Marketing SEED 2024-25 PDF

MARKETING SEED PREPARATORY KIT 2024 PREPARED BY Research and Scholastic Development Team  TABLE OF CONTENTS What is Marketing...................................................................................1 Marketing Vs Selling.........................................................

MARKETING SEED PREPARATORY KIT 2024 PREPARED BY Research and Scholastic Development Team  TABLE OF CONTENTS What is Marketing...................................................................................1 Marketing Vs Selling..............................................................................3 Marketing Mix.......................................................................................4 Marketing Tools.....................................................................................16 Segmentation, Targeting and Positioning.................................................18 Perceptual Map......................................................................................22 AIDA Model...........................................................................................23 Ansoff Matrix.........................................................................................25 BCG Matrix...........................................................................................29 Porter’s Five Forces................................................................................32 Attack Strategies.....................................................................................34 6M Framework.......................................................................................36 Commodification....................................................................................38 4C Model................................................................................................42 Product Mix...........................................................................................45 Levels of the Product...............................................................................47 Types of Consumer Products...................................................................49 Product Life Cycle..................................................................................51 Promotion Mix.......................................................................................54 Sales Promotion......................................................................................56 Net Promoter Score................................................................................58 Service Characteristics............................................................................60 Buyer Decision Process...........................................................................61 Marketing Funnel...................................................................................62 Customer Lifetime Value.........................................................................63 Sales Terminology...................................................................................66 Types of Marketing................................................................................67 Intermediaries.........................................................................................70 Distribution Channel...............................................................................71 POP and POS........................................................................................74 Shelf Space Marketing............................................................................75 Customer Purchase Journey...................................................................76 Brand....................................................................................................77 Conducting Market Research.................................................................83 Go-To-Market Strategy.........................................................................91 Marketing Plan.....................................................................................94 Return on Marketing Investment............................................................96 Marketing Myopia.................................................................................97 Rural Marketing....................................................................................98 Digital Marketing..................................................................................103 Experiential Marketing..........................................................................109 Color Psychology...................................................................................111 Influencer Marketing.............................................................................112 Mobile Optimisation..............................................................................113 Moment Marketing................................................................................114 Podcast Marketing.................................................................................117 Gamification..........................................................................................117 Omnichannel Marketing.........................................................................119 AI in Marketing.....................................................................................120 FAQs in Interviews.................................................................................122 Cases.....................................................................................................124  What is Marketing? The American Marketing Association offers the following formal definition: 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. One of the shortest good definitions of marketing is “meeting needs profitably.” Example: Spotify's main marketing efforts are centered on how the brand differs from other services by allowing customers to easily find new music and even filtering tunes by mood and genre. Spotify's algorithms use artificial intelligence to present customers with expertly crafted, bespoke playlists that truly suit their tastes, making listening to music or podcasts a whole new experience. Need, Want and Demand: 1 Needs: Human needs, which include food, clothes, and shelter, are the most basic need. Humans cannot thrive without the needs. Education and healthcare have become an increasingly important element of today's needs. In general, things that fall under the necessities category do not need to be pushed. Instead, the customer purchases it on their own. However, in today's tough and competitive market, so many businesses have come up with the same offering to meet consumer demands that even the "needs category product" must be pushed into the client's head. Example – you are thirsty Example from sector point of view- Agriculture sector, Real Estate, Healthcare etc. Wants: Wants are a step ahead of needs and are largely dependent on the needs of humans themselves. For example, you need to take a bath. Wants are not a mandatory part of life. One does not need a good smelling soap. But you will definitely use it because it is you want. Example – you want Soft drinks to quench your thirst Example from sector point of view-Hospitality industry, Electronics, FMCG, Consumer Durables etc. Demands: For an automobile, you can like a BMW or a Mercedes. You might want to consider taking a cruise. Can you, however, buy a BMW or take a cruise? You can if you have the financial means to buy a BMW or take a trip. As a result, demands are one step ahead of wants. When a person desires something high-end but also has the financial means to acquire it, his desires are transformed into demands. Purchasing Power is the fundamental distinction between desires and demands. A customer might want something, but he might not be able to get it. Example of demands – Black Water, premium bottled water Example from sector point of view-Accessories industry, Fast Fashion industry etc. 2  Marketing vs Selling Marketing: 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. Marketing is all about lead generation. Peter Drucker, a leading management theorist, puts it this way: There will always, one can assume, be need for some selling. But the aim of marketing is to make selling superfluous. The aim of marketing is to know and understand the customer so well that the product or service fits him and sells itself. Ideally, marketing should result in a customer who is ready to buy. All that should be needed then is to make the product or service available. Selling: Selling includes the activities that get customers to make a purchase. Selling is closing sales that make you money. Sales is all about generating revenue. E.g., an insurance agent trying to sell insurance, a salesperson selling encyclopedias door to door. A few things included in selling are presenting, answering questions, making suggestions, doing proposals or estimates, addressing concerns, negotiating, and most important, asking for the sale and then completing the sales agreement, etc. The Difference: If we were to look at the difference between marketing and selling in accessible format, then it would be something similar to the representation given below: 3  Marketing mix (7 P’s) Product: A tangible thing or intangible service that is mass produced or created in enormous quantities. Intangible products are frequently service-based, such as in the tourism and hotel industries. The automobile and the disposable razor are two examples of mass-produced tangible objects. A computer operating system is a less evident yet widespread mass produced service. Methods used to improve differentiate the product or increase sales or target sales more effectively or to gain competitive advantage Extension Strategies New Edition Improvement Changed packaging Technology Specialized Versions 4 Price: The price of a product is the amount a buyer pays for it. Market share, competition, material prices, product identity, and the customer's perceived value of the product are all factors that influence it. Some of the pricing schemes are as follows: 1. Penetration Pricing: The price charged for products and services is set artificially low in order to gain market share. Once this is achieved, the price is increased. Gillette has been able to maintain its position as a market leader for years by giving out razors for free or selling them at a lower price than its competitors. 2. Price Skimming: This is opposite of Penetration pricing. Charge a high price initially because you have a substantial competitive advantage or have developed strong loyalty in a set of consumers. However, the advantage is not sustainable for a long period of time. The high price tends to attract new competitors into the market, and the price inevitably falls due to increased supply or the pool of consumers willing to pay the price is exhausted. While Sony is most known for their televisions and smartphones, we can see their price-cutting strategy at work on their game consoles. 3. Premium Pricing: Use a high price where there is uniqueness about the product or service. This approach is used where a substantial competitive advantage exists. Such high prices are charge for luxuries such as Cunard Cruises, Savoy Hotel rooms, and Concorde flights. Clothes from high-end designers. Some manufacturers purposefully set a premium price for designer clothing in the hopes of giving the image of a luxury item of higher quality. 4. Value Pricing: This approach is used where external factors such as recession or increased competition force companies to provide ‘value’ products and services to retain sales. For a lot of companies’ value pricing simply becomes a long-term strategy to keep a high barrier for entry in the category. e.g. Value meals at McDonalds, Prices offered at Walmart and Big Bazaar. 