F a c u l t y o f M a n a g e m e n t S t u d i e s , D e l h i
Marketing Guide for
Batch of 2011 & 2012
Sukesh Chandra Gain
1. Marketing vs Selling:
Marketing: Marketing is an integrated communications-based process through which
individuals and communities are informed or persuaded that existing and newly-identified
needs and wants may be satisfied by the products and services of others. Marketing creates the
atmosphere to make it easy for sales to happen. Eg. ITC launched Fiama.
Here are some marketing activities:
Handling incoming inquiries
Asking your current customers for referrals for more business
Networking and building relationships
Advertising and public relations. Direct mail and e-newsletters
Special promotional events
Merchandising and merchandise selection
Holding sales, offering preferred customer bonuses
Getting articles published. Blogging
Doing cold calls to set appointments
Market research, customer surveys
Branding, creating your sales message
Design and creation of collateral materials
Building and maintaining your web site, blog, Facebook page, Twitter
Market planning and strategizing
Selling: Selling includes the activities that get customers to make a purchase. Selling is closing
sales that make you money. Eg 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. Then completing the sales agreement, etc
The Difference: The selling concept takes an inside-out perspective. It starts with the factory,
focuses on the company’s existing products, and calls for heavy selling and promoting to
produce profitable sales. The marketing concept takes an outside-in perspective. It starts with a
well-defined market, focuses on customer needs, coordinates all the activities that will affect
customers, and produces profits through creating customer satisfaction.
Thus, you could say that:
– Marketing is money OUT the door.
– Selling is money IN the door.
A few major differences:
Customer focused Product focused
Product is designed as per customer needs Revenue is generated from the product sold.
Profit through customer satisfaction Profit through sales maximization
Emphasis on product planning and developing
as per customer needs
Emphasis on selling the already produced
Segmentation is the process of grouping people or organizations within a market according to
similar needs, characteristics, or behaviour. “ Dividing the market into groups”
• an entire market rarely has the same tastes and preferences
Targeting is the actual selection of the segment you want to serve the target market is the
group of people or organizations whose needs a product is specifically designed to satisfy
Positioning is the use of marketing to enable people to form a mental image of your product in
their minds (relative to other products)
(Contributed by Sukesh Gain - 2012)
3. 4 P’s and 7 P’s
A tangible object or an intangible service that is mass produced or manufactured on a large
scale with a specific volume of units. Intangible products are often service based like the
tourism industry & the hotel industry or codes-based products like cellphone load and credits.
Typical examples of a mass produced tangible object are the motor car and the disposable razor.
A less obvious but ubiquitous mass produced service is a computer operating system.
Methods used to improve differentiate the product or increase sales or target sales more
effectively or to gain competitive advantage
- Extension Strategies
- New Editions
- Changed packaging
- Specialized Versions
3 Levels of Product
For many a product is simply the tangible, phsysical entity that they may be buying or
selling. You buy a new car and that's the product - simple! Or maybe not. When you buy a
car, is the product more complex than you first thought? In order to actively explore the
nature of a product further, lets consider it as three different products - the CORE product,
the ACTUAL product, and finally the AUGMENTED product.
These are known as the 'Three Levels of a Product.' So what is the difference between the
three products, or more precisely 'levels?'
Three Levels of a Product
The CORE product is NOT the tangible, physical product. You can't touch it. That's because
the core product is the BENEFIT of the product that makes it valuable to you. So with the car
example, the benefit is convenience i.e. the ease at which you can go where you like, when
you want to. Another core benefit is speed since you can travel around relatively quickly.
The ACTUAL product is the tangible, physical product. You can get some use out of it. Again
with the car example, it is the vehicle that you test drive, buy and then collect.
The AUGMENTED product is the non-physical part of the product. It usually consists of lots
of added value, for which you may or may not pay a premium. So when you buy a car, part
of the augmented product would be the warranty, the customer service support offered by
the car's manufacture, and any after-sales service.
Product Life Cycle and Customer Life Cycle are also important tools for studying the product.
The price is the amount a customer pays for the product. It is determined by a number of
factors including market share, competition, material costs, product identity and the customer's
perceived value of the product. The business may increase or decrease the price of product if
other stores have the same product.
There are many ways to price a product. Let's have a look at some of them and try to
understand the best policy/strategy in various situations.
Use a high price where there is a uniqueness about the product or service. This approach is used
where a a substantial competitive advantage exists. Such high prices are charge for luxuries such
as Cunard Cruises, Savoy Hotel rooms, and Concorde flights.
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. This approach was used by France Telecom and Sky
This is a no frills low price. The cost of marketing and manufacture are kept at a minimum.
Supermarkets often have economy brands for soups, spaghetti, etc.
Charge a high price because you have a substantial competitive advantage. However, the
advantage is not sustainable. The high price tends to attract new competitors into the market,
and the price inevitably falls due to increased supply. Manufacturers of digital watches used a
skimming approach in the 1970s. Once other manufacturers were tempted into the market and
the watches were produced at a lower unit cost, other marketing strategies and pricing
approaches are implemented.
Premium pricing, penetration pricing, economy pricing, and price skimming are the four main
pricing policies/strategies. They form the bases for the exercise. However there are other
important approaches to pricing.
This approach is used when the marketer wants the consumer to respond on an emotional,
rather than rational basis. For example 'price point perspective' 99 cents not one dollar.
Product Line Pricing.
Where there is a range of product or services the pricing reflect the benefits of parts of the
range. For example car washes. Basic wash could be $2, wash and wax $4, and the whole
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.
Captive Product Pricing
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 (and more) from the sale of the only design of blades which fit the razor.
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.
Pricing to promote a product is a very common application. There are many examples of
promotional pricing including approaches such as BOGOF (Buy One Get One Free).
Geographical pricing is evident where there are variations in price in different parts of the
world. For example rarity value, or where shipping costs increase price.
This approach is used where external factors such as recession or increased competition force
companies to provide 'value' products and services to retain sales e.g. value meals at
Cost Plus – Cost-plus pricing is a pricing method used by companies. It is used primarily because
it is easy to calculate and requires little information. There are several varieties, but the
common thread in all of them is that one first calculates the cost of the product, then includes
an additional amount to represent profit. Cost-plus pricing is often used on government
contracts, and has been criticized as promoting wasteful expenditures.
The method determines the price of a product or service that uses direct costs, indirect costs,
and fixed costs whether related to the production and sale of the product or service or not.
These costs are converted to per unit costs for the product and then a predetermined
percentage of these costs is added to provide a profit margin.
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. The price can even be so low that the product is sold at a
loss. A loss leader is often a popular article. Sometimes leader is now used as a synonym for loss
leader and means any popular article, in other words one sold at a normal price
A channel of distribution comprises a set of institutions which perform all of the activities
utilised 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
There are six basic 'channel' decisions:
Do we use direct or indirect channels? (e.g. 'direct' to a consumer, 'indirect' via a
Single or multiple channels.
Cumulative length of the multiple channels.
Types of intermediary.
Number of intermediaries at each level (e.g. how many retailers in Southern Spain).
Which companies as intermediaries to avoid 'intrachannel conflict' (i.e. infighting
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
Producer - distributor fit - Is there a match between their polices, 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?
Another one of the 4P's is 'promotion'. This includes all of the tools available to the marketer for
'marketing communication'. As with Neil H.Borden's marketing mix, marketing communications
has its own 'promotions mix.' Think of it like a cake mix, the basic ingredients are always the
same. However if you vary the amounts of one of the ingredients, the final outcome is different.
It is the same with promotions. You can 'integrate' different aspects of the promotions mix to
deliver a unique campaign. The elements of the promotions mix are:
* Personal Selling.
* Sales Promotion.
* Public Relations.
* Direct Mail.
* Trade Fairs and Exhibitions.
The elements of the promotions mix are integrated to form a coherent campaign. As with all
forms of communication. The message from the marketer follows the 'communications process'
as illustrated above. For example, a radio advert is made for a car manufacturer. The car
manufacturer (sender) pays for a specific advert with contains a message specific to a target
audience (encoding). It is transmitted during a set of commercials from a radio station (Message
The message is decoded by a car radio (decoding) and the target consumer interprets the
message (receiver). He or she might visit a dealership or seek further information from a web
site (Response). The consumer might buy a car or express an interest or dislike (feedback). This
information will inform future elements of an integrated promotional campaign. Perhaps a
direct mail campaign would push the consumer to the point of purchase. Noise represen
thousands of marketing communications that a consumer is exposed to everyday, all competing
The Promotions Mix.
Let us look at the individual components of the promotions mix in more detail. Remember all of
the elements are 'integrated' to form a specific communications campaign.
1. Personal Selling.
Personal Selling is an effective way to manage personal customer relationships. The sales person
acts on behalf of the organization. They tend to be well trained in the approaches and
techniques of personal selling. However sales people are very expensive and should only be
used where there is a genuine return on investment. For example salesmen are often used to
sell cars or home improvements where the margin is high.
