1) What is marketing?
Marketing is defined as to understand the needs of the customers and
fulfill their needs with our product/ services.
Marketing includes all types of advertisements, branding, selling, and
proper-segmentation of the market to meet the desired customer of
our products and ensure profitability for the company.
Marketing vs Sales:
Marketing and sales are both activities aimed at increasing revenue.
They are so closely inter-related that people often don’t realize the
difference between the two.
Marketing activities include consumer research (to identify the needs
of the customers), product development (designing innovative
products to meet existing or latent needs), advertising the products to
raise awareness and build the brand. The typical goal of marketing is
to generate interest in the product and create leads or prospects.
Sales activities are focused on converting prospects to actual paying
customers. Sales involves directly interacting with the prospects to
persuade them to purchase the product.
Activity Marketing Sales
Determine future needs
and has a strategy in
place to meet those
needs for the long term
Makes customer demand
match the products the
company currently offers.
Process One to many one to one
Fulfill customer's wants
and needs through
Fulfill sales volume
products and/or services
the company can offer.
Longer term Short term
creating products to
meet those needs,
promotions to advertise
Once a product has been
created for a customer need,
persuade the customer to
purchase the product to
fulfill her needs
Strategy Pull Push
Marketing shows how
to reach to the
Customers and build
long lasting relationship
Selling is the ultimate result
Marketing targets the
construction of a brand
identity so that it
associated with need
Sales is the strategy of
meeting needs in an
method, driven by human
interaction. There's no
premise of brand identity,
longevity or continuity. It's
simply the ability to meet a
need at the right time.
Why marketing is important to organization?
The success of your business lies in its marketing. Most aspects of your
business depend on successful marketing. The overall marketing covers
advertising, public relations, promotions and sales. Marketing is a process
by which a product or service is introduced and promoted to potential
customers. Without marketing, your business may offer the best products or
services in your industry, but none of your potential customers would know
about it. Without marketing, sales may crash and companies may have to
It helps your business in several aspects like:
Increasing the sales
To grab the customers
To communicate highly about your product with the public
What are 4 P’s of marketing mix?
The right product
sold at a right price
in the right place
with the suitable promotion
7P’s of service marketing
It includes marketing mix + 3 P’s
by doing it in a right process
with pleasing physical evidence
to reach the right people
What is the difference between Marketing a Good (tangible product) and
Marketing a Service?
Marketing a tangible product is completely different from marketing a
Both are having one common quality
I.e. to buy the product/to get the service from a particular company, one
should trust the company.
Otherwise the company has to close its operations.
Activity Product service
TIME When you sell a
product, there is time
invested to create or
acquire the product and
then it is sold again and
again without further
Selling a service also
means you're selling
your time. Services by
their very nature are
there is no way to
continue providing a
continuing to invest
time performing the
DELIVERABILITY When you're marketing
products, you can give
customers a delivery
date estimate if they're
ordering online or
through the mail, and
Services must be
created after they're
ordered, and delivery
times will vary. The
marketing services is
being able to convince
they can walk out the
door with the product
customers that you
can and will deliver
quality results within
a given period of time
RELATIONSHIP Marketing a product is
based on the
Needs and wants of the
Marketing a service is
completely based on
the relationship and
trust with the
2 .What is positioning?
Positioning refers to the perception of a product in the minds of consumer
in relation to its competing product. Positioning map is a graphical device
to study and analyze the positions or perception of each of a group of
competing products in respect of two specific product characteristic.
Example: Apple products have a very different market positioning than
Dell because Apple products are known as expensive, but innovative
technology pieces while Dell products are more known as less expensive,
but reliable products
It is a basically a graph that represents the strength or extent of the two
product characteristics on x and y-axis.
Example: To find relative position of different brands of cars in respect of
customer perception of superiority of their styling and technical features,
the graph may represent the styling attractiveness of the model along x-axis
and technical superiority along y-axis. Then each of the model to be plotted
on this graph according to the assessment of customer perception in respect
of these two characteristics.
What is FCB grid?
FCB Grid helps direct both our creative
strategy and our media strategy as it
clarifies how consumers approach the
buying process for different products. This
process is driven by the type of product.
POINT OF PARITY:
Points of parity are those elements that are considered mandatory for a
brand to be considered a legitimate competitor in its specific category. It is
what makes consumer consider your brand, along with your competitors.
