Marketing Compendium

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CONTENTS
WHAT IS MARKETING? ...................................................................................................................................... 4
SALES VS MARKETING ....................................................................................................................................... 4
CONSUMER BEHAVIOR ..................................................................................................................................... 7
SEGMENTATION, TARGETING AND POSITIONING ............................................................................................ 7
MARKETING MIX ............................................................................................................................................. 11
PUSH VS PULL MARKET ................................................................................................................................... 19
PRODUCT MIX – LENGTH, BREDTH ................................................................................................................. 20
PRODUCT LIFE CYCLE ...................................................................................................................................... 22

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WHAT IS MARKETING?

Marketing is about identifying and meeting human and social needs. In simple terms, it is meeting needs
profitably.

Formal definition as per The American Marketing Association: Marketing is an art and science of
choosing target markets and getting, keeping and growing customers through creating, offering and
freely exchanging products and services of value with others.

SALES VS MARKETING

DIMENSION SALES MARKETING

Focuses on the needs of the Focuses on the needs of the buyer

Focus seller

Focuses on making products Focuses on developing demands among

available to customers potential customers
Strategy through right channels in the
right quantities to meet
demand

Management is sales volume Management is profit oriented

Orientation oriented

Planning is short-run — Planning is long- run — oriented in

oriented in terms of today’s today’s products and in terms of new
Horizon products and markets products, tomorrow’s markets and
future growth

Depends on marketing to Depends on sales to close leads

Dependency generate leads

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NEEDS, WANTS, DEMANDS, AND DESIRES

Needs
• Needs are basic human requirements 

• They are states of felt deprivation for basic human requirements
• These include:
o Physical Needs: Food, clothing, shelter, clean air
o Social Needs: Belonging and affection
o Individual Needs: Knowledge and self-expression
• Generally, the products which fall under the needs category of products do not require a push.

Example: I need some food. I feel hungry.

Given below are the different types of needs:

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Wants

• Wants are need satisfiers. They are described in terms of objects that will satisfy needs 

• Wants are shaped by culture, society and individual personality 
E.g. A hungry person in Australia
may want a hamburger, chips and a cola while someone from Singapore may want noodles and
someone from the South Pacific region may want mango, coconuts and beans
• Thus, wants are not mandatory part of life. You DON’T need a good smelling soap. But you
will definitely use it because it is you want

Example: I want to have a pizza.

Demands and Desires:

• Demands are wants backed by consumer purchasing power i.e. wants for specific products backed
by an ability to pay for them
• Companies must measure not only how many people want their product but how many are willing
and able to buy it
• Customers view products as bundles of benefits and choose products that give them the
best bundle for their money

Desire is the basic difference between wants and demands. A customer may desire something but he
may not be able to fulfil it.

Example: My Demand is to have a Domino’s Pizza, but my desire is to have a Pizza Hut Pizza

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CONSUMER BEHAVIOR
Consumer behaviour is the study of how individuals, groups, and organizations SELECT, BUY, USE and
DISPOSE OFF goods, services, ideas, or experiences to satisfy their needs and wants.
A consumer’s buying behaviour is influenced by cultural, social and personal factors with cultural factors
exerting the broadest and deepest influence.

SEGMENTATION, TARGETING AND POSITIONING

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Segmentation
It is the process of defining and subdividing a large market into clearly identifiable segments having similar
needs, wants, or demand characteristics i.e. dividing a whole into parts based on various criteria like
geography, demography, behaviour, gender, personality etc. Why do we need segmentation?

Not all individuals have similar needs. A male and a female would have varied interests and liking towards
different products. A kid would not require something which an adult needs. A school kid would have a
different requirement than an office goer. Market segmentation helps the marketers to bring together
individuals with similar choices and interests on a common platform.
Segmentation is done along the following factors:

Demographic Geographic – Psychographic – Behavioral – Loyalty to

– Population where people people’s attitudes, a product
Characteristics live values and lifestyle
Age Urban Consumer opinions Purchase Occasions
and interests
Gender Suburban Socioeconomic group Usage and benefits
Education Rural Motives Loyalty
Family Size Regional Personality Use rate
Family life City Size Aspirations Price Sensitivity
cycle
Occupation Climate
Social class Landforms
Religion
Ethnicity

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Targeting:
Target Marketing involves breaking a market into segments and then concentrating your marketing efforts on
one or a few key segments consisting of the customers whose needs and desires most closely match your
product or service offerings. It can be the key to attract new business, increasing your sales or profitability.
An example of segmentation and targeting:
1. GSKCH has segmented the consumers based on age and targeted each segment with specific
products

Positioning:
Positioning is defined as the act of designing the company’s offering and image to occupy distinctive place
in the target market’s mind.
Positioning is all about ‘perception’. As perception differs from person to person, so do the results of the
positioning map e.g. what one perceives as quality, value for money in terms of worth, etc. will be different
to any other person’s perception. However, there will be similarities in certain cases.

