Basics of marketing student notes-sachin lele

Basics of Marketing- Semester I
Chapter 1: Marketing Concepts
1. Any business can be divided into sub parts or functions such as, Production, Marketing, Finance and
HR. These sub parts are called as business processes. These processes are interdependent and
their collective functioning can help the business to grow.
2. Short description of all business processes (Except Marketing)
 Production-It is concerned with creation or manufacturing of goods and services
 Finance- deals with arranging funds (money) for all business operations and aims at effective
utilization of money. Also helps the firm to calculate cost of operations.
 HR-deals with employees, their promotion policies, salary structures, managing conflicts,
improving performance of the employees
 Logistics and Supply chain Management- supply of goods and services to various markets
and geographical areas.
3. Marketing is one of the most important business functions. It includes all activities which will,
 To gauge customer’s preferences and to design products accordingly- Activities such as
Market research helps the companies to understand needs and expectations of customers
and gets vital inputs on how the company’s product or services should be, in terms of look s,
features, pricing and other factors. For Ex. A detailed study by Hindustan Unilever, the
makers of ‘Fair & Lovely cream’ revealed that, the product is being used by Indian males
also. This observation and other inputs from a market survey, helped the company to launch
“Fair & Lovely Men”
 Attract the customer to our products and services- Marketing creates awareness about the
product and services, which the company has produced. In today’s competitive world, it is
very important to reach out to our potential customers and inform them about how our
product is different than your competitor’s product. Advertising and promotions helps the
company to attract potential customers to point of sale. In the advertisement of “Fair &
Lovely Men” Virat Kohli is used as brand ambassador to indicate that, this cream is for men.
At the same time, Virat’s fan following helps the company to create a good impression on
customer’s mind over its competing product, “Fair and Handsome cream” which is
advertised by Shah Rukh Khan.
 Induce the customer to buy our products- Any customer buys a particular product on
certain conditions and factors. These factors are called as customer expectations. A product
has to satisfy all requirements of a customer. Similarly, a sales person needs to demonstrate
Prof. Sachin Lele-Mitcon Institute of Management, Pune. 9850043910

all features and benefits of the product so that, the customer may buy it. In case of online
shopping, the product should be displayed virtually. So a customer must get all information
and get to see product from all angles.
 Help the company to retain customers for long term by repeat purchase- Once a customer
buys a product and consumes it; he or she has some opinions or views about the product
based on experience. If the customer is happy with product, the concept is called as
customer satisfaction. Then he will surely buy the product again and again. It is called as
customer loyalty. Since a lot of money is being invested in attracting a customer to our
products, it is very necessary for a company to keep the customer satisfied and loyal to our
products so that, the cost of advertising and promotions can be reduced. Same way, a
satisfied customer himself becomes a brand ambassador for our product and recommends it
to his/her friends, relatives. This helps the company to increase sales on continuous basis.
 Build great brands which can attract customers on its own-Brands like ‘Raymond’s, ‘Dettol’,
‘Johnsons Baby Powder’, ‘Maruti’ are known for great products on which people have a
trust. By creating a customer loyalty, the company tries to build great brands which will
keep on attracting customers for a long period of time. After all, companies are known by
their brands.
 Get the feedback from customers on our products and develop new products or improve
the existing products- Customer is at the center of all marketing activities. After all, every
company tries to design a product which would satisfy customer needs. Market research is a
scientific marketing tool which helps the companies to know customer’s perception, views
and opinions about the product and services. This study reveals many factors on which
company can improve on the products or the way, its services are being delivered.
4. Marketing environment- Marketing environment is the collection of all factors which directly or
indirectly impacts the marketing strategies and decisions. For any company, it i s very important to
understand the impact of various factors on sales and promotion strategies. This is because, every
marketing activity has a cost and the companies do not want to spend their financial resources
which may not have any outcome or positive result. Marketing environment can be divided into
two parts.
 Macro Environment- Macro environment includes factors, common to all companies
competing in specific segment and in a specific market. For ex. The macro environment
for Tata Motors and Bajaj Auto would be same in India. Macro factors play an important
role in deciding competitive landscape, costing of the products and profitability of the
industry. Components of macro environment are as follows.
Exhibit No. 1: Macro Elements in Marketing Environment

