and Importance of Marketing, Basic concepts, Marketing Environment, Market Segmentation, Targeting and Positioning Introduction Marketing deals with identifying and meeting human and social needs. One of the shortest definitions of marketing is meeting needs profitably.
What is marketed? i. Goods: Goods constitute the bulk production and marketing efforts. Companies market cars, trucks, television sets, machine tools, watches, cosmetics etc.Service can also be associated ii. Services: Services include the work of airlines, hotels, maintenance and repair people, bakers, lawyers, doctors variable mix of goods and services. At fast food restaurant, for example consumes both a product and a service. iii. Events: Marketers promote time based events, such as major trade shows, artistic performances, Global sporting events such as the Olympics and the World Cup are promoted. iv. Experiences: An amusement park or a water park represents experiential marketing: customers by taking rides in the amusement park or the water park enjoy the thrill provided by these experiences.
v. Persons: Celebrity marketing is a major business. Artists, musicains people all get help from celebrity marketers. Celebrities such as Amitabh Bachchan, Sachin Tendulkar, Shah Rukh Khan, Aishwarya Rai are big brand themselves.
vi. Places: Cities, states, regions, and whole nations compete actively to software industry Bangalore is positioned as the silicon valley of India. In tourism industry, Karnataka is marketed as One state many words. The Government of India is marketing India as a tourist destination through the Incrediable india campaign. . Vii.Organizations: Organizations actively work to build a strong, favorable, and unique image in the minds of their target publics. Universities, museums, performing arts organizations, and nonprofits all use marketing to boost and to compete for audiences and funds.
viii. Property: Properties are intangible rights of ownership of either real property (real estate) or financial property (stocks and bonds). Properties are brought and sold exchanges require marketing. Investment Companies and banks market securities to both institutional and individual investors. ix.Information: Information is essentially what books, schools, and universities produce, market, and distribute at a price to parents, students and communities.Eg: Travel guides, Periodicals, newspapers etc. x. Idea: Every market includes a basic idea. Products and services are platforms for delivering some idea or benefit.Eg: ideas creating awareness about AIDS, discouraging smoking and so on.
What is market? A market is a set of all actual and potential buyers of product or services. In other words, market is a situation where sellers and actual and perspective buyers exist. Types of market 1.Consumer Markets: When an individual buys product for personal consumption or for gifting to another individual for his personal consumption is called as Consumer market. Eg: Cosmetics, shoes etc. 2. Business Markets: When buyer buys the product for a resell or to manufacture a product for a sale. It is called as Business market. Eg: Furniture, PC etc. 3. Global Market: When companies market the product across the countries, across the continent by altering the product as per the requirement of that specific market is known as Global market. The decision is made in the face of different requirements for buying ,negotiating, owing; different culture, language and legal and political system currencies that might fluctuate in value.
4. Non-profit and Governmental Markets: organizations such as churches, universities, charitable institutions and government organization need to price carefully. 5. B-B Market Business to Business Market 6. B-C Market Business to Consumer Market 7. C-C Market Consumer to Consumer Market .
Defining marketing Product oriented definition: the performance of business activities that direct the flow of goods and services through producers to consumers. Customer oriented definition: marketing is the business process by which products are matched with the markets and through which transfers of ownership are effected. System oriented : marketing is a total system of interacting business activities designed to plan, price, promote and distribute wants satisfying products to target markets to achieve organizational objectives.
Kotlers definition Marketing is defined as a social and managerial process by which individuals and group obtain what they need and want through creating offering and exchanging products of value with others. Marketing management "is a science and art of choosing target market and getting growing and keeping customers by creating, delivering and communicating customer superior value. According to AMA, Marketing is a function and set of processes for creating, communicating and delivering a value to customer and managing customer relationship in the way that benefits organization as well as consumer. Marketing system Core Marketing Concepts Target Markets and Segmentation: A marketer can rarely satisfy everyone in a market. Not everyone likes the same soft drink, automobile, college, and movie. Therefore, marketers start with market segmentation. They identify and profile distinct groups of buyers who might prefer or require varying products and marketing mixes Marketers and Prospects: A marketer is someone who is seeking a response (attention, a purchase, a vote, a donation) from another party, called the prospect. If two parties are seeking to sell something to each other, both are marketers.
