This document discusses marketing challenges in changing times and strategies to address them. It notes that customer expectations have changed, with less product differentiation and greater price sensitivity. Small stores now face competition from large retail chains. The document recommends that retailers build entertainment into their stores with coffee bars, art galleries, and events to create a marketing experience beyond just products. It asks questions about how marketing affects customer value and what a marketing plan includes.

1. WE LIVE IN CHANGING TIMES?
Marketing is changing:
Customer expectations have changed
Perceived less product differentiation
Greater price sensitivity
Brand manufacturing are facing intense competition from domestic & foreign
brands as well as store brands
Store based retailers are suffering in hands of giant retailing chains.
Small stores vs Alfatah/HKB/shoe planet
Book stores vs videos and on line shopping
Remedial Steps
Entertainment is being built in to stores along with coffee bars, corners,
lecture series, demonstrations, art galleries with café’s(crow eaters & nairang art
gallery by nayyar ali dada)
Marketing as an Experience vs a Product Assortment
Importance
Excitement
Pleasure
Entertainment
Social

2. Chapter Questions
 How does marketing affect customer value?
 How strategic planning is carried out at different levels of the
organization?
 What does a marketing plan include?

3. Customer Need
A vague idea:
Do they actually know what they want in a product
Help them learn what they want
a) Need a mobile phone
b) Want a television set
c) Want a car
d) Want clothes
Hybrid customers:
Traditional customer
Cyberspace customer
Hybrid customer
High touch and low touch product
Standardization
Shift In core values of customers
Style is in
Parents are younger
Women are working
Spending today is more important than…

4. Chapter 2
WINNING MARKET STRATEGEIES THROUGH
MARKTE ORIENTED STRATEGIC PLANNING
GROWTH STRATEGY
Market Penetration strategy
Product development strategy
Usage-new features-new variation-expand
product offering
Market Development Strategy
Target market-cereals-cosmetics
INTEGRATED GROWTH
Backward; forward; horizontal
DIVERSIFICATION GROWTH:
Concentric (Synergies that may exist)
Horizontal (new products to existing customer)
Conglomerate diversification
SWOT Analysis

5. Generic business strategies:
Over all cost leadership strategy
Differentiation Strategy
Focus Strategy
Strategic Alliance:
Forging of strengths to deliver greater value to the customer.
Sony Ericson
Visa and different merchants
Pepsi and restaurants
Mobile phone and camera lens mfg
Automobiles and tyre mfgs
Ferrari and Acer Computers
Intel inside
Marketing Plan:
Contents-assignment

6. Improving Value Delivery the
Japanese Way
 0 customer feedback time
 0 product improvement time
 0 purchasing time
 0 setup time
 0 defects
3 V’s Approach to Marketing
 Define the value segment
 Define the value proposition
 Define the value network
Categories of Marketing Alliances
 Product or Service Alliances
 Promotional Alliances
 Logistics Alliances
 Pricing collaborations

7. CHAPTER 3
SCANNING THE MARKETING ENVIRONMENT
Change in environment is like divine verdict on what things would be in
future for your business……….should u listen to it or not?
What if situation: Proactive vs. reactive approach
Danger and risk
What happened to video rental business with advent of cable TV?
Mega Malls are coming in. . .what will happen to small retailers?
Rise in petrol prices. . . what did the major retailers do?
Did they capitalize on CNG as opportunity to the looming threat?
NO! they were late.
Fad vs Trend
Fad is short lived adoption of style, design or way of doing things.
Trend is long term change in doing of things, life styles, fashion (health
consciousness, work place dresses, smoking, etc)
Megatrends: major shift in social, economic, political, and cultural
globalization, disposable products, average age increase, women
education, regional trade zones, environment awareness etc)

8. Demographical Environment:
Size, growth rate of population, age distribution, education and urban
versus rural divide, moving away from city canters, gender ratios,
ethnic groups, house hold patterns(single parents, extended family vs.
nuclear family, single people etc.)
Shift from mass to micro markets
Economic Environment:
Income distribution: very low income, low med, medium, high
medium, high income levels.
Saving, debt, and credit access.
Natural Environment:
Shortage of raw materials
Increased energy costs
Anti pollution pressure
Technological Environment:
Change in technology, move to digitization, GPS and cellular system,
navigation technology, entertainment, cable television, internet, voice
protocols etc. genetic engineering, molecular technology
Compression of time.
Political & Legal Environment: laws, business regulation, law and order
situation
Social cultural environment: existence of subcultures, core and
secondary values and shift in term.