 Demographic- It contains age, gender, density and other population parameters of a
particular market. This factor decides overall market size for a particular product. For
Ex. Tooth Paste market in India is naturally large than Sri Lankan tooth paste market
because India’s population is at least 12 times than Sri Lanka’s population. Same way,
65% of India’s population is below 35 years age. Naturally, the market for mobiles,
apparels, food joints is huge in India. The demographic differences make a particular
market attractive or non attractive. Companies have a little control over this factor.
 Political-Political system plays an important role in forming laws and policies regarding
business and industries. Political factors include “what type of government system a
country follows (Ruled by the king, democratic or military governed), “how stable is the
government?”. “Government’s overall outlook on business, taxes, priority sectors and
openness for foreign investments.
 Economical- It includes income level, purchasing power, spending patterns and income
disparities of the population. Any company would like to invest its resources in an
economy which is stable and based on strong foundations of industry and services
sector. More stable is the economy; chances of business success are more. For ex. In
case of recession or slowdown in economy, demand for new automobile vehicles
would be low. If the economy is going through long recession period, that market
becomes unattractive.
 Social- Social factors include openness of the society, social beliefs, cultural values and
typical social set up prevailing in the country. From business point of view, it is very
important study the social factors as this helps in designing products and services and
the promotion method for such products. After all a product would fail to attract the
customers if it is socially unacceptable or the society is not matured enough to accept.

 Technological-Understanding prevailing level of technology in any product segment
helps the companies to introduce products which would suit to customer’s needs. Any
new technology requires huge investment in Research and Development (R&D). So
before putting in such huge resources, a company needs to anticipate entry of new
products by its competitors which are based on same technology or platform.
 Natural Factors- Natural characteristics or peculiarities of a particular market. These
factors indirectly decide the volume for a particular market.
Micro environment-micro environment are all factors, inside the company which have direct or
indirect impact on marketing activities of the company.
 Various departments inside the company- every department in the company has direct
or indirect impact on activities of the marketing team. After all, a company can get
success only if, all departments have cordial relationship to share.
 Role of suppliers: if the supplier to company has a dominance over the market, it can
pressurize the company when it comes to pricing negotiations and other factors related
with procurements.
 Distribution network- every company has a unique distribution network. However the
effectiveness of this network has a great role to play in success of the marketing team.
After all, the products must be available in the market, when a customer is attracted to
your products.
5. Marketing Process- Marketing process is the step by step guide; any company has to follow while
introducing new products in the market.
Exhibit No.2: Marketing Process

 Understanding customer needs- analyzing what customer needs from a particular
product. Which are the very essential elements and desirable elements? Is the product
comes necessity, comfort or luxury goods?
 Analyzing the market- existing Market size, market growth rate, factors which will drive
the market in medium to long term. Government control over this sector. We also need
to understand, with which sector this market competes or complement with.
 Analyzing the competition-who are the players in this category? What kind of products
they offer? How are these products in terms of effectiveness? Is the price charged by
these products justifies the value offered to customers? What are the loopholes or
missing links in existing products on which we can bank upon?
 Research distribution- it is the study of existing sales and distribution network. Various
intermediaries such as wholesalers, retailers involved in between manufacturing and
end customer. Every commodity, category and service has a different distribution
network. For ex. Distribution system for cement industry would be totally different than
distribution for auto industry.
 Define Marketing Mix- Marketing mix refers to 4 main elements.
 Product-product features, appearance, taste etc
 Place- Which market to be targeted, potential markets for future
 Price- Pricing of the product. Would it be same as competing product or
higher/lower than it? Affordability to customer must be taken into account.
 Promotion- Ways of marketing and promotion. Media through which the
product will be promoted. Advertising strategies and other factors.
 Financial Analysis- Every business activity incurs a cost. So every marketing activity must
prove its cost by delivering required results. A marketing campaign may be very
attractive but if it is not delivering results or unaffordable to the company, there is no
point in taking the campaign ahead.
 Review and revise-After finalizing, the plan is executed. Senior management reviews the
entire process and finds out loopholes. Remedial measures and right changes in the
strategy helps the company to make marketing plan, a foolproof activity.
6. Marketing landscape-Marketing landscape is the collection of all factors such as,
 Overall market size, growth potentials, growth drivers for the segment.
 companies belonging to that industry, background and financial strength of each
 Products and services available in the market.
 Market share by volume and Value by each player, relative strengths and weaknesses of
these products.
 Marketing moves and upcoming products in this segment.
 Expected entrants in this market from the related or unrelated industry