Needs, Wants, and Demands: Needs describe basic human requirements such as food, air, water, clothing, and shelter. People also have strong needs for recreation, education, and entertainment. These needs become wants when they are directed to specific objects that might satisfy the need. A person needs food but wants a burger, French fries, and a soft drink. A person needs food but wants a mango, rice, lentils, and beans. Clearly, wants are shaped by ones society. Demands are wants for specific products backed by an ability to pay. Many people want a Mercedes; only a few are able and willing to buy one. Product or Offering: A product is any offering that can satisfy a need or want, such as one of the 10 basic offerings of goods, services, experiences, events, persons, places, properties, organizations, information, and ideas. A brand is an offering from a known source. A brand name such as McDonalds carries many associations in the minds of people: hamburgers, fun, children, fast food, golden arches. These associations make up the brand image. Value and Satisfaction:value is a ratio between what the customer gets and what he gives. The customer gets benefits and assumes costs, as shown in this equation: Value =benefits costs
Exchange and Transactions:Exchange, the core of marketing, involves obtaining a desired product from someone by offering something in return. For exchange potential to exist, five conditions must be satisfied: 1. There are at least two parties. 2. Each party has something that might be of value to the other party. 3. Each party is capable of communication and delivery. 4. Each party is free to accept or reject the exchange offer. 5. Each party believes it is appropriate or desirable to deal with the other party.
Relationships and Networks: Relationship marketing aims to build long-term mutually satisfying relations with key partiescustomers, suppliers, distributorsin order to earn and retain their long-term preference and business. The ultimate outcome of relationship marketing is the building of a unique company asset called a marketing network. A marketing network consists of the company and its supporting stakeholders (customers, employees, suppliers, distributors, university scientists, and others) with whom it has built mutually profitable business relationships. Marketing Channels: Communication channels deliver messages to and receive messages from target buyers.hey include newspapers, magazines, radio, television, mail, telephone, billboards, posters, and the Internet. Distribution channels to display or deliver the physical product or service(s) to the buyer or user. There are physical distribution channels and service distribution channels, which include warehouses, transportation vehicles, and various trade channels such as distributors, wholesalers, and retailers. Supply Chain: supply chain describes a longer channel stretching from raw materials to components to final products that are carried to final buyers. For example, the supply chain for womens purses starts with hides, tanning operations, cutting operations, manufacturing, and the marketing channels that bring products to customers. Competition: includes all of the actual and potential rival offerings and substitutes that a buyer might consider. Marketing Environment: The task environment includes the immediate actors involved in producing, distributing, and promoting the offering, including the company, suppliers, distributors, dealers, and the target customers. broad environment consists of six components: demographic environment, economic environment, Natural environment, technological environment, political-lgal environment, and social-cultural environment. Marketing Mix: is the set of marketing tools that the firm uses to pursue its marketing objectives in the target market.