9. Chapter 5
Creating Customer value, Satisfaction, and loyalty
Customer perceived Value: difference between all the benefits and all
the costs for a customer in selecting a particular market offering.
Total Customer Value: financial, functional, psychological
Total Customer Cost: physical, emotional, money, time,
psychological etc
Buying Process: Rational or Irrational?
Constraints and extraneous variables
Value Propositions
Value Delivery System
Measuring Satisfaction
Is satisfaction enough?
Costumer satisfaction and customer loyalty-not clear.
Maximizing customer Life Time value
What I profitable customer? life time stream of revenue and costs
Mass Customization Concept
Building Customer Loyalty
Price Sensitivity?
Customer Definition?

10. New vs Retention
Customer Bonding.
Chapter 6
Analyzing Consumer Markets and Buyer Behavior
Influencing Buyer Behavior
Cultural Factors
Culture, sub culture, and social class (stratification in society)
Social Factors
References Groups (direct or indirect influence on person’ attitudes and
behavior)
Membership Group (direct influence on a person).
Primary Groups (family, neighbors, friends with whom one interacts
informally but frequent basis.
Secondary groups (religious, professional etc..)
Aspirational groups (that we hope to join or aspire to be)
Opinion Leaders
Family: orientation and procreation. Influence on buying house hold and
related items. Furniture, television, car, cereals, ice cream, carpets, wall
paintings. Holidays, refrigerators etc.

11. Roles and Statuses: role is activities that a person performs and status is
its importance.
Personal Factors:
Age and Life cycle:
Occupation and Economic Condition: choice of items, clothing,
colors, traveling, software companies. Saving ratio in a society will also
determine the propensity to buy.
Essentials or luxury goods. Discretionary spending.
Life Style: way and manner in which we live our lives. Life style is
expressed through our activities.
Psychographics: Vals vs. British life style. It helps us decide the
choices that similar people belonging to certain cognitive group combined
with other attributes.
Personality and Self Concept: psychological traits that leads to
consistent behavior to certain stimuli in the environment
Perception
Selective Attention
How to notice something in a crowd or clutter
Selective Distortion
Tendency to twist information in to self interpretation or
meaning which may b different from that intended.
Selective Retention
Retaining information that

12. Learning
Change in behavior
Belief and Attitudes
The Buying Decision Process
Buying roles
Initiator
Influencer
Decider
Buyer
Buying Behavior
Complex Buying Behavior
Dissonance Buying Behavior
Habitual Buying Behavior
Variety Seeking Buying Behavior
Stages of Buying Decision Process
Meta Markets and Metamediaries
Take example of house furnishing business or
hospitals(wait reduction, aerobics plan etc.)
Problem recognition
Information search
Evaluation of alternatives
Purchase decision
Post purchase behavior
Post purchase satisfaction

13. Post purpose actions
Post purchase use and disposal
Chapter-7
Analyzing Business Markets
Business Market versus Consumer market
• Fewer buyers, larger buyers
• Close Supplier-customer relationship
• Professional purchasing-contracts
• Several buying influences- direct influences, committees, users,
purchases, technicians
• Multiple sales calls
• Derived demand
• Inelastic demand
• Geographically concentrated
• Direct purchasing- depending upon volume and size of co.
Buying Situations
• Straight Re-buy- routine buying from approved list of suppliers
• Modified Re-buy
• New Task- first time requirement-specification and price
determination
System Buying and Selling
Complete solution-turnkey basis
Buying Center
Decision making unit or committee or participants that influences the
buying process.

