning and
strategy formation. To assist in product designing and development also
comes under the marketing functions. The marketing functions have been
9
discussed here briefly:
1. Market Information: To identify the needs, wants and demands of the
consumers and then analyzing the identified information to arrive at
various decisions for the successful marketing of a firms products and
services is one of the most important functions of marketing. The
analysis involves judging the internal weaknesses and strengths of the
organization as well politico-legal, social and demographic data of the
target market. This information is further used in market segmentations.
2. Market Planning: Market-planning aims at achieving a firms marketing
objectives. These objectives may involve increasing market
presence, dominate the market or increase market share. The market
planning function covers aspects of production levels, promotions and
other action programmes.
3. Exchange Functions: The buying and selling are the exchange functions
of marketing. They ensure that a firms offerings are available in
sufficient quantities to meet customer demands. The exchange functions are
supported by advertising, personal selling and sales
promotions.
4. Product Designing and development: The product design helps in
making the prodyct attractive to the target market. In todays
competitive market environment not only cost matters but also the product
design, suitability, shape, style etc. matter a lot in taking
production decisions.
5. Physical Distribution: The physical distribution functions of marketing
involve transporting and storing. The transporting function involve
moving products from their points of production to locations convenient for
purchasers and storing function involve the warehousing products
until needed for sale.
6. Standardization and Grading: Standardization involves producing goods
at predetermined specifications. Standardization ensures that
product offerings meet established quality and quantity. It helps in achieving
uniformity and consistency in the output product. Grading is
classification of goods in various groups based upon certain predetermined
characteristics. It involves the control standards of size, weight
etc. Grading helps in pricing decisions also. The higher quality goods and
10
services attract higher prices.
7. Financing : The financing functions of marketing involve providing credit
for channel members or consumers.
8. Risk Taking: Risk taking is one of the important marketing functions. Risk
taking in marketing refers to uncertainty about consumer
purchases resulting from creation and marketing of goods and services that
consumers may purchase in future.
9. Packaging, labeling and branding: packaging involves designing
package for the products, labeling means putting information required /
specified on a products covering. Packaging and labeling serve as
promotional tools now a days, Branding distinguishes the generic
commodity name to a brand name. For example, Wheat Flour is a generic
name of a commodity while Ashirvad Aata is a brand name. In
service industry, also branding matters a lot.
10. Customer Support: Customer support is a very important function of
marketing. It involves pre sales counseling, after sales service,
handling the customer complaints and adjustments, credit services,
maintenance services, technical services and consumer information.
For example, water purifier comes with an onsite service warranty of 7 years
helps in marketing and is an important marketing function as well.
Meaning & Functions of Marketing Management
Management is the processes of planning, organizing directing motivating and
coordinating and controlling of various activities of a firm. Marketing
is the process of satisfying the needs and wants of the consumers.
Management of marketing activities is Marketing Management.
Management Guru Philip Kotler defines marketing as Marketing Management
is the analysis, planning, implementation anc control of programmes
designed to bring about the desired exchanges with target audiences for the
purpose of personal and mutual gain. It relies heavily on adoption and
coordination of the product, price, promotion and place for achieving
response:
In other words, a business discipline, which is focused on the practical
application of marketing techniques and the management of a firms
marketing resources and activities, is Marketing Management.
Marketing Management focuses upon the psychological and physical factors
11
of Marketing. The Marketing managers are responsible for influencing
the level, timing, and composition of customer demand accepted definition of
the term. While the psychological factors focus upon discovering the
needs and wants of the consumer and the changing patterns of buying
behavior, habit etc. the physical factors focus upon fulfilling those needs and
demands buy better product design, channel of distribution and other
functions.
In summary, Marketing in action is marketing Management.
Marketing Management has the responsibility of to perform many functions in
the field of marketing such as planning, organizing, directing,
motivating, coordinating and controlling. All these function aim to achiven the
marketing goals.
Following is a brief summary of functions of Marketing
1. Marketing Objectives: marketing management determines the marketing
objectives. The marketing objectives may be short term or long
term and need a clear approach. They have to be in coherence with the aims
and objectives of the organization.
2. Planning: After objectively determining the marketing Objectives, the
important function of the marketing Management is to plan how to
achieve those objectives. This includes sales forecast, marketing programmes
formulation, marketing strategies.
3. Organization: A plan once formulated needs implementation. Organizing
functions of marketing management involves the collection and
coordination of required means to implement a plan and to achieved pre
determined objectives. The organization involves structure of
marketing organization, duties, responsibilities and powers of various
members of the marketing organization.
4. Coordination: Coordination refers to harmonious adjustment of the
activities of the marketing organization. It involves coordination among
various activities such as sales forecasting, product planning, product
development, transportation, warehousing etc.
5. Direction: Direction in marketing management refers to development of
new markets, leadership of employees, motivation, inspiration,
guiding and supervision of the employees.
6. Control: Control refers to the effectiveness with which a marketing plan is
12
implemented. It involves the determination of standards,
evaluation of actual performance, adoption of corrective measures,
7. Staffing: Employment of right and able employees is very crucial to
success of a market plan. The market manager coordinates with the
Human Resource Manager of an organization to be able to hire the staff with
desired capability.
8. Analysis and Evaluation: The marketing management involves the
analysis and evaluation of the productivity and performs mace of individual
employees.
Basic Marketing Concepts
Anything that has a value can be marketed. A product, a service, a place, a
person, an idea, information , an event, an organization, property or
even experiences. However, there are some basic concepts of marketing,
which are interrelated, and one building on one before it. These concepts
are summarized in the following figure.
Here is a brief Description of the fundamental marketing concepts:
1. Needs, wants and demands: A need is a state of felt deprivation or
feeling of being deprived of something. Human need is the most
basic concept underlying the marketing. Need is a part of human nature.
There are many kinds of needs such as physical needs, social
needs, spiritual needs, etc. Needs are shaped up by culture, personality and
religion and they become wants when the need indicate an
object to fulfill that need. Wants depend upon the internal as well as external
factors. Want is defined in terms of an object that will define
the need. If thirst is need, water, a cola drink, or a fruit juice may be the want.
If hunger is need, pizza, burger, bread, or chapatti is a want.
There may be more than one object that may fulfill a need and this is called a
want-list. People have choices to choose a desired object or
service from the want-list to fulfill a particular need. However due to limited
resources, people want best value of their money. When a want
is backed by buying power, it becomes a demand. So if no buying power,
no demand. Money is required to create as well as fulfill a
demand. This is the most fundamental concept of marketing. The marketer
has to know the potential want list of his target market and make
them available the best value for their money.
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2. Product: Anything tangible or intangible that is offered to satisfy a need or
want is a product. They are called goods (tangible) and services
(intangible). The tangible products are physical products, which can be
touched or felt or tested, while the intangible products cane only be
experienced. For example, a service of a hotel can be experienced
(intangible) while food in the restaurant in the same hotel can be tested
(tangible). Cars, groceries, computers, places, persons , ideas and
informations -everything are objects that have the capability of fulfilling
the needs and wants. When products are offered in the markets they are
called market offering. A good market offering has to have a
good value for money.
3. Value & Satisfaction: The potential want list may have many products,
which may fulfill the need and want of a customer. However, a
customer chooses what gives him or her best value for money. There are
market offerings for the objects in their potential want list. The
market offerings have to provide the best value of the money and satisfaction
of fulfilling a want. This is the fundamental concept of
marketing, that when there are so many offerings in the market, the customer
buys a product on his / her perception. Based upon their own
perception the customers estimate the product value and judge whether, it
has the capacity of fulfilling their need.
Customer value is a guiding principle. The customer may rank the products as
per his / her estimate of a products capability to
satisfy a need. The price attached to the product may also affect this ranking.
Ultimately, the customer chooses a product, which
gives him / her best value of his / her money.
4. Exchange, Transactions and Relationships: As mentioned above, the
wants backed by buying power create demand. The demand is
fulfilled through exchange. Exchange is the act of obtaining a desired
object from someone by offering something in return. Barter is
also an exchange. One person cannot make exchange happen. To make
exchange happen, two people are required at least. However, the
transaction between two people can be a trade. Two people cannot create a
market. Three people are at least required to create a market,
so that there is competition from at least one side. For exchange to take
14
place, two people are needed. Both of them must have something to
offer each other and both of them should have a value to offer each other.