5. Target Based Pricing: In this type of pricing, the ROI is calculated in the first place, and the cost is arrived at by back calculation. This approach is usually used by companies which require a high capital investment like Automobile manufacturers, electric and gas companies etc. 6. Premium pricing, penetration pricing, economy pricing, and price skimming are the four mainpricing policies/strategies. They form the bases for the exercise. In addition, the following arefew more pricing strategies. The list is not exhaustive, but these should be enough to answer most summers questions on pricing. 7. Psychological Pricing: This approach is used when the marketer wants the consumer to respond on an emotional, rather than rational basis. For example, pricing apparels at 699 or 999; Garnier men’s white face wash at Rs 49. 5 8. Product Line Pricing: Where there is a range of product or services the pricing reflects the benefits of parts of the range. For example, car washes. Basic wash could be $2, wash and wax $4, and the whole package $6. Another example could be Gym packages. 9. Optional Product Pricing: Companies will attempt to increase the amount customer spend once they start to buy. Optional 'extras' increase the overall price of the product or service. For example, airlines will charge for optional extras such as guaranteeing a window seat or reserving a row of seats next to each other or offering a life insurance. 10. Captive Product Pricing/ Bait and Hook Strategy: Where products have complements; companies will charge a premium price where the consumer is captured. For example, a razor manufacturer will charge a low price and recoup its margin (and10 more) from the sale of the only design of blades which fit the razor. 11. Product Bundle Pricing: Here sellers combine several products in the same package. This also serves to move old stock. Videos and CDs are often sold using the bundle approach. 12. Price Discrimination: Price Discrimination is a pricing strategy where identical or largely similar goods or services are transacted at different prices by the same provider in different markets. Example – Different costs of soft drinks at different channels. 13. Cost Plus: Cost-plus pricing is popular because it is simple to compute and requires minimal data. There are various variations, but the common thread is that one calculates the cost of the goods first, then adds an additional number to indicate profit. On government contracts, cost-plus pricing is frequently employed, and it has been criticized for encouraging wasteful spending. The approach employs direct costs, indirect costs, and fixed expenses to calculate the price of a product or service, whether they are tied to the manufacturing and selling of the product or service. These costs are converted to per-unit costs for the product, and then a profit margin is calculated by adding a predetermined proportion of these costs. 14. Loss Leader: Loss leader or leader is a product sold at a low price (at cost or below cost) to stimulate other, profitable sales. It is a kind of sales promotion, in other words marketing concentrating on a pricing strategy. How one makes profit is by selling other products or services along with this and making net overall profit. E.g.: Supermarkets selling one thing at exceptionally low price and, hence inviting footfall. These people end up buying a lot many things making an overall profit for the supermarket owner 6 Place: A channel of distribution comprises a set of institutions which perform all of the activities utilized to move a product and its title from production to consumption. Place is also known as channel, distribution, or intermediary. It is the mechanism through which goods and/or services are moved from the manufacturer/ service provider to the user or consumer. There are six basic 'channel' decisions: 1. Do we use direct or indirect channels? (e.g. 'direct' to consumer, 'indirect' via a wholesaler). Single or multiple channels. 2. Cumulative length of the multiple channels. Types of intermediaries. 3. Number of intermediaries at each level (e.g. how many retailers in Southern India). 4. Which companies as intermediaries to avoid 'intra-channel conflict' (i.e. in-fighting between local distributors) Selection Consideration - how do we decide upon a distributor? Market segment - the distributor must be familiar with your target consumer and segment Changes during the product life cycle - different channels can be exploited at different points in the PLC e.g. Foldaway scooters are now available everywhere. Once they were sold via a few specific stores. Producer distributor fit - Is there a match between distributors’ policies, strategies, image, and yours? Look for 'synergy'. Qualification assessment - Establish the experience and track record of your intermediary. Training-How much training and support will your distributor require? Utility Created by Sales Channels Now, Let us understand the benefits created by designing a superior distribution network. Place Utility: Availability of a product in a location that is convenient to the customers buy only if accessible, convenience, reaches from producer’s place to place of consumption. E.g.: A couple of years ago, Mumbai-based consumer goods company Marico, which sells the Parachute brand of hair oil and the Saffola brand of edible oils, introduced a new route optimisation system which geo-tagged the routes taken by its salesmen. Since then, the company has increased its direct distribution reach by 20%, but with the same number of salespeople ! 7  Time Utility: Availability of a product when desired by a customer at a time when you want to use it, products are produced in advance, stored and released in the distribution channel when demand arises. E.g.: P&G, best known for its Ariel detergent and Gillette range of shaving products for men, has set up a dynamic delivery tool to optimise its market delivery system. This has reduced delivery time by up to 20%, cutting down on both costs and carbon footprint Form utility Providing product for grading, packaging to channel members to convert it to the form in which to make it available to consumers-washing and packaging fruits and vegetables, grading them according to their quality. Information utility Availability of answers to questions and general communication about product’s useful features and benefits. Retailers are close to consumers and have first hand information about customer feedback, problems. Information from consumers to producers for product improvements and to make consumers aware of products. HUL D2C platforms for its brands such as Lakmé, Simple, Love Beauty and Planet and multi-brand website, UShop, are directly engaging with consumers, enabling an end-to-end shopping experience and hence providing Information Utility 8 Distribution Channel Design Decisions 1. Identify major Channel Alternatives Companies can choose from a wide variety of channels for selling their products to customers. The factors behind choosing a specific channel depends on: Economic criteria: Different levels of sales and costs will result from each alternative channel. Example: The sales representatives of the company are more trained and pay more attention to marketing the company's products, which results in increased sales, but the products are more expensive and may only reach a small number of clients, which may lead to lower sales, yet there are no commissions due to Middlemen. Decide where it is most advantageous to do so in terms of costs and profits. Control Criteria: It refers to how much producers would prefer to have power over channel partners. For instance, in the case of cars the store might not have sufficient expertise in the technical aspects of vehicles, maintain a decent atmosphere, or appropriately use promotional materials like banners and posters. They might also not provide enough shelf space or arrange the shelves for the brand, among other things, as required by the manufacturer. Adaptive criteria- Flexibility of the channel for adjustments that can be made to meet the needs arising out of changes in co., channel members, customers, products. Each channel involves some duration of commitment and loss of flexibility. 2. Decide Market Coverage or Intensity of Distribution Strategy It is determining the number of middlemen to be involved to distribute the product. There are 3 levels of Intensity in market coverage: 9 Intensive Distribution - By utilising all accessible venues, intensive distribution aims to provide extensive coverage of the current market.Intensive distribution is most commonly used when the product is a very common product in the market and there are many different alternatives available. So, if the customer does not buy your brand, he will buy someone else’s. Hence the complete push is towards vast distribution of the product due to which the intensive distribution strategy is used. Intensive distribution's benefits Applying an extensive distribution plan has the advantages of generating money, increasing product awareness, and encouraging impulse purchases. More money is made as more goods are sold. There are more options for manufacturers to make money since there are more places that sell the products. As the product is available in as many places as possible, awareness of the product will increase. Customers consequently start to link the products they frequently see in stores with television advertising and print ads. Finally, when a product is unavailable on a store's shelves, shoppers typically choose another brand rather than visiting another one. The retailers also gain from this. Exclusive Distribution - It is a type of distribution wherein a distributor and a manufacturer authorises only one specific distributor to carry out distribution within a marked territory. Such an agreement makes the distributor the sole authorized entity to sell the manufacturer’s product in the defined market. Exclusive distribution strategy is important for a few reasons: An exclusive distribution agreement allows you to build a brand image in a particular geographical location or area, which can help you grow your business and increase sales over time. An exclusive distribution strategy gives you more control over how your product is sold, which can make it easier for you to maintain quality control over production and ensure that all products reach their customers safely and on time. An exclusive distribution strategy allows you to negotiate terms with other companies in order to bring more value to consumers and make sure they get what they want out of their purchases (e.g., discounts on buying multiple items at once). Example: Rolex watches. Selective Distribution - The business chooses a small number of locations to offer its items in. The total number of locations in a given area is capped by selective distribution. Distribution occurs through a few well chosen numerous outlets—not every outlet in a market. An advantage of this approach is that the producer can choose the appropriate outlets and focus effort (e.g., training) on them, supervising the way they sell the manufacturer’s products. It also enables the firm to establish a good working relationship with channel members. It is easier to manage than intensive distribution, to strengthen customer service, improve quality control, and create a better image of the product. 10 3. Selecting Specific Channel Members - It shows how many middlemen there are in the channel. Manufacturers and consumers are excluded. It displays how long or how short the channel is. The advantage of using more levels is that it’s possible to reach a larger number of widely scattered consumers. Usually, short channels are used for B2B markets and longer channels are used for Consumer products. Additionally, the number of channel partners also depends upon the level of intensity of business and cooperation required for the product. Each of the distribution strategies has its strengths and weaknesses. It is important for a business to place some emphasis on how they will distribute products and/or services in order to reach their target market as it can have an effect on a business’s brand image, sales, expenses. 