McCain Foods was founded in 1957 in Canada by the McCain brothers Harrison, Wallace, Robert and Andrew. McCain Foods is now the largest chip producer in the world with a market share of almost 33% and more than 20,000 employees working in 57 locations worldwide. Since 1968 McCain GB has been operating from its UK base in Scarborough, North Yorkshire. McCain prides itself on the quality and convenience of its product range and for over three decades has been making healthier versions of favourite staple foods. The McCain brothers had a simple philosophy 'Good ethics is good business'. This lies behind the McCain brand message 'It's All Good'. It is not just the food that is good. The philosophy also refers to the way McCain works with its suppliers and builds its relationship with its customers. McCain believes it is important to take care of the environment, the community and its people. It works with around 300 farmers in the UK, chosen for the quality of their potato crop. McCain factories are located in key potato growing areas, which help to reduce food miles. explain 4 P in context of McCain and to what extent is product the most important of the four Ps for McCain? Nature of marketing It is customer focused It must deliver value It is business It is surrounded by customer needs It is part of total environment It affects company strategy It a discipline It creates mutually beneficial relationships Functions of marketing Functions of research Marketing research Product planning and development Function of exchange Buying and assembling selling Function of physical treatment Standardisation,gradi ng and branding Packaging Storage Transportation Function facilitating exchange Salesmanship Advertising Pricing Financing insurance Objectives of marketing management To create customers for the business To satisfy the needs of the customers To determine marketing mix that will satisfy the needs of the customer To generate adequate profits for the business To earn goodwill for the business To raise standards of living of the people. responsive marketing, anticipative marketing, and creative marketing. A responsive marketer finds a stated need and fills it, while an anticipative marketer looks ahead to the needs that customers may have in the near future. In contrast, a creative marketer discovers and produces solutions that customers did not ask for, but to which they enthusiastically respond. Sony exemplifies a creative marketer because it has introduced many successful new products that customers never asked for or even thought were possible: Walkmans, VCRs, and so on. Sony goes beyond customer-led marketing Distinction between marketing and selling Starting point Factory
Target market Focus Product Customer needs Means Selling and promotion Integrated marketing
objective Profit through sales volume
Profit through customer satisfaction Selling concept Marketing concept Difference between marketing and selling Selling Marketing Emphasizes on the product Emphasizes on customers want Sales are the primary motive. Satisfaction of the customer is primary concern First production, then selling takes place without knowing customers need First the customers need is determined and then production takes place Internal company orientation External, market orientation Companys need is the motive Customers need is the motive Selling views the customer as the last link in the business Marketing vies the customer as the very purpose of the business. It is an activity that converts the good into cash It is a function that convert the consumer needs into product The seller determine what product is to be offered What should be offered as a product is determined by the customer. Marketing environment It denotes all the external factors and forces that affect a firms ability to develop and maintain successful transaction and relationship with the target market. Marketing environment Micro environment Suppliers Customer Intermediaries Competitors General public Macro environment Demographic Economic Natural technological Politico-legal Socio cultural Macro environment
1. Demographic Pattern and change in the society based on age,sex,education,ethnic background etc.the characteristics of generation and household pattern 2. Economic Nature of economic system, role of government policies. 3. Natural Environmental concern, natural resources, effect of improper handling of natural resources and environment 4. Technological Technology, information technology, invention etc. 5. Political/legal Stability of government,laws,judiciary and politics, consumer and environmental protection 6. Social/cultural Changing role of persons/consumer,conduct of business, marketers and social cultural behaviour Strategies to deal with marketing environment Anticipating and adapting: marketing manager can anticipate changes in environmental conditions and adopt appropriately .eg hotels and restaurants in hill stations can anticipate the tourist season. Smoothing or levelling:This strategy aims at smoothing the sales through out the year, for example during the period of low demand an organization may offer price reduction and during peak periods it may charge premium rate. Rationing :it leads to establishing a set of priorities for using scarce resources such as material or capital. Contracting : there may be uncertainty over the supply of working capital and material or sale of finished product. The management may enter into an agreement with commercial banks for supply of working capital. Coalescing: refers to merging or joining into a venture with another firm. a coalition is formed to achieve certain common objectives. Procurement of key personnel: the marketing organization can offer employment to dynamic persons working in other organization to increase its competitiveness. Market segmentation Market segmentation is the process of dividing a potential market into distinct sub markets of consumers with common needs and characteristics. Niche is a narrowly defined group of customers that have a distinct and complex set of needs Benefits of market segmentation Helps know company capabilities: by looking at a particular segment company can