7. Changes witnessed in marketing environment
 Customer is well informed about products- Today; the customer is getting information
from almost all possible sources. Various types of media such as Television, print, digital
is throwing plenty of information about various products to the customers. Before
taking a decision, a customer can have reviews, opinions from experts. So, the sales
team cannot fake the customers and conclude sale by fooling the customers.
 Cashing Time available for the category leader is shortening-Every category has a
leader. It enjoys premium price, huge market share and command over the category.
The time available for market leader is shortening due to excessive competition. Even if
a player remains market leader, its profitability and ability to control the market remains
low as it has to counter its competitors via various aggressive marketing strategies.
 Marketing is moving from physical to digital- Role of digital marketing has increased
multifold as the internet penetration growing rapidly. Internet marketing has helped the
companies to reach to targeted customers in a cost effective way. Especially, the
categories related with high technology or designed for executive class are being
promoted through digital media.
 Products are getting standardized in terms of features and performance- due to
technological advancement and improved production techniques, the product are
getting standardized in terms of effectiveness and features. As a result, there is hardly
any differentiation on which a company can base its marketing campaign. For ex. In case
of DTH industry, players such as Tata Sky, Dish TV and Reliance Digital are offering
products which are almost identical to each other.
8. Customer need, wants, desire and demand- Although, these concepts sounds similar to each
other, in marketing, each of these have a different meaning and impact on market strategies. Every
term determines what kind of campaign a company should run and on what factors we need to
concentrate, as a marketing person.
 Need- These are the basic necessities of the life, without which a human being cannot
survive. For ex. A person needs water to quench thirst. It is basic requirement of a human
body. This category hardly needs any marketing.
 Wants- When the need becomes specific and some extra attributes are being added to
want, it becomes a need. For ex. I need water is a basic need but ‘I need safe and clean
drinking water’ is a specific want, which is called as a need.
 Desire- Desire is a wish to buy or consume a particular goods or services, irrespective of
whether a person has capacity to pay. Desire hasn’t got any meaning till the moment; it is
not converted into a demand. For ex. A beggar may have desire to buy a car. It is a wish
despite of the fact that, he hasn’t got purchasing capacity for a car.
 Demand- When desire is backed up by willingness to pay, it becomes a demand. In
marketing, demand is the most important thing to concentrate on. Even these concepts
never remain constant for a person. For ex. For a school boy, owing a car is a desire but
when he becomes an executive, it becomes a demand for him due to purchasing capacity

9. Customer Satisfaction, Delight and Loyalty: In marketing, these three terms have significant
meaning as these terms are directly associated with marketing cost and company’s profitability.
 Customer Satisfaction- Every customer has some expectations from products or services at
the time of purchase. For ex. When we go to a restaurant, we expect some basic factors
such as good quality food, hygiene, ambiance and most importantly good service. When we
feel that, our expectations are getting fulfilled, we are satisfied with overall experience of
going into that restaurant. This concept is called as customer satisfaction. Satisfaction is a
subjective concept and factors determining satisfaction, changes from person to person. In
satisfaction concept, there are two major types. Essential factors and desirable factors.
 Customer Delight- When a customer gets satisfaction, more than what he expects, it is
called as customer delight. In simple words, it’s a positive surprise to a customer. For ex.
You are regular visitor at a coffee shop and the staff is aware that, it’s your birthday today.
If you get a coffee with ‘Happy Birthday’ message or a symbol of cake on hot sizzling coffee,
it would really make your birthday, memorable one. This feeling is called as customer
delight as the experience was a positive surprise for you.
ICICI Bank Advertisement- Example of customer delight
Customer delight has some common factors. It creates a ‘WOW’ sentiment for you. It keeps
on attracting the customer again and again as this kind of service is surprise to him/her.
However, it is important for any company to keep satisfying a delighted customer as he
expects same level of satisfaction at every purchase.
 Customer Loyalty- Customer loyalty refers to attracting right set of customers. Satisfying
their needs and requirements and keep doing it on continual basis so as the customer
would keep purchasing the product and would also recommend us to other customers.
There are two types in customer loyalty.

