“Marketing is Managing profitable customer relationships.

“The process by which companies create value for customers

and build strong customer relationships in order to capture
value from customers in return”

“Fulfilling customers wants and desires in order

to make a profit”

1
New Definition of Marketing (est. in 2007)
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.

(American Marketing Association)

2
 MARKETING OUTLINE
OPERATIONS

MARKETING 4Ps Producer/Deliverer

AS A FIELD
OF STUDY Distributor
Product/ Wholesaler Customer
Service Attitude
Retailer Behavior

Characteristics

Existing Concept Necessity

/Desire

RESEARCH

CONSUMER
BEHAVIOUR 3
Making and delivering a product to the
customer

 Anticipating customer need

 Developing and Selling Product
Concept
 Creating/anticipating demand
 Fulfilling demand

4
 MARKETING PROCESS

Understand the marketplace,

customer needs and wants

Design a Marketing Strategy

Construct a marketing
program

Build Profitable relationships

with Customers

Capture value from customers

in return
5
 Production Concept
Marketing
The idea that consumers will favour
Management
products that are available and highly
Orientations affordable

Product Concept

The idea that consumers will favour

products that offer the most in quality,
performance and features and that
organizations should therefore devote all its
efforts to make continuous product
improvements

6
 Selling Concept
Marketing
Management The idea that consumers will not buy enough
Orientations
of the firm’s products unless it undertakes
a large scale selling and promotion effort

Marketing Concept
The marketing management concept holds
that achei8ving organizational goals depends
on knowing the needs and wants of target
markets and delivering the desired
satisfactions better than competitors do.

7
 Societal Marketing Concept
Marketing
Management A principle of enlightened marketing that
Orientations
holds that a company should make good
marketing decisions by considering
consumers wants, the company’s
requirements, consumer’s long term
interests and society’s long run interests

8
 Psychological Factors

Motivation
Motivation

Beliefs &
Beliefs &
Perception
Perception Learning
Learning
Attitudes
Attitudes

9
 Model of Consumer Behavior

Consumer
Psychology Buying
Marketing Other Decision process
stimuli stimuli Motivation
Perception Problem recognition
Product Economic Learning Information search
Price Technological Memory Evaluation of
Place Political alternatives
Promotion Cultural Purchase decision
Consumer Postpurchase
characteristics behavior

Cultural
Social Purchase Decision
Personal
Psychological Product choice
Brand choice
Dealer choice
Purchase timing
Purchase amount
10
BUYER NEED RECOGNITION
DECISION
PROCESS
INFORMATION SEARCH

EVALUATION OF ALTERNATIVES

PURCHASE DECISION

POSTPURCHASE BEHVIOR

11
Steps Between Evaluation of Alternatives and a
Purchase Decision

Evaluation
of
alternatives

Attitude
of others

Purchase Purchase
intention decision

Unanticipated
situational
factors
12
13
MARKET
CONSUMER
INTELLIGENCE
BEHAVIOUR Rules of thumb or mental shortcuts in
the decision process

Availability Heuristic: Consumers base

their predictions on the quickness and
Decision
Heuristics and
ease with which a particular example of
Biases an outcome comes to minds

14
MARKET
CONSUMER Representativeness Heuristic:
INTELLIGENCE
BEHAVIOUR
Consumers base their predictions on
how representative or similar the
outcome is to other examples

 Anchoring and Adjustment Heuristic:

Decision
Heuristics and
Consumers arrive at an initial judgment
Biases and them make adjustments of that
first impression based on additional
information.

15
MARKET
CONSUMER The manner by which consumers code,
INTELLIGENCE
BEHAVIOUR categorize and evaluate financial outcomes
of choices

Prospect Theory
Mental
“Consumers frame decision alternatives in
Accounting
terms of gains and losses according to a
value function. Consumers are generally loss
averse. They tend to overweight very low
probabilities and underweight very high
probabilities”
16
MARKET
CONSUMER The manner by which consumers code,
INTELLIGENCE
BEHAVIOUR categorize and evaluate financial outcomes
of choices

Prospect Theory
Mental
“Consumers frame decision alternatives in
Accounting
terms of gains and losses according to a
value function. Consumers are generally loss
averse. They tend to overweight very low
probabilities and underweight very high
probabilities”
17
MARKET
CONSUMER Consumers tend to segregate gains
INTELLIGENCE
BEHAVIOUR
 Consumers tend to integrate losses
 Consumers tend to integrate smaller
losses with larger gains. “Cancellation
Principle”
Mental  Consumers tend to segregate small gains
Accounting
from large losses. “Silver-lining Principle”

18
MARKET
CONSUMER
INTELLIGENCE
BEHAVIOUR How are consumers thinking?
 Introspective method
 Retrospective method
Mapping the
Customer’s  Prospective method
Consumption
System/Customer  Prescriptive method
Activity
Cycle/Customer
Scenario

19
MARKET
CONSUMER
INTELLIGENCE
BEHAVIOUR
 Plugging-in
 Frame Blindness
 Lack of frame control
Biases in Decision
Making  Overconfidence in judgment
 Shortsighted shortcuts
 Shooting form the hip
 Group failure

