Introduction to Marketing - Student Guide PDF

Marketing Management LECTURE 1 Introduction to Marketing Marketing Marketing is the process of promoting, selling, and distributing a product or service. It encompasses various activities to identify and satisfy customer needs and desires. These activities include market research, adverti...

Marketing Management LECTURE 1 Introduction to Marketing Marketing Marketing is the process of promoting, selling, and distributing a product or service. It encompasses various activities to identify and satisfy customer needs and desires. These activities include market research, advertising, sales, distribution, and customer service. The goal of marketing is to create value for both the company and the customer. It ensures that the company's products or services meet the needs of its target market, leading to customer satisfaction and business success. Importance of Marketing 1. Customer Understanding and Satisfaction: Marketing helps businesses understand their customers' needs, preferences, and behavior through market research and data analysis. This understanding enables companies to create products and services that fulfill these needs, increasing customer satisfaction. Hindustan Unilever: Through extensive market research and customer feedback, Hindustan Unilever tailors its wide range of products to meet the diverse needs of Indian consumers. Its Lifebuoy brand, for example, was repositioned with a focus on health and hygiene, addressing specific customer concerns. 2. Brand Awareness and Positioning: Effective marketing strategies increase brand awareness and establish a strong brand identity. This helps differentiate a company's products or services from competitors, making it easier for consumers to recognize and choose the brand. Amul: Amul has established itself as a household name in India through effective branding and advertising campaigns. The ‘Amul Girl’ advertisements, which address contemporary issues with humor and wit, have created a strong brand identity and consumer loyalty. 3. Sales and Revenue Growth: Marketing drives sales by promoting products or services to potential customers. Advertising, promotions, and sales strategies are designed to attract customers, increase demand, and boost revenue. Reliance Jio: By offering affordable data plans and disrupting the telecom market, Reliance Jio significantly boosted its subscriber base and revenue. Its aggressive marketing strategies, including free initial offerings, helped drive massive sales growth. 4. Market Expansion: Marketing identifies new markets and growth opportunities, helping businesses expand their reach and tap into new customer segments. This can lead to increased market share and business growth. 2  OYO Rooms: OYO has leveraged its marketing strategies to expand beyond Indian borders, entering international markets such as China, the USA, and Europe. Its focus on providing standardized and affordable accommodation has helped it capture a significant market share globally. 5. Building Customer Relationships: Marketing fosters strong relationships by engaging with them through various channels, providing valuable content, and offering excellent customer service. Loyal customers are more likely to repeat purchases and recommend the brand to others. Flipkart: Flipkart has focused on building strong customer relationships through personalized marketing, customer-centric services, and a reliable e-commerce platform. Its customer loyalty programs and responsive customer service have fostered trust and repeat business. 6. Competitive Advantage: A well-executed marketing strategy gives businesses a competitive edge by highlighting their unique selling points (USPs) and effectively communicating them to the target audience. This helps companies stand out in a crowded marketplace. Tata Motors: Tata Motors differentiates itself through continuous innovation and marketing its range of vehicles to various customer segments. The introduction of the Tata Nano, marketed as the world’s cheapest car, highlighted its competitive edge in affordability and innovation. 7. Innovation and Product Development: Marketing insights can drive innovation by revealing market gaps and unmet customer needs. This information guides product development and improvements, ensuring offerings remain relevant and appealing. Godrej: Godrej’s focus on innovation, driven by marketing insights, has led to the development of unique products such as the Godrej ChotuKool, an affordable and portable refrigerator designed for rural households. This product was developed based on a clear understanding of the needs of this specific market segment. 