Each of them must be free to accept or reject the offer. Both of
them must be able to communicate with each other and must be able to
deliver what they offering to each other. These are some basic
conditions to make exchange happen.
Exchange cannot be forced. Both the people must be independent and able to
accept or reject one anothers offer. Exchange may be for
profit or also for no profit. Whether for profit or no profit , an exchange must
give some value to the exchange partners. A successful
exchange is a transaction. The transaction is the unit of measurement in
marketing. The value associated with transactions is the trade
values. A monetary transaction involves money for goods / services and a
barter transaction involves good/ service for good / service.
A marketer does not want a single transaction. His aim is to continuously
make market offerings and the continuous exchanges /
transactions create relationships. Todays marketing is relationship marketing.
The focus of marketing is not to get maximum profit from a
single transaction but to get long running relationship with the customers. If
there are good relationships, the transactions will follow and run
long term.
5. Markets: As we have discussed, an exchange may take place between two
people, but three people are required to create a market. There
are always many potential buyers and many potential sellers and the set of
these potential buyers and sellers is market. A market essentially
needs competition (except in absolute monopoly). A market may be a physical
market with few shops to a large complexes and shopping
malls. A market also may be virtual and today virtual markets are no inferior to
the physical markets, thanks to greater access to information technology.
Basics of Marketing Process
The predetermined objectives of marketing are to maximize the profits and
maximize the share in the market. To achieve these objects, a wellformulated
marketing plan is needed. Marketing plan involves the important decisions
and route map to achieve enterprise goals. A plan is
implemented and reviewed through marketing process. A well designed
15
marketing process achieves the marketing goals due to effective decision
making, while a faulty process may lead to wrong decisions which further lead
to marketing failure.
The overall process of marketing has been divided into various steps by
various marketing philosophers. To understand the marketing in simple
way, we have divided the marketing process in following 6 steps.
1. Strategy Formulation
2. Marketing Planning
3. Marketing Programming, Allocating And Budgeting
4. Marketing Implementation
5. Monitoring And Auditing
6. Analysis And Research
Each step is interrelated with other steps, as marketing is a complex and
continuous process. The relationships are shown as below in the figure. There
are only vague and unclear dividing lines between any two parts of the
process as precise boundaries are not as important as the general concept.
Following is a brief Description about each of the above steps:
1. Strategy Formulation: Marketing strategy formation involves the
development of the broadest marketing/business strategies with the
longest-term impact. Through marketing strategy, the organization is allowed
to concentrate its limited resources on the greatest opportunities to increase
sales and achieve a sustainable competitive advantage. A marketing strategy
should be centered on the key concept that customer satisfaction is the main
goal. Marketing strategy also defines the principles on which competition is
faced successfully. At the strategy formulation stage, complex integration with
other corporate functions is required. A marketing strategy has to be
in rhythm with other functional strategies and overall corporate strategy. In
fact, marketing strategy and overall corporate strategy are meld
into a unified strategy. The overall target of strategy formulation is to achieve
a sold positioning of the product or service of the firm.
2. Market Planning: Market Planning is the base of the marketing. It involves
objectives and plans with a 2-5 year time horizon and is thus
further from day-to-day activity of implementation with an objective to make
the best possible utilization of all the human & physical resources
of a firm. A well-formulated marketing plan helps in establishing the effective
16
coordination among various activities / departments of a firm.
Most marketing plans are broad in nature and have a long term impact. Plans
have to be developed by a combination of the specialists as
well as the line managers who are responsible for carrying out a plan.
3. Programming, Allocating & Budgeting: Marketing Programming,
Allocating and Budgeting involves detail and focuses relatively on a
shorter duration generally. Programming is like creating functional
implementation programme keeping in view one or more elements of the
marketing mix.
Programming depends upon the nature of the firm, its organizational structure.
Allocating means allocation of the resources of the firm on various elements of
the marketing programme such as advertising or distribution
etc. Through allocation, the firm decides what to do and what not to do and
also how much and how long to do. Allocation is not based upon
optimism of the marketer but involves hard decisions within the limits of firms
priority and market environment.Budgeting involves the quantitative forecasts
and estimates of each marketing function. It involves forecast cash flows and
needs, sales forecasts etc.
4. Market Implementation:
This is the most functional stage of marketing process. Strategy formulation,
market planning programming, allocating and budgeting lead to
marketing implementation. Marketing implementation is the execution phase.
This phase produces the actual results. The best strategies
carved out by the best marketing specialists may get busted if the
implementation is poor.Implementation depends upon the human resources of
the organization very much. For different personnel the meaning of
implementation isdifferent and set within his/ her work area. For example, for
a sales person , the implementation means to go through effectively all the
sales steps. While for a sales manager, the implementation is to organize the
sales team/ force. Marketing implementation is people oriented and
focuses on prospects, customers, distributors, retailers, and wholesalers.
Marketing implementation needs support, coordination, and a welldeveloped
network for successful results.
5. Monitoring & Auditing:
In general, audit is evaluation of a person, organization, system, process,
17
enterprise, project or product and monitoring is act of supervising.
In marketing, the monitoring and auditing involve to identify those existing
(external and internal) factors, which will have a significant impact
on the performance of firm. Therefore, it involves the assessment of
performance against quantitative goals. The comprehensive audit also
involves review of the processes as well qualitative and non-quantifiable
aspects of marketing operation. The audit has to be done on a
certain occasions while the monitoring refers to the day-to-day supervision
and review activity.
6. Analysis and Research:
Analysis and Research is the end and beginning of marketing process. The
marketing decisions need to be based upon the careful analysis
and research. This may be quantitative based upon mathematics, statistics,
and other quantitative disciplines and qualitative based upon
psychology, behavioral science, moral science, anthropology and other
disciplines.
All the above activities are interrelated to each and other. The marketing is the
front end of a corporate while bearing the lateral connections with all the other
functional departments.
Marketing Process: The Basic Schematic
Marketing process is a complex & complicated set of various activities. The
given graphic makes you understand the basic schematic of the
marketing process.
Every marketer has to understand some basic questions before making a
marketing plan. The first set of areas of analysis is 5Cs of the market viz.
Customers,
Company, Competitors, Collaborators & Context.
1. Customers: Customer is the king and ultimate goal of marketing process is
to derive profit as well as satisfy the customer needs. The
marketer has to find out what are the needs and demands of the customers
and how the firm would seek to satisfy those demands.
Customer is central to marketing as well as business and existence of a firm.
2. Company: Todays markets are competitive and here goes the principle
survival of the fittest. The company has to have some
competencies and abilities to survive and flourish. The marketer has to judge,
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analyze and make marketing plans and strategies within the
limits of the competencies and capabilities of the firm.
3. Competition: Market essentially has competition. Competition makes
choices & options available to customers as well as provides the best
value for money to the end consumers. The marketer has to find out who
competitors are and how to meet that competition. There is always
competition in the market offerings and unless the competition taken into
account, the marketer may lead the firm in wrong direction.
4. Collaborators: Someone who assists in a programme is a collaborator.
The collaborator term in marketing involves all the people whose
help required meeting the marketing goals. The personnel of the company as
well as external collaboration such as advertising agencies,
direct sales agents etc. need to be discussed.
5. Context: Context deals with the external and internal environment of the
firms and markets. The efficient marketer has to judge the political,
legal, social, cultural and technological environment of the market and decide
upon the factors, which may affect the course of marketing
process.
The above specification leads to analyze the market prerequisites. It is
followed by
specification of the target market.
A target market is a set of customers that the firm decides to aim its
marketing efforts.
A well-defined target market is the first element to a marketing strategy. The
selected market needs to be segmented on the basis several of geographic,
demographic/socio-economic, psychographic, behavioral & product-related
criteria and this is called market segmentation. Apart from this, the firms need
to create an image or identity in the minds of the target market for its product/
service, brand or organization.
Neil Borden first used the term market mix in 1953. Neil Borden used this term
in his American Marketing Association presidential address.