2. Sales Promotion.
Sales promotion tend to be thought of as being all promotions apart from advertising, personal
selling, and public relations. For example the BOGOF promotion, or Buy One Get One Free.
Others include couponing, money-off promotions, competitions, free accessories (such as free
blades with a new razor), introductory offers (such as buy digital TV and get free installation),
and so on. Each sales promotion should be carefully costed and compared with the next best
3. Public Relations (PR).
Public Relations is defined as 'the deliberate, planned and sustained effort to establish and
maintain mutual understanding between an organization and its publics' (Institute of Public
Relations). It is relatively cheap, but certainly not cheap. Successful strategies tend to be long-
term and plan for all eventualities. All airlines exploit PR; just watch what happens when there is
a disaster. The pre-planned PR machine clicks in very quickly with a very effective rehearsed
4. Direct Mail.
Direct mail is very highly focussed upon targeting consumers based upon a database. As with all
marketing, the potential consumer is 'defined' based upon a series of attributes and similarities.
Creative agencies work with marketers to design a highly focussed communication in the form
of a mailing. The mail is sent out to the potential consumers and responses are carefully
monitored. For example, if you are marketing medical text books, you would use a database of
doctors' surgeries as the basis of your mail shot.
5. Trade Fairs and Exhibitions.
Such approaches are very good for making new contacts and renewing old ones. Companies will
seldom sell much at such events. The purpose is to increase awareness and to encourage trial.
They offer the opportunity for companies to meet with both the trade and the consumer. Expo
has recently finish in Germany with the next one planned for Japan in 2005, despite a recent
decline in interest in such events.
Advertising is a 'paid for' communication. It is used to develop attitudes, create awareness, and
transmit information in order to gain a response from the target market. There are many
advertising 'media' such as newspapers (local, national, free, trade), magazines and journals,
television (local, national, terrestrial, satellite) cinema, outdoor advertising (such as posters, bus
Sponsorship is where an organization pays to be associated with a particular event, cause or
image. Companies will sponsor sports events such as the Olympics or Formula One. The
attributes of the event are then associated with the sponsoring organization.
The elements of the promotional mix are then integrated to form a unique, but coherent
Extended marketing mix
In the 1980s Booms and Bitner included three additional 'Ps' to accommodate trends towards a
service or knowledge based economy:
What is significant about services are the relative dominance of intangible attributes in the
make-up of the “service product”. Services are a special kind of product. They may require
special understanding and special marketing efforts. The need for the extension is due to the
high degree of direct contact between the providers and the customers, the highly visible
nature of the service process, and the simultaneity of the production and consumption. While it
is possible to discuss people, physical evidence and process within the original-Ps framework
(for example people can be considered part of the product offering) the extension allows a more
thorough analysis of the marketing ingredients necessary for successful services marketing.
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 is another element of the extended marketing mix, or 7P's.There are a number of
perceptions of the concept of process within the business and marketing literature. Some see
processes as a means to achieve an outcome, for example - to achieve a 30% market share a
company implements a marketing planning process.
Another view is that marketing has a number of processes that integrate together to create an
overall marketing process, for example - telemarketing and Internet marketing can be
integrated. A further view is that marketing processes are used to control the marketing mix, i.e.
processes that measure the achievement marketing objectives. All views are understandable,
but not particularly customer focused.
For the purposes of the marketing mix, process is an element of service that sees the customer
experiencing an organization’s offering. It's best viewed as something that your customer
participates in at different points in time. Here are some examples to help your build a picture
of marketing process, from the customer's point of view.
Example - Going on a cruise - from the moment that you arrive at the dockside, you are greeted;
your baggage is taken to your room. You have two weeks of services from restaurants and
evening entertainment, to casinos and shopping. Finally, you arrive at your destination, and
your baggage is delivered to you. This is a highly focused marketing process.
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:
Paperwork (such as invoices, tickets and despatch notes).
Signage (such as those on aircraft and vehicles).
The building itself (such as prestigious offices or scenic headquarters).
Mailboxes and many others .
A sporting event is packed full of physical evidence. Your tickets have your team's logos printed
on them, and players are wearing uniforms. The stadium itself could be impressive and have an
electrifying atmosphere. You travelled there and parked quickly nearby, and your seats are
comfortable and close to restrooms and store. All you need now is for your team to win!
Some organizations depend heavily upon physical evidence as a means of marketing
communications, for example tourism attractions and resorts (e.g. Disney World), parcel and
mail services (e.g. UPS trucks), and large banks and insurance companies (e.g. Lloyds of
(Contributed by 2011)
4 PS OF MARKETING/ 7PS: EXTENDED MARKETING MIX
The term "product" refers to tangible, physical products as well as services. Here are some
examples of the product decisions to be made:
>Product Variety >Quality > Design > Features > Brand name > Functionality > Styling >
Returns > Safety > Packaging > Repairs and Support > Warranty > Accessories and services >
Some examples of pricing decisions to be made include:
> Pricing strategy (skim, penetration, etc.) > Suggested retail price/List price > Volume
discounts and wholesale pricing > Cash and early payment discounts > Allowances > Credit
Terms and Payment period > Seasonal pricing > Bundling > Price flexibility > Price
Distribution (Place) Decisions
Distribution is about getting the products to the customer. Some examples of distribution
> Distribution channels > Market coverage (inclusive, selective, or exclusive distribution) >
Assortments > Locations > Specific channel members > Inventory management >
Warehousing > Distribution centers > Order processing > Transportation > Reverse logistics
In the context of the marketing mix, promotion represents the various aspects of marketing
communication, that is, the communication of information about the product with the goal of
generating a positive customer response. Marketing communication decisions include:
> Promotional strategy (push, pull, etc.) > Advertising > Personal selling & sales force > Sales
promotions > Public relations & publicity > Marketing communications budget > Direct
The 7-Ps or Extended Marketing Mix of Booms and Bitner is a Marketing Strategy tool that
expands the number of controllable variables from the four in the original Marketing Mix Model
The Traditional Marketing Mix model was primarily directed and useful for tangible products.
The 7-Ps model is more useful for services industries and arguably also for knowledge-intensive
environments. The additional 3 Ps are:
An essential ingredient to any service provision is the use of appropriate staff and people.
Recruiting the right staff and training them appropriately in the delivery of their service is
essential if the organisation wants to obtain a form of competitive advantage. Consumers make
judgments and deliver perceptions of the service based on the employees they interact with.
Staff should have the appropriate interpersonal skills, aptititude, and service knowledge to
provide the service that consumers are paying for.
Refers to the systems used to assist the organisation in delivering the service. E.g at McDs u get
a burger in 2 min. What was the process that allowed you to obtain an efficient service delivery?
Banks that send out Credit Cards automatically when their customers old one has expired again
require an efficient process to identify expiry dates and renewal. An efficient service that
replaces old credit cards will foster consumer loyalty and confidence in the company.
Where is the service being delivered? Physical Evidence is the element of the service mix which
allows the consumer again to make judgments on the organisation. If you walk into a restaurant
your expectations are of a clean, friendly environment. On an aircraft if you travel first class you
expect enough room to be able to lay down!
Physical evidence is an essential ingredient of the service mix, consumers will make perceptions
based on their sight of the service provision which will have an impact on the organisations
perceptual plan of the service.
We must remember that the 4p/7p are from the sellers point of view. From the buyers point of
view we have:
Solution: How can I solve my problem?
Information: Where can I get information from?
Value: What is my total sacrifice to get the solution?
Access: Where can I find it?
In fact recently the 4 Cs of marketing have come up which along with the 4ps address a broad
range of marketing issues. You can read about them here:
(Contributed by Aastha Chawla - 2012)
4. Types of Entry Strategies, Specific Attack Strategies
Follow this link: Everything is mentioned.
5. Penetration Pricing and Price Skimming
Penetration pricing is the pricing technique of setting a relatively low initial entry price, often
lower than the eventual market price, to attract new customers. The strategy works on the
expectation that customers will switch to the new brand because of the lower price.
Penetration pricing is most commonly associated with a marketing objective of increasing
market share or sales volume, rather than to make profit in the short term
Suitable for elastic demand .
The advantages of penetration pricing
This can take the competition by surprise, not giving them time to react
It can create goodwill among the early adopters
Discourages the entry of competitors. Low prices act as a barrier to entry
Eg. Reliance mobile
Price skimming is a pricing strategy in which a marketer sets a relatively high price for a product
or service at first, then lowers the price over time
Price skimming is sometimes referred to as riding down the demand curve. The objective of a
price skimming strategy is to capture the consumer surplus. If this is done successfully, then
theoretically no customer will pay less for the product than the maximum they are willing to
pay. In practice, it is almost impossible for a firm to capture all of this surplus.