8. Effective Communication: Marketing ensures that a company's message is consistently communicated across all channels, including advertising, social media, public relations, and customer service, creating a cohesive brand experience. Zomato: Zomato effectively uses various communication channels, including social media, to engage with its audience. Its humorous and topical content resonates well with the younger demographic, creating a strong and consistent brand presence. 9. Customer Education: Marketing educates customers about product or service features, benefits, and uses. Informed customers are more likely to make confident purchasing decisions and derive greater satisfaction from their choices. ICICI Bank conducts financial literacy programs and uses marketing to educate customers about its range of banking products and services. Its campaigns often focus on digital banking and secure financial practices. 10. Adaptability and Growth: Marketing strategies help businesses stay adaptable and responsive to changes in the market environment. This includes keeping up with trends, technological 3  advancements, and shifts in consumer behavior, ensuring long-term sustainability and growth. Infosys: Infosys has demonstrated adaptability by continuously evolving its service offerings to meet the changing demands of the global market. Its marketing strategies emphasize its expertise in digital transformation and innovation, helping it stay relevant and competitive. Best marketing campaigns and what did they achieve for the company Many fantastic marketing campaigns are out there, but some stand out for their creativity and lasting impact. 1. Amul: ‘Utterly Butterly Delicious’ and the Amul Girl Campaign: Amul’s iconic ‘Utterly Butterly Delicious’ campaign featuring the Amul Girl has been running since the 1960s. The campaign uses topical ads to comment on current events, political scenarios, and social issues with wit and humor. Achievements: ○ Brand Recognition: Created a strong brand identity and loyalty. ○ Sales Growth: Consistently boosted sales of Amul butter and other dairy products. ○ Longevity: The campaign’s longevity has made Amul a household name in India. 2. Cadbury Dairy Milk: ‘Kuch Meetha Ho Jaaye’ Campaign: The ‘Kuch Meetha Ho Jaaye’ campaign positioned Cadbury Dairy Milk as a staple for celebrations and moments of joy in Indian households. Achievements: ○ Cultural Integration: Successfully integrated the brand into Indian celebratory occasions. ○ Market Leadership: Helped Cadbury maintain its leadership in the Indian chocolate market. ○ Emotional Connection: This built a strong emotional connection with consumers. 3. Tata Tea: ‘Jaago Re’ Campaign: The ‘Jaago Re’ campaign aimed to awaken social consciousness and encourage political participation among Indian citizens, using tea as a metaphor for waking up. Achievements: ○ Brand Purpose: Reinforced Tata Tea’s commitment to social causes. ○ Consumer Engagement: Increased consumer engagement by associating the brand with social activism. ○ Sales Boost: Enhanced brand image, leading to a boost in sales. 4. Surf Excel: ‘Daag Acche Hain’ Campaign: Surf Excel’s ‘Daag Acche Hain’ campaign promoted the idea that stains are good if they result from positive actions and experiences. 4  Achievements: ○ Brand Messaging: Successfully shifted brand messaging from stain removal to encouraging positive behavior. ○ Consumer Loyalty: Strengthened brand loyalty by resonating with parents and children. ○ Market Positioning: Reinforced Surf Excel’s position as a leading detergent brand. 5. Fevicol: ‘Fevicol ka Jod’ Campaign: Fevicol’s creative advertisements, often showcasing humorous scenarios of unbreakable bonds, have been memorable and highly effective. Achievements: ○ Brand Recall: Achieved high brand recall with clever and humorous ads. ○ Market Dominance: Solidified Fevicol’s position as the go-to adhesive brand in India. ○ Cultural Impact: Became a part of popular culture, often referenced in everyday conversations. 6. Flipkart: ‘Kya Pehnu’ and ‘No Kidding, No Worries’ Campaign: Flipkart’s campaigns featuring kids acting such as adults to promote its range of products, particularly fashion. Achievements: ○ Brand Differentiation: Differentiated Flipkart from competitors with unique and engaging ads. ○ Consumer Engagement: Increased consumer engagement and relatability. ○ Sales Growth: Boosted sales, particularly in the fashion segment. 7. Airtel: ‘Har Ek Friend Zaroori Hota Hai’ Campaign: Airtel’s campaign focused on the importance of friendship and staying connected, leveraging a catchy jingle. Achievements: ○ Emotional Connection: Built an emotional connection with younger audiences. ○ Brand Loyalty: Reinforced brand loyalty among existing customers. ○ Market Share: Helped Airtel maintain a strong market share in the competitive telecom sector. 