Inexpensive

Overnight
Delivery

Speed

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Elements of positioning:
1. Target Audience: For whom the product is intended

2. Points of Parity (POP): Attributes similar to other products in the category. Points of parity are
important because customers expect basic offerings from a category. For example when purchasing
a toothpaste, a customer will expect that it should have freshness as well as it tastes well.

3. Points of Difference (POD): Attributes that differentiates the products from others in the category.
The more the number of PODs the better the positioning. PODs should satisfy the following criteria

• It should be desired by the customer

• It should be sustainable by the producer

Apple introduced the fingerprint scanner to unlock device in the iPhone models. This was a POD
until Samsung and all other manufacturers used the same technology to make it into a POP, thus
nullifying Apple’s unique POD

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MARKETING MIX
Its purpose is to make a marketing strategy for a new market or an existing market.

For a product marketing mix has 4 Ps

Place - Distribution Channels

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Price

Consumer-Perceived Value (CPV)

CPV is the difference between the perceived customer evaluation of all the benefits and costs of the offering and the
perceived alternatives.

Customer-Perceived Value = Total Customer Benefit – Total Customer Cost

Total Customer Benefit is the perceived monetary value of the bundle of economic, functional and psychological
benefits customers expect from a given market offering because of the product, service, people and image.

Total customer cost is the complete packet or fees a customer expects to pay in the researching, buying,
obtaining and maintaining of a given product or service including monetary, time, energy, and psychological costs.

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Can you think of the factors that you considered while deciding to buy your last smart phone?

Product – Benefits

Products provide benefits, and it is for these benefits that they are bought by customers. These
benefits may be classified into three types:

Go-to-Market Strategy
A go-to-market strategy (GTM strategy) is an action plan that specifies how a company will reach
customers and achieve competitive advantage. The purpose of a GTM strategy is to provide a blueprint for
delivering a product or service to the end customer, taking into account such factors as pricing and
distribution. A GTM strategy is somewhat similar to a business plan, although the latter is broader in scope
and considers such factors as funding.

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Example of 4 Ps
Product
(Nestlé’s bestselling product)
Shape - Chocolate bars with different
numbers of fingers 2, 3 or 4.
Variants – Nestle KitKat ice-cream (America,
UK, France and Ireland), Nestle KitKat
Drumsticks (Malaysia and Australia), Caramac
(2005)
Feature - chocolate + Biscuit,
crunchy Package – red & white
Competitors - Perk, Munch
Place
KitKat is available at retail stores, super
market etc. It is also available at
websites like Big Basket, Grofers etc.
Produced in - 21 countries
Available in - nearly 100 countries
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Price
Starting Price of Kit Kat remains unchanged
as Rs. 5 but the quantity changed.
It uses psychological pricing – 13 gm Perk is
priced Rs. 5 but 6 gm KitKat is priced Rs. 5.
This tricks people into buying KitKat without
realizing they get less chocolate for more
price.
It’s available in price Rs. 5, Rs. 10, Rs. 15, Rs.
50
Promotion
Have a break, have a kit kat
Online – Facebook, Instagram, Twitter
websites that asks the visitors to take a
break and have a KitKat
Offline - newspapers, magazines,
billboards, posters, televisions, various
places made for people to rest between
their work to have a break
Exclusive Ads - “Have a Break, Have a
KitKat” ads in 90s, “Dancing Panda” in 1987
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Extended Ps
In case of a service 3 more Ps are added to
the marketing Mix, together they make 7 Ps
for an extended marketing mix of a service .
1. Product
2. Price
3. Place
4. Promotion
5. People
6. Physical Evidence
7. Process

Process
A process involves customers at every step and it is used to give quality services. Efficient
process ensures that the service is perceived as being dependable by the target segment.
1. Flow of activities 2. Number of steps
3. Level of customer involvement
Eg. A highly focused marketing process of going on a cruise – When we arrive we are greeted
and our baggage is taken to our room. We have a week of services from restaurants and
entertainment, to casinos and shopping.

Physical evidence
It is the material part of a service. As, there are no physical attributes to a service, so a consumer
tends to rely on material cues.
1. Uniforms 2. Office/showroom
3. Packaging 4. Business cards
5. Internet/web pages 6. Signage (e.g. for defense)
7. Paper work (e.g. invoices, tickets)
E.g. Tourism Industry (Essel World), Telecom corporate packs (Vodafone, Airtel, Jio), large
banks and insurance companies (SBI, HDFC)

People
People are used to produce and consume service or experiences. Customers buy from people
they like, so the attitude, skills and appearance of all staff need to be first class.
1. Employee 2. Employee customer Interaction
3. Training 4. Remuneration
5. Communication Culture and values
Eg. A tour guide or restaurant waiter/manager can affect our experience to travel or eat