So before you work on identifying your competitive advantage, you want to
make sure you identify what it takes to be a player in your category.
POINTS OF DIFFERENTIATION:
Points of differentiation are the attributes that make your brand unique. It is
your competitive advantage. It is what your brand slogan should reflect.
What is branding?
Branding is one of the most important aspects of any business, large or
small, retail or B2B. An effective brand strategy gives you a major edge in
increasingly competitive markets
Simply put, your brand is your promise to your customer. It tells them what
they can expect from your products and services, and it differentiates your
offering from your competitors'. Your brand is derived from who you are,
who you want to be and who people perceive you to be.
Are you the innovative maverick in your industry? Or the experienced,
reliable one? Is your product the high-cost, high-quality option, or the low-
cost, high-value option? You can't be both, and you can't be all things to all
people. Who you are should be based to some extent on who your target
customers want and need you to be.
Visualizing POP and POD
The foundation of your brand is your logo. Your website, packaging and
promotional materials--all of which should integrate your logo--
communicate your brand.
3. What is segmentation?
A group of people that share one or more characteristics. Each market
segment is unique and marketing managers decide on various criteria to
create their target market(s). They may approach each segment differently,
after fully understanding the needs, lifestyles, demographics and
personality of the target. To meet the most basic criteria of a market
segment, three characteristics must be present:
Homogeneity (common needs within segment)
Distinction (unique from other groups)
Reaction (similar response to market)
Example: interests, lifestyle, age, gender, race, marital status, education
Segmentation is based on
What is target marketing?
A target market can be separated from the market as a whole by
geography, buying power and demographics, as well as by psychographics.
Target Marketing involves breaking a market into segments and then
concentrating your marketing efforts on one or a few key segments. It can
be the key to a small business’s success.
The beauty of target marketing is that it makes the promotion, pricing and
distribution of your products and/or services easier and more cost-effective.
It provides a focus to all of your marketing activities.
While market segmentation can be done in many ways, depending on how
you want to slice up the pie, three of the most common types are:
Geographic – based on location such as home addresses;
Demographic – based on measurable statistics, such as age or income;
Psychographic – based on lifestyle preferences, such as being urban
dwellers or pet lovers.
What is a target group?
Target group is a particular group on whom the company is targeted to sell
their products directly/indirectly to those group of people.
A target market is a group of customers that the business has decided to aim
its marketing efforts and ultimately its merchandise. A well-defined target
market is the first element to a marketing strategy. The target market and
the marketing mix variables of product, place(distribution), promotion and
price are the four elements of a marketing mix strategy that determine the
success of a product in the marketplace.
Once these distinct customers have been defined, a marketing mix strategy
of product, distribution, promotion and price can be built by the business to
satisfy the target market
A target audience, is a specific group of people within the target market at
which a product or the marketing message of a product is aimed at. A target
audience can be formed of people of a certain age group, gender, marital
status, etc., e.g. teenagers, females, single people, etc. A combination of
factors, e.g. men aged 20–30 is a common target audience. Other groups,
although not the main focus, may also be interested.
Example: If a company sells new diet programs for men with heart
disease problems (target market) the communication may be aimed at the
spouse (target audience) who takes care of the nutrition plan of her husband
4. What is a product?
A product is a good/service that can be offered to a market to satisfy the
need or want of a customer.
Core product – This is the end benefit for the buyer and answers the
question: What is the buyer really buying?
Example: The buyer of a car is buying a means of transport, the buyer of an
aspirin is buying pain relief and the buyer of financial advice is hoping to
buy financial security and peace of mind.
Formal product – This is the actual physical or perceived characteristics
of your product including its level of quality, special features, styling,
branding and packaging.
Augmented product – The support items that complete your total product
offering such as after-sales service, warranty, delivery and installation.
Product positioning is the way a product or service is seen by consumers
and how they view its important attributes in relation to competitor’s
A car can be positioned on the basis of style, performance, safety or
economy whilst a computer might be positioned on the basis of speed,
capacity, and reliability.
Total product concept:
The importance of service in your product strategy
Many businesses underestimate the importance of quality customer service,
but consumers today are becoming more educated, more discerning, more
demanding, and more aware of their rights, so disregarding the customer
service element in your product strategy could be a costly error.