4. Terms and Responsibilities of Channel members - Trade Relations Mix The rights and responsibilities of participating channel members must be determined by the producer. Each channel member needs to understand their roles and how fulfilling them will benefit him. Distributors Territorial Rights - It is deciding the number of retailers carrying a firm’s product in a particular geographical area Price Policy - Price to final consumers if all merchants should offer the product at a fixed price or can deduct it from their commission in order to make the sale, 11 allowances/discounts to intermediaries that are equitable, sufficient, & motivating enough to middlemen to do their job successfully Payment Terms - Cash discounts, defective goods, volume discount & guarantees etc. Promotional support- record keeping system, training of retailer’s salesmen technical assistance. In case of Franchisees – satisfaction of company’s standards regarding physical facilities, supplies from specified vendors etc The inventory is under the ownership of the company only until it reaches the distributors by the C&F agents. The stockists are responsible for distributing to the retailers. The stockists/distributor appoint salesmen who take the orders from the retailers, and the delivery is made. The link between the manufacturer and the stockist is maintained by the manufacturer’s employees Area Sales Manager, Territory Sales Manager, Activation Manager, and the Re-Stockist Salesman (RSSM) manages all the distribution, purchases, labour management, and supervises the delivery process. Once the distributor receives the stock, it is up to him on how he manages the business. The sales from the company to the distributor are called primary sales and the sales from the distributor to the retailer are called secondary sales. Similarly, the schemes provided by the company to the distributor are called primary schemes and the schemes provided by the distributor to the retailer are called secondary schemes. 12  Asian Paints decided to be the maverick by operating via its own delivery network, without relying on intermediary warehouses and supply chain entities, instead of following conventional operating procedures for the distribution of paint. These conventional distributors or wholesalers often consumed 20% or less of the margins. Asian Paints unlocked a tremendous development potential by cutting them out of the process and distributing its paint directly to the consumer. Asian Paints has access to a vast amount of data on the colour, quantity, size, and type of paint purchased at different periods of the year in each retail location in each Indian neighbourhood. With its greatest market share in India, Asian Paints finds itself in the catbird seat when it comes to forecasting paint demand thanks to its special secret weapon. Asian Paints uses cutting-edge artificial intelligence (AI) and machine learning (ML) based predictive techniques to forecast demand using all of these data. These tools predict the demand for a certain brand of paint on a given day, in a specific area, anyplace in India. By looking into this crystal ball, Asian Paints can ensure in advance that the necessary paint products are supplied directly to the retail store, reducing reliance on intermediary wholesale retailers. The sales channel is now nearly direct, so DMart doesn't need many warehouses. Inventory is at its stores, where customers can pick it up, and inventory turnover is optimal, which lowers storage costs. DMart has 330 locations dispersed across Indian cities. DMart has cut out the middlemen with its direct bulk purchases, and the savings are passed along to customers as discounts. 13 Promotion: 14 Extended marketing mix: In the 1980s Booms and Bitner included three additional 'Ps' to accommodate trends towards a service or knowledge-based economy. The extended marketing mix describes three more P's added to the original four. People, processes, and physical services make room for services marketing and round out a complete marketing mix method. People: People are the most important element of any service or experience. Services tend to be produced and consumed at the same moment, and aspects of the customer experience are altered to meet the 'individual needs' of the person consuming it. Most of us can think of a situation where the personal service offered by individuals has made or tainted a tour, vacation or restaurant meal. Remember, people buy from people that they like, so the attitude, skills and appearance of all staff need to be first class. Some ways in which people add value to an experience, as a part of the marketing mix, are - training, personal selling and customer service. Process: It refers to the process and methods of offering a service. For instance, the method of handling sales, processing of orders and after-sale service can be very important elements of the marketing mix. E.g.: Services provided at restaurant by staff members to visitors. Physical evidence: Physical evidence is the material part of a service. Strictly speaking there are no physical attributes to a service, so a consumer tends to rely on material cues. There are many examples of physical evidence, including some of the following: 1. Packaging (considered in the product dimension in the traditional 4Ps) 2. Internet/web pages Paperwork (such as invoices, tickets and dispatch notes). 3. Brochures 4. Furnishings 5. Signage (such as those on aircraft and vehicles) 6. Uniforms 7. Business cards 8. The building itself (such as prestigious offices or scenic headquarters) 9. Mailboxes Physical evidence abounds at a sporting event. Your tickets are printed with your team's emblems, and the players are dressed in uniform. The stadium itself might be spectacular, with a thrilling atmosphere. You arrived fast and parked nearby, and your chairs are comfy and conveniently located near facilities and a store. Now all you need is for your squad to triumph! Tourism sites and resorts (e.g. Disney World), parcel and postal services (e.g. UPS trucks), and huge banks and insurance firms all rely extensively on physical proof as a way of marketing communications (e.g. Lloyds of London) 15  Marketing Tools Companies market their products in a number of ways. These ways fall into either of these two Above the line (ATL): Above the Line (ATL) marketing refers to large-scale promotional operations. This sort of promotion is carried out on a national, regional, or larger area level, and it targets a large audience. About the company and its goods, a brand image is developed. Television, film, radio, newspapers, and magazines are all employed to make an impression about a company or a product. The nature of ATL communication is more traditional. Example: Coca-Cola's “Taste The Feeling” campaign, where they used TV commercials, billboards, and other mass media to promote their product. Below the line (BTL): Non-media communication includes Below the Line (BTL) communication, which is unorthodox in nature and done at a micro level. Direct mail, flyer and brochure distribution, sponsorships, public relations, telemarketing, and point-of-sale are all examples of measures. Example: a) Red Bull's “Stratos Jump” campaign, where they sponsored Felix Baumgartner's jump from the edge of space and used social media to promote the event and engage with their customers. b) Scotch Brite Wash Your Charge: In April 2015, Scotch-Brite, a 3M scrub sponge brand, debuted an innovative on-ground engagement in which participants might reduce their restaurant bill by just washing a few utensils. The 'Wash Your Bill' campaign was launched in Mumbai, Delhi, Pune, and Bengaluru, and was carried out in four cities across India. People could wash their dishes instead of paying their bill thanks to a collaboration between the brand and Barbeque Nation 16 Through The Line Marketing (TTL): TTL marketing is a combination of ATL and BTL marketing. It involves using a mix of mass media and targeted marketing techniques to reach out to customers. This approach allows companies to create a more integrated marketing strategy that targets specific customers while also reaching a wider audience. Example: Apple's iPhone launch events, where they use mass media to promote the event and reach a wider audience, while also inviting specific individuals and groups to attend the event and engage with the product on a more personal level. 17  Segmentation, Targeting & Positioning (STP) A) Segmentation: The basic idea of segmentation is to identify the different parameters based on which you further group your customers into segments which will have common needs or will respond similarly to a marketing action. Psychographic Segmentation: Lifestyle The customer could be a student, a college student, an office worker, or someone else. As a result, when we talk about lifestyle, we're talking about where the customer is in his life cycle. Similarly, a rural customer's lifestyle may differ from that of a city dweller. Personality In psychographic segmentation, personality is influenced by both lifestyle and social status. A person's personality will be rich only if he has a lot of money and good taste in clothes to support such a lifestyle. As a result, the phrase "brand personality" was coined. The reason for this is because various brands cater to certain personalities. A simple example would be if I ask you what comes in mind if I talk about a “Harley Davidson biker” more commonly known as Hogs. They would be people unshaven, tall, manly who like to live a rough lifestyle. That’s the personality built for Harley over time. Thus, brands target their customers even based on their personality. 18 Behavioral segmentation: Occasions: Groups individuals according to the occasions when they purchase, use or think of buying a product. Benefits Sought: Groups individuals according to the benefits they seek from the product. Usage Rate Groups individuals according to the level of usage they make of the product, be it Heavy, Medium or Light usage. User Status: Groups individuals according to whether they are non-users, potential users, first- time users, regular users, or ex-users of a product. Loyalty Status: Groups individuals according to their level of loyalty to the product. 'Hard core loyal' always purchase the product / brand in question. Whilst 'Soft core loyal' will sometimes purchase another brand, and 'Switchers' will not specifically seek out a particular brand, but rather purchase the brand available to them at time of need, or that which was on sale. Buyer Readiness Stage: Groups individuals according to their readiness to purchase the product. This segmentation model is particularly useful in formulating and monitoring the marketing communication strategies employed to move consumers towards purchase of a product or brand. Stages in Buyer-Readiness: Awareness Knowledge Liking Preference Conviction Purchase Targeting After deciding on the parameters and the distinct groups that correspond to each parameter, the next stage for a marketer is to decide on the groups to whom he would offer his product. Before beginning to advertise their goods, every marketer should settle on well-defined target groups. The list below refers to what’s needed to evaluate the potential and commercial attractiveness of each segment. Criteria Size: The market must be large enough to justify segmenting. If the market is small, it may make it smaller. Difference: Measurable differences must exist between segments. Money: Anticipated profits must exceed the costs of additional marketing plans and other changes. Accessible: Each segment must be accessible to your team and the segment must be able to receive your marketing messages Focus on different benefits: Different segments must need different benefits. 