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For Rural Areas we can use 4 A’s
Example
Acceptability
• Came up with a new product,
Colgate Ayurvedic Tooth powder
targeting rural rich and
consuming class
• Came up with a sachet of tooth
powder for rural population
who buy in smaller lots
4 As
Availability
• In 1998 Colgate 6 million
people in 20k people
• Tying up with initiatives like E-
choupal and Disha to
strengthen distribution network
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Affordability
• Quantity that Colgate offered
consumer was much higher than
the competitor at the same price
• Price was set low for
market penetration
• 50 gm – Rs 20 (Current Price)
Awareness
• Colgate created awareness
by melas, door to door
selling, haats, sampark
campaign, vans, free dental
checkups, free samples
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To focus more on customer’s wants and needs we can use 4 Cs

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Brand Personality
Specific mix of human traits that we can attribute to a particular brand
The theory is that consumers are more likely to choose brands with which they can associate their own
personalities. Brands are generally positioned in the following 5 traits:

Some marketers carefully orchestrate brand experiences to express brand personalities. For example, Axe,
the popular deodorant, caters to consumers who want others to view them as attractive and appealing.
These traits may vary depending on the socio-economic factors in different geographies with different
people.
Eg.
Japan lacks ‘Ruggedness’ and has Peacefulness instead
China lacks ‘Ruggedness’ and ‘Sincerity’ and has ‘Joyfulness’, ‘Traditionalism’ and ‘Trendiness’ instead

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PUSH VS PULL MARKET

Pull
Advertisements: Radio, TV, Print Ad, Online
Consumer Promotion: 30% extra
PR & Publicity: Non-paid, online blogs, press releases,
etc.
Events and Experiences: mall activations
Push
Sales promotion: Trade promotions - buy one
get one free
Pricing offers: Get 1000 Rs. Off on purchase
above Rs. 10000
Personal: Face to face sales push
Direct to consumer: Tele marketing

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PRODUCT MIX – LENGTH, BREDTH

Product Mix
The complete set of all products that a company offers to the market is called as the Product mix of the
company. For example, the below picture shows the complete product mix of Proctor and Gamble:

Product Line
A product line is a group of products within the product mix that are closely related, either because they
function in a similar manner, are sold to the same customer groups, are marketed through the same types
of outlets or fall within given price ranges.
Example: For HUL Soaps is one product line.

Product Line Breadth

The breadth (or width) of the product mix consists of all the product lines that the company has to offer to
its customers. If we take P&G, for example, the breadth of the major product lines would consist of hair
products, oral care, soaps and detergents, baby care, and personal care. This means that the product mix
breadth is five.

Product Line Depth

The number of products in a product line refers to its product line depth. The depth of product blend refers
to how many variants are obtainable of each product in the line. For example, since Lux comes in 4 type of
scents (exotic flower petals & almond oil, jojoba oil, and milk cream, fruit extracts and honey and sandal
saffron in milk cream), it contains a depth of 4.

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Length of the Product Mix

It refers to the whole number of items in the mix. For example, ABC Company may have two product lines
and five brands within each product line. Thus, ABC's product mix length would be ten.

Product Mix Consistency

It pertains to how closely related product lines are to one another------in terms of use, production and
distribution. A company's product mix may be consistent in distribution but vastly different in use. For
example, a small company may sell its health bars and health magazine in retail stores. However, one
product is edible and the other is not.

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PRODUCT LIFE CYCLE

PLC describes the various stages that a product goes through from the time it was initially thought of until
it is finally removed from the market.

Product Development Stage: This is the stage where the product is conceived and developed. This stage is
characterized by high R&D costs and losses in the form of manufacturing costs.
Introduction Stage: This is the stage where products are introduced to the market. This stage is
characterised by high marketing costs since the company invests a lot in creating awareness for the
product. Sales growth is slow in this stage due to which the company experiences huge losses during this
period. Due to the inability to continuously sustain losses, the failure at this stage is the highest.
UberEATS is an online food delivery platform started by Uber. It has been
recently introduced to the market and is currently in the introductory
phase.
Growth Stage: This stage is marked by a sharp increase in sales and the product becomes profitable in this
stage. Company spends on marketing to strengthen market share and capture market share. This stage also

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experiences competition from new entrants who now see value in entering the segment. This
stage also experiences the highest profits.

Reliance Jio is now in its growth phase, dealing with high

growth rates and acquiring more and more customers.

Maturity Stage: This stage sees stagnation in profits and the sales after growing for a certain
period start going down. Companies often spend a lot on innovation and promotions to sustain
this stage as long as possible. This is also a stage that is characterised by strong competition
since the segment is now an established one. A product might be in this stage for months or for
decades.
LED TVs are currently in the maturity stage, coming up with
new features and innovation to sustain their sales.

Decline Stage: This is the stage when players start moving out of the segment because it has
been replaced by better and more lucrative alternatives. Companies reduce their marketing
spends and do not invest in innovations and the product sells by itself. The sales in this stage
continuously decrease until the product goes obsolete

Desktop computers are currently in the decline stage with a

decreasing market every year and little to no innovation