When developing and implementing your customer service policy it’s
worth remembering the following points:
Firstly, it’s a well-researched fact that each dissatisfied customer will,
on average, tell 15 other people of their negative experience - a
satisfied customer will tell no more than 6 so with those odds, you
really can’t afford to have too many dissatisfied customers.
Secondly, it’s only loyal customers that take the time to complain -
others simply take their business elsewhere - so you should treat a
complaint as a golden opportunity by solving it and then going on to
cement a positive and ongoing relationship with that customer.
What are product mix and product line?
Product mix also known as product assortment consists of all the product
lines and items that a particular seller offers for sale. Avon’s product mix
consists of four major product lines: cosmetics, jewelry, fashions, and
household items. Each product line consists of several sublines.
Product range/mix -> all products which a company is selling
It includes four elements:
Width assortment: It refers to how many product lines the company
Length assortment: It signifies how many products a given line includes.
Depth assortment: It touches on how many versions of a given product a
Consistency assortment: It denotes the uniformity relative to how
products are used by consumers, or by how they are produced or
Example: An automotive manufacturer could be two product lines "wide:"
cars and trucks. The car line "length" could run from sub-compact to full-
size, four or five cars long. Within the car line, their sub-compact could
offer a "deep" portfolio: a two-door coupe, a four-door sedan and a
hatchback, all offered in base, mid-range, higher-end and sport trim: 12
models. Finally, much of an auto manufacturer’s product mix is consistent
in that they use gasoline motors to transport people and goods, and sell via
It is a group of products that are closely related because they function in a
similar manner, are sold to the same customer groups, are marketed through
the same types of outlets, or fall within given price ranges.
Example: Nike produces several lines of athletic shoes, Motorola produces
several lines of telecommunications products, and AT&T offers several
lines of long-distance telephone services. A company could have one line
or several lines, but all the products within this line or lines would be the
5. What are the different types of pricing strategies?
Price set to ‘penetrate the market’
‘Low’ price to secure high volumes
Typical in mass market products -chocolate bars, food stuffs, mobile
May be useful if launching into a new market
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.
Example: PlayStation, jewelers, digital technology.
Prices set according to perceived value of the product/service and
'willingness to pay'
Examples: Include status products/exclusive products like sachin’s
autographed cricket bat.
Goods/services deliberately sold below cost to encourage sales elsewhere
Purchases of other items more than covers ‘loss’ on item sold typical in
Used to play on consumer perceptions
Example: - Rs. 999 instead of Rs. 1099
GOING RATE (PRICE LEADERSHIP)
Leading the way in determining prices
Common in oligopolies
Example: Pepsi, Sbi
Firm (or firms) submit their price for carrying out the work
Purchaser then chooses which gives best value
Deliberate price cutting or offer of free gifts/products to force rivals
(normally smaller and weaker) out of business to prevent new entrants.
Example: Intel, Walmart
ABSORPTION/FULL COST PRICING:
Full Cost pricing: Attempting to set price to cover both fixed and variable
Absorption Cost Pricing: Price to set absorb some of the fixed costs of
Marginal Cost Pricing:
Setting the price of a product to equal the extra cost of producing an extra
unit of output. Mostly used during the period of low sales. Particularly
relevant in transport where fixed costs may be relatively high.
Aircraft flying from Delhi to Mumbai. Total cost including normal profit-
Rs.15000 of which Rs.13000 is fixed cost.
Number of seats=160
Average price= Rs.93.75
MC of each passenger=2000/160 =Rs.12.50
If flight is not full, better to offer passengers chance of flying at Rs.12.50
and fill the seat than not fill it all.
Contribution=Selling price-variable (direct costs) prices to ensure coverage
of all variable costs and a contribution to the fixed costs.
Setting price to target a specified profit level estimates the cost and
potential revenue at different prices.
Selling price= cost of production + profit %
Variable & Fixed cost + markup%= price
INFLUENCE OF ELASTICITY:
Degree of price elasticity impacts on the level of sales and hence revenues
(%change in quantity demanded)/ (% change in price)
6. What is the role of “place” in marketing mix?
Marketing mix refers to the right mixture of marketing factors with the aim
of achieving the best results that will help a company sell products under
consideration. Marketing mix includes price, place, promotion and product.
These four marketing factors have established economic principles or
conditions that have to be met in order to achieve maximum sales. The role
of place in the marketing mix is its importance as a means of deciding the
best channels for effectively getting the goods to the customer.