8. Nescafé: ‘It All Starts with a Nescafé Campaign: This campaign featured real-life stories of struggle and perseverance, emphasizing the role of Nescafé in starting one’s day and journey. Achievements: ○ Brand Storytelling: Excelled in storytelling, making the brand more relatable. ○ Youth Engagement: Engaged a younger audience by highlighting themes of resilience and aspiration. 5  ○ Brand Perception: Improved brand perception as a companion in everyday challenges. Difference between Sales and Marketing A sale is a transaction between the buyer and the seller in which the seller sells intangible or tangible goods, assets, or services against money. For example, a customer walks into a clothing store, and the salesperson assists them in choosing a dress by providing information, offering styling suggestions, and ensuring a smooth transaction. Sales: Sales refers to the activities and processes involved in directly selling a product or service to customers. It focuses on converting leads into customers and generating immediate revenue Here's how sales would apply to a street vendor selling handmade crafts: Customer Interaction: The street vendor engages with potential customers who pass by their stall and showcases the crafts they have for sale. Product Demonstration: The vendor highlights the unique features, quality, and craftsmanship of each handmade craft, demonstrating their value to interested customers. Negotiation and Pricing: The vendor discusses the price and negotiates with customers to finalize the sale. They may offer discounts or promotions to encourage customers to make a purchase. Closing the Deal: Once the customer agrees to buy a specific handmade craft, the vendor completes the transaction, collects payment, and provides any necessary receipts or documentation. Marketing: Conversely, marketing refers to the broader set of activities aimed at promoting a product or service, creating awareness, and attracting customers. It involves understanding customer needs, developing a compelling value proposition, and implementing strategies to reach and engage with the target audience. Here's how marketing would apply to the street vendor selling handmade crafts: Product Positioning: To differentiate themselves from other vendors, the vendor identifies the unique selling points of their handmade crafts, such as the use of eco-friendly materials or intricate designs. Targeting the Right Audience: The vendor determines the target audience for their crafts, considering factors such as age, preferences, and buying behavior, and tailors their marketing efforts accordingly. 6  Promotion and Advertising: The vendor uses various marketing channels to create awareness and attract potential customers. This can include distributing flyers, leveraging social media platforms, or participating in local craft fairs or events. Building Relationships: The vendor focuses on building customer relationships to encourage repeat business and word-of-mouth referrals. They may offer loyalty programs or provide personalized recommendations to enhance the customer experience. Branding: The vendor establishes a brand identity by ensuring consistent quality, using attractive packaging, and showcasing the crafts in an appealing and eye-catching manner. Market Research: The vendor stays updated on market trends, customer preferences, and competitors' offerings to make informed decisions about product assortment, pricing, and marketing strategies. Product Life Cycle The product life cycle refers to the progression of a product through different stages from its inception to its eventual withdrawal from the market. This concept helps businesses understand and manage the performance, profitability, and marketing strategies of their products over time. Stages in the Product Life Cycle The four stages in the product life cycle are: 1. Introduction 2. Growth 3. Maturity 4. Decline 1. Introduction Stage When a product first launches, sales will typically be low and grow slowly. In this stage, company profit is small (if any) as the product is new and untested. The introduction stage requires significant marketing efforts, as customers may be unwilling or unlikely to test the product. There are no benefits from economies of scale, as production capacity is not maximized. The underlying goal in the introduction stage is to gain widespread product recognition and stimulate trials of the product by consumers. Marketing efforts should focus on the innovators' customer base – those most likely to buy a new product. There are two price-setting strategies in 7 the introduction stage: Price skimming involves charging an initially high price and gradually reducing (‘skimming’) it as the market grows. Price penetration: Establishing a low price to quickly enter the marketplace and capture market share, before increasing prices relative to market growth. For example: Tata Nano Description: The Tata Nano was introduced as the world’s cheapest car in 2008, targeting first-time car buyers and those looking to upgrade from two-wheelers. Challenges: Faced high production and marketing costs, along with the need to educate consumers about the benefits and affordability of the Nano. Marketing Strategies: Heavy advertising, roadshows, and special financing options to create awareness and drive initial sales. 