Pg 202 Marketing Management Jay Russo and Kevin Schoemaker

20
MARKET
CONSUMER
INTELLIGENCE
BEHAVIOUR
 Fooling yourself about feedback
 Not keeping track
 Failure to audit your decision process
Biases in Decision
Making by
Marketing
Managers

21
 Need Problem
Problem Recognition
Recognition
Recognition General
General Need
Need Description
Description

Info Product
Product Specification
Specification
Search/ Supplier
Supplier Search
Search
Eval Proposal
Proposal Solicitation
Solicitation

Purchase Supplier
Supplier Selection
Selection

Order
Order Routine
Routine Specification
Specification
Post Performance
Performance Review
Review
Purchase
22
Participants in the Business Buying
Process

Users

Initiators Influencers

Gatekeepers

Buyers Deciders

Approvers

23
The Product (features, quality, service, support,
Marketing product line etc.)
Mix
Place (channel of distribution,
exclusive vs. intensive, etc.)

(advertising, sales force,

Promotion brochures, coupons, etc.)

Price (list price, discount, deals, both end-user

and channel)

25
The Packaging (Physical
Marketing Evidence)
Mix

Positioning (Process)

People

26
The Product (features, quality, service, support,
Marketing product line etc.)
Mix
Place (channel of distribution,
exclusive vs. intensive, etc.)

(advertising, sales force,

Promotion brochures, coupons, etc.)

Price (list price, discount, deals, both end-user

and channel)

27
MARKET
IDENTIFYING
INTELLIGENCE
MARKET
SEGMENTS Preferences Segments
AND TARGETS
 Homogeneous preferences
 Diffused preferences
 Clustered preferences
SEGMENT
MARKETING

28
MARKET
IDENTIFYING  Customers with distinct set of needs
INTELLIGENCE
MARKET
 Pay premium to a firm that best satisfies
SEGMENTS their needs
AND TARGETS
 Unlikely to attract other competitors
 Nicher gains certain economies through
specialization
NICHE
 Niche has size, profit and growth potential
MARKETING
 Fairly small and attract few competitors

29
MARKET
IDENTIFYING
LOCAL MARKETING
INTELLIGENCE
MARKET
SEGMENTS
AND TARGETS

CUSTOMERIZATION
 Customized Marketing
 One-to-one Marketing

30
MARKET
IDENTIFYING
INTELLIGENCE
MARKET  Geographic region
SEGMENTS
 City size
AND TARGETS
 Density
 Climate
GEOGRAPHIC
VARIABLES

31
MARKET
IDENTIFYING  Demographic age
INTELLIGENCE
MARKET
 Family size
SEGMENTS
AND TARGETS
 Family Life cycle
 Gender
 Income
DEMOGRAPHIC
 Occupation
VARIABLES
 Education
 Religion

32
MARKET
IDENTIFYING
INTELLIGENCE
MARKET
 Race
SEGMENTS
AND TARGETS  Generation
 Nationality
 Social Class
DEMOGRAPHIC
VARIABLES

33
MARKET
IDENTIFYING
INTELLIGENCE
MARKET
 Race
SEGMENTS
AND TARGETS  Generation
 Nationality
 Social Class
DEMOGRAPHIC
VARIABLES

34
MARKET
IDENTIFYING
PRIZM (Potential Rating Index by Zip Markets)
INTELLIGENCE
MARKET
SEGMENTS
 Combines Geographic and Psychographic
segmentation variables together
AND TARGETS
Examples
Blue Blood Estates, Winner’s Circle, Hometown
Retired, Latino America, Shotguns and Pickups,
Black Country Folk, Young Digerati, Beltway
Boomers, The Cosmopolitans, Old Milltowns

35
MARKET
IDENTIFYING
INTELLIGENCE
MARKET
 Psychographic Lifestyle
SEGMENTS
AND TARGETS (Culture oriented, Sports oriented, Outdoor
oriented)
 Personality
PSYCHOGRAPHIC (Compulsive, Gregarious, Authoritarian,
VARIABLES Ambitious)

36
MARKET
IDENTIFYING
INTELLIGENCE
MARKET
SEGMENTS  VALS Framework
AND TARGETS

PSYCHOGRAPHIC
VARIABLES

37
 Innovators High Resource
MARKET
IDENTIFYING Primary High Innovation
INTELLIGENCE
MARKET Motivation Ideals Achievement Self-Expression
SEGMENTS
AND TARGETS
Thinkers Achievers Experiencers

PSYCHOGRAPHIC
VARIABLES Believers Strivers Makers

Low Resource
Survivors Low Innovation
38
MARKET
IDENTIFYING
Groups with Higher Resources
INTELLIGENCE
MARKET  Innovators – Successful, Sophisticated, Active,
SEGMENTS “Take Charge” people, with high self esteem.
AND TARGETS Purchases often reflect cultivated tastes for
relatively upscale, niche-oriented products and
services