Place (or its more common name “distribution”) is about how a business
gets its products to the customers. The objective of distribution is clear. It
is to make products available in the right place at the right time in the right
quantities. Distribution matters for a business of any size, it is a crucial part
of the marketing mix.
It is one thing having a great product, sold at an attractive price. But what
• Customers are not near a retailer that is selling the product?
• A competing product is stocked by a much wider range of outlets?
• A competitor is winning because it has a team of trained distributors or
sales agents who are out there meeting customers and closing the sale?
You can see from the above that getting distribution right is a key part of
Distribution is achieved by using one or more distribution channels,
• Distributors / Sales Agents
• Direct (e.g. via e-commerce)
What is a VMS and HMS?
A vertical marketing system, or VMS, is a business system that aims to
achieve better efficiency and economies of scale. In the vertical marketing
system, independent companies within related industries work together and
eliminate conflict. Horizontal marketing systems, on the other hand,
represent agreements across different industries.
Vertical marketing is a joining of manufacturers, wholesalers and retailers
in the production and distribution process.
The VMS includes advertising, promotions and public relations within
different but related industries. This process allows businesses to manage
and coordinate various companies formally or informally in order to gain a
larger market share.
The purpose of a VMS is to eliminate competition and conflict that
typically arises in the conventional marketing system. This leads to a higher
efficiency and reduction in product costs, as companies no longer pursue
their individual financial goals.
Types of VMS:
There are three major types of VMS:
Corporate: In the corporate system, the supply chain components
belong wholly or partially to one firm. Forward integration means that
a production company owns the retail chain. On the other hand,
backward integration occurs when a retail chain owns production
Administered: An administered system implies that there exists one
dominant company that controls production and distribution and
dictates terms to the suppliers without a formal agreement or
Contractual: With contractual VMS, independent production and
distribution companies come to an agreement to integrate resources
for their mutual benefit. Examples of such systems are franchises and
The main advantage of VMS is that a centralized management has
direct control over all aspects of the business, anticipates problems
and makes necessary changes to increase efficiency.
A good communication and coordination is crucial to the success of
VMS, as these organizations are larger and their operations are more
VMS applies to both small and large companies. Small businesses
benefit from VMS by building a strong relationship with their
suppliers, distributors and retailers. Once these small businesses grow,
they can start making acquisitions and developing their own vertical
Employees at the bottom of a vertical structure may feel less valued than
those higher up in the chain. Some employees may not relish the
accompanying culture of politics, which places heavy emphasis on pleasing
the boss. It can also take a great deal of time for top management decisions
to filter down through multiple layers, reducing the organization's ability to
react quickly to a rapidly changing business climate. Because of the
centralized control of power, weak leadership at the top can hamper the
effectiveness of the entire organization.
A horizontal structure differs from a vertical structure in that there are
fewer structural layers. Each department consists of several lateral
functional areas overseen by an individual known as a product manager or
process leader who reports to top management. For example, the product
development department may consist of the lateral functional areas of
market analysis, research, product planning and product testing. The
product manager is responsible for the end result.
Employees may attain greater satisfaction in a horizontal structure due
to greater freedom and autonomy.
The use of cross-function teams can also lead to high levels of
cooperation throughout the organization.
The heavy emphasis on innovation can lead to ideas that keep the
organization ahead of the competition.
The absence of multiple structural layers provides streamlined
communication and reporting processes, making the organization
more nimble and adaptable to change.
The decentralized structure could lead to a "loose ship," as the team and
project leaders have high levels of responsibility for achieving results but
little real authority over their team members.
A resulting lack of control can lead to finger-pointing when things go awry,
which can hinder productivity, according to the Practical Management
Organizations attempting to convert from a vertical to a horizontal
structure can face challenges, as management needs to adjust to a less
authoritarian and a more peer-like relationship with subordinates.
Different formats of retail stores found in India?
The term retail institution refers to the basic format or structure of a
business. Classification for Retail institutions is necessary to enable firms
to better understand and enact their own strategies: selecting an
organizational mission, choosing an ownership alternative, defining the
goods/ service category and setting objectives.
Retailing is one of the few sectors in our economy where entrepreneurial
activity is extensive. Although retailers are primarily small (80% of all
stores are operated by firms with one outlet and over one-half of all firms
have two or fewer paid employees), there are also very large retailers.