19 Positioning When a company decides on a target market, it works hard to develop a mental image of its product in the minds of potential customers. Through positioning, marketers build a first impression of the product in the eyes of consumers. Positioning aids firms in forming a mental image of their products in the minds of their target market. The premium market is served by Ray Ban and Police sunglasses, while the middle-income group is served by Vintage or Fastrack sunglasses. The lower income segment has no interest in Ray Ban sunglasses. There are three positioning factors that can help you gain a competitive edge: 1. Symbolic positioning: Enhance the self-image, belongingness, or even ego of your customers. The luxury car industry is a great example of this – they serve the same purpose as any other car but they also boost their customer’s self-esteem and image. 2. Functional positioning: Solve your customer’s problem and provide them with genuine benefits. 3. Experiential positioning: Focus on the emotional connection that your customers have with your product, service, or brand. Example: The Cola Wars During the 1980s Cola Wars between Coca-Cola and Pepsi-Cola, a nice example of the STP process (segmentation, targeting, and positioning) can be discovered. As you may know, Coca-Cola eventually went through the dramatic process of reformulating and withdrawing their main Coca-Cola product from the market in order to replace it with "new" Coke. Pepsi segmented the market on a relatively rudimentary basis, utilising an attitude and loyalty segmentation strategy, during this age, when Pepsi was highly active with their marketing initiatives, including the Pepsi Challenge taste test advertising and the "choice of a new generation" positioning. Pepsi segmented the market into three consumer segments only, namely: 1. Consumers with a positive attitude to the Coke brand and 100% loyal to Coke 2. Consumers with a positive attitude to the Pepsi brand and 100% loyal to Pepsi 3. Consumers with a positive attitude to both Coke and Pepsi, with loyalty to both brands,but switching their purchases between these two brands from time to time It is in this third market segment that the battle for market leadership in the cola market was always waged, up to the New Coke decision in 1985. This switching segment were responsive to sales promotions consisting of point-of-purchase displays, discounts, general advertising, as well as personal factors such as mood, social situation, taste preference, and so on. As a result, Coke and Pepsi's combined advertising budgets – which were over $350 million per year at the time (with Coke spending $200 million and Pepsi spending $150 million) – were effectively aimed at the 50% of cola drinkers who would switch between the Coke and Pepsi brands. Pepsi, on the other hand, changed their target market selection with the launch of the New Coke product, focusing on loyal Coke customers (approximately 25 percent of the market). This was due to existing Coca-Cola users' displeasure with the fact that the "original" CocaCola product was no longer available on the market. 20 As a result of this shift in target market selection, Pepsi positioned their product as the main reason that Coca-Cola replaced their classic Coca-Cola with New Coke. This positioning change was demonstrated in TV commercials that Pepsi ran at the time. The first showed a teenage girl who is virtually discussing a breakup scenario and is emotionally upset that CocaCola has changed. This positioning is consistent somewhat with Pepsi’s youth target market at the time. However, the second TV commercial shows an older demographic of very traditional and loyal Coke drinkers. It is tapping in nicely into the dissatisfaction among Coke drinkers. This is particularly highlighted in a line in the Pepsi TV commercial where a character says that “they changed my Coke”. The key word here is the word “my”– which demonstrates the mood of the time that Coca-Cola belonged to the consumer market, not to the company. Following this decision, and the relaunch of “classic” Coca-Cola, Coca-Cola’s management did recognize that they were caretakers of an American icon. This change in marketing strategy by Pepsi in response to the competitive action by Coke, clearly highlights the three steps of segmentation – targeting – positioning. By a change in the segmentation view, and the selection of a new target market, the company is enabled to constructa modified market positioning, which should have the effect of increasing market share. 21  Perceptual Map A perceptual map is a visual tool businesses use to see how customers view different products or brands. It’s like a map that shows where your stuff stands in people’s minds compared to others. Collecting customer data lets you determine how consumers perceive your things. This helps you decide how to improve your products, marketing, and overall business strategy to better meet customer preferences and needs. Perceptual Maps: 1. Identify Market Gaps: Perceptual maps help product managers spot gaps between what consumers want and what’s currently available. These gaps indicate unmet needs, providing insights for developing new products. 2. Launch Effective Marketing Campaigns: They’re useful for assessing the success of marketing efforts and refining business plans. 3. Enhance Brand Identity: Perceptual maps reveal customer perceptions, aiding in improving product features, customer satisfaction, and brand identity. 4. Understand Market Segments: They provide insights into market segments, competitive positioning, changing customer needs, and introducing new products over time. How to make a perceptual map: 1. Pick Attributes/dimensions across which consumer perceptions must be studied. Place the attributes in the x and y axis while defining its spectrum from least to maximum, like in coordinate geometry; we number the x and y axis from – infinity to + infinity. 2. Choose the competitors with whom comparison across attributes is desirable. 3. Conduct surveys to understand consumers’ perceptions of the attributes of products/services offered by the competitors and place them on the perceptual map. For further understanding, refer to the following link. 22  AIDA Model The AIDA model, which stands for Attention, Interest, Desire, and Action model, is an advertising effect model that identifies the stages that an individual goes during the process of purchasing a product or service. The AIDA model is commonly used in digital marketing, sales strategies, and public relations campaigns. The AIDA model says that Awareness leads to Interest, which leads to Desire, and finally, Action. Let us consider ways to use the AIDA model by looking into each part of the hierarchy. Attention: Many marketers neglect the importance of attracting attention. It is thought that the product or service has already piqued the interest of consumers, which may or may not be true. In any case, don't assume that everyone is familiar with your product. Innovative disruption — breaking existing patterns of behavior with a highly creative message – is one of the most effective ways to gain customer attention. This can be accomplished in a variety of ways: Placing ads in unusual places or situations. Guerrilla marketing is a term used to describe this type of marketing. Using provocative images in commercials to create shock. A message that is highly targeted. Personalization is another term for this. The purpose is to raise consumer awareness of a product or service. 23 Interest: The most difficult element is usually generating attention. This can be difficult to do, for example, if the product or service is not intrinsically attractive. Make sure the advertising material is well- organized and easy to read, with engaging subheadings and pictures. Concentrate on what is most important to your target market in terms of your product or service, and only deliver the most crucial message to consumers. A good example of this is Wendy’s “Where’s the beef?” ad campaign that focused on the fact that Wendy’s hamburgers contained more beef than their competitors’ hamburgers. Desire: The second and third steps of the AIDA model go together. As you are hopefully building interest in a product or service, it is important that you help customers realize why they “need’ this product or service. Think about how the content in infomercials is presented – they aim to provide interesting information on the product, along with benefits of buying it – benefits that ideally make consumers want the product more and more. Infomercials do this extremely well by showing the product being used in several creative situations. Convey to the audience the value of the product or service, and why they need it in their life. Action: The final phase in the AIDA paradigm is to get your customer to take action. A call to action should be included at the end of the commercial, which is a statement intended to elicit an immediate response from the consumer. Netflix, for example, employs persuasive text to persuade customers to sign up for a free trial. Netflix emphasizes the convenience and value of their product before encouraging customers to sign up for a free trial. Consumers should be motivated to act RIGHT NOW by good advertising that evokes a sense of urgency. Making limited time offersis a frequent approach for accomplishing this goal (such as: free shipping). Example: Netflix: When Netflix came to India, the biggest problem they faced was that Indians already had access to free and continuous content on various platforms with the majority of houses having cable connections. Netflix had to appeal to a new market and convince them to take up Netflix. This is how they used the AIDA model: To create awareness Netflix went the traditional way of outdoor advertising by placing huge posters of shows like Narcos, Friends, etc. They also had a few original shows under their banner like Sacred Games which they promoted. Interest was created by focusing on the youth population of India. Customers would see the 24 1 monthly free trial on their website which would create curiosity about other shows that were being featured on Netflix. After experiencing Netflix for a month, the desire to continue with Netflix would become stronger with the original documentaries, shows, multiple original web series, a large Hollywood and Bollywood movie collection, features like support for any device, personalized recommendations based on watching habits of viewers, high-resolution videos and much more. The action step would be achieved when Netflix offered multiple plans for subscriptions depending upon the pocket of the customer. The customer at this point is hooked to all that is being offered and converting the customer here becomes easier. Ansoff Matrix The Ansoff Product-Market Growth Matrix is a marketing tool created by Igor Ansoff and was first published in his article "Strategies for Diversification" in the Harvard Business Review (1957). The matrix allows marketers to consider ways to grow the business via existing and/or new products, in existing and/or new markets – there are four possible product/market combinations. Ansoff's matrix provides four different growth strategies: 25 The matrix illustrates, in particular, that the element of risk increases as the strategy moves away from the known quantities - the existing product and the existing market. Thus, product development (requiring, in effect, a new product) and market development (a new market) typically involve a greater risk than ‘penetration’ (existing product and existing market); and diversification (new product and new market) generally carries the greatest risk of all Market Penetration Market penetration is a growth strategy in which a company sells its existing products to established markets. Market penetration aims to accomplish the following goals: 1.Maintain or expand present product market share using a combination of competitive price methods, advertising, sales promotion, and possibly increased resources committed to personal selling. 