carry SWOT analysis Provide opportunities to expand market: by segmenting the market, a marketer is able to create new markets for their product . Helps create innovation: marketer get benefits in focusing the relevant segment more closely and look for changes in the market requirement. Create gains to customers: segmentation result into wars and the consumers gain in terms of added quantity and variety. Requisites of effective segmentation Measurable and obtainable: the size ,profile and other relevant characteristics of the segment must be measurable and obtainable in terms of data. Substantial :the segment should be large enough to be profitable .for consumer markets ,the small segment might disproportionally increase the cost and hence product might be priced too high. Accessible: the segment must be accessible through existing network of people at a cost that is affordable. Differentiable: the basis of segmentation should be such that it leads to different segment . Actionable: the segments which a company wishes to pursue must be actionable in the sense that there should be sufficient finance, personnel and capability to take them all. General consideration: must have growth potential,profitable,carries no unusual risk and has competitors who do not fight directly with the product. Philosophies of market segmentation Mass marketing :before the onset of the marketing age ,there was wide-spread adoption of mass marketing, mass production,distribution,and promotion. Product-variety marketing: once it is learnt that the consumer would not accept standard products, the marketer might try to provide different sizes,colour,shapes,features and qualities to attract them. The product variety approach satisfies a customer more than standardized one model product. Target marketing: target marketing helps the marketer to correctly identify the markets -the group of customers for whom the product is designed. Micro-marketing: it occurs when target market in further bifurcated and the needs of the smaller customer group are addressed on a local basis. Customized marketing: the focus of the target marketing is further shifting from local basis to individual customer basis. Personalized marketing: mass production with product varieties ,and target marketing for segments, which are further divided into customers on a local basis or on individual customer needs, the focus of the company is shifting more minutely. Mass marketing
Total market as one segment Product- variety maeketing Mass marketing with product variety Target marketing
Total market different segment
Micro marketing
Serves one segment on local basis Customized marketing Serves individual customer needs Personalized marketing Serve the person customer needs Bases of market segmentation Geographic segmentation Demographic segmentation Psychographic segmentation Behavioral segmentation
region North East West south central City size Metropolitan cities Small cities Town Density of area Urban Semi urban rural Climate Geographic segmentation Hot Humid Cold Rainy Demographic segmentation age Sex Marital status Income Family size Occupation Family life style Religion Nationality
Psychographic segmentation Conservative,Liberal,Health and fitness conscious, adventuresome, status seekers Life style Lower class, lower middle class, middle class, rich class Social class Continental,mughai,chienese,indian,north indian,south Indian Cultural Extrovert,introvert,aggressive,complainants personality Behavioural segmentation Needs- motivation Shelter Safety Security affection Sense of self worth Perception Low risk Moderate risk High risk Learning involvement Low involvement High involvement Attitude Positive Negative neutral
Occasions Regular special Benefits Convenience Prestige Economy Value for money Quality services
Readiness stage Unaware Aware Informed Interested Desirous Intending to buy enthusiastic Steps in market segmentation 1. Identify the target market: The first and foremost step is to identify the target market. The marketers must be very clear about who all should be included in a common segment. Make sure the individuals have something in common. A male and a female cant be included in one segment as they have different needs and expectations. Maruti Suzuki has adopted a focused approach and wisely created segments within a large market to promote their cars. Lower Income Group - Maruti 800, Alto Middle Income Group - Wagon R, Swift, Swift Dzire, Ritz High Income Group - Maruti Suzuki Kizashi, Suzuki Grand VitaraSuzuki Grand Vitara would obviously have no takers amongst the lower income group.
2. Identify expectations of Target Audience Once the target market is decided, it is essential to find out the needs of the target audience. The product must meet the expectations of the individuals. The marketer must interact with the target audience to know more about their interests and demands. Kelloggs K special was launched specifically for the individuals who wanted to cut down on their calorie intake. Marketing professionals or individuals exposed to sun rays for a long duration need something which would protect their skin from the harmful effects of sun rays. Keeping this in mind, many organizations came with the concept of sunscreen lotions and creams with a sun protection factor especially for men.
3. Create Subgroups The organizations should ensure their target market is well defined. Create subgroups within groups for effective results. Cosmetics for females now come in various categories. Creams and Lotions for girls between 20-25 years would focus more on fairness. Creams and lotions for girls between 25 to 35 years promise to reduce the signs of ageing.
4. Review the needs of the target audience It is essential for the marketer to review the needs and preferences of individuals belonging to each segment and sub-segment. The consumers of a particular segment must respond to similar fluctuations in the market and similar marketing strategies. 5. Name your market Segment Give an appropriate name to each segment. It makes implementation of strategies easier. A kids section can have various segments namely new born, infants, toddlers and so on.