 Attitudinal Loyalty- A loyal customer, who recommends particular product but
may not buy the product himself, when it comes to repeat purchase. This set of
customers adds value to particular brands. For ex. A person like Honda City car. He
may not buy the same brand when it comes to purchase, may be due to
affordability factor. However, he recommends this car to his relatives and others.
 Behavioral Loyalty- When a customer is satisfied with particular goods or service
and keep on buying it on regular basis, it is called as behavioral loyalty. This is very
important for business as it has a direct linkage to company’s sales figures. For ex.
If a person regularly buys ice cream from a particular product, he is said to be
behavioral loyalist to the brand. A person from this category may or may not be
an attitudinal loyalist customer.

Chapter 2: Marketing Planning
1. SWOT Analysis- Before initiating detailed marketing plan, every organisation has to undertake
some exercises. SWOT analysis is one of these. This exercise critically examines four factors related
with an organisation and tries to judge its position on each of these parameters.
 Strengths-it includes company’s strong points over its competitors. It may be brand value
of the organisation, Company’s Unique Selling Proposition (USP), excellent products or
even a technology, which helps the company to reduce production cost by say 30%, when
compared with its competitors.
 Weakness: These are the shortcoming or weak points in your organisation. Any factor due
to which, the sales or brand image may suffer, comes in this category. Basic defects in
product range, shortcomings in services offered or any negative reputation about brands
are some of the examples.
 Opportunities: refers to opportunities arising out of changes in macro factors in marketing
environment. Amy change in demographics, social set up or even in existing landscape can
offer multiple opportunities for a business to expand its business further.
 Threats: Similar to opportunities, there can be unfavorable changes in business
environment which may have a dent on company’s business and profitability. For ex. Any
change in government’s tax policies may make entire sector unprofitable for business.
It is to be noted that,
 Strengths and Weaknesses are integral part of any organisation on which it may have control.
However, Opportunities and threats are beyond control of any company in that sector.
 Every company tries to convert opportunities into its core strength and minimize the impact of
weaknesses so as to avoid decline in sales volumes and profitability.

2. Marketing plan- It is a comprehensive and systematic outline of activities to be carried out for
making our marketing activities successful. Marketing plan is an integral part of business planning
process, which is carried out by senior management in any organisation. Marketing plan describes ,
 Potential customer class for our products- narrowed down to details as far as possible
 Which market to be targeted
 Which product should be introduced and to be marketed
 Marketing mix- the ways to reach out to the customer
 Authorities responsible for planning and execution of the plan
Process or steps involved in preparing a marketing plan-
 Analyzing the macro and micro environment- Before designing a marketing plan, an
organisation has to critically evaluate micro and macro elements related with business
environment. In macro, we need to undertake a PEST analysis and identify critical elements
and its possible impact on company’s business, profitability and overall survival. Analysis of
micro factors helps the company to evaluate its strengths and weaknesses, in comparison
with its competitors. This study forms a base for company’s long term objectives to be
achieved at the end of marketing plan.
 Defining Mission, Vision and long term objectives- These three elements are the guidelines
for the functioning of any company. Mission statement describes the whole purpose behind
company’s existence and the role it wants to play in the long run. Vision tells us the path; an
organisation should follow for reaching to the destined target. Objectives are the short and
medium term goals set, which would ultimately follow the path of mission statement. A firm
has to decide, where it would like to be say, after 10, 15 or 20 years. Marketing plan should
be designed in a manner which would fulfill these long term objectives and would follow the
path laid down by mission and vision statements.
 Define your market and targeted customer class- while designing every product, it is
necessary to define, which market to be targeted and targeted customer class. For ex. A
company like Samsung caters to entire Indian consumer durables market with an aim of
attracting higher middle class and rich class customers. Here, both factors (target market &
target customers) are well defined. If a company is entering into a new category or if it is a
startup company, it is better to select a particular pocket or region to introduce the
products and then to expand in other regions, based on learning from initial entry. A
company can identify potential market where it can explore growth opportunities. This
selection is based on company’s existing presence in various markets & competitor analysis.
 Define brand, positioning and creative strategy- Brand is an identity of product which is
perceived by a customer. A well established brand attracts and retains customers on long
term basis. Branding helps companies to steer ahead of the competing products. Brand