2. Ensure growth market dominance 3.Restructure a mature market by driving out rivals - vigorous promotional campaign backed up by a pricing strategy that makes the market unattractive to competitors. 4. Increase existing consumer usage by creating loyalty programmes. The least hazardous approach for a corporation to grow is through market penetration. Market Development Market Development is a growth strategy where the business seeks to sell its existing products into new markets. There are many possible ways of approaching this strategy, including: New geographical markets; for example, exporting the product to a new country New distribution channels Different pricing policies to attract different customers or create new market segments For example, Lucozade was first marketed for sick children and then rebranded to target athletes. This is a good example of developing a new market for an existing product. Again, the market need not be new in itself; the point is that the market is new to the company. Product Development Product development is a growth strategy where a business aims to introduce new products into existing markets. This strategy may require the development of new competencies and requires the business to develop modified products that appeals to the existing markets. For example, McDonald's is always within the fast-food industry, but frequently markets new burgers. Frequently, when a firm creates new products, it can gain new customers for these products. Diversification Diversification is a growth strategy where business markets new products in new markets. This is an inherently more risk strategy because the business is moving into markets in which it has little or no 26 experience. For a business to adopt a diversification strategy, therefore, it must have a clear idea about what it expects to gain from the strategy and an honest assessment of the risks. For example, Virgin Cola, Virgin Megastores, Virgin Airlines, Virgin Telecommunications are examples of new products created by the Virgin Group of UK, to leverage the Virgin brand. This resulted in the company entering new markets where it had no presence before. Ansoff Matrix Examples: Market Penetration: (EXISTING Market, EXISTING Product) This strategy is attempting to gain market share inside existing industries, either by selling more product to existing consumers or by attracting new clients within these sectors - usually by modifying the Marketing Mix's 'Promotion' factor. Coca-Cola has been able to use market penetration on an annual basis by developing an association between Coca-Cola and Christmas, such as through the notorious Coca-Cola Christmas advert, which has helped raise sales throughout the festive period, thanks to the incredible strength of the company's brand. Product Development: (EXISTING Market, NEW Product) This entails thinking about how new products can better match customer wants and outperform competition when designing new items for existing markets. Small-scale competitors had identified a profitable opportunity to add cherry- flavored syrup to Coca-Cola and resell it, prompting the launch of Cherry Coke in 1985 – Coca-first Cola's extension beyond its original recipe – and a strategy prompted by this was the launch of Cherry Coke in 1985 – Coca-first Cola's extension beyond its original recipe – and a strategy prompted by small-scale competitors who had identified a profitable opportunity to add cherry- flavored syrup to Coca- Since then, the company has successfully launched several flavored variations such as lime, lemon, and vanilla. Market Development: (NEW Market, EXISTING Product) Finally, the market development approach comprises identifying a new market for an existing product. Coke Zero, which debuted in 2005, was a famous example of this, with a concept that was identical to Diet Coke: the fantastic 27 flavor of Coca-Cola with no sugar and low calories. Diet Coke was introduced more than 30 years ago, and despite the fact that more females drink it every day than any other soft drink brand, it was discovered that young men avoided it due to its connotation as a woman's drink. Coke Zero has effectively generated a more "masculine" appeal with its gleaming black can and polar opposite advertising campaigns. Related Diversification: (NEW Market, NEW Product) This entails the development of a new product category that complements the existing portfolio in order to enter a new but relevant market. Coca- Cola paid $4.1 billion for Glaceau in 2007, which included the health drink brand Vitamin water. With sales of carbonated soft drinks like Coca-Cola declining year over year, the company believes the beverages market will become less sweet in the future, therefore it has jumped on board the rising health drink sector. Unrelated Diversification: (NEW Market, NEW Product) Finally, unrelated diversification means entering a new industry that bears little resemblance to the firm's current markets. Coca-Cola often avoids dangerous forays into uncharted territory, preferring instead to rely on its brand strength to continue to thrive within the beverage sector. Coca-Cola, on the other hand, sells branded goods ranging from pens and glasses to refrigerators, capitalizing on its strong brand advocacy. Example: McDonalds 28  BCG Matrix It is also called Product Portfolio Matrix. Used for an overview of products, not for detailed analysis. The BCG matrix considers two parameters: Growth rate of the market: The growth rate of the market dimension is used as a proxy measure of the attractiveness of the market, with high-growth markets being seen as more attractive and offering more potential and opportunity. Relative market share: Relative market share is used as a surrogate of competitive strength. The larger the firm’s market share, relative to its largest competitor, the stronger the firm is in the marketplace. Therefore, the BCG matrix combines a measure of market attractiveness against overall competitive strengths in order to identify the quadrant of the model with the firm or business unit is situated. Market Share: Percentage of the total market serviced by your company/product/brand measured in either revenue terms or unit volume terms Relative market share (RMS): Relative market share is the firm’s or brands market shareis an index of its largest competitor. In this way, relative market share becomes a measure of competitive strength. The formula for calculating relative market share is as follows: Relative market share = firm’s market share/largest competitor’s market share If Tang has a market share of 20% and Rasna has 30%, then RMS of Tang is 20/30 = 0.66 Market leader will have RMS >1 29 Calculating the market growth rate for the BCG matrix, a simple year on year growth rate is typically utilized. This would be calculated by: Market growth rate = total market unit sales in current year/total market unit sales in previous year It is important to define the market for the BCG matrix. Dogs: Low Market Share / Low Market Growth: In these areas, your market presence is weak, so it's going to take a lot of hard work to get noticed. Also, you won't enjoy the scale economies of the larger players, so it's going to be difficult to make a profit. Stars: High Market Share / High Market Growth: Use large amounts of cash; they are the leaders in business so they should produce large amounts of cash as well. These are fantastic opportunities, and you should work hard to realize them. Question Marks (Problem Child): Low Market Share / High Market Growth: These are the opportunities no one knows what to do with. They are not generating much revenue right now because you don't have a large market share. But they are in high growth markets so the potential to make money is there. Question Marks might become Stars and eventual Cash Cows, but they could just as easily absorb effort with little return. These opportunities need serious thought as to whether increased investment is warranted. Cash Cows: High Market Share / Low Market Growth: These units typically generate cash in excess of the amount of cash needed to maintain the business. They are regarded as staid and boring, in a "mature" market, yet corporations value owning them due to their cash generating qualities. They are to be "milked" continuously with as little investment as possible since such investment would be wasted in an industry with low growth. Example: PepsiCo 30 A perfect example to demonstrate BCG matrix could be the BCG matrix of PepsiCo. The company has perfected its product mix over the years according to what’s working and what’s not. Here are the four quadrants of PepsiCo’s growth-share matrix: Cash Cows – With a market share of 58.8% in the US, Frito Lay is the biggest cash cow for PepsiCo. Stars – Even though Pepsi’s share in the market has been reduced to 8.4%, it’s still the star for PepsiCobecause of its brand equity. Other stars are Aquafina (biggest selling mineral water brand in the USA), Tropicana, Gatorade, and Mountain Dew. Question Marks – Since it’s a mystery whether the diet food and soda industry will boom in the futureand will PepsiCo’s products will find their place or not, Diet Pepsi, Pepsi Max, Quaker, etc. fall in the question marks section of the PepsiCo’s BCG matrix. Dogs – As of now, there isn’t any product line that falls in the dogs section of the PepsiCo’s BCG matrix.However, seasonal and experimental products like Pepsi Real Sugar, Mtn Merry Mash-up can be insertedin this section 31  Porter’s Five Forces Five forces model of Michael Porter is a powerful and widely used tool for systematically diagnosing the significant competitive pressures in the market and assessing their strength and importance. The model holds that the state of competition in an industry is a composite of competitive pressures operating in five areas of the overall market. Five primary forces: 1. The threat of new entrants 2. The bargaining power of buyers/customers 3. The bargaining power of suppliers 4. The threat of substitute products 5. Rivalry with competitors The competitive pressure can be determined on the basis of the factors mentioned in the image. Attractiveness of the market depends upon: Intense competition, which allows minimal profit margins Mild competition, which allows wider profit margins 32 Example: Coca Cola Threat of New Entrants/Potential Competitors: Medium Pressure Entry barriers are relatively low for the beverage industry: there is no consumer switching cost and zero capital requirement. There is an increasing number of new brands appearing in the market with similar prices than Coke products 29. Coca-Cola is seen not only as a beverage but also as a brand. It has held a very significant market share for a long time and loyal customers are not very likely to try a new brand. Threat of Substitute Products: Medium to High pressure There are many kinds of energy drink s/soda/juice products in the market. Coca Cola doesn’t really have an entirely unique flavor. In a blind taste test, people can’t tell the difference between Coca-Cola and Pepsi. The Bargaining Power of Buyers: Low pressure The individual buyer no pressure on Coca-Cola Large retailers, like Wal-Mart, have bargaining power because of the large order quantity, but the bargaining