14. • Initiators
• Users
• Influencers
• Deciders
• Approvers-approve the decision of deciders,
• Buyers-formal authority to
• Gate keepers
Buying Center influences
Different participants have different interests and priorities regarding
the purchase. This could change with job position, department, expertise,
attitude etc.
Buying center Targeting
Who are different important decision participants and what type of
decisions do they influence.
1. Price oriented customers-transactional selling-low price
2. Solution oriented customers-consultative selling
3. Gold standard customers-quality selling
4. Strategic value customers-enterprise selling-long term relationship
Types of purchasing processes:
1. Routine Products-low risk items-seeking low prices
2. Leverage products-higher value products but many suppliers in
market therefore competitive pricing.
3. Strategic products-high value and high risk products. Willing to pay
higher price through an established and trusted supplier.
4. Bottleneck products-low cost and value-supply reliability is the issue.
Stages in buying process:
• Problem recognition
• General need description and product specification
• Suppliers search

15. • Proposal solicitation
• Supplier selection-very important
• Order routine specification
• Performance review
Chapter-8
Identifying market segment and selecting
target markets.
Level of markets segmentation
Mass marketing: - production, distribution, promotion. Creates
large market, lower costs, economies and efficiencies will lead to
lower prices and higher profits/margins.
Micro markets: - mega malls, dispersed population, home shopping,
proliferation of media(electronic & print). Like tv. Channels, websites
etc. expensive to cover markets.
Segment marketing: - group wanting similar value creation.
Segments are not created rather identified.
Advantages: - fine tune-more specific; easier to select
better and focus distribution, pricing, pkging, and communication
channels.
Contradiction: - does segmentation resolve the issue
of uniform or similar wants within the group. Variation does exist.
Flexible market offering

16. 1. Naked solution
2. Discretionary options
Niche Marketing: - having distinct setoff needs more narrowly
defined than that of segment. Customers will pay a premium and the size
discourages the competition to enter the particular market. Economies are
gained through specialization and volume.
Basis for Segmentation:
Geographical basis
Demographic
Age and life cycle stage: - computer games-network
games
Life stages
Gender
Income
Generation
Social class
Psychographics: difference on basis of value and personality
traits or
Lifestyles.
Personality
Values: - core values-see memo “tapping into core values
around the globe”.
Occasions
Benefits
User status: - non-user; ex-user; potential user; first time
user; regular user.
Usage rate: -
Loyalty status: - Hard core loyal; split loyalty; shifting
loyalty; shifting loyalty; switchers.
Buyer stage

17. Attitude: - five types
Selecting and evaluating the segments
Single segment
Selective specialization
Product specialization
Market specialization
Full market coverage
Local Marketing: - neighborhood markets-local focus and
international campaign is redundant.
Individual customer marketing: - one to one marketing.
Reversing the process of gaining efficiencies without compromising
efficiency yet delivering greater value. Technology enabled it!
Mass customization: - ability to meet at mass scale individual
preferences.
Choice board: - interactive online system
Market Segmentation Process
Need based segmentation:-
Segmentation identification; attractiveness; profitability;
Positioning; marketing mix strategy.
Marketing positioning:
a) Brand dominant hierarchy
b) Nation dominant hierarchy
c) Price dominant hierarchy

18. d) Type dominant hierarchy
Dealing with the competition chapter-9
Winning firms lead their competition
Factor determining long run profit attractiveness:
A. Threat of intense segment rivalry
Numerous strong and aggressive competitors
B. Threat of New Entrants
Entry barriers are high and exit barriers are low
Entry and exit barriers both are high
Entry and exit are both low
Entry is low but exit barriers is high
C. Threat of substitute products
Substitutes put limit on prices and profits-oil industry &
telecom
D. Threats of buyers’ growing bargaining power
Product is undifferentiated
Switching cost is low-mobile
Buyers are price sensitive

19. E. Threat of suppliers’ growing bargaining power
Companys’ suppliers are powerful
Few substitutes are available and cost of switching is high
Identifying Competition
Who are your competitors?
Who are emerging or potential threats-they are more dangerous
Current competitors vs. latent one
Analyzing Competitors
A) Strategies
Same strategy for a given market-key competition
B) Objectives
Size history financial strengths and management commonality
Short term vs. long term goals; profit maximization; growth.
Expansion plan.
C) Strength and weaknesses
Dominant
Strong
Favorable
Tenable
Weak
Non viable
Designing Competitive strategies
Market leader strategies
Life is not easy
A) Expanding the total market
1) New user
Cosme ics-oil of ulay adv., restaurants, boutiques
adding bridals to party wear, baby shampoo for
adults
2) New uses

20. Cereal; snicker bar; banking soda as deodorizer
3) More usage
Example of Michelin is ingenious
B) Defending market share
Incentives and innovations. Example of super stores and
departmental stores.
C) Defense strategies:
Position defense
Preemptive defense
Counteroffensive defense
Mobile defense
Contraction defense
D) Expand market share
Market Challenger strategy
Must decide whom to attack
Market leader; firm of own size; firm of smaller size
i. Frontal attack
ii. Flank attack
iii. Encirclement attack
iv. Bypass attack-segment vs geographical-pepsi food-water
Market follower strategies
1) Counterfeiter-illegal-piroting-fake
2) Cloner- look alike but not with same name
3) Imitator-copies few things but does have some differentiation
4) Adapter-follows but improves upon it. Aspires to be challenger and
grow in a dominant position.