Marketing Mix refers to Product, Price, Place and Promotion. Place here
means the channel of distribution. Most important is the pricing decision.
The 4Ps altogether creates value for the customer and creates value for the
firm too.
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This leads to Customer acquisition and customer retention for a long-term
profit for the firm.
Understanding Marketing Environment
Marketing Environment refers to the forces or variables of the outer and
inner environment of a firm that affects the marketing managements
ability to build and maintain the successful relationships with the
customer. The marketing environment framework consists of macro
environment and micro environment. Microenvironment variables are close to
the firm and include the suppliers, marketing intermediaries, customer
markets, competition & publics. Microenvironment also refers to the internal
environment of the company and affects not only marketing but also all the
departments such as management, finance, research and development,
Human resources, purchasing, operations and accounting.
Macro-environment deals with the Demographic, economic, Technological,
Natural, socio-cultural and politico-legal environment of the markets.
The following graphic shows the environmental framework.
1. Customers: Customers are the core of the marketing environment. There
are different types of customers such as end consumers,
business customers, government customers, international customers and
retailer customers.
2. Suppliers: A slightest delay in receiving the supplies may result in
dissatisfaction of the customers. The marketers have to watch the supply
availability and other trends related to the suppliers
3. Marketing intermediaries: The resellers, physical distribution firms,
marketing services agencies, and financial intermediaries all make
marketing intermediaries. They help in promotion of the company and sales
and distribution of the companys products. Stores and
warehouses are the physical distribution firms that store and transport the
companys product from its origin to its destination. Other
intermediaries are marketing services agencies, which are responsible for
conducting marketing research, advertising, and consulting.
Financial intermediaries are institutions such as banks, credit companies and
insurance companies.
4. Publics: Publics is any group that has interest or impact on firms ability to
meet its goals. This includes the financial publics, media publics,
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government publics, local publics such as NGO and citizen action
organizations. While the financial publics can hinder a companys ability to
obtain funds affecting the level of credit a company, the media publics can
publish articles of interest regarding the company and editorials
that may influence customers opinions. Similarly, government publics is
capable of affecting the company by passing legislation and laws
that put restrictions on the companys actions and citizen-action publics (eg.
environmental groups and minority groups ) can question the
actions of a company and put them in the public spotlight.
5. Competitors: Competitors are the companies with similar offerings for
goods and services. To remain competitive a company must
consider who their biggest competitors are while considering its own size and
position in the industry. The company should develop a
strategic advantage over their competitors.
6. Politico-legal factors: Political factors include how and to what degree a
government intervenes in the economy. This includes monetary
and tax policies of the government, labour laws, environmental laws, various
trade restrictions, tariffs. Political stability is one of the main
factors. This also includes the merit goods and demerit goods as per the
provisions of the local government. Legal factors deal with the
discrimination law, consumer law, antitrust law, employment law, and health
and safety law.
7. Economic factors: Economic factors are general economic growth,
interest rates, exchange rates , balance of payments, monetary
policies, inflation rate etc. These factors play a very important role in business
operations. These factors have the capability to alter the cost
of operations, cost of capital and returns ultimately. There is a major impact of
the exchange rates on exports and imports of the country.
8. Social factors: Social factors are the social and cultural aspects, which
include health consciousness, population growth rate, age
distribution, career attitudes and emphasis on safety.They, have a major
impact on demand of a firms products and services.
9. Technological factors: Technological factors include the research and
development, automation, expansion of internet and other
communication technologies, technology incentives and technological
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barriers. They affect the efficiency of the production. Outsourcing
decisions mainly depend upon technological environments.
10. Natural Environment Factors: These factors include the weather,
climate, and climate change, availability of water, availability of raw
products etc.
Understanding Consumer Behavior
Consumer is King and Consumer is always right are the buzzwords in
modern marketing. The activities of the marketer revolve around the
consumer behavior. The firms have to provide what their consumers want and
for this purpose they adopt various types of marketing strategies to
reach and alter the consumers buying behavior in favor of their products and
services.
Consumer behavior is a dynamic, multidisciplinary and multidimensional
process and studies when, why, how, and where people do or do not buy.
Marketing has borrowed the elements from psychology, sociology, social
anthropology and economics to explain the consumer behavior. The
consudmer behavior is now a distinct discipline of marketing which attempts to
understand the buyer decision making process, both individually
and in groups
Kurt Lewin, a German-American psychologist who is also known as of the the
pioneers of modern social, organizational, and applied psychology
provides a very useful classification of Buyers behavior. this is known as
Lewins Proposition. The Lewins proposition says:
B= (P,E)
The above proposition says that Buyers behavior (B) is a function of Personal
Influences (P) and Outside or External environmental forces (E).
The most generic model of understanding the buyer behavior is stimulus-
response pattern, which say that response of the consumer is a result of
different types of stimuli. These stimuli are applied to the consumer and
consumer in return comes up with a response. The stimuli can be
marketing or environmental stimuli. The marketing stimuli are subject to
manipulation by the marketer while the environmental stimuli like economy,
culture etc are subject to consumers environment. The response is to buy
and not to buy, what to buy, which brand, which dealer, which location
and so on
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The above simple model is shown in following graphic:
The above graphic shows that there is a complex and continuous interaction
of stimuli, consumer characteristics, and decision process and
consumer responses. The different determinants of the Consumer behavior
are discussed briefly in the following pages:
Personal Factors Affecting Buyers Behavior
Consumer behavior is also affected by internal factors such as personal &
inter-personal factors. Each individual has his own set of unique needs,
motives, perceptions, attitudes, learning and self concepts, to buying
decisions. Individual purchase decisions are driven by the needs, motives,
perceptions, attitudes, learnings and self-concept. They have been discussed
here:
Needs and Motives: A need is necessary for a person to live a healthy life.
need is different than want, a deficiency of need is a dysfunction
or death. Needs can be physical needs or psychological needs. Physical
needs involve water, food and shelter while the examples of social
need are self -esteem. Want is something that is desired. Every person has
unlimited wants, but his/ her resources are limited. Thus, people
cannot have everything they want and must look for the most affordable
alternatives.
A need is an imbalance between the consumers actual and desired states.
This imbalance needs to be corrected A marketer does the job of
creating an imbalance. Marketing makes the need felt and motivates the
person to correct this imbalance. The action taken to bring the
condition in equilibrium the ultimate goal of a marketer. This action leads to
persons buying decision.
Perceptions: The word perception is derived from Latin words perceptio,
percipio, which mean receiving, collecting, action of taking
possession. Perceptions is what a person attributes the incoming stimuli
gathered through five sense of hearing, sight, touch, smell, and
taste. Perception is the process of attaining awareness and is dependent on
the senses. Perception also involves a persons understanding
which depends upon his / her Psyche; i.e. imagination, conscience, intellect,
memory.
Perception is widely used in management science. In consumer behavior,
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perception plays a very important role in driving the purchasing
decisions at personal level.
Attitudes: An attitude is a hypothetical construct. Attitude represents the
degree of like or dislike of a person for an item/ idea/
information/event. Attitudes may be positive or negative views of a person,
place, thing, or event. Attitudes affect the perception. The
purchasing decisions are strongly based upon the current attitude about a
product/ service / brand/ shop/ sales person. The markers job is
to create favorable attitude, which positively affect the brand preferences.
Marketers need to determine the consumer attitude towards their
products.
Learning: Consumer learning is a process by which the consumer acquire the
purchase and consumption knowledge and this experience
affects the future purchases.
Self Concept: A persons multifaceted picture about himself or herself plays a
very important role in the consumer behavior. The self-concept
is an outcome of personal and interpersonal influences and they affect the
buying behavior of a person.
Economical Factors Affecting Buyers Behavior:
A need when identifies an object to fulfill that need becomes a want. A want
backed by a buying power becomes a demand. A demand leads the
person to make a purchasing decision, which is duly affected by the economic
factors such as personal income, family income, consumer credit,
govt. policies, etc.
Personal Income: Income of a consumer is most important factor affecting
the demand and subsequently the purchase decisions. Every
person has unlimited wants but limited resources so higher the income higher
is want backed by the buying power i.e. demand. The
demands may increase or decrease depending upon the persons
expectations about the future income. A persons deposable income is
what is left after fulfilling the basic needs and the disposable income increases
the purchasing power of the consumers.