power is lessened because of the end consumer brand loyalty. The Bargaining Power of Suppliers: Low pressure The main ingredients for soft drink include carbonated water, phosphoric acid, sweetener, and caffeine. The suppliers are not concentrated or differentiated. Coca-Cola is likely a large, or the largest customer of any of these suppliers. Rivalry Among Existing Firms: High Pressure Currently, the main competitor is Pepsi which also has a wide range of beverage products under its brand. Both Coca-Cola and Pepsi are the predominant carbonated beverages and committed heavily to sponsoring outdoor events and activities. There are other soda brands in the market that become popular, like Dr. Pepper, because of their unique flavors. These other brands have failed to reach the success that Pepsi or Coke have enjoyed. Example: Starbucks Threat of New Entrants/Potential Competitors: Medium pressure Barriers to entry is not very high the investment needed at the start is low. Switching cost for users are low as new brands are able to offer a lower price to attract customers to come on board. However, with a strong brand image (brand loyalty), Starbucks still have a good amount of market share. Starbucks ability to pay its suppliers a better amount of money makes it harder for its competitors to gain access to such supplies and to start/run a coffee club. Threat of Substitute Products: Medium to High pressure There are many substitutes for Starbucks out there in the market, be it different coffee brands, or different types of drinks. There are also many providers of drinks, from bars to restaurants. On the flip side, branding has been a pivotal strategy of Starbucks over the years and is known throughout the world. The Bargaining Power of Buyers: High pressure With internet now available to most of us, buyers are more well informed about the choices that they have. Globalisation has also led to the availability of an abundance of coffee brands in the market. Starbucks customers are also able to switch brands at little to no cost. (beside the store environment and brand loyalty for some customers). 33  Attack Strategies Frontal Attack: A frontal attack strategy in marketing refers to a competitive strategy where a company directly confronts and challenges its competitors in the market, often by emphasizing its own strengths and advantages while targeting the weaknesses of its rivals. This strategy involves openly competing with competitors in areas such as price, product features, marketing tactics, or market share. Example: Tide Vs Rin advertisement. Pepsi launched Diet Pepsi shortly after Coca-Cola launched Diet Coke. Flank Attack: A flank attack strategy in marketing refers to a competitive approach where a company focuses its efforts on targeting a specific niche or segment within a market that is not well served by existing competitors. Instead of directly challenging the dominant players in the market, a company employing a flank attack strategy seeks to exploit gaps or underserved areas in the market to gain a competitive advantage. Examples: LG outflanked the other colored TV producers in India, by launching a rural-specific color TV “Sampoorna”, thereby becoming the first one to tap the rural areas. Woodland outflanked the other big players, Viz Bata, and Liberty by introducing the robust, durable, rough, and tough outdoor shoes, and hence captured the untapped market segment. Encirclement Strategies An encirclement strategy in market- ing refers to a challenger attacking the competitor on various fronts including the strengths & and weaknesses of the competitor. Since the attack is on multiple fronts it is usually tough for the defender to keep up with it. In addition, this helps the challenger with multiple opportunities to win. However, the usual con for attackers is that they are typically benchmarked against the defender and the defender could be assumed as a market leader in the minds of the public. Example: E-commerce platforms like Amazon and Flipkart usually rely on this tactic (Amazon great Indian festival & Flipkart Big Billion Days). Bypass Strategy: Bypass strategy refers to firms bypassing the competitor by serving a new market segments or geographies where the enemy’s presence is weak or absent. Examples: Pepsi started offering mineral water bottle which was a direct substitute of cola and energy drinks. Spotify started offering freemium music streaming service which forced Apple iTunes to change its distribution strategy of selling music (instead of subscription). Guerrilla Attack: Guerrilla Attack strategies are a series of small, targeted campaigns to chip away the competition. Typically these strategies use unconventional creatives and techniques in the campaigns. Example: The very infamous Coca– Cola Vs Pepsi Advertisements & Burger King Vs McDonalds advertisements are examples of Guerrilla Attack strategies. 34 The Bargaining Power of Suppliers: Low pressure Starbucks’ large market size and strong branding gives it a competitive edge in when accessing raw materials and suppliers. The coffee giant does not incur high costs when switching to another supplier, due to the abundant supply of coffee farmers and suppliers. (except for their high-altitude Arabic, a coffee). Rivalry Among Existing Firms: Medium to High pressure High level of saturation in the industry such as Coffee Bean, McCafe and Dunkin' Donuts. Each of Starbucks’ competitors are also working hard to innovate and come up with new ways to attract and retain their customers. However, Starbucks has managed to retain 40% of the market shares in the US. Example: Apple Competitive rivalry: high When Apple released the iPhone, it was the first phone of its kind, and so they owned the entire marketplace. Since then, a steady stream of new competitors has transformed it into a diverse and competitive industry. Apple only averages around 15% market share per quarter, and there’s fierce competition with companies constantly trying to one-up each other with smart new designs. Threat of new entrants: Moderate Designing and manufacturing a smartphone isn’t easy, but the knowledge and infrastructure already exist — particularly in China. Over the past few years, we’ve seen a number of new phone brands start to carve out a market for themselves — Oppo, Realme, and more. Many tech consumers show a surprising willingness to try completely new brands. And because you can easily hire talent or even entire factories that have produced competing products before, it’s not as prohibitive to new entrants as you might think. Bargaining power of suppliers: Moderate Apple and other electronics makers rely heavily on scarce materials like rare-earth minerals to manufacture their products. The scarcity gives the supplier a lot of bargaining power, but the sheer volume and buying power of Apple means it still has leverage. Bargaining power of buyers: Moderate With smartphones, telecommunications providers are major buyers that greatly impact phone sales. They’ll buy thousands of new phone models to package with data plans in special promotions. But because of Apple’s own retail infrastructure (with Apple Stores worldwide) and strong brand, Apple doesn’t need these partnerships to sell its products. Threat of substitution: moderate While there are a lot of good smartphones out there, there are two factors that keep the iPhone’s substitution down — brand and user interface. Having to relearn a new UI from scratch is the main switching cost of a smartphone. Since Apple uses its own OS and not Android, this means it has a lower threat of substitution than many other brands. Apple’s strong brand reputation is the second factor at play. For many loyal Apple customers, switching to a new smartphone is simply unthinkable. Using Apple products has already become a part of their identity. 35  6M Framework Marketing requires a systematic approach to effectively reach and engage with target audiences. One of the frameworks that has gained prominence in recent years is the 6M framework. 6M framework is based on six key factors viz. Mission, Market, Message, Media, Measurement, and Money and provides a comprehensive and structured approach to designing and executing successful marketing campaigns. This framework can help businesses navigate the ever-evolving landscape of marketing in the digital age. This framework can be used to perform Ad Analysis. Mission: At the core of any marketing strategy is a clear and well-defined mission. This is the foundation upon which all other marketing decisions are built. The mission sets the overarching goals and objectives of the marketing campaign. It answers questions like: What is the purpose of the marketing campaign? What are the long-term and short-term goals? Defining a mission helps align all marketing efforts towards a common purpose and ensures that every action is in sync with the brand’s vision. Market: Understanding the market is essential for any marketing strategy. It involves comprehensive research into the target audience, including their demographics, preferences, behavior and needs. A deep understanding of the market allows marketers to tailor their messages and offerings to resonate with their audience. Market research also helps identify competitors and market trends, which can inform strategic decisions. Aim is to decide - Whom are we addressing? Are we speaking to the right target and are we crafting messages that are specific to them? Message: Crafting the right message is crucial for effective communication. The message should be tailored to the target audience and align with the brand’s mission. It should be clear, compelling, and resonate with the emotions and aspirations of the audience. A well-crafted message can differentiate a brand from competitors and create a lasting impact on consumers. Media: Media selection is about choosing the right channels and platforms to deliver the marketing message. This includes traditional media such as televi- sion, print, and radio, as well as digital media like social media, email marketing, and websites. The choice of media depends on the target audience and the nature of the message. Effective media selection ensures that the message reaches the right people at the right time. Measurement: In marketing, the saying “what gets measured gets managed” holds true. Measurement involves tracking and analyzing the performance of marketing campaigns. Key performance indicators (KPIs) such as website traffic, conversion rates, return on investment (ROI), and customer engagement are monitored to assess the effectiveness of the campaign. This data-driven approach allows marketers to make informed decisions, optimize their strategies, and allocate resources efficiently. 