Retail firms may be independently owned, chain owned, franchisee
operated, leased departments, owned by manufacturers or wholesalers,
consumer owned. From a positioning and operating perspective, each
ownership format delivers unique value.
Retail executives must work on the strengths and weaknesses inherent in
each of these formats to be successful Independents
Also, most of the time these stores save tax as they belong to the small
A chain retailer operates multiple outlets (store units) under common. In
developed economies, they account for nearly a quarter of retail outlets and
over 50 percent of retail sales. Retail chains can range from two stores to
retailers with over 1,000 stores.
Chain Retailers have several advantages. They enjoy strong bargaining
power with suppliers due to the volumes of purchases. They generally
bypass wholesalers. Many of them buy directly from the manufacturers.
Suppliers service the orders from chains promptly and extend a higher level
of proper service and selling support. New brands reach these stores faster.
Most of these chains sell private. Chains achieve efficiency due to the
centralization of purchasing and warehousing and computerization.
Wider geographic coverage of markets allows chains to utilize all forms of
media. Most of the chains invest considerable time and resources in long
term planning, monitoring opportunities and threats.
Chain retailers suffer from limited flexibility, as they need to be consistent
throughout in terms of prices, promotions, and product assortments.
Chain retailers have high investments in multiple leases, fixtures, product
assortments and employees. Due to their spread, these retailers have
reduced control, lack of communication and time delays. Thus, such
retailers focus on managing a specific retail format for a better strategic
advantage and increased profitability.
Some chain retailers capitalize on their widely known image and adopt
flexibility to market changes.
Franchising is a contractual agreement between a franchiser and a
franchisee that allows the franchisee to operate a retail outlet using a name
and format developed and supported by the franchiser. In a franchise
contract the franchisee pays a lump sum plus a royalty on all sales for the
right to operate a store in a specific location. The franchisee also agrees to
operate the outlet in accordance with procedures prescribed by the
franchisers. The franchiser provides7
assistance in locating and building the store,
Developing the products and/or services sold, management training
There are two types of franchising: product/ trademark and business format.
In product/ trademark franchising, franchisees acquire the identities of
the franchiser by agreeing to sell the latter’s product and/or operate
under the latter’s names. But they are independent in their operation.
They may draw certain operating rules in consultation with the
In a business format franchising arrangement, the two parties have a
synergetic relationship. The franchiser provides assistance in strategic
and operation issues besides the right to sell goods and services. The
franchisees can take advantage of prototype stores, standardized
product lines and cooperative advertising.
Three structural arrangements are found in retail franchising.
(a) Manufacturer- Retailer; where a manufacturer the right to sell goods and
related services through a licensing agreement as in the case of automotive
dealers and petroleum products dealers.
(b) Wholesaler- retailer; which may take the form of a voluntary franchise
system as in consumer electronic stores or co-operative where a group of
retailers set up a franchise system and share the ownership and operations
of a wholesaling organization.
(c) Service sponsor retailer, where a service firm licenses individual
retailers to let them offer specific service package to consumers, such as
auto rental, hotels and fast food restaurants.
This arrangement has several advantages.
Individual franchisees can own retail enterprises with relatively small
Franchisers gain a national or global presence quickly and with less
investment. It improves cash flow as money is obtained when goods
are delivered rather than when they are sold.
Since franchisees are owners and not employees, they have a greater
incentive to work hard.
Franchisees may also have to face certain disadvantages.
Over saturation could occur adversely affecting the sales and profits
of each unit.
They may enter into contract provisions that give the franchisers
undue advantage. They can exclude franchisees
A supermarket, a large form of the traditional grocery store, is a self-
service shop offering a wide variety of food and household products,
organized into aisles. It is larger in size and has a wider selection than a
traditional grocery store, but is smaller and more limited in the range of
merchandise than a hypermarket or big-box market.
The traditional supermarket occupies a large amount of floor space, usually
on a single level. It is usually situated near a residential area in order to be
convenient to consumers. The basic appeal is the availability of a broad
selection of goods under a single roof, at relatively low prices. Other
advantages include ease of parking and frequently the convenience of
shopping hours that extend into the evening or even 24 hours a day.
Supermarkets usually allocate large budgets to advertising, typically
through newspapers. They also present elaborate in-shop displays of
Supermarkets typically are supplied by the distribution centers of
their parent companies, usually in the largest city in the area. Supermarkets
usually offer products at relatively low prices by using their buying power
to buy goods from manufacturers at lower prices than smaller stores can.