Examples: Playstation, DVDs, etc.
(Contributed by Nihar Sai Reddy – 2012)
6. Promotion Mix
Marketers have at their disposal four major methods of promotion. Taken together these
comprise the promotion mix. In this section a basic definition of each method is offered while in
the next section a comparison of each method based on the characteristics of promotion is
Advertising – Involves non-personal, mostly paid promotions often using mass media
outlets to deliver the marketer’s message. While historically advertising has involved one-
way communication with little feedback opportunity for the customer experiencing the
advertisement, the advent of computer technology and, in particular, the Internet has
increased the options that allow customers to provide quick feedback.
Sales Promotion – Involves the use of special short-term techniques, often in the form of
incentives, to encourage customers to respond or undertake some activity. For instance,
the use of retail coupons with expiration dates requires customers to act while the
incentive is still valid.
Public Relations – Also referred to as publicity, this type of promotion uses third-party
sources, and particularly the news media, to offer a favorable mention of the marketer’s
company or product without direct payment to the publisher of the information.
Personal Selling – As the name implies, this form of promotion involves personal contact
between company representatives and those who have a role in purchase decisions (e.g.,
make the decision, such as consumers, or have an influence on a decision, such as
members of a company buying center). Often this occurs face-to-face or via telephone,
though newer technologies allow this to occur online via video conferencing or text chat.
7. Concept of Customer Derived Value
Marketing is about meeting the needs of your targeted market, but also providing them with a
value. This value is determined when subtracting the benefits a customer gets from the product
with the customer costs he does to get it.
8. Al Ries and Jack Z Trout on Positioning
A product's position is how potential buyers see the product. Positioning is expressed
relative to the position of competitors. The term was coined in 1969 by Al Ries and Jack Trout in
the paper "Positioning" is a game people play in today’s me-too market place" in the publication
Industrial Marketing. It was then expanded into their ground-breaking first book, "Positioning:
The Battle for Your Mind".
Positioning is something (perception) that happens in the minds of the target market. It is the
aggregate perception the market has of a particular company, product or service in relation to
their perceptions of the competitors in the same category. It will happen whether or not a
company's management is proactive, reactive or passive about the on-going process of evolving
But a company can positively influence the perceptions through enlightened strategic actions.
In marketing, positioning has come to mean the process by which marketers try to create an
image or identity in the minds of their target market for its product, brand, or organization. It is
the 'relative competitive comparison' their product occupies in a given market as perceived by
the target market.
Re-positioning involves changing the identity of a product, relative to the identity of competing
products, in the collective minds of the target market.
De-positioning involves attempting to change the identity of competing products, relative to the
identity of your own product, in the collective minds of the target market.
The Process of Positioning
Generally, the product positioning process involves:
Defining the market in which the product or brand will compete (who the relevant
Identifying the attributes (also called dimensions) that define the product 'space'
Collecting information from a sample of customers about their perceptions of each
product on the relevant attributes
Determine each product's share of mind
Determine each product's current location in the product space
Determine the target market's preferred combination of attributes (referred to as an
Examine the fit between:
o The position of your product
o The position of the ideal vector
The process is similar for positioning your company's services.
Services, however, don't have the physical attributes of products - that is, we can't feel them or
touch them or show nice product pictures.
So you need to ask first your customers and then yourself, what value do clients get from my
services? How are they better off from doing business with me? Also ask: is there a
characteristic that makes my services different?
Write out the value customers derive and the attributes your services offer to create the first
draft of your positioning.
9. BCG Matrix
MARKET SHARE & MARKET GROWTH
Market share is the percentage of the total market that is being serviced by your company,
measured either in revenue terms or unit volume terms. The higher your market share, the
higher proportion of the market you control.
The Boston Matrix assumes that if you enjoy a high market share you will normally be making
money (this assumption is based on the idea that you will have been in the market long enough
to have learned how to be profitable, and will be enjoying scale economies that give you an
Market growth is used as a measure of a market's attractiveness. Markets experiencing high
growth are ones where the total market is expanding, which should provide the opportunity for
businesses to make more money, even if their market share remains stable.
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.
High Market Share / Low Market Growth
Here, you're well-established, so it's easy to get attention and exploit new opportunities.
Profits and cash generation should be high. Because of low growth investments needed shd be
low. Cash cows are stars of yesterday n the foundation of the company.
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
Question Marks (Problem Child):
Low Market Share / High Market Growth
These are the opportunities no one knows what to do with. They aren't 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.
BCG MATRIX FOR ITC
FMCGs and others
(Contributed by 2011)
10. Ansoff Matrix:
The Ansoff Product-Market Growth Matrix is a marketing tool created by Igor Ansoff
and 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
Existing Products New Products
Market Penetration Product Development
Market Development Diversification
Ansoff's matrix provides four different growth strategies:
Market Penetration - the firm seeks to achieve growth with existing products in their
current market segments, aiming to increase its market share.
Market Development - the firm seeks growth by targeting its existing products to new
Product Development - the firms develops new products targeted to its existing market
Diversification - the firm grows by diversifying into new businesses by developing new
products for new markets.
The matrix illustrates, in particular, that the element of risk increases the further the strategy
moves away from known quantities - the existing product and the existing market. Thus,
product development (requiring, in effect, a new product) and market extension (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. In his
original work, which did not use the matrix form, Igor Ansoff stressed that the diversification
strategy stood apart from the other three.
While the latter are usually followed with the same technical, financial, and merchandising
resources which are used for the original product line, diversification usually requires new skills,
new techniques, and new facilities. As a result it almost invariably leads to physical and
organizational changes in the structure of the business which represent a distinct break with
past business experience. For this reason, most marketing activity revolves around penetration.
The market penetration strategy is the least risky since it leverages many of the firm's existing
resources and capabilities. In a growing market, simply maintaining market share will result in
growth, and there may exist opportunities to increase market share if competitors reach
capacity limits. However, market penetration has limits, and once the market approaches
saturation another strategy must be pursued if the firm is to continue to grow.
Market penetration is the name given to a growth strategy where the business focuses on
selling existing products into existing markets.
Market penetration seeks to achieve four main objectives:
Maintain or increase the market share of current products – this can be achieved by a
combination of competitive pricing strategies, advertising, sales promotion and perhaps
more resources dedicated to personal selling
Secure dominance of growth markets
Restructure a mature market by driving out competitors; this would require a much
more aggressive promotional campaign, supported by a pricing strategy designed to
make the market unattractive for competitors
Increase usage by existing customers – for example by introducing loyalty schemes
A market penetration marketing strategy is very much about “business as usual”. The
business is focusing on markets and products it knows well. It is likely to have good
information on competitors and on customer needs. It is unlikely, therefore, that this
strategy will require much investment in new market research.
Market development is the name given to 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 product dimensions or packaging: for example
• New distribution channels
• Different pricing policies to attract different customers or create new market segments
Product development is the name given to 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 which can appeal to
Diversification is the name given to the growth strategy where a 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 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.
Market penetration (existing markets, existing products): Market penetration occurs
when a company enters/penetrates a market with current products. The best way to
achieve this is by gaining competitors' customers (part of their market share). Other
ways include attracting non-users of your product or convincing current clients to use
more of your product/service, with advertising or other promotions. Market penetration
is the least risky way for a company to grow.
Product development (existing markets, new products): A firm with a market for its
current products might embark on a strategy of developing other products catering to
the same market (although these new products need not be new to the market; the
point is that the product is new to the company). 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. Hence, new
product development can be a crucial business development strategy for firms to stay
Market development (new markets, existing products): An established product in the
marketplace can be tweaked or targeted to a different customer segment, as a strategy
to earn more revenue for the firm. 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.
Diversification (new markets, new products): 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.
(Contributed by Aastha Chawla – 2012; 2011)
11. Opportunity and Threat Matrix
12. McKinsey 7-S Framework
The McKinsey 7-S model was named after a consulting company, McKinsey and
Company. The McKinsey model is a model that describes 7 factors that determine how one can
holistically and effectively organize a company. It is basically a Value Based Management Model.