Family Income: The low-income families have lesser demands and happy
and prosperous family income have more demands.
Consumer Credit: The facility of credit available to the consumer increases
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the demand.
Government Policies: Tax rates and other government policies have a great
impact on the consumers buying behavior.
Understanding Market Segmentation
A market segment is a subset that fits with other subsets to constitute a whole
market. A market is composed of people, consumers, institutions,
firms with needs & wants backed by sufficient purchasing power and
willingness to buy. Markets are heterogeneous and consist of elements that
are not of the same kind or nature. However, the heterogeneous market can
be divided into many homogenous customer segments using several
variables. This division of the whole market into relatively homogenous groups
is called market segmentation.
A market segment consists of people or organizations sharing with one or
more characteristics that cause them to demand similar product and/or
services based on qualities of those products such as price or function.
A true market segment is distinct from other segments as different segments
have different needs. A market segment is homogeneous within the
segment and exhibits common need, wants and demands. A true market
segment responds similarly to a marketing stimulus.
Market segmentation is based upon the assumption that markets of all
commodities are heterogeneous. Two groups of people are never common
in all characteristics and all products seldom succeed by appealing to
everybody. The marketers with clear marketing communications target the
identified homogenous segments.
Marketing Guru Philip Kotler defines market segmentation as the subdivision
of a market into homogenous subsets of customers where any
subject may conceivably be selected on a market target to be reached with a
distinct marketing mix.
Market segmentation helps the marketing decision in following ways:
1. By helping the marketer to identify the groups of customers to whom he can
more effectively target marketing efforts.
2. By helping the marketer to avoid trial and error methods of strategy
formulation.
3. By helping the marketer in addressing the customer needs and satisfying
them.
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4. By providing important data to the marketer on which long term plans can
be formulated.
5. By helping, the marketers to stay focused rather than scattering their
marketing resources.
Features of a Market Segment:
The market segment must be internally homogenous because consumers
within the segment would be more similar to each other in
characteristics.
The market segment must be identifiable so that the individuals can be placed
within or outside the segment.
The market segment must be accessible to that it can be reached by an
advertising media and distribution channels
The market segment must represent an effective demand.
Variables of Segmentation: Consumer Markets
There are two types of the markets- consumer markets and industrial market.
Consumer markets are those markets where the ultimate
consumers for their personal use purchase the products. In Industrial markets,
the goods and services are purchased for use directly or indirectly
in the production of other goods and services for resale.
Marketers use different variables for market segmentation.
The variables of dividing the consumer markets can be placed in two broad
categories. One is Consumer background characteristics, which
include Geographical, Demographical, Psychographical & General Life-style
variables. Another is consumers market history, which includes
product usage, product benefit and Decision process.
Here is a brief discussion about them:
Consumer background characteristics:
1. Geographical variables: The geographic segmentation is the oldest, most
basic and most conventional way of segmenting the markets.
The variables included in geographical segmentation are Region of product
distribution, Cultural differences, languages, accessibility to the
target market, mobility of the consumers and so son
2. Demographic Variables: Demographic features of the markets are also
basic variables of market segmentation. Demographic variables
include the Age, Sex, Income, Educational level, Social status etc.
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3. Psychographic Variables: The psychographic variables include the
personality traits, perception, and attitudes, Reference Groups like
family and friend circles, and Social roles of the consumers.
4. General Lifestyle Variables: General lifestyle provides a multidimensional
profile of the consumers and deal with the general way of life of
the consumers. The represent a correlation of demographic, geographic and
psychographic variables.
Consumers Market History:
1. Product Usage: The market can be segmented based upon the product
usage. For example, the market can be divided into heavy, medium,
light and non-users of a particular product or service. The variables can be
use, Brand loyalty and attitude of the consumer towards a
product. It also involves the durability and no durability of a product.
2. Product benefit: Product benefit variables are used in product positioning
as well. This variable includes expectations of product
performance, the needs which are fulfilled by the product, brand perception,
brand satisfaction etc.
3. Consumer decision process: This variable segment the markets based
upon sensitivity to the markets, shopping patterns, Product
information searches etc.
Variables of Segmentation: Industrial Markets
Industrial marketing involves the marketing of goods and services from one
business to another. The industrial gods are used in the industry for
producing different end products. The segmentation of the Industrial markets
takes into account the Size of Industry, Size of company, Location,
Infrastructure, purchasing criteria and so on. These variables have been
divided into 5 broad categories viz. Demographic variables, Operating
Variables, Purchasing approaches, Situational Factors and Personal
characteristics. Here is a brief discussion:
1. Demographical Variables: The demographic variables of Industrial market
segmentation include the type of industry, type of the target
company, its location. Some marketers target a specific type of industry while
some marketers seek a group of industries to target. For
example, a company, which produces clutch wires for motorcycles, may target
a motorcycle company. On the other hand, a company which
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deals with multiple products such as Spoilers, GRP Components, GRP
Panels, Car Styling Kits, Rear Parcel Shelves, Door Trim Panels,
Injection Molding, Azdel Components, Tractor Body Parts etc. will look for a
portfolio of target companies such as Automobiles, Trucks and
Buses manufacturers, tractors and construction equipment manufacturers,
Locomotives and Railways, Defense, Airport furniture
manufactures, medical equipment, windmills and so on
2. Operating Variables: Operating variables deal with the customer
technologies, user and no user or heavy user status, and the customer
capabilities.
3. Purchasing Approaches: Some companies have centralized purchasing
while others have decentralized purchasing. Industrial marketing
often involves competitive tendering. In this process, the purchasing
organization undertakes to procure goods and services from suitable
suppliers. This is normally done for high value of some purchases and the
purchasing organization shall seek a number of bids from
competing suppliers and choose the best offering. This is called strategic
procurement. Organizational structure or power structure is also
important criteria. This gives an insight into the general purchase policy of the
buying organization.
4. Situational Variables: These variables include the urgency, quick delivery
or scheduled delivery of the goods and services. The other criteria
may be specific application and size of the order.
5. Personal Characteristics: Personal selling is very important & effective in
industrial marketing because many products need to be customized to suit the
requirements of the individual customer. Other criteria are buyer-seller
similarity, attitude towards risk and loyalty of a industrial customer.
Understanding Targeting Approaches: Differentiated, Undifferentiated,
Niche & Micromarketing
Identification of the market segment leads a firm to decide how to approach
the selected markets. However, there are many firms, which do not
segment the market and would work for the aggregate market. This is called
market aggregation which exactly opposite to segmentation. There are
different kinds of targeting approaches and each marketing firm has its own
unique way of targeting its customers. These targeting approaches are
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simply divided into four kinds viz. undifferentiated marketing, differentiated
marketing, concentrated marketing and Micro marketing.
Here is a brief discussion:
1. Undifferentiated marketing: Undifferentiated marketing refers to an
approach when a firm produces only one product or product line and
targets all of its customers with a single marketing mix. The other term used
for this approach is mass marketing. In Mass Marketing, the
market coverage strategy essentially ignores the market segment differences
and goes after the whole market with one offer. This marketing
approach attempts to sell through persuading a wide audience. Usually the
idea is to broadcast the message with an aim to reach the largest
number of people possible. Mass marketing focuses on media coverage such
as radio, television and newspapers. The idea is to maximize
the exposure to the product. Examples of mass marketing products are
toothpastes, which are not made especially for one consumer group
or segment and are sold in huge quantities. Other examples are furniture,
artwork, automobiles, residential communities, cola drinks and
personal computers.
2. Differentiated Marketing: The differentiated marketing refers to the
approach of the firms, which produce numerous products with different
marketing mixes. These products are designed to satisfy the smaller
segments. In this approach, instead of marketing one product with a
single marketing program the firm approaches the different consumer groups
with products customized for each group. Most companies do
this for specialization and to remain competitive. The differentiated marketing
essentially requires market segmentation and incurs a higher
production cost, inventory cost and marketing costs.
3. Concentrated marketing: The popular term for concentrated marketing is
niche marketing. Another term for the same is Focused Market.