36 Money: Money, or budgeting, is a fundamental aspect of marketing planning. It involves allocating financial resources to various marketing activities based on their expected return on investment. A well-balanced budget ensures that marketing efforts are adequately funded while maintaining fiscal responsibility. It’s essential to strike a balance between spending enough to achieve marketing goals and not overspending. Successful marketing campaigns re- quire a harmonious alignment of these six components within the 6M framework. For more insights, check out this link. 37  Commodification Commodification is the capitalist transformation of anything, which was earlier available without an upfront price, into tradable commodities. Commodification assigns an economic value to every product, it is more of a profit-oriented concept. Example: Evian Evian is a company that sells water like a luxury product. Evian and other mineral water companies are more examples of how some companies have creatively utilized commodification. Example: Airbnb This is one of the smartest businesses ideas where the company has been catering to the need of both thehost who wish to monetize their empty space and the visitors who look for an alternative to the hotels.Airbnb did not commodify anything. But Airbnb thrives on a commodification that was already in themarket in the form of paying guests and tenants. It’s just that Airbnb does it on a much larger scale Example: Carbon Credits Carbon dioxide is one of the most released gases from the combustion of fuels. Carbon credits are a part of the international emission trading norms under UNFCC, and the central authority sets a limit with a capon the amount of carbon that can be emitted. Now, these limits are called as permits, so now if a firm wants to emit more than the limit then they have to buy the permits, so basically, we are trying to sell pollution or the right to pollute to the corporations Market Research Process 38 According to Kotler, marketing research is the systematic design, collection, analysis, and reporting of data and findings relevant to a specific marketing situation facing the company. Primary vs secondary market research Market research can be split into two distinct sections: primary and secondary. They can also be known as field and desk, respectively (although this terminology feels out of date as plenty of primary research can be carried out from your desk). Primary (field) research Primary market research is research you carry out yourself. This could include running your own focus groups or conducting surveys. The ‘field’ part referring to going out into the field to get data. Secondary (desk) research Secondary market research is research carried out by other people that you want to use. This could include studies carried out by researchers or financial data released by companies. Market research methods The methods in this list cover both areas. Which ones you want to use will depend on your aims. Have a browse through and see what fits. 1) Focus groups A simple concept but one that can be hard to put into practice. You get a bunch of people into a room, record them, and ask them about whatever you want. For some it’ll be new product ideas, for others it might be views on a political candidate. From these discussions, the organizer will try to pull out some insights, or use it judge the wider society’s view on something. Generally, the participants will be chosen based on certain criteria, such as demographics, interests, or occupation. A focus group’s strength is in the natural conversation and discussion that can take place between participants (if they’re done right). In comparison to a questionnaire or survey that have a rigid set of questions, a focus group can gooff on tangents the organizer could not have predicted (and therefore not planned questions for). This can be good in that unexpected topics can arise, or bad if the aims of the research are to answer a very particular set of questions. The nature of discussion is important to recognize as a potential factor that skews the resulting data. Focus groups can encourage participants to talk about things they might not have otherwise,and they might be impacted by others in the group or the presence of the researcher. This can alsoaffect unstructured one-on-one interviews. 39 2) Surveys In survey research. survey questions are given to respondents (in person, over the phone, emailed,or an online form). Questions can be close-ended or open-ended. As far as close-ended questions go, there are many different types: Dichotomous (two choices, such as ‘yes’ or ‘no’) Multiple choice Checkbox Rating scale Likert scale (common version is five options between ‘strongly agree’ and ‘stronglydisagree’) Matrix (options presented on a grid) Demographic (asking after info such as gender, age, or occupation) Surveys are massively versatile because of the range of question formats. Knowing how to mix and match them to get what you need takes consideration and thought. Different questions need the right set up. It’s also about how you ask. Good questions lead to good analysis. Writing clear, concise questions that abstain from vague expressions and don’t lead respondents down a certain path can help your results reflect the true colours of respondents. 3) Interviews In interviews, the interviewer speaks directly with their respondent. This type of market research method is more personal, allowing for communication and clarification, making it good for open- ended questions. Furthermore, interviews enable the interviewer to go beyond surface-levelresponses and investigate deeper. 4) Experiments and field trials Field experiments are conducted in the participants’ environment. They rely on the independent variable and the dependent variable – the researcher controls the independent variable to test its impact on the dependent variable. The key here is to try and establish whether there iscausality going on. 5) Observation Observational market research is a qualitative research method where the researcher observes their subjects in a natural or controlled environment. This method is much like being a fly on the wall, but the fly takes notes and analyses them later. In observational market research, subjects are likely to behave naturally, which reveals their true selves. They are not under much pressure. Although if they’re aware of the observation, they can act differently. 6) Competitive analysis Competitive analysis is a highly strategic and specific form of market research, in which the researcher analyses their company’s competitors. It is critical to see how your brand stacks up to rivals. Competitive analysis starts by defining the product, service, or brand, and market segment. There are different topics to compare your firm with your competitors. It could be from a marketing perspective: content produced, SEO structure, PR coverage, and social media presence and 40 engagement. It can also be from a product perspective: types of offerings, pricing structure. SWOT analysis is key, assessing strengths, weaknesses, opportunities, and threats. 7) Analyze sales data Sales data is like a puzzle piece that can help reveal the full picture of market research insights. Essentially, it indicates the results. Paired with other market research data, sales data helps researchers gain a better picture of action and consequence. It’s also important for understanding your customers, their buying habits, and how these are changing over time. 41  4C Model The traditional Marketing mix is a 7P’s model and is business oriented. The 4C’s model of marketing on the other hand is more consumers oriented because of its focus on consumers. The 4C’s model is mainly used for Niche Marketing. However, just like the traditional marketing mix, it can also be used for mass markets. The four variables in the 4 C’s model are Consumer Cost Convenience Communication Consumer The principle of 4C’s of marketing states that your customer should be your prime focus. Unlike the traditional marketing mix where the primary focus is on Products, in the 4 C’s model, the primary focus is on the customer. Thus, the companies which follow this model believe in making products which satisfy their customers. They are generally ready to offer customizable products and because they have a general set of target customers, this principle is only applicable for smaller market segments and not for mass markets. For mass markets, the traditional marketing mix can be used. Questions that need to be asked are: Who is your customer - or prospective customer? What are their needs? Where do they live; where do they work; and what do they do for fun? Where do they get information? 42 Cost Cost is equivalent to Pricing in the traditional marketing mix. Cost is a very important consideration during consumer decision making and hence in the 4 C’s principle, the cost variable is given special attention. The 4 C’s model generally plans on the basis of Customers and not products. And hence they have to plan the cost of the product on the basis of their customer. The socio-economic classification (SEC) is a measure used to classify and target consumers based on certain parameters. The Urban SEC Grid, which uses Education levels and Occupational criteria of the Chief Wage Earner (CWE) of a household as measures to determine socio-economic classification, and segments urban India into 7 groups (A1 to E2) If you are targeting a SEC A segment, then the costing of the product needs to be premium to have proper psychological positioning. On the other hand, if your product is for the SEC B and SEC C classes, then it needs to have a lower costing. Thus, over here, costing of the product depends on the customer. Communication The concept of communication remains same for both, the traditional marketing mix as well as for the 4 C’s of marketing. Off course, the marketing communications for a company following the 4 C’s of marketing is completely different as it needs a completely different Segmentation, targeting and positioning. As said before, the 4 C’s of marketing are generally used for Niche products. The media vehicles used for marketing communications for a mass product and that for a niche product are different. A niche marketing company might use more of BTL rather than ATL whereas in a mass marketing company, ATL communications are very important. Ask yourself How will you communicate your offering to customers? What modes of communication are available to you (or your client)? Which will be most effective What will be the strategic mix of communications? Convenience Convenience is equivalent of distribution or placement of the traditional marketing mix. When you have a niche customer base, the convenience of the customer in acquiring your product plays a critical role. Take a niche product like Heavy machinery as an example or even products like televisionand air conditioners. What if the companies who sell these products do not give you delivery and installation? You will not buy the product as you won’t be ready to pick up the machine and install it yourself. You will be looking out for your own convenience. Thus convenience, like distribution, plays a critical role. The customer will not buy your product if it is not convenient to him. All in all, the traditional marketing mix model helps a company define its strategy more efficiently. However, the 4 C’s model, although not much different, really helps if you are a customer-oriented firm. 43 New technology changed the competitive landscape in many ways. There was more awareness among consumers, there were newer ways of marketing and selling and businesses shifted their focus to the consumer. This paradigm shift made marketing more aggressive and in 1993 Robert Lauterborn suggested the 4Cs which are a 4Ps substitute in the marketing mix. Consumer – It is suggested that businesses must shift focus from what a firm wants to sell to what the consumer wants to buy. This change in perspective forced firms to conduct business differently so as to benefit the end user by creating a fair marketplace where only the bestfirm wins. Cost – Cost here not only refers to the one-time cost that a consumer incurs in acquiring a product but also refers to the repeat costs associated with it like maintenance and the cost of letting go of an existing product to acquire the new one. Looking at the ‘cost to consumer’ rather than ‘price of product’ brings transparency in the market, thereby benefitting the consumer. Convenience – With the advances in internet and mobile technology, the Place of the 4Ps is becoming less and less relevant. Consumers now have many ways of learning about a product, comparing similar products and purchasing them. According to most, winning businesses craft the convenience factor extremely well in their marketing mix. Communication – This aspect of MM is different from Promotion in the sense that it is notjust about a firm advertising its product in different ways. Communication refers to any form of contact a business has with its customers – whether it is to gather feedback, provide support or simply reach out to its target audience by way of viral videos. 