It consists of seven factors. Together these factors determine the way in which a corporation
The seven factors of McKinsey 7-S model are -
Shared values, originally termed superordinate goals, refers to the significant meanings
or guiding concepts that organisational members share---shared beliefs and attitudes---
what the org stands for and what it believes in
Structure is defined as the skeleton of the organisation or the organisational chart---the
way in which the organization’s units relate to each other---centralized, functional
divisions (top down), decentralized, matrix etc
Strategy is the plan or course of action in allocating resources to achieve identified goals
over time---environment, competition, customers
Systems are the routine processes and procedures followed within the organisation---
financial systems, recruiting, promotion and performance appraisal systems, information
Staff is described in terms of personnel categories within the organisation
Skills variable refers to the capabilities of the staff within the organisation as a whole
Style is the way in which key managers behave in achieving organisational goals---
cultural style of the organisation
Advantages of using this framework
diagnostic tool for understanding organizations that are ineffective
guides organizational change
combines rational and hard elements with emotional and soft elements
managers must act on all Ss in parallel and all Ss are interrelated
It is basically used to audit companies based on the 7-Ss
For instance, if we want to study a company post merger we would do the following:
1) Assess the current situation for each of the 7-S for
2) Decide on what is the desired situation
3) Focus on strategy and business plan (costs, benefits, migration, communication, risks etc) to
go from step 1 to step 2
Trivia: The 7-S framework was first mentioned in the “The Art of Japanese Mgmt” by Richard
Pascale and Anthony Athos in 1981. They had been investigating how the Japanese industry had
been so successful. At around the same time Tom Peters and Robert Waterman were exploring
what made a company excellent. They all came up with the 7-S model in1978 and was taken up
as a basic tool by McKinsey
(Contributed by Rima Chakravarty - 2012)
13. B2B, B2C, C2C Marketing
Customer to Customer (C2C) MARKETING
Customer 2 Customer or the commonly used acronym C2C is a new marketing mantra
for Indian firms and the foreign multinationals.
Customer to Customer (C2C) markets are innovative ways to allow customers to interact with
each other. In customer to customer markets the business facilitates an environment where
customers can sell these goods and or services to each other. The quality of a product is vital for
the continued success of a business. A terrific marketing strategy might bring a customer to your
door, but if the product you deliver fails to satisfy, they will never return. And worse, the best
advertising of all, word-of-mouth, will turn against you.
Now let's define what is - Customer 2 Customer and Word Of Mouth.
Customer 2 Customer as defined by Philip Kotler:
"Customer 2 Customer includes all activities involving interaction between consumers.
Customer 2 Customer activities include auctions between consumers that are facilitated by
firms such as e-bay, personal, classified ads, ad games etc."
Word of Mouth as defined by Philip Kotler:
"Personal communication about a product between target buyers and neighbours, friends,
family members and associates."
Let's understand the real meaning of Customer 2 Customer and Word of Mouth through an
illustration. This illustration mainly focuses on the success behind Toyota Qualis.
Toyota Qualis is a car that has a tag of a taxi, than that of a personal or a private car. And one of
the sole reasons behind the huge volume of sales is its taxi tag. Now how did they get this taxi
tag? It all happened because of the word of mouth – the best medium of advertisement. Private
taxis are the most roughly-driven cars and if these drivers swear by a car, then it's the best ad
for its reliability and toughness.
How were they able to win over these drivers? They won over them because they delighted
them. Delighted them means - they were able to provide delight to their customers by
understanding their specific personal interests, anticipating their needs, exceeding their
expectations, and making every moment and aspect of the relationship a pleasant - or better
yet, an exhilarating - experience.
This illustration proves only one aspect of Customer 2 Customer i.e. Word of mouth.
Now coming to the second aspect, i.e. C2C's role in consumer decision making:
Often we find that in a consumer decision process several individuals get involved. Each of them
plays an influencing role. At times, more than one role may be played by an individual. These
This is the person who sows the seed in a prospective customer's mind to buy the product. This
person may be a part of the customer's family like spouse or parents. Alternatively the person
may be a friend, a relative, a colleague or even the sales person.
Influencer is a person within or outside the immediate family of the customer who influences
the decision process. The individual perceived as an influencer is also perceived as an expert. In
consumer durable sale the dealer plays an influencing role.
He is the person who actually takes the decision. In a joint family often it's the head of the
family or the elders in the family who take a decision. But in nuclear and single families and with
the increase in the literacy among women and number of working couples, one finds more
often than not, decisions are joint. Husband, wife and even the entire family taking the decision,
particularly on major purchases, is quite common in urban and metro areas. The decider/s
considers both economic and non-economic parameters before selecting a brand.
It is important to note that the people who play these roles seek different values in the
product or service. The perception of the value is to a large extent influenced by their prior
experience of others, media reports and the marketing cues created by the firm. These values,
which may also be referred to as, market value is the potential of a product or service to satisfy
customer's needs and wants.
The most common and widely used example of C2C marketing is Ebay. Ebay provides sellers a
platform to freely hawk their goods as well as interact with customers. These sellers themselves
are non-business individuals.
A real-life example is auctions, where sellers, who were initially customers themselves, sell
goods that they have bought to other individual customers.
Business to consumer (B2C) marketing
B2C marketing is one of the most popularly used strategies for effective market communication
and profitable business building. Business to consumer marketing is when a business markets
products to a consumer market. A consumer is a buyer of products that are not business
related. B2C products include goods and services such as food, clothes, cars, houses, phone
services, credit repair services, etc.
A B2C sale is to an individual. That individual may be influenced by other factors such as family
members or friends, but ultimately it’s a single person that pulls out their wallet.
B2C features a large target market, single step buying process and shorter sales cycle.
Repetition and imagery create its brand identity. B2C focuses on merchandising and point of
buying activities including coupons, displays and store fronts. Basically any business that offers
a retail product to the public comes under this type. In B2C markets, the brand encourages the
shopper to purchase, remain loyal and potentially pay a higher price.
It is one of the many marketing campaigns that business houses can use for publicizing their
goods and services. For this the company can hire people who can reach out to the general
public as company representatives. These representatives can address customers at public
places, such as shopping malls or districts and make them aware about company’s products and
services by distributing flyers containing company’s information or by handing over various
forms of promotional materials. The company’s representatives also undertake door to door
marketing to promote company products or services. All these factors make B2C marketing one
of the most effective modes of communication. B2C marketing also involves advertising through
newspapers, television and radio for better communication. These modes provide the
companies with better consumer marketing strategies that can be worked upon to build a
bigger market for the products and services and thus achieve a profitable goal.
The B2C internet marketing is one of the most advanced consumer marketing strategies that
revolutionized the business world. It not only helps in developing a direct contact between the
consumer and business house but also allows the businessman to advertise and sell his
products and services in an easy manner.
Now a days with the advent of Internet, a businessman can make use of various online
advertising strategies which help to cater to wider section of potential market globally. Online
advertising strategies such as PPC and Podcast are counted among the most effective promotion
campaigning for any business. These advertisements can be displayed on various search sites so
that they are viewed by many people at the same time.
Making aware of company’s offerings via websites also helps the business house to successfully
cater the potential audience. Also, the online shopping facility provided through the websites
make the customers in availing the facilities and buying the products without wasting any time
and extra money
to visit any physical store for making a desirable purchase.
It is not enough to just establish a business; the business should also flourish and produce
profit. To meet the objective, various strategies are used for good publicity. Among various
business market strategies, B2B marketing i.e. business to business marketing and B2C
marketing i.e. business to consumer marketing are being constantly talked about. A constant
debate over the two has created a B2B vs. B2C marketing situation in the business world.
Though the purpose of both is same i.e. business development and to generate profits but their
approaches are different. While B2B deals with transactions between two businesses, B2C
marketing strategy helps the business house in directly targeting the customers.
A family is at home on a Sunday night and is watching television. An advertisement
appears that advertises home delivered pizza. The family decides to order a pizza.
Walking down a supermarket aisle, a single man aged in his early 30's sees a hair care
product that claims to reduce dandruff. He pick's the product and adds it to his shopping
A pensioner visits her local shopping mall. She purchases a number of items including
her favourite brand of tea. She has bought the same brand of tea for the last 18 years.
Business-to-Business (B2B) Marketing
Business to Business marketing is the practice of individuals or organizations (commercial
businesses, governments and institutions) facilitating the sale of their products or services to
other companies or organizations that in turn resell them, use them as components in products
or services they offer, or use them to support their operations. This is also known as Industrial
In B2B, the customers can be:
1) Companies that consume products or services eg. automakers, who buy gauges to put in
2) government agencies – this includes centre, state and local governments
3) institutions - schools, hospitals and nursing homes, churches and charities
4) resellers - wholesalers, brokers and industrial distributors
A B2B sale is to an organization. B2B describes commerce transactions between businesses,
such as between manufacturer and a wholesaler, or between a wholesaler and a retailer. The
volume of B2B transactions is much higher than the volume of B2C transactions. The main
reason is that in any supply chain, there will be many B2B transactions, e.g. involving
subcomponent or raw materials, and only on B2C transaction, i.e. the finished good’s sale to
customer. B2B Marketing is driven purely on the basis of fewer, but larger, customers. It is very
necessary to be able to customize offering based on the buyer’s needs.
Some B2B Marketing Strategies:
B2B Branding – Closely align corporate brands, divisional brands and product/service
brands and to apply brand standards to material often considered informal such as email
and other correspondence.
Product – cost-saving or revenue-producing benefits of products/services should factor
throughout product development and marketing cycle.