PSYCHOGRAPHIC
VARIABLES
 Thinkers – Mature, satisfied and reflective
people who are motivated by ideals and value
order, knowledge and responsibility. Favour
durability, functionality and value in products

39
MARKET
IDENTIFYING
Groups with Higher Resources
INTELLIGENCE
MARKET  Achievers – successful goal-oriented people who
SEGMENTS focus on career and family. Favour premium
AND TARGETS products that demonstrate success to their peers
 Experiencers – Young, enthusiastic, impulsive
people who seek variety and excitement. Spend
comparatively high proportion of their income on
PSYCHOGRAPHIC
fashion, entertainment and socializing
VARIABLES

40
MARKET
IDENTIFYING
Groups with Lower Resources
INTELLIGENCE
MARKET  Believers – Conservative, conventional and
SEGMENTS traditional people with concrete beliefs. Favour
AND TARGETS familiar products and are loyal to established
brands

PSYCHOGRAPHIC  Strivers – Trendy and fun-loving people who are

VARIABLES resource constrained. Favour stylish products that
emulate the purchases of those with greater
material wealth

41
MARKET
IDENTIFYING
Groups with Lower Resources
INTELLIGENCE
MARKET  Makers – Practical down-to-earth, self-sufficient
SEGMENTS people who like to work with their hands. Favour
AND TARGETS products with a practical or functional purpose.

 Survivors – Elderly, passive people who are

PSYCHOGRAPHIC concerned about change. Loyal to their favourite
VARIABLES brands

42
  Behavioral Occasions
MARKET
IDENTIFYING
INTELLIGENCE
MARKET (Regular Occasion, Special Occasion)
SEGMENTS  Benefits
AND TARGETS
(Quality, Service, Economy, Speed)
 User Status

BEHAVIORAL (Non-user, Ex-user, Potential User, First time

user, Regular User)
VARIABLES
 Usage Rate
(Light user, Medium user, Heavy user)

43
  Loyalty Status
MARKET
IDENTIFYING
INTELLIGENCE
MARKET (None, Medium, Strong, Absolute)
SEGMENTS  Readiness Stage
AND TARGETS
(Unaware, Aware, Informed, Interested,
Desirous, Intending to buy)
 Attitude toward product
BEHAVIORAL
(Enthusiastic, Positive, Indifferent, Negative,
VARIABLES
Hostile)

44
  Behavioral Segmentation Breakdown
MARKET
IDENTIFYING
INTELLIGENCE
MARKET (Pg 257 MM )
SEGMENTS
AND TARGETS

BEHAVIORAL
VARIABLES

45
  The Conversion Model
MARKET
IDENTIFYING
INTELLIGENCE
MARKET  Measures the strength of Psychological
SEGMENTS
Commitment between brands and
consumers and their willingness and
AND TARGETS
openness to change

BEHAVIORAL
VARIABLES

46
MARKET
IDENTIFYING
INTELLIGENCE
MARKET HIGH ENTRENCHED

SEGMENTS
AND TARGETS
AVERAGE

COMMITTMENT

SHALLOW
CONVERSION
MODEL - Users
LOW CONVERTIBLE

47
MARKET
IDENTIFYING
INTELLIGENCE
MARKET HIGH STRONGLY
UNAVAILABLE
SEGMENTS
AND TARGETS
WEAKLY
UNAVAILABLE
BALANCE OF
DISPOSITION
AMBIVALENT
CONVERSION
MODEL –
LOW AVAILABLE
Nonusers

48
MARKET
IDENTIFYING
INTELLIGENCE
MARKET
SEGMENTS
AND TARGETS

BUSINESS MARKETS
SEGMENTATION

49
 1. Needs Based Segmentation
MARKET
IDENTIFYING
2. Segment Identification
INTELLIGENCE
MARKET
SEGMENTS 3. Segment Attractiveness
AND TARGETS
4. Segment Profitability

5. Segment Positioning – “Value Proposition”

STEP S IN
SEGMENTATION 6. Segment “Acid Test” - “Segment Story Board”
PROCESS
7. Marketing-Mix Strategy

50
BRAND EQUITY
 Executive Summary
 Table of Contents
 Situation Analysis
 Marketing Strategy
 Financial Projections
 Implementation Controls

51
BRAND EQUITY
 Benefits of Branding to Companies
• Simplify Product Handling or tracing
BRANDING
• Organize inventory and accounting records
• Legal Protection (Intellectual Property)
• Brand Name – Registered Trademarks
• Manufacturing Process – Patents
• Packaging – Copyrights and designs
• Brand Loyalty
• Predictability of Demand
• Entry barriers for competition

52
  Benefits of Branding Marketing
Advantages
BRANDING • Improved Perceptions of Product Performance

• Greater Loyalty
• Less Vulnerability to Competitive Marketing Actions
• Larger Margins
• More Inelastic Consumer Response to Price
Increases
• More Elastic Consumer Response to Price Decreases