2. Growth Stage If the product continues to thrive and meet market needs, the product will enter the growth stage. In the growth stage, sales revenue grows exponentially from the take-off point. Economies of scale are realized as sales revenues increase faster than costs and production reaches capacity. Competition in the growth stage is often fierce as competitors introduce similar products. In the growth stage, the market grows, competition intensifies, sales rise, and customers increase. Price undercutting in the growth stage is rare, as companies in this stage can increase their sales by attracting new customers to their product offerings. For example, Zomato Launch and Growth: Zomato, an online food delivery service, saw significant growth as internet penetration and smartphone usage increased in India. Sales Growth: Rapid increase in the number of restaurant partners and customer base. Marketing Strategies: Strategic partnerships, aggressive discounting, and promotional campaigns, along with enhancements to the user interface and delivery logistics. 3. Maturity Stage Eventually, the market grows to capacity, and product sales growth declines. In this stage, price undercutting and increased promotional efforts are common as companies try to capture customers from competitors. Due to fierce competition, weaker competitors will eventually exit the marketplace—the shake-out. The strongest players in the market remain to saturate and dominate the stable market. 8 The biggest challenge in the maturity stage is maintaining profitability and preventing sales from declining. Retaining customer brand loyalty is key in the maturity stage. In addition, to re-innovate itself, companies typically employ strategies such as market development, product development, or marketing innovation to ensure that the product remains successful and stays in the maturity stage. For example, Maruti Suzuki Description: Maruti Suzuki, the leading car manufacturer in India, has products such as the Maruti Suzuki Swift that are in the maturity stage. Market Characteristics: Slower sales growth as the market becomes saturated, with intense competition from other car manufacturers. Marketing Strategies: Regular updates to the model, introduction of new variants, attractive financing schemes, and maintaining strong after-sales service to retain customers. 4. Decline Stage In the decline stage, product sales start to fall and profitability decreases. This is primarily due to the market entry of other innovative or substitute products that satisfy customer needs better than the current product. Several strategies can be employed in the decline stage, for example: Reduce marketing efforts and attempt to maximize the life of the product for as long as possible (called milking or harvesting). Slowly reducing distribution channels and pulling the product from underperforming geographic areas. Such a strategy allows the company to pull the product out and attempt to introduce a replacement product. Selling the product to a niche operator or subcontractor. This allows the company to dispose of a low-profit product while retaining loyal customers. For example, Bajaj Chetak (Original) Description: The Bajaj Chetak, an iconic scooter, saw its decline with the advent of more advanced motorcycles and scooters. Market Characteristics: Decrease in sales due to changing consumer preferences and advancements in two-wheeler technology. Strategies: Bajaj eventually phased out the original Chetak but later revived the brand with an electric version to cater to the new market trends. 9 Reference: ▪ Bhasin, H. (2023). Pricing strategies. Marketing91. https://www.marketing91.com/pricing-strategies/ ▪ https://www.outbrain.com/help/advertisers/benefits-of-marketing/. (n.d.). https://www.outbrain.com/help/advertisers/benefits-of-marketing/ ▪ https://www.surveysparrow.com/blog/role-of-market-research-in-product-development/. (n.d.). https://www.surveysparrow.com/blog/role-of-market-research-in-product-development/ 10 ▪ https://www.hubspot.com/sales/what-is-sales. (n.d.). https://www.hubspot.com/sales/what-is-sales 11