People – Usually, the target market for business products are smaller and have more
specialized needs. Thus, there can be multiple influencers on purchase decision, and
these need to be marketed to as well.
Pricing – Business markets can pay premium prices if the pricing and payment terms are
structured well. This is particularly true in the case of a strong brand.
Promotion – Specific trade shows, analysts, publications, blogs and retail/wholesale
outlets tend to be fairly common to each industry/product area. In essence, with proper
knowledge of your industry/product, the promo strategy almost writes itself.
Place -- The importance of a knowledgeable, experienced and effective direct (inside or
outside) sales force is often critical in the business market. If you sell through
distribution channels also, the number and type of sales forces can vary tremendously
and your success as a marketer is highly dependent on their success.
Business Marketing vs. Consumer Marketing
Although on the surface the differences between business and consumer marketing may seem
obvious, there are more subtle distinctions between the two with substantial ramifications.
Dwyer and Tanner (2006) note that business marketing generally entails shorter and more direct
channels of distribution.
While consumer marketing is aimed at large demographic groups through mass media and
retailers, the negotiation process between the buyer and seller is more personal in business
marketing. According to Hutt and Speh (2004), most business marketers commit only a small
part of their promotional budgets to advertising, and that is usually through direct mail efforts
and trade journals. While that advertising is limited, it often helps the business marketer set up
successful sales calls.
Marketing to a business trying to make a profit (Business-to-Business marketing) as opposed to
an individual for personal use (Business-to-Consumer, or B2C marketing) is similar in terms of
the fundamental principles of marketing. In B2C, B2B and B2G marketing situations, the
marketer must always:
successfully match the product/service strengths with the needs of a definable target
position and price to align the product/service with its market, often an intricate
Communicate and sell it in the fashion that demonstrates its value effectively to the
(Contributed by Nazia Asad – 2012; 2011)
14. Basics of Media Planning
15. Below the Line Initiatives (10 examples)
What is BTL, compare & contrast BTL with ATL?
BTL – Below the Line. All advertising by means other than the five major media - the
press, television, radio, cinema and outdoors; below-the-line advertising employs a variety of
methods - direct mail, sponsorship, merchandising, trade shows, exhibitions, sales literature
and catalogues, and so on. Below the line promotions are becoming increasingly important
within the communications mix of many companies, not only those involved in FMCG products,
but also for industrial goods.
With the increasing pressure on the marketing team to achieve communication objectives more
efficiently in a limited budget, there has been a need to find out more effective and cost
efficient ways to communicate with the target markets. This has led to a shift from the regular
media based advertising.
Below the Line uses less conventional methods than the usual specific channels of advertising to
promote products, services, etc. than Above the Line strategies. These may include activities
such as direct mail, public relations and sales promotions for which a fee is agreed upon and
charged up front. Below the line advertising typically focuses on direct means of
communication, most commonly direct mail and e-mail, often using highly targeted lists of
names to maximize response rates.
Above the line is much more effective when the target group is very large and difficult to define.
But if the target group is limited and specific, it is always advisable to use BTL promotions for
efficiency and cost-effectiveness.
Most of the educational institutes like Career Launcher, Time and PT are holding
informative workshops and free tests for students which give a direct interaction of
these institutes with the target customer, and hence, a suitable platform to sell
Sales counters, beauty advisors, and dealer aids such as shade cards etc. – LAKME
Search, email and online advertising
o A discount to the normal selling price of a product, or
o More of the product at the normal price
(1) ING Vysya Bank also launched a social responsibility campaign, which started on the
Internet and moved to on-ground. It launched a website, www.kidzzbank.com, to educate
children about the importance of saving money and investing. Later, the initiative was taken to
underprivileged children in South India.
(2) ICICI Prudential Life Insurance recently launched a rural activation programme, called
Pragati Ki Anokhi Paathshala (PKAP), to inform the parents residing in the rural areas of the
country about how to plan their children's education better. Through the campaign, the
insurance player seeks to inform its target consumers about its education insurance plans.
(3) Dabur India ran a school activation campaign in 500 schools across 21 cities to look
for Super Champs, promising to pay their entire school fees for a year. The primary objective of
the activity is to create awareness and drive consumer engagement for Dabur Chyawanprash
and Dabur Chyawan Junior, a newly launched malted drink.
(4) HomeStop(of shoppers stop ), decided to launch its regular exchange offer scheme
under which customers can bring in their old furniture (which in turn will be donated to charity
by HomeStop) and avail of attractive discounts and offers on new furniture in return
(5) Most of the educational institutes like Career Launcher, Time and PT are holding
informative workshops and free tests for students which give a direct interaction of these
institutes with the target customer, and hence, a suitable platform to sell themselves.
(6) Pepsi organized an inter-school cricket event for 425 schools across 14 cities which did
wonders for the company by promoting the brand amongst the right target customer for almost
(7) Another interesting BTL promotion was by NIKE, an athlete dressed up in Nike
sportswear could be seen jogging on an elevated treadmill for the whole day on National
Highway 8, Delhi.
(8) Most of the pharmacy companies do BTL promotion by getting shelf-space through
doctors to display their products or by giving away free calcium tablets again through doctors,
knowing that for a patient a personal advise from a doctor would hold more value as compared
to a commercial advertisement
(9) Media companies like Hindustan Times are holding weekly events throughout the
country in which companies can put up their stalls, display banners and posters, and arrange for
some fun activities.
(10) Ring-tones and music-videos on cell phones are helping the entertainment industry to
promote a music video or a movie for dirt-cheap rate as compared to media promotion
(11) The Dove Evolution Campaign
(12)‘Igen’ – A cigarette brand was build through below the line marketing efforts. The brand
of cigarette was promoted through organizing parties for the BPO employees on weekly basis
and collecting their database and then making the cigarette available at their door steps, the
exercise was continued for quite a few months and a strong database and customer base was
developed for the brand among the BPO employees.
(13)The tea brand from Hindustan Unilever (HUL), Lipton, is riding on its ‘Stay Sharp’
proposition. The brand has taken an online jigsaw activity on-ground in Delhi. The activity is
being managed by Ogilvy Action, which had managed the on-ground promotions for the website
earlier. The ‘Stay Sharp’ campaign conveys that Theanine (an ingredient present in Lipton Yellow
Label tea) helps clear minds and stay sharp and focused.
(14) (Example from the Non Traditional Marketing Workshop) The Scotch Brite Fountain
(15) The membership cards given by stores like Westside, Shoppers’ Stop, Lifestyle etc.,
which give a certain incentive on every purchase from the store.
(16) Max New York Life (MNYL) Insurance launched a 'Wheel of Fortune' game in all
Spencer's retail stores across Delhi to enhance its lead generation exercise
(17) Hewlett Packard (HP) created 'Experience Zones' in airports to promote its newly
launched Elite Books with corporates & executives
(18) Tata Tea, in a campaign for encouraging people to vote, centred its communication
round a website www.jaagore.com. The site was used to get voter registrations through a
campaign that comprised a TV commercial, OOH and on-ground activation in colleges and
(19) GM's Chevrolet Spark organised a BTL activity 'Jeevan mein umang, Spark ke sang' to
promote the newly priced Spark in small towns & cities.
(20) CavinKare's Chic Shampoo too launched a school campaign 'Choo Lo Sitharon Ko' to
educate school going girls.
(21) In the media space, Sab TV, the comedy channel from MSM India, devised an interesting
route to reach media planners and buyers during the launch of Bhootwala Serial, India's first
horror comedy. Breaking the clutter, promoters dressed in scary ghostly costumes went across
all agencies like Zenith Optimedia, Lodestar, Lintas Media Group, Starcom, Madison, Maxus,
Mindshare and Mindshare Fulcrum.
(23) Nokia's Take Back campaign, an e-waste recycling programme. As part of this initiative,
Nokia will encourage people to dispose of mobile handsets in an ecologically friendly manner.
For this Nokia has set up recycling bins across its priority dealers & care centres.
(Contributed by 2011)
16. Brand Equity
A brand is a name or symbol used to identify the source of a product. When developing a new
product, branding is an important decision. The brand can add significant value when it is well
recognized and has positive associations in the mind of the consumer. This concept is referred to
as brand equity.
There are at least three perspectives from which to view brand equity:
Financial - One way to measure brand equity is to determine the price premium that a
brand commands over a generic product. For example, if consumers are willing to pay
$100 more for a branded television over the same unbranded television, this premium
provides important information about the value of the brand. However, expenses such
as promotional costs must be taken into account when using this method to measure
Brand extensions - A successful brand can be used as a platform to launch related
products. The benefits of brand extensions are the leveraging of existing brand
awareness thus reducing advertising expenditures, and a lower risk from the perspective
of the consumer. Furthermore, appropriate brand extensions can enhance the core
brand. However, the value of brand extensions is more difficult to quantify than are
direct financial measures of brand equity.