53
  Benefits of Branding Marketing
Advantages
BRANDING • Greater Trade Cooperation and Support

• Increased Marketing Communication Effectiveness

• Possible Licensing Opportunities
• Additional Brand Extension Opportunities

54
  Benefits of Branding Marketing
Advantages
BRANDING • Greater Trade Cooperation and Support

• Increased Marketing Communication Effectiveness

• Possible Licensing Opportunities
• Additional Brand Extension Opportunities

55
 Augmented
Product
Product
Actual
Delivery &
Credit
Product After
sales
Brand Features service
Name
Core
Benefit
Design
Quality
Level
Packaging
Warranty
Installation

56
 PRODUCT LINE
Product A group of products that are closely related 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

PRODUCT MIX
The set of all product lines and items that a particular
seller offers for sale

57
 BRAND EQUITY
Product The positive differential effect that knowing the
brand name has on customer response to the product
or service

BRAND POSITIONING
- Product Attributes
- Benefits
- Beliefs and Values

58
 BRAND NAME SELECTION
Product - Selection
- Protection

BRAND SPONSORSHIP
- Manufacturer’s brand
- Private brand
- Licensing
- Co-branding

59
 BRAND DEVELOPMENT
Product - Line Extension
- Brand Extension
- Multibrands
- New brands

60
 Line Extension: Different versions of the same
Product product

Brand Extension: New products are added under the

name of an existing brand

Multibrands: Different brands of the same product.

61
 PRICING APPROACHES

Price  Cost based Pricing

 Cost Plus pricing – Add standard profit
(mark-up) to the cost of the product

 Break-Even Analysis and Target Profit Pricing

 Value-based pricing
Setting price based on buyer’s perceptions of
value rather than on the seller’s cost
62
 NEW-PRODUCT PRICING STRATEGIES

Price  Market Skimming Pricing

Selling a high price for a new product to skim
maximum revenues layer by layer from the
segments willing to pay the high price
- Fewer but more profitable sales

 Market-Penetration Pricing
Setting a low price for a new product in order to
attract large number of buyers and a large
market share
63
 etin g
a r k
fM
Pri nc iples o 4 P’s of Marketing
PRODUCT MIX PRICING STRATEGIES

Price  Product Line Pricing

Setting the price steps between various
products in a product line based on cost
differences between the products, customer
evaluations of different features and
competitor’s prices

 Optional-Product Pricing
The pricing of optional or accessory products
along with a main product
64
 PRODUCT MIX PRICING STRATEGIES

Price  Captive Product Pricing

Setting a price for products that must be used
along with a main product e.g blades for razors,
cartridges for printers

 By-Product Pricing
Setting a price for by products in order to make
the main product’s price more competitive

65
 PRICE ADJUSTMENT STRATEGIES

Price  Discount
 Allowance
 Segmented Pricing
 Psychological
 Geographical
 Promotional
International

66
 Distribution or Supply Chain Management
Marketing Channel or Distribution Channel:
Place
Producer Producer Producer
InDirect
Marketing
InDirect Channel
Direct Wholesaler
Marketing
Marketing
Channel
Channel

Retailer Retailer

Consumer Consumer Consumer

67
 • Advertising
Promotion
• Sales Promotion

• Personal Selling

• Public Relations

• Direct Marketing
68
Customer Loyalty
Value and
Loyalty “A deeply held commitment to re-buy or re-patronize a preferred product
or service in the future despite situational influences and marketing
efforts having the potential to cause switching behavior” - Oliver

Satisfaction

Value Proposition
Consists of the whole cluster of benefits a company promises to deliver to
its customers

69
 Measuring Satisfaction
Customer
Satisfacti
- Elements of company performance
on
- On-time transportation
- Completeness of order
- Repurchase intention
- Product Quality
- Customer Service

70
MARKETING • Developing Marketing Strategies and
MANAGEMENT Plans
TASKS • Capturing Marketing Insights
• Connecting with Customers
• Building Strong Brands
• Shaping the Market Offerings
• Delivering Value
• Communicating Value
• Creating Long-term Growth
71
STRATEGY
Levels of Management
FORMULATION
LEVELS

72
STRATEGY
Levels of Management
FORMULATION
LEVELS
VISION

MISSION

STRATEGY

TACTICS

PLANS

73
STRATEGY
Levels of Management
FORMULATION
LEVELS
VISION

T
MISSION

STRATEGY M

TACTICS
O
PLANS

74
STRATEGY
FORMULATION
LEVELS
• Product / Brand Level

• SBU Level

• Corporate Level

75
ANALYSIS TOOLS
• BCG Matrix
• SWOT Analysis / TOWS Analysis
• Customer Matrix
• Customer Profitability Analysis
• Intensive Growth Strategies

76
MARKET • Internal
INTELLIGENCE

• External
Market Scanning

77
MARKET • Internal Reports – Sales, Prices,
INTELLIGENCE Inventories
• Order-to-Payment Cycle
Market Scanning
• Sales Force