6. Marketing Strategies Devise relevant strategies to promote brands amongst each segment. Advertisements promoting female toiletries cant afford to have a male model. A model promoting a sunscreen lotion has to be shown roaming or working in sun for the desired impact. 7. Review the behavior Review the behavior of the target audience frequently. It is not necessary individuals would have the same requirement (demand) all through the year. Demands vary, perceptions change and interests differ. A detailed study of the target audience is essential. 8. Size of the Target Market It is essential to know the target market size. Collect necessary data for the same. It helps in sales planning and forecasting.
Market segment selection Once the marketer has evaluated the different segments for their size,growth,and attractiveness ,and found that they are compatible with the company objective and resources, the obvious step is to go far selecting the market segment .kotler has suggested five patterns of target market selection Contd Single segment concentration: the company may select single segment eg sport car manufacturing company. Through concentrated marketing the firm gains a strong knowledge of segment needs and achieve a strong market presence. Selective specialization: the firm selects a number of segment each objectively attractive and appropriate eg television channels Product specialization: here the firm specializes in making a certain product that it sells to several segments.eg microscopes universities, lab, commercial labs etc.through such kind of specialization the firm builds a strong reputation in specific product area. Market specialization: here the firm concentrates on serving many needs of the particular customer group.eg the firm sells product only to university lab includes microscope,burners,chemical flasks etc. Full market coverage: here the firm attempts to serve all customer group with all the product they might need ,only a very large firm can undertake a full market coverage. Positioning It is the act of designing the companys offering and image to occupy a distinctive place in the target markets mind. Many marketers advocate promoting only one central benefit referred to as Unique Selling Proposition (USP).which includes best quality", "best services", "lowest price"," best value"," safest etc. Positioning of product or service is nothing but creating a image in consumers mind .consumer generally tend to use images while making a purchase ;they buy brand image rather than actual product. Consumer associate brand name with life style, social position, professional roles and these association combine to form an image or position. Qualities of a successful position Relevance Distinctiveness Durability Clarity Courage Positioning approaches Positioning by product attributes Positioning by price-quality Positioning by product-user Positioning by use of application Product repositioning
Wahaha - Taking the fizz out of the giant cola brands!
When Zong Qinghou, a Chinese farm worker, started a company of beverages and ice creams with two retired teachers in 1987, hardly anyone could have imagined that this company could give sleepless nights to global giants such as Coca-Cola and Pepsi Co. But the new company, Wahaha, the pride of many contemporary Chinese consumers, has managed to do just that. Wahaha, one of the leading homegrown Chinese beverage brands, had revenues of US$1.37 billion (11.4 billion yuan) and profits of US$162.7 million (1.34 billion yuan) in 2004. Wahaha, which is meant to mimic the sound of a baby laughing, demonstrates clearly what great brand stories are made of. The company started small, and in 1991, it merged with the state-owned Hangzhou Canning Factory. The 1996 joint venture with the Danone Group gave the company foreign investment to the extent of US$45 million. After dabbling in many product categories, it launched its trademark brand the "Future Cola" in 1998 to compete against the global cola giants. Today, Wahaha's product portfolio includes milk and yogurt drink, purified and mineral water, carbonated soft drink, fruit and vegetable juice, sports drink, and iced tea including cognee (rice porridge), canned food and health products. Wahaha has been careful in its strategy to compete against the global cola and food giants. As the fashion conscious Chinese consumers seem to prefer the global colas in the larger costal Chinese cites, Wahaha has till now focused on rural and semi-urban Chinese areas. Further, the Wahaha brand has generously used home grown celebrities for all its products. This is in line with its overall strategy to position Wahaha as a patriotic company and to tap into the patriotic fervor of the Chinese consumers. By projecting Wahaha's products as China's own, the Wahaha brand has carved out a clear positioning in the market against the global brands. But whether this strategy will work in the long run is a million dollar question and will require constant efforts to balance the brand promise and its careful delivery in a hostile and increasingly competitive Chinese market place
questions
What aspects of consumer behaviour have been discussed in this case Discuss the positioning strategy of wahaha