Consumer-based - A strong brand increases the consumer's attitude strength toward the
product associated with the brand. Attitude strength is built by experience with a
product. This importance of actual experience by the customer implies that trial samples
are more effective than advertising in the early stages of building a strong brand. The
consumer's awareness and associations lead to perceived quality, inferred attributes,
and eventually, brand loyalty.
Strong brand equity provides the following benefits:
Facilitates a more predictable income stream.
Increases cash flow by increasing market share, reducing promotional costs, and
allowing premium pricing.
Brand equity is an asset that can be sold or leased.
However, brand equity is not always positive in value. Some brands acquire a bad reputation
that results in negative brand equity. Negative brand equity can be measured by surveys in
which consumers indicate that a discount is needed to purchase the brand over a generic
Building and Managing Brand Equity
In his 1989 paper, Managing Brand Equity, Peter H. Farquhar outlined the following three stages
that are required in order to build a strong brand:
1. Introduction - introduce a quality product with the strategy of using the brand as a
platform from which to launch future products. A positive evaluation by the consumer is
2. Elaboration - make the brand easy to remember and develop repeat usage. There
should be accessible brand attitude, that is, the consumer should easily remember his or
her positive evaluation of the brand.
3. Fortification - the brand should carry a consistent image over time to reinforce its place
in the consumer's mind and develop a special relationship with the consumer. Brand
extensions can further fortify the brand, but only with related products having a
perceived fit in the mind of the consumer.
Alternative Means to Brand Equity
Building brand equity requires a significant effort, and some companies use alternative means
of achieving the benefits of a strong brand. For example, brand equity can be borrowed by
extending the brand name to a line of products in the same product category or even to other
categories. In some cases, especially when there is a perceptual connection between the
products, such extensions are successful. In other cases, the extensions are unsuccessful and
can dilute the original brand equity.
Brand equity also can be "bought" by licensing the use of a strong brand for a new product. As
in line extensions by the same company, the success of brand licensing is not guaranteed and
must be analyzed carefully for appropriateness.
Managing Multi Brands
Different companies have opted for different brand strategies for multiple products. These
Single brand identity - a separate brand for each product. For example, in laundry
detergents Procter & Gamble offers uniquely positioned brands such as Tide, Cheer,
Umbrella - all products under the same brand. For example, Sony offers many different
product categories under its brand.
Multi-brand categories - Different brands for different product categories. Campbell
Soup Company uses Campbell's for soups, Pepperidge Farm for baked goods, and V8 for
Family of names - Different brands having a common name stem. Nestle uses Nescafe,
Nesquik, and Nestea for beverages.
Brand equity is an important factor in multi-product branding strategies.
17. Brand Rituals (10 examples)
Brand ritual is the performance of an act by the consumers as defined by the brand
(Owners). These days brand rituals are a common strategy adopted by marketers. Some rituals
become a part of our behavior over time. Few examples are as follows:
1. Close up:- The HA-HA thing which we do by holding our palm in front of our mouth to
check the fresh breath
2. Kitkat:- Push the chocolate out of the paper wrap. Pull your thumb across the lines
between the chocolate bars. Break it. Unwrap and eat...
3. Pepsi My can:- The way they hold the can in the ads to ask the viewers to do the same...
4. Tequila Shots:- The trademark way of consuming tequila.
5. Bru Cappuccino:- Sip, Lick... Ummm..!! Denoted how to enjoy the cool drink and the
6. Wrigley's Chiklets:- Shake the box of chewing gums 2 make that chik-chik noise…
7. Boomer:- the bubble that everyone started making while chewing the gum….
8. Corona Beer:- Consume the beer with a slice of lemon…
9. Horlicks:- Epang Opang Jhapang. Try and make a chocolate shake with Horlicks by using
their freebie and this technique.
10. Fair & Lovely:- One of the ads showed the viewers to apply the cream on the face and
massage it in the shape of eight.
(Contributed by 2011)
18. Brand Rivalry (10 examples)
1. (Heinz)Complan vs (GSK)Horlicks
Complan has never been an aggressive player compared to the market leader Horlicks . This
explains the reason why such a powerful brand is languishing in a distant position of 15%
market share compared to the 60 % share of Horlicks.
While Horlicks has been breaking new grounds with a series of variants aiming at the
entire family segment, Complan was lying low all these years. The major happening for this
brand in 2008 was the launch of the new flavor Kesari Badam . In the promotional front, the
brand was in a low key mode continuing with the extension of its earlier campaign focusing on
2. (Nestle) Munch vs (Cadbury) Dairy Milk
Fighting with advertisements is not new in the Indian consumer market. First we saw two cola
companies making ads against each others, then came two hot beverage products doing this
and now its the turn for the chocolates - Dairy Milk vs Nestle Munch.
3. (Coca Cola) Sprite vs (Pepsi) Mountain Dew
Sprite came up with an ad hitting on mountain dew’s jingle.
4. Pepsi vs Coca Cola - Pepsi's 'Nothing Official About It' campaign in World Cup 96 after Coca
Cola became the official sponsor. One of its effects was the stringent anti-ambush marketing
laws that cricketers had to sign in 2002
5. Nestle Munch v/s Cadbury Dairy Milk: Cadbury as it always comes up with ads showing new
reasons to celebrate, by showing in the retro style people celebrating their payment on the 1st
day of month through Dairy Milk. Nestle Munch which is the biggest rival of dairy Milk hit it with
an ad campaign showing that Munch can be eaten on any day & there needn't be any specific
day for which it should wait.
6. Kotex v/s whisper: Whisper has the highest market share in the product segment & Kotex
attacking the no. 1 brand came up with the ad campaign which showed, don't whisper be loud.
This was to directly attack the Whisper Brand.
7. HUL v/s Eureka Forbes: Eureka Forbes making mockery of the Pureit Mascot, ie the guy in the
yellow raincoat. There is a case filed by HUL regarding the same in the high court.
Other rivalries are-
Sony vs Nintendo
AMD vs INTEL
Huggies vs Pampers
Energizer vs Duracell
Mcdonalds vs Burger King USA
CCD vs barista
Ford vs GM
BMW vs Mercedes Benz
(Contributed by 2011)
19. Buyer Decision Process
Research suggests that customers go through a five-stage decision-making process in any
purchase. This is summarized in the diagram below:
This model is important for anyone making marketing decisions. It forces the marketer to
consider the whole buying process rather than just the purchase decision (when it may be too
late for a business to influence the choice!)
The model implies that customers pass through all stages in every purchase. However, in more
routine purchases, customers often skip or reverse some of the stages.
For example, a student buying a favorite hamburger would recognize the need (hunger) and go
right to the purchase decision, skipping information search and evaluation. However, the model
is very useful when it comes to understanding any purchase that requires some thought and
The buying process starts with need recognition. At this stage, the buyer recognizes a problem
or need (e.g. I am hungry, we need a new sofa, I have a headache) or responds to a marketing
stimulus (e.g. you pass Starbucks and are attracted by the aroma of coffee and chocolate
An “aroused” customer then needs to decide how much information (if any) is required. If the
need is strong and there is a product or service that meets the need close to hand, then a
purchase decision is likely to be made there and then. If not, then the process of information
A customer can obtain information from several sources:
Personal sources: family, friends, neighbors etc
Commercial sources: advertising; salespeople; retailers; dealers; packaging; point-of-sale
Public sources: newspapers, radio, television, consumer organizations; specialist magazines
Experiential sources: handling, examining, using the product
The usefulness and influence of these sources of information will vary by product and by
customer. Research suggests that customers value and respect personal sources more than
commercial sources (the influence of “word of mouth”). The challenge for the marketing team is
to identify which information sources are most influential in their target markets.
In the evaluation stage, the customer must choose between the alternative brands, products
How does the customer use the information obtained?
An important determinant of the extent of evaluation is whether the customer feels “involved”
in the product. By involvement, we mean the degree of perceived relevance and personal
importance that accompanies the choice.
Where a purchase is “highly involving”, the customer is likely to carry out extensive evaluation.
High-involvement purchases include those involving high expenditure or personal risk – for
example buying a house, a car or making investments.
Low involvement purchases (e.g. buying a soft drink, choosing some breakfast cereals in the
supermarket) have very simple evaluation processes.
Why should a marketer need to understand the customer evaluation process?
The answer lies in the kind of information that the marketing team needs to provide customers
in different buying situations.
In high-involvement decisions, the marketer needs to provide a good deal of information about
the positive consequences of buying. The sales force may need to stress the important
attributes of the product, the advantages compared with the competition; and maybe even
encourage “trial” or “sampling” of the product in the hope of securing the sale.