positioning refers to a strong foundation of ideas on which a brand is based. Positioning is
that mental space where the product's benefits and the customer's most important needs
meet each other. For ex. Samsung Plasma TV range is positioned as a product for high end,
tech savvy customer, who is keenly interested in crystal clear picture quality. On this
platform, Plasma is branded as premium category product and priced above Rs. 80,000
based on its features and picture quality.
 Set strategies Marketing mix- Marketing mix refers to 4Ps. Coming to this stage, basic idea
about the product, branding concepts and brand positioning is being finalized. Now, its time
to decide the place (point of sales and distribution strategy). A well defined distribution
channel is basic requirement for the success of a brand. In case of consumer durables
category, the normal chain would be like producer-stockiest-retailer. Due to increased usage
of internet shopping, it has become unavoidable for companies to sale through online
shopping portals such as ebay.com or allcheckdeals.com. Pricing decision is based on
company’s dominance over the segment, degree of customer sensitivity to pricing issues &
most importantly, customer’s perceived value. Based on all of the factors mentioned, the
promotion strategy is chalked out. Advertising medium, promotion techniques, usage of
digital media and related factors are to be well defined in the plan.
 Define marketing goals- As a marketing team; we need to set specific and measurable goals
for the marketing plan. For ex. A goal can be to achieve 20% market share in Maharashtra
region by 2015 or to cross sales figure of Rs. 5,000 crores by 2015. To achieve desired results
the entire plan is being divided into small targets (generally on yearly basis). Similar to these
goals, there can be qualitative objectives also. For ex. being the largest brand in terms of
brand valuation or being the most trusted brand on customer satisfaction index. There
might be debates, discussions and consultations on deciding these goals since it requires
commitment and active participation from entire marketing team.

 Prepare financial budget for marketing activities- every business activity incurs a cost and
the benefits from such activities has to substantiate the investment made. Naturally, the
business plan should include details about amount of financial & human resources required.
Today marketing and promotion cost has increased substantially as a marketer needs to get
in touch with the potential customers via different mediums. If the incurred cost is not
producing results in terms of volume and revenue, it may affect profitability or even pose a
question mark on survival of the business. Generally in business planning, annual budget is
set for each of the marketing activity. It is the skill of marketing team to utilize this budget in
an effective manner.
 Blueprint of your action plan- In this process, stage wise details of the marketing plan are
being chalked out and responsibility is being assigned for each of the task. This document
becomes a guiding book for people executing plan. Effectiveness or performance of every
marketing team member can be judged by comparing actual results with desired results as
per marketing plan. Generally, senior and middle management drafts this blueprint and
ground staff executes it. However, marketing head is solely responsible for attaining long
term goals set in the plan.
 Review and corrective action plan- Once we start implementing the plan, we may come
across some bottlenecks or even mistakes in basic marketing philosophy. Generally
companies do discover flaws in branding or positioning strategies in pilot market research.
This calls for a review and corrective action to make the plan a full proof strategy. Yearly
review of sales figures also indicates problem areas, in which corrective action is required.
This helps the organisation to survive, grow in terms of revenue, profitability.
3. Analyzing changes in Macro environment and its possible impact on marketing strategies
Macro Factors-Macro factors such as political system, social structure and economical conditions
have a bigger role to play, when it comes to evolution of a market and changes which keeps on
moving the market into various directions. It is utmost important to analyze current scenario in
each of these elements and the expected changes in near future. Ultimately business and its
profitability is a function of these factors.
 Political- changes in political system, major shift in government’s outlook on a particular
sector, tax policies and rules related with FDI are to be properly monitored. All expansion
or acquisition strategies should be based on expected changes (positive or negative) in
political factors as these may make our calculations haywire.
 Economical- It would be difficult to predict economic growth of any economy on a longer
run but we can definitely judge the growth momentum. Changes in income distribution,
spending patterns, saving rates, RBI’s stance on economic issues are some of the important
factors for companies dealing with products which accounts for larger proportion of a

customer’s wallet. For ex. Housing loan or car loan products are usually for 20 years and 7
years duration respectively. In this case, marketing plan should cover expected changes in
interest rates as small movements in interest rates have significant impact on demand for
longer duration loans.
 Social- Marketing deals with customer behavior, which is largely influenced by the social
culture. In marketing, one need to understand the existing cultural trends, emerging
patterns and changes in value system which would have an impact on long term. In simple
words, we need to predict culture after say, 10 years duration as the customers in that era
would choose a product matching to prevai ling culture.
 Technological- Marketing is a role of meeting customer needs and demands. Naturally, for
satisfying customer needs, we must be aware about level of technological awareness a
customer has. If a company is introducing products based on completely new technology, it
has to go for informative marketing. Educate the customers about new technology, its
usage and prove effectiveness so as the customer should accept and buy the product.

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