Internal • Data Warehouses, Data Mining

78
 • Sales Force to spot and report new
MARKET development
INTELLIGENCE • Distributors, Retailers and other
intermediaries
Market Scanning • External Networking – competitor products,
trade shows, competitor reports,
External • Advisory Panel
• Government data resources
• Information Suppliers – Gartner, AC Nielsen,
Biz360
• Customer feed back
79
MARKET • Trend – A direction or sequence of events
INTELLIGENCE that has some momentum and durability
• Fad – A sequence of events that is
Market Scanning
unpredictable, short lived and without social,
political and economic significance
• Mega trends – large social, economic,
Needs
and political and technological changes that are
Trends slow to form but influence us for sometime

80
MARKET • Political - Legal
INTELLIGENCE
• Economic
Market Scanning • Technological
• Social & Cultural

Major
Factors These factors have an impact on all environments

81
MARKET • Political - Legal
INTELLIGENCE
• Economic
Market Scanning • Technological
• Social & Cultural

Major
Factors

82
MARKET
INTELLIGENCE • Demographic Environment
• Population growth, Age Mix, Household
Market Scanning
patterns
• Economic Environment
Application of
Factors on • Geographical shifts in population,
Environments Income redistribution, Credit culture
• Social & Cultural Environment

83
MARKET
INTELLIGENCE • Social & Cultural Environment
• Views of themselves
Market Scanning
• Views of others
• Views of organizations
• Views of society
Application of
Factors on • Views of nature
Environments
• Views of the universe

84
MARKET
INTELLIGENCE • Social & Cultural Environment
- Core Values
Market Scanning
- Secondary Beliefs

Application of
Factors on
Environments

85
MARKET
INTELLIGENCE • Natural Environment
- Consumption of vital resources
Market Scanning
- Oil, Water, Metals, Nuclear
Materials

Application of - Global Warming, Weather

Factors on patterns
Environments

86
87
 Define the problem and
MARKET
MARKETING
research objectives
INTELLIGENCE
RESEARCH
Develop the research plan

Collect the Information

Process Analyze the information

Present the findings

Make the decision

88
MARKET
MARKETING
INTELLIGENCE
RESEARCH
 What is the problem?

 Research objectives?

Step - 1

89
MARKET
MARKETING
INTELLIGENCE
RESEARCH DATA SOURCES

 Primary Data

 Secondary Data
Step – 2

Research Plan

90
 RESEARCH APPROACHES
MARKET
MARKETING
INTELLIGENCE
RESEARCH
 Observational Research

 Focus Group Research

Step – 2  Survey Research

Research Plan  Behavioral Data

 Experimental Research

91
 RESEARCH INSTRUMENTS
MARKET
MARKETING
INTELLIGENCE
RESEARCH
 Questionnaires

 Focus Groups

Step – 2  Qualitative Measures

Research Plan

92
 RESEARCH INSTRUMENTS
MARKET
MARKETING
INTELLIGENCE
RESEARCH
 Qualitative Measures
 Shadowing
 Behaviour mapping
 Consumer journey

Step – 2  Camera journals

 Extreme user interviews

Research Plan  Unfocus groups

93
MARKET
MARKETING
 Analyze the Information
INTELLIGENCE
RESEARCH
Advanced Statistical Techniques
 Frequencies
 Crosstabs
 Factor Analysis
Step – 2  Cluster Analysis
 Discriminant Analysis
Research Plan  Regression Analysis

94
MARKET
MARKETING
INTELLIGENCE
RESEARCH
 Present the findings

 Make the decision

Step – 2

Research Plan

95
MARKET
MARKETING
 Sales Analysis
INTELLIGENCE
RESEARCH
 Sales variance analysis
 Micro-sales analysis
 Market Share
Measuring  Overall Market Share
Marketing
Productivity  Served Market Share
 Relative Market Share

96
MARKET
MARKETING
 Market Share
INTELLIGENCE
RESEARCH
 Overall Market Share
 Served Market Share
 Relative Market Share
Measuring Company’s sales expressed as a percentage of total market sales
Marketing
Productivity
Is all the buyers who are willing and able to buy a company’s
product

A market share that is in comparison with the market leader

97
MARKET
MARKETING
 Market Share
INTELLIGENCE
RESEARCH
 Overall Market Share

Overall Market Share = Customer Penetration

X
Measuring
Marketing Customer Loyalty
Productivity X
Customer Selectivity
X
Price Selectivity

98
MARKET
MARKETING Customer Penetration % of all customers who buy form
the company
INTELLIGENCE
RESEARCH
Purchases made by customers as a
Customer Loyalty % of total purchases made from all
suppliers

Size of the average customer purchase

from the company expressed as a % of
Measuring
Customer Selectivity the average customer purchase from an
Marketing average company
Productivity
Average price charged by the
company as a percentage of the
Price Selectivity average price charged by all
companies

99
MARKET
MARKETING
 Sales Analysis
INTELLIGENCE
RESEARCH
 Sales variance analysis
 Micro-sales analysis
 Expense to Sales Analysis
Measuring  Financial Analysis
Marketing
Productivity  DuPont Analysis

100
MARKET
MARKETING
 Profitability Analysis
INTELLIGENCE
RESEARCH

Measuring
Marketing
Productivity

101
MARKET
MARKETING
 Measures of Market Demand
INTELLIGENCE
RESEARCH

 Potential Market: Is the set of

consumers who profess a sufficient
level of interest in a market offer. They
Forecasting and must have enough income and have
Demand access to the product offer.
Measurement