Post-purchase evaluation - Cognitive Dissonance
The final stage is the post-purchase evaluation of the decision. It is common for customers to
experience concerns after making a purchase decision. This arises from a concept that is known
as “cognitive dissonance”. The customer, having bought a product, may feel that an alternative
would have been preferable. In these circumstances that customer will not repurchase
immediately, but is likely to switch brands next time.
To manage the post-purchase stage, it is the job of the marketing team to persuade the
potential customer that the product will satisfy his or her needs. Then after having made a
purchase, the customer should be encouraged that he or she has made the right decision.
(Contributed by 2011)
20. Cause related marketing
Cause marketing or cause-related marketing refers to a type of marketing involving the
cooperative efforts of a "for profit" business and a non-profit organization for mutual benefit.
The term is sometimes used more broadly and generally to refer to any type of marketing effort
for social and other charitable causes, including in-house marketing efforts by non-profit
organizations. Cause marketing differs from corporate giving (philanthropy) as the latter
generally involves a specific donation that is tax deductible, while cause marketing is a
marketing relationship generally not based on a donation.
The creation of the term "cause-related marketing" is attributed to American Express, and it was
coined to describe efforts to support locally based charitable causes in a way that also promoted
business. The term was then used to describe the marketing campaign led by American Express
in 1983 for the Statue of Liberty Restoration project. A penny for each use of the American
Express card, and a dollar for each new card issued was given to the Statue of Liberty renovation
program. Over a four-month period, $2 million was raised for Lady Liberty, transaction activity
jumped 28 percent and the concept that doing good was good for business, was born.
Attracting and Retaining Customers: Companies that have engaged in Cause –Related
Marketing report that those efforts help attract and build long- term relationships with
customer. For Example, affinity credit cards, in which a nonprofit organization benefits each
time a consumer, uses the card to make a purchase, help credit card companies develop
longterm relationships with consumers.
• Market Differentiation: For many companies, Cause- Related Marketing has helped them to
create an alternative and distinctive approach to brand advertising. CRM can help companies
distinguish themselves from their peers by offering the consumer the opportunity to contribute
to something more then the company’s bottom line. National and International brands can
better identify with their local markets by linking themselves with community organizations, or
with regional or nongovernmental organizations.
• Out reach to Niche Markets: Partnering with nonprofit organizations can help a company to
connect with specific demographic or geographic markets. For Example, Ford Motor Company
successfully positioned itself among a formerly disengaged target market – Women. In addition
to its Substantial financial and in – kind donations to Race events, The Ford Division of the Ford
Motor Company has issued thousands of public service announcements in an effort to both
communicate a critical health message to women and to enfold them into its brand identity.
(Cause Related Marketing A Conceptual Paradigm)
Examples in Indian context:
1. Tata Salt, the pioneers and undisputed leaders in the packaged and iodized Salt Category,
reiterated its commitment to the cause of educating underprivileged children and
announced its Desh Ko Arpan Programme. The Desh Ko Arpan Programme, Tata
Chemicals Limited Contributes 10 paise for every kilo of Tata Salt, sold during specific
periods, to the education of underprivileged children. Child Relief and You (CRY) has
been chosen as partners. The money raised was Rs 33 lakhs in a period of one month.
The money raised will support six child – development initiatives across the country,
Lok Shakti Vikas Sansthan, Barmer, Rajasthan
Jabala, Kolkata, West Bengal
The Good Shepherd Society, Chennai, Tamil Nadu
Gramya, Nalgonda, Andhra Pradesh
The community Services Guild, Namakkal, Tamilnadu
Rachana Society for Social Reconstruction, Pune Maharashtra.
2. P&G’s Shikha campaign
Every time you choose to buy a large pack of Tide, Ariel, Pantene, H&S, Rejoice, Vicks VapoRub,
Whisper, Gillette Mach 3 Turbo, Gillette series, Oral B, Duracell or Pampers, P&G promises to
contribute are helping thousands of underprivileged children across India to access their right
to education. Minimum contribution from P&G to Shiksha, irrespective of sales will be Rs. 1
Shiksha enabled the education of 33052 children in 435 communities in 2006
(Contributed by Nupur Jain - 2012)
21. Customer relationship management
Main aim: customer retention and customer satisfaction
We have to make list of the customers, these serve as the target lists.
Strategy should be:
Save money by not marketing to those who are less likely to respond.
Make money by making relevant offers to those who need, or want or can afford or
We build relationship with our best customers, resulting in higher loyalty, retention,
referral, spending rate and profits
It is a process or methodology used to learn more about customers' needs and behaviours in
order to develop stronger relationships with them. CRM helps businesses use technology and
human resources to gain insight into the behaviour of customers and the value of those
According to industry view, CRM consists of:
Helping an enterprise to enable its marketing departments to identify and target
their best customers, manage marketing campaigns and generate quality leads for
the sales team.
Assisting the organization to improve telesales, account, and sales management by
optimizing information shared by multiple employees, and streamlining existing
processes (for example, taking orders using mobile devices)
Allowing the formation of individualized relationships with customers, with the aim
of improving customer satisfaction and maximizing profits; identifying the most
profitable customers and providing them the highest level of service.
Providing employees with the information and processes necessary to know their
customers, understand and identify customer needs and effectively build
relationships between the company, its customer base, and distribution partners.
(Contributed by Venkat Sujit Samrat – 2012; 2011)
22. Customer relationship Marketing
Customer Relationship Marketing (Basics)
Focuses on retaining existing Customers to create long-term value to the firm
DOES NOT FOCUS on targeting new customers/acquisition of new clients
It costs four-to-six times more to convert a customer than it does to retain one
Directly linked to enhancing the levels of Customer Satisfaction
It can be applied when there are competitive product alternatives for customers to
choose from and also when there is an ongoing & periodic desire for the product or
o Reduce Customer Turn-over/ Increase Customer Retention
o Increase Customer Loyalty
o Increase Customer Satisfaction
o Increasing switching barriers (especially when there are many competitors
offering similar products/services)
It relies upon the communication and acquisition of consumer requirements solely from
existing customers in a mutually beneficial exchange so as to create value.
Usually facilitated by Customer Relationship Management systems (software systems
that facilitate tracking and analyzing customer's preferences purchasing behavior,
activities, tastes, likes, dislikes, and complaints, etc.)
It is empirically proven that a 5% improvement in customer retention can cause an
increase in profitability of between 25 and 85 percent.
One of the advantages of retaining customers is that these long-term customers may
initiate free word of mouth promotions and referrals, which is one of the most cost-
effective campaigns that a product can get.
Customers that stay with you tend to be satisfied with the relationship and are less likely
to switch to competitors, making it difficult for competitors to enter the market or gain
Customer retention efforts involve considerations such as the following:
1. Customer valuation - describes how to value customers and categorize them
according to their financial and strategic value so that companies can decide where
to invest for deeper relationships and which relationships need to be served
differently or even terminated.
2. Customer retention measurement - This is simply the percentage of customers at
the beginning of the year that are still customers by the end of the year. In
accordance with this statistic, an increase in retention rate from 80% to 90% is
associated with a doubling of the average life of a customer relationship from 5 to 10
years. This ratio can be used to make comparisons between products, between
market segments, and over time.
3. Determine reasons for defection - Look for the root causes, not mere symptoms.
This involves probing for details when talking to former customers. Other techniques
include the analysis of customers' complaints and competitive benchmarking.
4. Develop and implement a corrective plan - This could involve actions to improve
employee practices, using benchmarking to determine best corrective practices,
visible endorsement of top management, adjustments to the company's reward and
recognition systems, and the use of "recovery teams" to eliminate the causes of
23. Different Pricing Strategies
The pricing strategy for a new product should be developed so that the desired impact on
the market is achieved while the emergence of competition is discouraged. Pricing strategies are
as many as there are market scenarios. Thus, it is best to start defining the most commonly used
strategies, illustrated with examples where they can be found.
1. Penetration pricing: Price set to ‘penetrate the market’
‘Low’ price to secure high volumes
Typical in mass market products – chocolate bars, food stuffs, household goods, etc.
Suitable for products with long anticipated life cycles
May be useful if launching into a new market
Eg. Reliance mobile
2. Market Skimming :
High price, Low volumes
Skim the profit from the market
Suitable for products that have short life cycles or which will face competition at some
point in the future (e.g. after a patent runs out)
Examples: Playstation, DVDs, etc.
1. Value pricing:
Price set in accordance with customer perceptions about the value of the product/service
Eg. bottled water like Bisleri, Skin care products like Olay
2. Loss leader:
Goods/services deliberately sold below cost to encourage sales elsewhere
Typical in supermarkets, e.g. at Christmas, selling bottles of gin at £3 in the hope that
people will be attracted to the store and buy other things
Purchases of other items more than covers ‘loss’ on item sold
Example: ‘Free’ mobile phone when taking on contract package, modem along with
3. Psychology pricing:
Used to play on consumer perceptions
Classic example – Rs 999 instead of Rs 1000!