A niche market is a subset of the market on which a specific product is
focusing. Each niche market essentially defines specific product
features such as product design, price range, production quality and the
demographics that is intended to impact. In niche marketing, the firm
essentially focuses. Niche marketing chooses a small segment provided its a
profitable segment. This approach is most suitable to smaller
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firms, which have lesser resources.
4. Micromarketing: This is the narrowest approach of targeting. It is most
effective technique for small business users to sustain, build and
grow their own brand. It targets the potential customer at the very basic and
personal level.
Understanding Marketing Mix : 4Ps and 4Cs
The selection of a target market leads the marketers to focus their activities
towards profitability of the target segment. For this purpose, they need
to manipulate many variables. Such variables were named marketing mix.
The term marketing mix was first of all used by Neil Borden, in his
American Marketing Association presidential address in 1953. However, E.
Jerome McCarthy proposed a classification of marketing mix in four
areas viz. Product, Price, Place & Promotion.
The marketing mix is the blending of these four elements as per the needs
and preferences of the specific target market.
Each element of marketing mix has its own set of sub elements. For service
industry, an extended version of Marketing Mix with 7Ps has been
proposed. Here is a brief Discussion about the 4Ps of marketing mix.
Product : A product may be a tangible product or an intangible product. A
product is produced with a specific volume of units with an aim to
satisfy the needs of the customers.. The sub elements of product are Product
design, positioning, branding, packaging & labeling, Product
line, customer service, warranties & guarantees, new product development,
and product life cycle.
Price: Amount a customer pays for the product is its price. Price is
determined by a lot of factors such as demand, supply of raw
components. Market share, competition, material cost and operational cost
(production cost), and customers perceived value of the product.
The sub elements of Price include Manufacture, Wholesaler and retailer
prices, terms and conditions of pricing, bidding tactics. Discount
policies, Price differentiation and Skim vs. Penetrating prices.
Promotion: Promotion refers to all of the communications that a marketer
may use in the marketplace. The supplements are Advertising,
Sales force polices, direct marketing, Public relationships, Price promotions,
Trade shows and special events. The four distinct factors of
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promotion are advertising, public relations, word of mouth and point of sale.
Promotion may be paid or unpaid. Paid promotions include
advertising through various media, sponsorship deals, exhibitions,
conferences, seminars, paid participation in trade fairs and events and
unpaid promotion include the press releases, word of mouth etc.
Place: Place refers to the location where a product can be purchased. It
represents the distribution channel. The Distribution channel may be
direct or indirect. Channel length and channel breadth matter a lot. Some
other sub elements are sublets, franchisees, direct sales agents,
wholesalers, retailers etc.
T h e above marketing mix is product focussed. There is a customer-
focused marketing mix which is known as 4C model. The elements are 4 C
model of marketing
mix are Commodity, Cost, Channel and Communication.
The Extended Marketing Mix for Service Industry: Additional 3 Ps
The marketing mix of product marketing consists of 4Ps, the services
marketing takes in 3 more Ps making the extending market mix for service
industry: 7Ps
The additional 3Ps are People, Process and Physical Evidence.
Why additional Ps?
These additional 3P are required because of the special characteristics of the
Service Industry. The product of a service industry is not tangible.
The Service cannot be manufactured and inventoried but are often produced
& delivered simultaneously. The service cannot be touched or felt but
has to be experienced. The quality of the service is perceived quality and
depends upon who is providing, when is providing and how is providing.
The services are perishable and depend upon the people who are providing,
the ambience where it is being provided and the way it is being
provided. Because of certain characteristics like intangibility, inseparability,
heterogeneity, perishability etc. Service industry needs additional
marketing mix elements.
The Process industrializes and standardizes the services, Physical evidence
tangibilizes the services and people (personnel) are the essential parts of the
service.
The sub elements of these 3Ps are discussed here:
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Process: The sub elements of process are flow of activities, service steps,
and involvement of the customers.
Physical evidence: The sub elements of physical evidence are Ambience,
facility design, Equipment, signage, Employee attire, Displays
etc.
People: The sub elements of people are Employees and customers.
Marketing Aptitude Summary Notes 2
Q.1 What are the marketing Functions?
There are 8 universal functions of Marketing, categorized into 3 broad
categories:
1. Buying,
2. Selling,
3. Transporting,
4. Storing,
5. Standardizing and grading,
6. Financing,
7. Risk taking
8. Securing marketing information.
Q.2 What are Concepts of Marketing ?
The 5 concepts of marketing are as follows:
1. Needs, wants and demands
2. Products
3. Value and satisfaction
4. Exchange, transactions and relationships
5. Markets
Q.3 Internet has empowered the customer. Write a Brief note
In the connected world, the customers empowered by Internet can
1. Get objective information for multiple suppliers without relying on the
manufacturer or the retailer(http://www.alibaba.com/ )
2. Initiate requests for information and advertising from manufacturers (e.g.,
http://www.dealtime.com/)
3. Design and configure customized offerings e.g., http://www.hp.com/
4. Use buying agents to pit sellers against each other
http://www.indiamart.com/
5. Unbundle offerings and arbitrage across channels http://www.naaptol.com/
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6. Payby the minute, by the month, by the mile http://www.paypal.com/
7. Communicate with peers and experts for feedback on products and brands
http://www.amazon.com/ and http://www.epinions.com/
Q.4 What are Different Steps in marketing Process?
Different Steps in Marketing Process are as follows:
1. Strategy formulation the development of the broadest
marketing/business strategies with the longest term impact
2. Marketing planning the development of longer-term plans which have
generally stronger impact than the short-term programs
3. Marketing programming, allocating and budgeting the development of
short-term programs which generally focus on integrated
approaches for agiven product and on the allocation of scarce resources such
as sales effort orproduct development time across various
products and functions
4. Marketing implementation the actual task of getting the marketing job
done5. Monitoring and auditing the review and analysis of
programs, plans and strategies to assess their success and to determine what
changes must be made
5. Analysis and research the deliberate and careful acquisition and
examination of qualitative and quantitative data to improve decision
making
Q.5 What are 5 Cs of Marketing Decision Making?
Following are five major areas of analysis (5 Cs) that underlie marketing
decision
making :
1. Customer needs What needs do we seek to satisfy?
2. Company skills What special competencies do we possess to meet those
needs
3. Competition Who competes with us in meeting these needs?
4. Collaborators Who should we enlist to help us and how do we motivate
them?
5. Context What environmental (say, cultural, technological or legal) factors
limit what is possible?
Q 6. Write a brief note on Nature of Marketing
1. Marketing is a universal activity
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2. Marketing is an art as well as science
3. Marketing is a human activity
4. Marketing is a socio economical activity
5. Product or service is the subject matter of marketing
6. For marketing presence of market is a must
7. The basis of marketing is exchange
8. Marketing is consumer oriented and not product oriented
Concept of Product
Generally market offering of any kind is called a product. In management, a
product is anything that is offered in the market to satisfy a need or want. The
products may be raw materials in industries, merchandise in retailing or
services in service industry. The raw materials are called
commodities often. Commodity is also something offered in an open market.
A product essentially has utility. A product is a bundle of utilities consisting of
various features and services.
The bundle of utilities here means that the product is not the physical product
but the total package of the benefits obtained by a customer.
A product is a mixture of tangible plus intangible attributes.
For example if we buy a book or CD from amazon.com, the product is not only
the book but also the guarantee of getting delivered with 24 hours.
The book in this example is the core product or core benefit. A product as a
bundle of tangible and intangible attributes is a Total product and the
concept is called Total Product Concept.
This bundle is represented by the following graphic:
Core Benefit refers to what the product means to a customer. The Generic
product is the unbranded and undifferentiated commodity which
provides the core benefit. A Branded product gives an identity to the generic
product. For example water is a generic product, but Bisleri and
Aquafina are the brands. Car is a generic product which offers the benefits of
convenience in travelling but Wagon R or Mercedes are brands.
The generic products are undifferentiated products. However, differentiated
products have a distinction from other similar products. The
differentiation is mostly claimed by the marketers; however It may or may not
have the real distinction of ingredient, quality, utility and service. For
example Pacimol and Calpol are two brands which offer Paracetamol as
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ingredient used for fever medicines.