102
MARKET
MARKETING
 Measures of Market Demand
INTELLIGENCE
RESEARCH

 Available Market: Is the set of

consumers who have interest, income,
access and qualifications for the
Forecasting and particular market offer.
Demand
Measurement

103
MARKET
MARKETING
 Measures of Market Demand
INTELLIGENCE
RESEARCH

 Target Market: Is the part of the

qualified market that the company
decides to pursue.
Forecasting and
Demand
Measurement

104
MARKET
MARKETING
 Measures of Market Demand
INTELLIGENCE
RESEARCH

 Penetrated Market: The set of

consumers who are buying the
company’s product.
Forecasting and
Demand
Measurement

105
MARKET
MARKETING
 Market Demand
INTELLIGENCE
RESEARCH

Is the total volume that would be

bought by a defined consumer group, in
a defined geographical area in a defined
Forecasting and time period, in a defined marketing
Demand environment under a defined marketing
Measurement
program

106
MARKET
MARKETING
 Estimating Future Demand
INTELLIGENCE
RESEARCH
 Past Data Analysis
Time-Series analysis
 Exponential Smoothing
Forecasting and  Statistical Demand Analysis
Demand
Measurement  Econometric Analysis

107
MARKET
MARKETING
 Estimating Future Demand
INTELLIGENCE
RESEARCH
 Survey of buyer’s intentions
 Composite of sales force opinion
 Expert Opinion
Forecasting and  Market Test Method
Demand
Measurement

108
Analysis of
Capabilities
 5 Factor’s of Production
 Porter’s Value Chain
 Porter’s 5 Forces model
SWOT - TOWS

109
Analysis of
Capabilities

SWOT - TOWS

Porter’s
Value Chain

110
Analysis of
Capabilities New
Entrants

Industry
Suppliers Competition Customers
SWOT - TOWS

Porter’s
5 Forces
Model
Substitutes

111
Analysis of Strengths
Capabilities  Bharti Airtel has more than 65 million customers (July
2008). It is the largest cellular provider in India, and also
supplies broadband and telephone services - as well as many
other telecommunications services to both domestic and
corporate customers.

SWOT - TOWS  Other stakeholders in Bharti Airtel include Sony-Ericsson,

Nokia - and Sing Tel, with whom they hold a strategic
AirTel alliance. This means that the business has access to
knowledge and technology from other parts of the
telecommunications world.

 The company has covered the entire Indian nation with its
network. This has underpinned its large and rising customer
base.

112
Analysis of Weaknesses
Capabilities
 SBU technical as well as organizational capabilities are
outsourced.

 As opposed to competitors (Hutshison Essar), Key

Infrastructure (Communication Towers) are not owned by
SWOT - TOWS AirTel.

AirTel  Lack of any resolve to develop future markets once the

Indian market has become mature.

113
Analysis of
Capabilities

SWOT - TOWS

Environmental
Analysis

114
Analysis of
Capabilities

SWOT - TOWS

Environmental
Analysis

115
Analysis of
Capabilities

SWOT - TOWS

Environmental
Risk

116
Analysis of
Capabilities

SWOT - TOWS

Environmental
Analysis

117
Analysis of
Capabilities

SWOT - TOWS

Environmental
Analysis

118
Analysis of
Capabilities

Performance
Analysis

Ratios

119
Analysis of
Capabilities

Performance
Analysis

Marketing
Ratios

120
Analysis of
Capabilities

Performance
Analysis

Profit Impact of
Market
Strategy

121
Analysis of
Capabilities

Performance
Analysis

Profit Impact of
Market
Strategy

122
Analysis of
Capabilities

Portfolio Analysis

123
Analysis of
Capabilities

Portfolio Analysis

War Horses Dodos

124
Analysis of
Capabilities
1. Build

2. Hold
Portfolio Analysis
3. Harvest

4. Divest

125
 SALES (In thousands)
PRODUCTS

LAPTOPS 2007 2008 2009

Sony 300 400 410
Toshiba 400 450 470
Dell 425 500 490
Analysis of
Acer 600 610 500
Capabilities IBM 100 90 75

HARD DISK DRIVES

Seagate 900 1050 2000
Toshiba 800 700 900
Samsung 810 811 900
Portfolio Analysis
TV
Sony 2000 2100 1500
LG 980 1500 2000
Samsung 1000 920 1700
Sharp 800 900 800
Toshiba 1200 1800 1300

DVD PLAYERS
Toshiba 700 900 1800
Sony 1000 2000 1070
LG 900 1600 1500
Samsug 400 1000 126 1200
Phillips 1000 950 1100
 Model of Consumer Behavior

Consumer
Psychology Buying
Marketing Other Decision process
stimuli stimuli Motivation
Perception Problem recognition
Product Economic Learning Information search
Price Technological Memory Evaluation of
Place Political alternatives
Promotion Cultural Purchase decision
Consumer Postpurchase
characteristics behavior

Cultural
Social Purchase Decision
Personal
Psychological Product choice
Brand choice
Dealer choice
Purchase timing
Purchase amount
127
MARKET
CONSUMER
INTELLIGENCE
BEHAVIOUR Rules of thumb or mental shortcuts in
the decision process

Availability Heuristic: Consumers base

their predictions on the quickness and
Decision
Heuristics and
ease with which a particular example of
Biases an outcome comes to minds

129
MARKET
CONSUMER Representativeness Heuristic:
INTELLIGENCE
BEHAVIOUR
Consumers base their predictions on
how representative or similar the
outcome is to other examples

 Anchoring and Adjustment Heuristic:

Decision
Heuristics and
Consumers arrive at an initial judgment
Biases and them make adjustments of that
first impression based on additional
information.