Links with value pricing – high value goods priced according to what consumers THINK
should be the price
Example: dollar store (everything is priced at Rs99)
4. Going Rate (Price Leadership):
In case of price leader, rivals have difficulty in competing on price
too high: they lose market share,
too low: the price leader would match price and force smaller rival out of market
May follow pricing leads of rivals especially where those rivals have a clear dominance of
Where competition is limited, ‘going rate’ pricing may be applicable
eg banks, petrol, supermarkets, electrical goods – find very similar prices in all outlets
5. Tender Pricing:
Many contracts awarded on a tender basis
Firm (or firms) submit their price for carrying out the work
Purchaser then chooses which represents best value
Mostly done in secret
Eg. Defence vehicle contracts, Delhi Metro Rail project
6. Price Discrimination:
Charging a different price for the same good/service in different markets
Requires each market to be impenetrable
Requires different price elasticity of demand in each market
Eg: Airlines, dell (online & store prices diff for the same model)
7. Destroyer/Predatory Pricing:
Deliberate price cutting or offer of ‘free gifts/products’ to force rivals (normally smaller
and weaker) out of business or prevent new entrants
Anti-competitive and illegal if it can be proved
Eg: Rs 500 mobile phone by Reliance
8. Absorption/Full Cost Pricing:
Full Cost Pricing – attempting to set price to cover both fixed and variable costs
Absorption Cost Pricing – Price set to ‘absorb’ some of the fixed costs of production
Eg. Autocomponents ( fixed cost of tools+ variable material cost)
9. Marginal Cost Pricing:
Marginal cost – the cost of producing ONE extra or ONE fewer item of production
MC pricing – allows flexibility
Particularly relevant in transport where fixed costs may be relatively high
Allows variable pricing structure – e.g. on a flight from London to New York – providing
the cost of the extra passenger is covered, the price could be varied a good deal to attract
customers and fill the aircraft
10. Contribution Pricing:
Contribution = Selling Price – Variable (direct costs)
Prices set to ensure coverage of variable costs and a ‘contribution’ to the fixed costs
Similar in principle to marginal cost pricing
Break-even analysis might be useful in such circumstances
11. Target Pricing:
Setting price to ‘target’ a specified profit level
Estimates of the cost and potential revenue at different prices, and thus the break-even
have to be made, to determine the mark-up
Mark-up = Profit/Cost x 100
Eg. Real Estate
12. Cost-Plus Pricing:
Calculation of the average cost (AC) plus a mark up
AC = Total Cost/Output
(Contributed by 2011)
24. Positioning & Differentiation
Positioning is the act of designing the company’s offering and image to occupy a
distinctive place in the minds of the target market. A good brand positioning strategy will lead
to clarifying the brands essence, the goals it helps consumers achieve and it does it in a unique
way. Positioning requires the marketer to clearly communicate the similarities and differences
between brands. Determining a positioning strategy requires establishing a ‘frame of reference’
by identifying the target market and the competition and identifying the ideal points of parity
and points of difference brand associations.
Frame of reference is the framework used by the consumers to make sense of the product in
question. Humans understand and remember new things by linking it to existing (known)
objects. Frame of reference is that evaluative criterion which is used by consumers to make a
better understanding of the product/services. Frame of reference also explains the context in
which consumers tend to evaluate /place the product. For example, the frame of reference used
to evaluate Frooti is that it is a mango drink. Coca Cola = Cola, Ace = Mini Truck, Dettol =
Antiseptic etc. If Frooti launches an Apple Drink, the consumers will find it difficult to accept the
product since it is out of the frame of reference used to evaluate/understand Frooti.
Since consumers use a frame of reference in understanding a product, the concept has a very
important place in the positioning of the product. Once the frame of reference is identified, the
marketer will position the product in line with the frame of reference. In case of products that
lack a frame of reference, marketers should create a frame of reference for the consumers.
The concept of Points of Parity helps marketers to place the product in line with the consumer's
frame of reference. Points of parity are those associations that are not necessarily unique to the
brand but may in fact be shared with other brands. There are two forms of Points of Parity -
Category POP and Competitive POP. Category POPs are those associations that consumers view
as being necessary to be a legitimate and credible offering with a certain product or service
category. Competitive POP are those associations designed to negate competitor's Points of
Parity. For example, hand sanitizer is a new category and consumers are not aware of such a
category. So when a brand is being launched in such a new category, brand managers should
first establish a category POP. For that, the consumers should be made aware of such a category.
Right now marketers are using infomercials to educate the consumers about hand sanitizer, its
advantages and uses. Once the frame of reference is established, then the brand should be
placed in the category. Usually marketers use packaging, product form and labels to establish
category points of parity.
Competitor POP is where marketers tell the consumers that their brand have all the
properties/qualities of their competing brands. For example Lifebuoy soap will establish
competitive POP with Dettol soap by claiming that it has germ killing qualities and vice versa.
These strategies will fail if the marketers did not understand the frame of reference used by
consumers in evaluating the product. This lack of understanding can lead to positioning failures
that eventually lead to product failure.
Some examples of positioning:
Dominoes – Hot pizza delivered within 30 mins
Monaco smart chips – healthy snack
Lays - convenient snack,
Bingo - different tastes
Aliva - health + taste
Hippo is being positioned as a hunger- killer. The brand wants to be a guilt-free snack for hunger
Interesting ad positioning hippo
The market is flooded with similar products and offerings which has created a huge clutter of
brands and products. It is essential for a marketer to be able to differentiate his product to
break through the clutter. Differentiation based on product features has become a difficult task
with competitors taking no time in copying /adopting that feature. Differentiations based on
incremental product improvements /features have become difficult to develop and sustain in
Methods of differentiation:
1) Invest in R&D
India is an R&D and product development hub for most of the MNCs but seldom Indian
marketers were able to create breakthrough products for the Indian market. Tata Nano has
shown the world what Indian minds can do when inspired. The market is moving in a direction
where only those brands will succeed who can innovate.
2) Protect the Differentiation
An important determinant of a successful differentiation is the brand’s ability to protect the
differentiation. Smart brands use ingredient branding to protect their key differentiators.
Ingredient branding is where a particular product feature or an ingredient is branded by the
company. There are two kinds of ingredient brands.
a) Where the ingredient is owned by another company. Intel is a pioneer in ingredient branding.
Intel has built ingredient brands like Pentium, Celeron and Atom etc.
b) Where the feature/ingredient is owned by the company itself. Bajaj has a powerful ingredient
brand DTSI (which is also a patented technology) which it now uses for all of its two wheeler
3) Connect to a Relevant Need
Creating a sustainable differentiation is possible only when brands become customer focused.
When products become standardized, it is important for marketers to create differentiation
focusing on consumer needs.
‘Brand laddering’ is a strategy that can be used by marketers to create differentiation on a need
rather than on a product feature (attribute to value). Raymond is a brand that has created a
space for itself by effectively laddering up to a customer need (Complete Man). The benefit of
such a strategy is that competitors will find it difficult to copy the differentiation since it is based
on an intangible attribute. The brand has created a unique powerful image which is sustainable
4) Long Term Vision through Brand Charter
It is important for marketers to create a brand charter which will spell out the long term vision
for the brands, its differentiation and positioning platforms, guidelines and strategies.
Such a brand charter will guide the future brand managers to create tactics which are in line
with the overall brand vision. If a brand chose to create intangible differentiation opportunities,
there has to be a consistency in the brand’s positioning and differentiation strategies. Brand
Charter will help bring consistency which will in turn facilitate create a sustainable
Types of Differentiation:
Personnel Differentiation: By using better trained employees. Singapore airlines are well
regarded because of its flight attendants.
Channel Differentiation: By efficiently and effectively designing distribution channels coverage,
expertise and performance. Eureka Forbes water purifiers and vacuum cleaners gained
popularity due to their differentiated positioning through their direct to home channel.
The Himalaya drug company differentiates itself by using ayurvedic ingredients.
Product Positioning: - In marketing, positioning has come to mean the process by which
marketers try to create an image or identity in the minds of their target market for its product,
brand, or organization. It is the 'relative competitive comparison' their product occupies in a
given market as perceived by the target market.
Positioning means determining and communicating the central benefit of the product in the
minds of target buyers. For example, a car manufacturer might target buyers for whom safety is
a major concern. The company "positions" its cars as the safest vehicles that customers can buy.
Positioning starts with a product. A piece of merchandise, a service, a company, an institution,
or even a person. But positioning is not what you do to a product. Positioning is what you do to
the mind of the prospect. That is, you position the product in the mind of the prospect. Brands
usually position themselves using certain parameters. These parameters highlight the most
relevant features of its product and the image, the brands wishes to portray to its consumers.
How to write a positioning statement:-
For [target end user]