In customized product, the customer requirements are taken into account.
The augmented products involve the voluntary improvements made
by the product manufacturers. The potential product is tomorrows product
which may possibly introduced by the firm in future depending upon
the technological and economic resources of the firm
Understanding Product Positioning
The Concept of Positioning is very important in the Marketing Management.
Positioning refers to the concept of placing a product in a certain
position in the minds of the prospective buyers. The concept was introduced
by Positioning Gurus named Al Ries and Jack Trout in their article in
Advertising Age. Their work Positioning: The Battle For Your Mind is the
industry standard for the subject.
They define positioning as
an organized system for finding a window in the mind. It is based on the
concept that communication can only take place at the right time and under
the right circumstances According to them Positioning starts with the
product, but positioning is not what you do to the products. Positioning is what
you do to the mind of the prospect
In other words by Positioning marketers try to create an image or identity in
the minds of their target market for its product, brand, or organization in
contrast with the competing products/ brands and organizations. The
positioning strategy has a crucial impact on the marketing success of a
company.
Anything that makes a brand or product unique is positioning. There are
different possibilities of positioning. Some companies use some attribute or
benefit of the product. This is called attribute positioning. Some examples of
attribution positioning are Volvo (safety) , Dettol (Hygiene), Fairness (Fair &
Lovely), Tough Shoes (Woodland) etc. Quality or price positioning refers to
product positioning as the best value for money.
Competitive Positioning is when a comparison is highlighted with the
competitor. Product category positioning refers to the positioning of a product
belonging to a particular category. Some companies use unique taglines for
better brand positioning. For example Jeete
raho.. (ICICI-Prudential) , Jindagi ke saath bhi Jindagi Ke Baad bhi (LIC)
35
, Thanda Matlab .. (Coca Cola), Just do it (Nike) , Hum Hai na(ICICI
Bank), Pure banking Nothing Else (SBI) all these taglines have a great brand
recall value.
Product positioning is closely related to market segment focus. Product
positioning
involves creating a unique, consistent, and recognized customer perception
about a
firms offering and image. A product or service may be positioned on the basis
of an
attitude or benefit, use or application, user, class, price, or level of quality. It
targets a
product for specific market segments and product needs at specific prices.
The same
product can be positioned in many different ways.
Positioning is a process to create an image or identity in the minds of their
target market. Positioning is the brand identity & value proposition in a
perspective customers mind. Positioning demonstrates an advantage over
competing brands
The following presentation from GKToday is dedicated to Positioning:
[youtube=http://www.youtube.com/watch?v=oC3V_PsdRoY]
Marketing Aptitude Summary Notes 3
Two exams are coming very shortly: one is Union bank of India Marketing
Officers
exam (September 6) and another SBI management Executive Exam
(September 13).
Its not possible to frame enough quizzes which can help my readers. so I am
here by
writing some compendiums each with 10 points with absolutely objective info.
They
might be useful for the readers. We devote next 2 days for this compilation.
1.There are four types of Utilities : Form, Place, Time & Ownerships
2.There are some myths about marketing and selling:
1. Marketing and selling are synonymous
2. The job of marketing is to develop good advertisements
3. Marketing is pushing the product to the customers
36
4. Marketing is transaction-oriented than relationship-oriented
5. Marketing is a short-term business strategy
6. Marketing is an independent function of a business
7. Marketing is part of selling
There are 5 Eras of Evolution & Marketing:
1. Production Era : Cut costs. Profits will take care of themselves
2. Product Era: A good product will sell itself
3. Sales Era : Selling is laying the bait for the customer
4. Marketing Era : The customer is King!
5. Relationship Marketing Era : Relationship with customers determine our
firms
future
4.There are 4 Ps of Marketing
Product, Place, Price and promotion
5.There are a few types of marketing :
1. Product marketing,
2. Service marketing,
3. Consumer marketing,
4. Industrial marketing,
5. International marketing,
6. Non-profit marketing
6.There are three types of Marketing Functions:
1. Exchange Functions (Buying & selling),
2. Physical Distribution Functions (Transporting & Storing) and
3. Facilitating Functions (Standardizing and grading, Financing, Risk taking)
7.There are 5 types of Marketing Concepts
1. Needs wants and demands,
2. Products
3. Value & satisfaction
4. Exchange, Transactions and Relationships
5. Markets
8.Marketing Process: The Marketing Process involves 6 step process as
follows:
1. Strategy formulation the development of the broadest marketing/business
strategies with the longest term impact
37
2. Marketing planning the development of longer-term plans which have
generally
stronger impact than the short-term programs
3. Marketing programming, allocating and budgeting the development of
shortterm
programs which generally focus on integrated approaches for a given
product and on the allocation of scarce resources such as sales effort or
product
development time across various products and functions
4. Marketing implementation the actual task of getting the marketing job
done
5. Monitoring and auditing the review and analysis of programs, plans and
strategies to assess their success and to determine what changes must be
made
6. Analysis and research the deliberate and careful acquisition and
examination of
qualitative and quantitative data to improve decision making
9.Nature of Marketing:
1. Marketing is a Human Activity
2. Its a socio economic activity
3. The subject matter of marketing is products and services
4. Certain Type of market is a must for marketing to happen
5. Its a consumer oriented process and not a product oriented process
6. Marketer performs the marketing and consumer is required to do marketing
7. The base of marketing is Exchange
8. Its an art as well science
9. It is a universal activity
10. There are five major areas of analysis (5 Cs) for marketing decision
making:
1. customers,
2. company,
3. competitors,
4. collaborators
5. context.
Summary Notes 4
38
1. The 5 Cs of analysis of marketing Decision making are as follows:
1. Customer needs What needs do we seek to satisfy?
2. Company skills What special competencies do we possess to meet those
needs?
3. Competition Who competes with us in meeting these needs?
4. Collaborators Who should we enlist to help us and how do we motivate
them?
5. Context What environmental (say, cultural, technological or legal) factors
limit
what is possible?
2. The external Environment of Marketing comprises:
1. Competitive environment
2. Political-legal environment
3. Economic environment
4. Technological environment
5. Social-cultural environment
3. Competitive Environment:
In involves direct competition and indirect competition , Monopoly,
Monopolistic
Competition Oligopoly etc.
4. Political-legal Environment:
Rules of the game must be understood before a new marketer starts
marketing. The
politico-legal environment involves:
1. Laws and their interpretations : Ignorance of laws, ordinances and
regulations or failure to comply with them can result in fines, embarrassing
negative publicity and possibly expensive civil damage suits.
2. Designing, labeling, packaging, distributing, advertising and promoting
goods and services.
3. The national foreign policy can dominate the international business
decisions of the local firms
4. The political ideology of the Government can affect the international brands
wanting to enter a market
5. The competitors who work closely with the government can help erect trade
barriers for a firm
39
6. Global trade organizations can enforce trade barriers when their regulations
and guidelines are not observed
7. A host nation may levy anti-dumping duties on a foreign firm and such a
decision may be dominated by the local businesses lobbying with the
government
8. Copyright infringements, trademark and intellectual property rights
violations
9. Direct comparative advertisements may not be allowed in few countries
10. Use of children is advertising and advertising to children are banned in
certain countries
11. Price regulations preempt any pricing strategy of a firm
12. A detailed displaying of the ingredients in product labels is mandatory in
most countries
13. The channel members are given the additional responsibility of verifying
the eligibility of the prospective buyers for certain products
14. Use of certain raw materials or methods of manufacturing are prohibited in
certain countries
15. Industry watch dogs and consumer groups are always on the prowl for any
unethical trade practices
16. Each one of the above issues has serious implications for the marketer in
his marketing decision making. Ignorance of the law is no excuse
and breaking of the law is an offence.
5. The Economic Environment
The overall health of the economy influences how much consumers spend
and what
they buy.This relationship affects marketing. All marketing activity is directed
toward
satisfying consumer wants and needs, marketers must understand how
economic
conditions influence consumer buying decisions.