130
MARKET
CONSUMER The manner by which consumers code,
INTELLIGENCE
BEHAVIOUR categorize and evaluate financial outcomes
of choices

Prospect Theory
Mental
“Consumers frame decision alternatives in
Accounting
terms of gains and losses according to a
value function. Consumers are generally loss
averse. They tend to overweight very low
probabilities and underweight very high
probabilities”
131
MARKET
CONSUMER The manner by which consumers code,
INTELLIGENCE
BEHAVIOUR categorize and evaluate financial outcomes
of choices

Prospect Theory
Mental
“Consumers frame decision alternatives in
Accounting
terms of gains and losses according to a
value function. Consumers are generally loss
averse. They tend to overweight very low
probabilities and underweight very high
probabilities”
132
MARKET
CONSUMER Consumers tend to segregate gains
INTELLIGENCE
BEHAVIOUR
 Consumers tend to integrate losses
 Consumers tend to integrate smaller
losses with larger gains. “Cancellation
Principle”
Mental  Consumers tend to segregate small gains
Accounting
from large losses. “Silver-lining Principle”

133
MARKET
CONSUMER
INTELLIGENCE
BEHAVIOUR How are consumers thinking?
 Introspective method
 Retrospective method
Mapping the
Customer’s  Prospective method
Consumption
System/Customer  Prescriptive method
Activity
Cycle/Customer
Scenario

134
MARKET
COMPETITION
1 Against whom are we competing?
INTELLIGENCE

2 What strengths and weaknesses do they

possess?

3 What are their objectives?

4 What strategies are they pursuing and how

successful are they?

5 How are they likely to behave and, in

particular, how are they likely to react to
offensive moves?
135
 1 Competition consists only of those companies offering a similar
MARKET
COMPETITION product or service to the target market, utilizing a similar technology,
and exhibiting similar degrees of vertical integration. Thus, Nestlé (which
INTELLIGENCE makes Nescafé) sees General Foods, with its Maxwell House brand, as a
similar competitor in the instant coffee market, while Penguin sees its
direct competitors in the chocolate snack bar market to be Kit-Kat’s six
pack, Twix and Club.
2 Competition consists of all companies operating in the same product
Levels of
or service category. Penguin’s indirect competitors, for example, consist
Competition
of crisps and ice-creams.
3 Competition consists of all companies manufacturing or supplying
products that deliver the same service. Thus, long-distance coach
operators compete not just against each other, but also against railways,
cars, planes and motorcycles.
4 Competition consists of all companies competing for the same
spending power. An example of this is the American motorcycle
manufacturer, Harley Davidson, which does not necessarily see itself as
competing directly with other motorcycle manufacturers. Instead, for
many buyers it is a choice between a Harley Davidson motorcycle and a
136
major consumer durable such as a conservatory or a boat
MARKET
COMPETITION
INTELLIGENCE

137
MARKET
COMPETITION
INTELLIGENCE
1. Industry Perspective of Competition

2. Market Perspective of Competition

138
MARKET
COMPETITION
INTELLIGENCE

Industry
Perspective
of
Competition

139
MARKET
COMPETITION
INTELLIGENCE

Industry
Perspective
of
Competition

140
MARKET
COMPETITION
INTELLIGENCE 1. Conflict
Industry
Perspective 2. Competition
of
Competition
3. Coexistence

4. Cooperation

5. Collusion

141
MARKET
COMPETITION
INTELLIGENCE 1. The relaxed competitor
Competitor
Responses 2. The tiger competitor

3. The selective competitor

4. The unpredictable competitor

142
MARKET
COMPETITION Financial factors
➡ Cash flow problems
INTELLIGENCE ➡ Under funding
➡ Low margins
Identifying ➡ High-cost operations and/or distribution.
Competitor Market and performance-related factors
Weaknesses ➡ Slow/poor growth
➡ An overdependence on one market
➡ An overdependence on one or a small number of customers
➡ Strength in declining market sectors
➡ Little presence in growing and high margin markets
➡ Low market share
➡ Distribution weaknesses
➡ Weak segmentation of the market
➡ Poor/confused and/or unsustainable positioning
➡ A weak reputation and/or poorly defined image.