44  Product Mix The complete range of products present within a company is known as the product mix. The product mix includes four elements. The width of the assortment refers to how many product lines the company markets. The length signifies how many products a given line includes. Depth touches on how many versions of a given product a line offers. Consistency denotes the uniformity relative to how products are used by consumers, or by how they are produced or distributed. None of the organizations wants to take the risk of being present in the market with a single product. If a company has only a single product, then it is understood that the demand of the product is very high, or the company does not have the resources to expand the number of products it has. Product line: The product line generally refers to a type of product within an organization. As the organization can have a number of different types of products, it will have similar number of product lines. Like, in Nestle, there are milk-based products like milkmaid, Food products like Maggi, chocolate products like KitKat and other such product lines. Thus, Nestlé’s product mix will be a combination of the all these three product lines. Product line length: If a company has 4 product lines, and 10 products within the product line, then the length of the product mix is 40. Thus, the total number of products in the total number of product lines forms the length of the product mix. This equation is also known as product line length. 45 Product line width: The width of the product mix is equal to the number of product lines within a company. Taking the above example, if there are 4 product lines within the company, and 10 products within each product line, then the product line width is 4 only. Thus, product line width is a depiction of the number of product lines which a company has. Product line depth: Depth of a product mix pertains to the total number of variations for each product. Variations can include size, flavour and any other distinguishing characteristic. For example, if your company sells three sizes and two flavors of toothpaste, that particular line of toothpaste has a depth of six. Just like length, companies sometimes report the average depth of their product lines; or the depth of a specific product line. If the company also has another line of toothpaste, and that line comes in two flavors and two sizes, its depth is four. Since one line has a depth of six and the second line has a depth of four, your company's average depth of product lines is five (6+4=10, 10/2=5). Product line consistency: Product mix consistency describes how closely related product lines are to one another--in terms of use, production and distribution. The lesser the variations between the products, the more is the product line consistency. For example, Amul has various product lines which are all dairy related. So that product mix consistency is high. But Samsung as a company has many product lines which are completely independent of each other. Like Air conditioners, televisions, smart phones, home appliances, so on and so forth. Thus, the product mix consistency is low in Samsung. 46  Levels of the Product A product meets the needs of a consumer. In addition to a tangible value, it also has an abstract value. In order to shape this abstract value, Philip Kotler states that there are five product levels that can be identified and developed. These five product levels indicate the value that consumers attach to a product. The customer will only be satisfied when the specified value is identical or higher than the expected value. There are 5 levels of a product: 1. Basic Product 2. Generic Product 3. Expected Product 4. Augmented Product 5. Potential Product 1. Basic Product: The core product is the intangible product. It is the BENEFIT that we get out of a product. For Example - The core product of a restaurant is offering food. It is not the building of the restaurant or the service in itself. The core product is the food. 2. Generic Product: If we talk about restaurants, there are various types of restaurants. Some are 3 star, some 4 star, some 5 star and even 7 stars are found in this world. However, the basic level of a restaurant is the one found in your locality, offering basic food. If a hotel, wanted to turn its core product (rest and food) into a basic product, then the building of the hotel, the type of bed, the type of food, all together form the basic product. A version of the product containing only those attributes or characteristics absolutely necessary for it to function. 3. Expected Product: The set of attributes or characteristics that buyers normally expect and agree to when they purchase a product. A 5-star hotel will just not be expected to have a bed and normal food but expect a lot more. The expectation is built on the fact that the hotel is a 5-star hotel. As the brand grows in reputation, you have to take care of the expectations of the consumer. 47 4. Augmented Product: This refers to all additional factors which sets the product apart from that of the competition. And this particularly involves brand identity and image. It involves deciding the additional non-tangible benefits that a product can offer. Competition at this level is based around after sales service, help lines, warranties, free/cheap delivery and so on. In other words, it is things that the product does not do but customers may find them useful. For example, non-tangible benefits such as product warranties offer customers peace of mind and demonstrate the manufacturer has faith in the quality of its product. A 5- star restaurant, giving a fantastic four course meal, with the relaxation and the ambiance of your life, is serving as an augmented product. 5. Potential Product: This includes all the augmentations and transformations a product might undergo in the future. To ensure future customer loyalty, a business must aim to surprise and delight customers in the future by continuing to augment products. A best example of Potential product is the rivalry between Facebook and Google for virtual reality. Where Facebook has Occulus rift for gaming, Google has google glass for day to day usage. Each of them is progressing forward to dominate in the potential product Virtual reality. 48  Types of Consumer Products A consumer product is a product bought by end customers for personal consumption. But not every consumer product is the same. There are four different types of consumer products. Marketers usually classify consumer products into these 4 types: Convenience products Shopping products Specialty products Unsought products These 4 types of consumer products all have different characteristics and involve a different consumer purchasing behavior. Thus, the types of consumer products differ in the way consumers buy them and, for that reason, in the way they should be marketed. 49 Unsought products Unsought products are those consumer products that a consumer either does not know about or knows about but does not consider buying under normal conditions. Thus, these types of consumer products consumers do not think about normally, at least not until they need them. Most new innovations are unsought until consumers become aware of them. Other examples of these types of consumer products are life insurance, pre-planned funeral services etc. As a consequence of their nature, unsought products require much more advertising, selling and marketing efforts than other types of consumer products. 50  Product Life Cycle Stage 1. Market Development / Introduction This is when a new product is first brought to market, before there is a proven demand for it, and often before it has been fully proved out technically in all respects. Sales are low and creep along slowly. The need for immediate profit is not a pressure. The impact on the marketing mix and strategy is as follows: Product branding and quality level is established and intellectual property protection, such as patents and trademarks are obtained. Pricing may be low penetration to build market share rapidly or high skim pricing torecover development costs. Stage 2. Market Growth Demand begins to accelerate, and the size of the total market expands rapidly. It might also be called the “Take-off Stage.” Competitors are attracted into the market with very similar offerings. In the growth stage, the firm seeks to build brand preference and increase market share. Product quality is maintained, and additional features and support services may be added. Pricing is maintained as the firm enjoys increasing demand with little competition. Distribution channels are added as demand increases and customers accept the product. Promotion is aimed at a broader audience. 51 Stage 3. Market Maturity Demand levels off and grows, for the most part, only at the replacement and new family-formation rate. Those products that survive the earlier stages tend to spend longest in this phase. At maturity, the strong growth in sales diminishes. Competition may appear with similar products. The primary objective at this point is to defend market share while maximizing profit. Product features may be enhanced to differentiate the product from that of competitors. Pricing may be lower because of the new competition. Distribution becomes more intensive, and incentives may be offered to encourage preference over competing products. Promotion emphasizes product differentiation. Stage 4. Market Decline The product begins to lose consumer appeal and sales drift downward. At this point, there is a downturn in the market. For example, more innovative products are introduced, or consumer tastes have changed. There is intense price cutting, and many more products are withdrawn from the market. Profits can be improved by reducing marketing spending and cost cutting. As sales decline, the firm has several options: Maintain the product, possibly rejuvenating it by adding new features and finding new uses. Harvest the product–reduce costs and continue to offer it, possibly to a loyal niche segment. Discontinue the product, liquidating remaining inventory or selling it to another firm that is willing to continue the product. By imaginatively repositioning their products, companies can change how customers mentally categorize them. They can rescue products struggling in the maturity phase of their life cycles and get them back to the growth phase. And in some cases, they might be able take their new products forward straight into the growth phase. The Con of Using Product Life Cycles to Direct Strategies Though the product life cycle concept has been used successfully in past, it has made marketers assume that there is only one trajectory for successful products. By viewing the product life cycle in the same way, marketers pursue similar positioning strategies for products and services during each stage of the life cycle. In the process, they miss out on opportunities to differentiate themselves. 52 53  Promotion Mix The Promotion Mix refers to the blend of several promotional tools used by the business to create, maintain and increase the demand for goods and services. The fourth element of the 4 P’s of Marketing Mix is the promotion; that focuses on creating the awareness and persuading the customers to initiate the purchase. The several tools that facilitate the promotion objective of a firm are collectively known as the Promotion Mix. The Promotion Mix is the integration of Advertising, Personal Selling, Sales Promotion, Public Relations and Direct Marketing. The marketers need to view the following question