21. Chapter-11
Positioning and differentiating the Market offering
through the product life cycle
Developing and communicating a positioning strategy:
STP-Segmenting, Targeting, and positioning
Positioning: what you do to the mind of the target customer in
terms of perceived value creation.
Three strategic Alternatives:
A) Strengthen the existing position: second largest ( Mobilink-
the largest co.)
B) Occupy a vacant position-Safeguard; snicker bar; Godiva
choco; Nestle yogurt-health & nutritional value. ABL & UBL
having largest net work of branches.
C) Reposition or deposition: Lifeboy soap.
D) How many ideas to promote: how many positions to take?
Best quality; best performance; best service; safest, biggest, best
looking; most expensive; most technologically advanced
(chocolate-LG phone).

22. Errors in Positioning
Under positioning: no meaningful value
Over Positioning: might scare consumers
Confused positioning: Tia Maria –café? Pricing
Doubtful positioning: claims hard to substantiate
Perceptual Mapping:
Which Position to Highlight
Play at your realizable strength and not that of the competitors’.
Communicate the position
Media, packaging, service, tangible and intangible
(Mobilink-bad communication)
Differentiation:
Adding and delivering meaningful value to the target market.
Characteristics of differentiation:
A) Important
B) Distinctive
C) Superior
D) Preemptive
E) Affordable
F) Profitable
All companies try to differentiate but all do not succeed
Building customer value hierarchy:
i. Basic
ii. Expected
iii. Desired
iv. Unanticipated
Product differentiation:
i. Form

23. ii. Features
iii. Performance quality
iv. Conformance quality
v. Durability
vi. Reliability
vii. Repirability
viii. Style
ix. Design: integration of all elements of differentiating factors
Service differentiation:
A. Ordering ease
B. Delivery
C. Installation
D. Customer training
E. Customer consulting
F. Maintenance
Personnel differentiation
Channel differentiation
Image differentiation: symbols; colors; slogans; physical appearance;
events & sponsorships.
Product life Cycle marketing strategies
a) Introduction
b) Growth
c) Maturity: growth, stable and decaying
d) Decline
Difference between style, fashion and fad life cycles
Distinctive mode of expression in term of colors, arrangements of
elements etc.
Currently acceptable popular style.

24. Chapter 12 Developing New Market Offering
What is meant by new product?
1. New to world products (creates entirely new markets)
2. New product lines (in existing markets-first time)
3. Addition to existing products lines (packaging sizes, colors, flavors etc)
4. Improvements or revisions to existing products.
5. Repositioning- targeted to new markets or segments
6. Cost reductions-new products or versions at lower price
Only less then 10%of all new products are innovated and new to the world.
Challenges in new product development:
Not innovating is the greatest risk-why?
i. Changing customers needs and tastes
ii. New technologies-creates new needs
iii. Shortened product life cycles
iv. Increased domestic and foreign competition
Incremental innovation versus disruptive
technologies (continuous vs discontinuous)
Case of personal computers-apple vs. IBM
New product failure rate is at more than 90-95%

25. Reasons for failure:
Idea is pushed from the top
Market size is overestimated
Product is not well designed
Positioning error
Distribution deficiencies or coverage problems
Competitors fight back harder than expected
Hindrances in diffusion of new products:
1. Shortage of new ideas
2. Fragmented markets
3. Social and governmental constraints
4. Cost of development
5. Capital shortages
6. Shortages product life cycles
Managing the development process: ideas
Idea generation
Interacting with others
Creative techniques
Idea screening
Drop error vs. Go error: drop a good idea versus
going ahead with bad idea.
Concept development and testing
Concept development:
Who will use this product
What primary benefits this product will deliver
When will people consumer or use this product
Concept Testing:
Prototyping