Economic environment consists of forces that influence consumer buying
power and
marketing strategies. They include
1. The stage of the business cycle,
2. Inflation,
40
3. Unemployment,
4. Resource availability
5. Income.
6. Technological Environment
It represents the application to marketing of discoveries in science, inventions
and
innovations. New technology results in new goods and services for
consumers; it also
improves existing products, strengthens customer service and often reduces
prices
through new, cost-efficient production and distribution methods. Technology
can
quickly make products obsolete, but it can just as quickly open up new
marketing
opportunities.
7. The Social-Cultural Environment
It involves the relationship between marketing and society and its culture.
Marketers
must cultivate sensitivity to societys changing values and to demographic
shifts such
as population growth and age distribution changes.
It involves demography, cultural aspects, Psychographic aspects and
Consumer
behavior.
8. Consumerism:
Changing social values have led to the consumerism movement which is a
social force
within the environment designed to aid and protect buyers by exerting legal,
moral
and economic pressures on business. Consumerism also advocates the rights
of the
consumers such as:
1. The right to choose freely consumers should be able to choose among a
range of
goods and services
41
2. The right to be informed consumers should have access to enough
education and
product information to make responsible buying decisions
3. The right to be heard consumers should be able to express legitimate
complaints
to appropriate parties be it manufacturers, sellers, consumer assistance
groups and
consumer courts.
4. The right to be safe consumers should feel assured that the goods and
services
they purchase will not cause injuries in normal use. Product designs should
allow
average consumers to use them safely.
9. Stimuli of buying Behavior
The 4 ps and 4 types of Marketing environment given as above function as
stimuli of
Consumer Behavior which ultimately lead to buyers response.
10. Importance of Marketing
1. To obtain physical distribution function
2. Maximise the profit of the Firm & Minimise the cost (per unit)
3. Innovation
4. Maximise sales
5. Reach the Target Consumer
6. Goodwill creation
7. Market Information and Research
8. Employment
9. Social Values
10. Corporate Social Resposiblity (CSR) :
11. Optimum Use of Resources
12. Increase in Income of nation
Product versus Goods
Products and goods are used as synonyms in common parlance. However, a
good is something that is tangible in contrast with the services which
are intangible. Both goods are services are products. Anything, whether good
or service offered in the market is a Product. Goods may be
42
consumer goods or Industrial Goods. The consumer goods and services refer
to the products that are meant for final consumption by the ultimate
Consumer. The examples are Bread, Butter, Soap, Toothpaste (Consumer
Goods) and hair cut , personal healthcare etc. (Consumer service).
Industrial Goods refer to the goods that are meant to be used in commercial
production of other goods and services or any other business activity.
Raw materials, engines, lubricants, tools, etc. are some examples.
Here are few more differences between Consumer Goods and Industrial
Goods:
1. The number of customers for consumer goods is often very large
2. The demand for consumer goods is autonomous demand. This means that
they are demanded by the ultimate consumers directly. The
demand for Industrial Goods is derived demand, which means that demand
for one good is a result of demand of another good.
3. The consumers often dont do through analysis and research their
demanded products. In case of industrial goods, extensive study is done.
4. The difference in quantity demanded. In Industrial goods, often the
demanded quantity per customer is high.
5. Market for consumer goods is large and open market, while in the case of
Industrial goods it is often limited.
Industrial Products
The goods which are meant to be used in making other products or rendering
services are Industrial Goods. So industrial goods are basically used
as inputs. Some basic features of the industrial goods are as follows:
1. The number of buyers of the industrial goods is less than the number of
buyers of consumer goods.
2. The channels of distributions are often shorter.
3. The industrial markets are highly concentrated geographically.
4. The demand for Industrial goods is derived demand i.e. it is derived out of
the demand for consumer products.
5. There is a greater significance of technical details about the industrial
goods.
6. There is reciprocal buying in some Industrial goods.
These Goods are classified in following five categories:
Raw products: Those industrial Goods which shall become become a part /
43
component / ingredient of another good. The farm products
such as cotton, sugar cane, oil seed, natural products and crude products
such as minerals, crude petroleum, iron ore etc.
Fabricating materials: These are finished products but become part of the
complete product. Yarn, Buttons, Leather, flour are some
examples.
Installations: They are used in further production but dont become the part
of these goods. They are often expensive equipments.
Accessory Equipments: They are accessories to the installations and have
a lesser cost and duration.
Operating Supplies: Short lasting goods and services that facilitate
developing or managing the finished products.
Product Mix, Product Lines & Cannibalization
The combination of all the products offered by a firms is a Product Mix. In marketing the
decisions related to product mix and product lines are very
important. When we discuss product mix, we discuss all the products offered by a
company. In simple words, any organization which is selling
more than 1 product has a product mix. A product line is a broad group of products,
intended for similar uses and having similar characteristics.
For example Hindustan Uniliver has a broad product mix with several product lines such
as Soap Line, Food Line, Personal care Line Home Care
line and so on..
The number of items in each product line is called the Product Mix length. For example
Hindustan Unilever has Breeze, Hamam, Lifebuoy, Lux,
Rexona, Le sancy and Liril in its soap line. The width of the product mix refers to the
number of product lines a company has.
One typical example is Amul. The product lines of Amul are Bread Spreads, Milk Drinks,
Powder Milk, Fresh Milk, Cheese, Cooking, Desserts &
Health Drinks. Each line has several products to offer. You can view the product line of
Amul
There may be a number of reasons to alter either an existing product or a product
line. These reasons may include supporting the marketing strategy, Improving sales,
Expansion of market share etc. The product line can be altered by altering one or
more of the following attributes.
1. Composition of product line
2. Expansion or contraction of the product line
3. Value addition
4. Brand Image
5. Packaging
6. Physical characteristics
44
7. Positioning
Addition of new products to a product line is expanding the product line. The
product line may be too long of reducing product line length results in more profits.
The product line may be too short if addition of new products increases profits. When
a range of product line (often the price range) is increased it is called line
stretching. When a company operates at the lower end of the market and
introduces new products to enter the upper market, it is called upward stretching.
This is done by introducing premium products and services. If a company working in a
high end market introduces new products to enter the lower markets as well, this is
called downward stretching. Many companies start with higher end and move
towards the lower end. For example parker started selling premium pens , out of
reach to many of the consumers and later the company introduced the lower end
products. The lower end market products are also called budget products. The Budget
products are advertised heavily to bring the customer to the entire product line of the
company.
If a company works in a moderate market and decides to survive both the low end
and upper end of the market is Two Way Stretch.
There is one more concept called cannibalization. Cannibalism is the act of any
animal consuming members of its own type or kind. In marketing, Cannibalization
refers to a reduction in the sales volume, sales revenue, or market share of one
product as a result of the introduction of a new product by the same producer.
Introduction of diet Pepsi or diet coke may eat up some of its sales of regular coke or
Pepsi. Introduction of a new car may eat up the sales of an older model of the same
car.
Basics of Brand
A brand is a symbol or a mark that helps the customers in instant recall and
differentiates it thereby from the competitor products of same nature.
The American Marketing Association (AMA) defines brand as follows:
A Brand name is a part consisting of a word, letter, groups of words or letters
to identify a product or a service of a seller or group of sellers to differentiate
them from those of competitors.
Generic Brand:
A brand name over which the original owner has lost the exclusive claim
because all offerings in the associated class of products have
geneally known as the the brand name can be called a Generic Brand.
Generic brand products are often of equal quality but lesser prices
as that of a branded product.
A Brand v/s a Trade Mark:
A brand that has legal protection and is granted solely to its original owner is a
Trade mark.
45
Brand preference / Brand Loyalty:
It is the degree to which customers are commitetted to a brand. It refers to the
chances that a customer chooses the brand over another
brand.
Brand insistence:
The customers willingness to search a brand and insisting to buy a brand is
brand insistence.
Brand Equity:
It is the overall value of a brand in the market
Brand awareness:
Brand awareness measures consumers knowledge of a brands existence.
The extent to which a brand associated with a particular product
is authenticated by potential and existing customers either positively or
negatively is Brand Awareness. Creation of brand awareness is the
primary goal of advertising at the beginning of any products life cycle in target
markets. In fact, brand awareness has influence on buying
behavior of a buyer. Brand awareness can be measured by showing a
consumer the brand and asking whether or not they knew of it
beforehand.