143
MARKET
COMPETITION Product-related factors
➡ Outdated products and a failure to innovate
INTELLIGENCE ➡ Product weaknesses
➡ Weak or non-existent selling propositions.
Identifying Managerial factors
Competitor ➡ A short-term orientation
Weaknesses ➡ The poor management of staff
➡ The failure to focus upon what is important
➡ Managerial predictability and the adherance to well-tried formulae
➡ Product or service obsolescence/weaknesses
➡ An over- and ill-justified confidence
➡ Managerial arrogance and a belief that the organization has an
inalienable right to a place in the market
➡ Competitive arrogance, competitive myopia and competitive
sclerosis
➡ Bureaucratic structures
➡ A fiscal year short-term fixation
144
MARKET
COMPETITION
INTELLIGENCE

Competitive
Intelligence
System

145
SEGMETATION,
MARKET
TARGETTING &
INTELLIGENCE
POSITIONING

Stages of
STP

146
MARKET
IDENTIFYING
INTELLIGENCE
MARKET
SEGMENTS  VALS Framework
AND TARGETS

PSYCHOGRAPHIC
VARIABLES

147
 Young & Rubicam, 4Cs (a Cross-Cultural
SEGMETATION,
MARKET Consumer Characterization) for UK
TARGETTING &
INTELLIGENCE
POSITIONING
1 The constrained
(i) the resigned poor
(ii) the struggling poor.
Segmentation
2 The middle majority
Psychographic (i) mainstreamers
(ii) aspirers
(iii) succeeders.

3 The innovators
(i) transitionals
(ii) reformers.

148
 Consumer profiling and shopping habits
Source: The Times, 1 February 1997, p. 17.
SEGMETATION,
MARKET
TARGETTING &
INTELLIGENCE
• Habit-bound diehards.
POSITIONING

• Self-indulgent shoppers.
Segmentation
Psychographic • Struggling idealists.

• Comfortable and contenteds.

•Frenzied copers.

• Mercenaries
149
SEGMETATION,
MARKET
TARGETTING & 1. Undifferentiated or mass marketing
INTELLIGENCE
POSITIONING

2. Product-variety or differentiated
marketing
Target
Marketing
Strategies
3. Target or concentrated marketing.

150
SEGMETATION,
MARKET
TARGETTING &
INTELLIGENCE
POSITIONING

Positioning

151
SEGMETATION,
MARKET 1. Single benefit positioning
TARGETTING &
INTELLIGENCE
POSITIONING

2. Primary and secondary benefit positioning

Positioning
3. Double benefit positioning

4. Triple benefit positioning.

152
SEGMETATION,
MARKET
TARGETTING &
INTELLIGENCE
1 Confused positioning, where buyers are unsure of
POSITIONING what the organization stands for

Positioning 2 Over-positioning, where consumers perceive the

organization’s products as being expensive and fail
to recognize the full breadth and value of the range

3 Under-positioning, where the message is simply

too vague and consumers have little real idea of
what the organization stands for or how it differs
from the competition. 153
GENERIC
MARKET
STRATEGIES
INTELLIGENCE 1. BUILD

2. HOLD

BCG based 3. HARVEST

strategies
4. DIVEST

154
GENERIC
MARKET
STRATEGIES
INTELLIGENCE

GE MATRIX
based
strategies

155
GENERIC
MARKET
STRATEGIES
INTELLIGENCE

Shell Matrix

156
GENERIC
MARKET
STRATEGIES
INTELLIGENCE

PORTER’S
STRATEGIES

157
GENERIC
MARKET
STRATEGIES
INTELLIGENCE

PORTER’S
STRATEGIES

158
GENERIC
MARKET
STRATEGIES
INTELLIGENCE

POSITION
BASED
STRATEGIES

159
SCORPIO
MARKET
TECHNIQUE
INTELLIGENCE

160
SCORPIO
MARKET
TECHNIQUE
INTELLIGENCE
 Industry or Technology thinking

 Market or Customer Thinking

Industry or
Market

161
SCORPIO
MARKET
TECHNIQUE
INTELLIGENCE ● It defines your real competition
● It defines your customers ’ needs
● It defines your potential for growth
● It defines your strategic threats and
Industry or opportunities
● It can kill you early if you don’t get it right .
Market-
Importance

162
SCORPIO
MARKET
TECHNIQUE
INTELLIGENCE

Customer

163
SCORPIO
MARKET
TECHNIQUE
INTELLIGENCE
 Market Research

 Consumer Insights
Customer

164
SCORPIO
MARKET
TECHNIQUE
INTELLIGENCE

Segmentation
and
Targeting

165
SCORPIO
MARKET
TECHNIQUE
INTELLIGENCE

Positioning
and
Branding

166
SCORPIO
MARKET
TECHNIQUE
INTELLIGENCE

Customer
Retention

167
SCORPIO
MARKET
TECHNIQUE
INTELLIGENCE

Customer
Retention

168
SCORPIO
MARKET
TECHNIQUE
INTELLIGENCE

Organization:
Processes
and Culture

169
SCORPIO
MARKET
TECHNIQUE
INTELLIGENCE

Offerings

170
SCORPIO
MARKET
TECHNIQUE
INTELLIGENCE

Offerings

171