26. Computer aided designs are fast replacing actual
prototypes
Conjoint analysis:
Preference and weight-age given to hierarchy of
attributes. What combination of attributes consumers
would prefer.
Marketing strategy
A) Target markets size, structure, and behavior, positioning, target
market share and targeted profits.
B) Planned pricing, distribution strategy, and budget for marketing.
C) Long sales, profits, and marketing mix strategy
Business analysis
Attractiveness of the proposal-sales, growth, competition, barriers,
cost and risk analysis.
Development to commercialization
A) Quality function deployment-QFD
Take desired customer attributes and convert them into
engineering attributes.
B) Testing version-beta vs. alpha versions
C) Market testing
D) Commercialization

27. Chapter-14 Setting the product and branding strategy
Product levels:
Customer value hierarchy:
i. Core benefit
ii. Basic benefit
iii. Expected benefit
iv. Augmented benefited-exceeds the customers’ expectation
Consumption system-lead by product augmentation
financing, logistics, customer advice (car sales, books-on line)
Product Hierarchy
1. Need family- communication-transport
2. Product family-automobiles
3. Product class-4 wheel; road runner
4. Product line-petrol, diesel, capacity
5. Product type-too door; 4 door.
6. Item- stock keeping unit.
Product system concept-related by different products
Product classification:
Durability-

28. Tangibility
Consumer goods classification:
Convenience goods
Shopping goods-
Specialty goods
Unsought goods
Product line decisions
Sales and profitability
Market profile-vis-a’-vis competition
Product line length, width, depth,
Line modernization
Line featuring
Line pruning
Line stretching
Downward stretching
Upward stretch
Two way stretch
Line filling
Brand decisions:
What is brand vs non brand
Brands’ levels of meaning:
Attributes
Benefits
Values

29. Culture
Personality
User
External vs. internal branding
Brand equity
Power and value in the market
Brand awareness
Brand acceptability
Brand preference
Brand loyalty
Extent to which u r willing to pay the premium
Branding decision
To brand or not to brand?
Manufacturers’ brand also called nation brand distributor brand
Brand name decisions
a. Individual names
b. Blanket family names
c. Separate family names for all products
d. Corporate name combines with individual product names
Brand extension to other products
Co-branding
Packaging and labels
Function & objectives

30. Chapter-16
Developing price strategies and program
What is a price?
Setting the price
Objective
Survival
Maximum profit
Maximum market share
Market skimming
Product quality leadership
Determining demand
Price sensitivity
Distinctive
Substitute awareness
Quality comparability of substitute
Portion of customers’ total income
Part of total cost of the end product
Used in conjunction with assets previously bought
Perceived value-image-prestige
Storability
Types of cost:

31. Variable cost
Fixed cost
Target costing
Mark up pricing
Target return pricing
Perceived value pricing
Value pricing
Going rate pricing
Price discount allowances
Promotional pricing
Discriminatory pricing
Optional featuring pricing
Captive product pricing
Two part pricing
Product bundling price
Channel management process
Selection criterion of channel member
Training of channel members
Motivating channel members
Coercive power

32. Reward power
Legitimate power
Expert power
Referent power
Channel dynamics
Vertical marketing systems
Conventional marketing channel versus vertical marketing
channel
Horizontal marketing system-banks in super store
Multi channel marketing systems
Instead of one channel you may have parallel channels for the
same product but for different segments
Conflicts among the channel members
Conflict of objectives with the principal
Manage and resolve the channel conflict

33. Chapter-17
Designing marketing channels
What is marketing channels-distribution channels?
Hybrid channels: combination of direct sales and external sale channels.
Functions of marketing channels:
Financial
Economy and efficiency
Reduce the Opportunity cost
Greater penetration
Gather information
Marketing flows carried out by marketing channels
Physical flow of goods
Title flows
Payment flows
Information flows
Promotion flows

34. Channels levels:
Zero level
One level
Two level
Service sector channels of distribution
Major channels alternatives:
Exclusive distribution
Intensive distribution
Selective distribution
Trends in retailing:
• New retail forms: food chains at gas station-nirala, pizza hut, coffee
shops in art galleries and book stores etc.
• Growth of intertype competition-different type of stores competing
for same customer. On line vs retailers
• Growth of large retailers-HKB.
• Growing investment in technology.
• Global presence of major retailers-makro-D mart-walmart
• Logistics have become the back bone of wholesalers and on line
retailers-etailers.