Brand Recall
The extent to which a brand name is recalled as a member of a brand,
product or service class, as distinct from brand recognition is brand
recall. For example if I am asked to name a few favourite cars I may recall
Wagon R, Santro Xing, and so on
Brand recall may be unaided and aided Aided recall measures the extent
to which a brand name is remembered when the actual brand
name is prompted. An example of such a question is Do you know of the
Honda brand?
Brand Recognition
The extent to which a brand is recognized for stated brand attributes or
communications is Brand Recognition. It is basically an aided recall.
If a product name can be associated with a certain tagline, logo or attribute,
there is presence of certain level of Brand recognition.
Difference between Selling and Marketing
The market is a place for economic transactions. The buying and selling are
46
two sides of the same coin that is transaction. Selling is different from
marketing. While selling means offering to exchange something (intangible or
tangible) of value for something else, marketing means much
more. Selling is a part or component of marketing. Marketing may start
even before production of goods and services. Marketing involves
analyzing consumer needs, securing information needed to design and
produce goods or services that match buyer expectations, creating, and
maintaining relationships with customers and suppliers.
The selling starts from the factory in case of tangible goods, while marketing
starts in the market place. The focus of selling is product or service
which exists, while the focus of marketing is customer needs. The means of
selling is a sale and to conclude a sale depends upon the
Persuading art of the sales person, means of marketing is a complex,
integrated and interdependent factors.
The ultimate end of selling is profit while the ultimate end of the marketing is
Customer satisfaction.
A common person, due to continuous exposure to advertising and personal
selling links marketing and selling. There are some misconceptions or
myths regarding the selling and marketing, biggest of which is Marketing and
selling are synonymous. The other myths are:
1. Marketing job is to create good advertising campaign
2. Marketing means to push the product to customer.
3. Marketing is transaction oriented.
4. Marketing is short term strategy
5. Marketing is an independent function.
6. Marketing is part of selling.
Both marketing and selling promote a product or service but marketing
involves selling, promoting, educating and exciting people about a product or
service. Marketing builds a brand.
Who is a customer?
A customer, also known as a client is a current or potential buyer of a
product -good or service. The firm or organization is seller. A potential
customer is also known as prospective customer or client. A customer may
view, check, experience the service but not purchase.
The word customer has derived from custom, which means a habit (of going
47
to frequently to a shop). In todays cutthroat competition, the Customer is a
King.
Marketing professionals ironically say Customer is always right.
The biggest challenge is for an organization is how to create a customer?
Creating a customer means identifying needs in the marketplace, finding out
which
needs the organization can profitably serve and developing an offering to
convert
potential buyers into customers. (Guiltinan and Paul)
The marketing professionals are mostly responsible to create customers. The
activities, which are necessary to create customers, are as follows:
To identify the customer needs.
To design the goods and services that meet those identified needs
To communicate the information about those goods and services to
prospective buyers
To make goods and services available at times and places that meet
customers needs
To price goods and services to reflect costs, competition and customers
ability to buy
To provide necessary service and follow-up to ensure customer satisfaction
after the purchase
Whether a firm is a profit making organization or a nonprofit making
organization, marketing has to play a very important role in the firms
business,
society and country. While raising the standard of living by designing products
suitable to needs and wants of the customers, marketing also helps
in development of the national economy. Producing goods and services for
the society according to the needs and create demand for them and
thus improving the standard of living of the people is one of the most
important role played by marketing. For a firm, marketing helps in reducing the
cost of business by reducing market distribution cost. Marketing also helps in
increase in the employment opportunities. The successful marketing
channel involves services of wholesalers, retailers, transporters; storage
functionaries finance professionals, insurance services and so on. By
creating, maintaining and increasing the demand marketing indirectly adds to
48
the national income. Marketing also helps to build a cushion against
slack business and recession.
Convenience Goods: The items which are bought frequently, immediately
and with minimum shopping efforts are convenience goods. These
include candy, ice-cream, cold drinks, cigarettes, magazines, medicines etc.
the shops which keep the convenience goods are called convenience
stores. Often convenience goods are non durable.
Some common features:
1. Generally non durable
2. Purchased at convenient locations.
3. Regular and continuous demands
4. Generally small unit of purchase and low prices
5. Most of them are standardized in prices
6. Sales promotion, schemes etc. are very important.
Shopping Goods:
Shopping is the activity of examination and selection of the goods or services
from
retailers with the intent to purchase at that time. The selection & purchasing is
a
result of a comparison of products based upon their suitability, quality, price,
style
and so on.. Examples are furnitures, dresses, electronic items & appliances
etc. Most
of the shopping goods are durable.
Some common features:
1. Generally durable
2. Generally high price in contrast with convenience goods.
3. Comparison is main factor in making purchase decisions.
4. Purchase is generally pre planned
5. Retailers have very important role to play.
Specialty Goods:
The specialty goods incur special purchasing efforts and the items posses
some
special features.
The buyers are willing to spend a lot of time & money to buy them in contrast
49
with
the shopping goods. The rare arts collections, antiques, prestige brands, style
goods,
automobiles etc. are the examples. The particular hotel, restaurant, hair salon,
spa &
resorts are examples of services.
The comparison factor is absent in specialty goods.
Some common features
1. Limited demand and limited number of buyers
2. Costly products generally
3. Sold at few places
4. Aggressive promotion is required.
What is culture? The values, beliefs preferences and tastes passed on from
one generation to another generation in the society are called culture.
Culture is one of the broadest determinants of Buyers behavior. A marketer
needs to understand the culture to be able to do successful marketing.
Culture keeps changing and so do the values, beliefs, preferences and tastes
of the people. The successful marketer needs to monitors these
changes and inculcates them in the marketing strategy of the firm.
Culture is very important in Global marketing. To market a product overseas,
one needs to understand the cultural taboos, social customs,
preferences, religious outlook and other things.
Social Factors: Man is a social animal. Every person belongs to social group
or groups. Group imparts a major influence on a consumers buying
decisions. These influences may be informational or normative.
In psychology, it is referred to as conformity. Conformity is a process by
which an individuals attitudes, beliefs, and behaviors are conditioned by
what is conceived to be what other people might perceive. Solomon Eliot
Asch, an American Psychologist, first explained this and it was known as
Asch Phenomenon. The group influences may be the result of subtle
unconscious influences, or direct and overt social pressures.
Informational social influence occurs when a person turns to the members of
his/ her group to obtain accurate information. Normative social
influence occurs when a person conforms to be liked or accepted by the
members of the group. It usually results in public compliance, doing or
50
saying something without believing in it.
The impact can be easily seen in children. The decisions of children are often
based upon their groups what the other children are wearing, eating
and doing. The people who affect a group like the brand ambassadors are
known as Opinion Leaders who have the capability to act as trendsetters
and affect the buyers behavior.
Family Influences: Family is a group and one of the most dominant factor
affecting the purchase decisions of person. Family often has a set of
norms and has different role and status for its members. Household decision-
making depends upon the role of the family members.
Market segmentation makes it possible for a firm to best utilize its available
resources. It needs intensive marketing research. Once it is decided to
go for market segmentation, there are lists of questions, which must be
answered. The examples of the questions are given as under. These are
just general steps, which make you aware of the market segmentation, and
each firm may have its own set of questions.
1. What is the marketing objective of the firm?
2. Is marketing looking for new segments?
3. If yes, what about the research, shall the firm use the existing data or will
invest
money in research?
4. If no, how to better satisfy the existing market segments?
5. What is the size of the total market and its various segments?
6. What are the users and non users of the products / services
7. What are the factors that distinguish between users and non-users?
8. Who are the competitors and what are their market / niche segments?
9. What is the firms position in the competition in the market?
10. How the firm can differentiate the consumers?
11. What are the possible segment profiles?
12. Does this segment profile makes internally homogenous groups?
13. Is the number of segments needs to be reduced or increased?
14. Which segments represent the best competencies and market
opportunities?
15. What are the target segments characteristics and market behavior?
16. Who are the competitors in the target segment?
51
17. What kind of market mix will be suitable to this segment?
18. Does the firm have the necessary resources to carry out a segment
strategy?
19. How flexible is this segment strategy? Can this be broadened in future?
20. Does this segment strategy fits the corporate strategy?

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