They also minimize financing costs by paying for goods at least 30 days
after receipt and some extract credit terms of 90 days or more from
vendors. Certain products (typically staple foods such
as bread, milk and sugar) are very occasionally sold as loss leaders, that is,
with negative profit margins so as to attract shoppers to their store.
A retail store that combines a department store and a grocery supermarket.
Often a very large establishment, hypermarkets offer a large variety of
products such as appliances, clothing and groceries
Hypermarkets offer shoppers a one-stop shopping experience. The idea
behind this big box store is to provide consumers with all the goods they
require, under one roof. Some of the more popular hypermarkets include
the Wal-Mart Supercenter, Fred Meyer and Super Kmart.
Hypermarkets, like other big-box stores, typically have business models
focusing on high-volume, low-margin sales
Because of their large footprints, many hypermarkets choose suburban or
out-of-town locations that are easily accessible by automobile.
A departmental store is a large retail trading organization. It has several
departments, which are classified and organized accordingly. Departments
are made as per different types of goods to be sold. For example, individual
departments are established for selling packed food goods, groceries,
garments, stationery, cutlery, cosmetics, medicines, computes, sports,
furniture, etc., so that consumers can purchase all basic household
requirements under one roof. It provides them maximum shopping
convenience and therefore, also called as 'Universal Providers' or 'one spot
shopping'. The concept of a departmental store first originated in France.
All departments are run under the same ownership, management and
control. Each department is an independent unit as far as a sale of any
specific product and its varieties are concerned. The main aim of every
departmental store is to provide and fulfill all requirements of their
customers at one place along with comforts and facilities which a small
scale retailer cannot provide. Here all goods which are available under one
roof are sold on a cash basis.
Departmental Store is located in the center of a city
Departmental Store offers a wide variety of goods
Departmental Store means shopping under one roof
Departmental Store offers quality goods and services
Departmental Store has a high operational cost
Departmental Store diffuses the risk of loss
7. What is brand equity?
Brand equity is how your customer recognizes why you are different
and better than the alternative.
Brand equity is built on that customer's direct experience with your
product or service. This experience, repeated over time, creates equity
or value in your brand. And it serves as a shorthand in the buyer's
mind that separates you from everyone else.
Brand equity is what creates loyalty that carries beyond price or the
occasional product or service bump in the road. It is the quality that
motivates your customers to recommend their friends or colleagues to
How to build brand equity?
Clarify your position
The first step to building brand equity is to define your
positioning: the single thing your company stands for to your
customers. Single is the operative word here. Good positioning
forces hard choices.
A simple one that I like is the Positioning XYZs:
"We are the only X that solves Y problem in Z unique way."
X is the category of the company, product, or service or other
offering you've chosen to own.
Y is the unmet need of your target audience.
Z is the differentiation, advantage, or key positive distinction
you have over your competition
Tell your story
All brands are stories, and a good way to get started is to
document and share your best corporate stories: the founding
insight of the company, the times you went to extraordinary
lengths to take care of a customer, or the background behind the
big product breakthrough.
The good news is that with ubiquitous broadband access and
Web-based applications, it is within every company's grasp to
share these stories more broadly through rich-media video and
Bring into your life
Once you have the story, you need to bring it to life. Make sure
that the way your company looks and feels to the outside world
matches that truth. This leads to questions about your corporate
identity: Do the basics (starting with your name and logo) make
the impression you want? And your broader system for
communicating to the market: Web site, brochures, your retail
Start building brand before they buy
Think beyond the transaction. Brands begin at the transaction
level, but the brand experience goes much deeper. The
opportunity to create a brand impression starts long before the
buying decision. The principle is a simple one: Give away an
artifact of your brand for free. In the professional services
world, this means a taste of your service or your intellectual
Measure your efforts
o Ask your customers
o Check your search rankings
o Monitor the social media conversation
How to measure brand equity?
A Brand Development Model is a diagnostic tool that integrates many
proven metrics into a framework that guides strategy. Marketers need to
consider six stages of development for a brand, each equating to a different
marketing priority, starting with creating basic awareness and concluding
with building customer loyalty. The following identifies these stages,
recommended metrics, and strategy implications for brand management.
Brand should be Recognizable
Brand should be Memorable
Brand should be Viewed with Favor
Brand should be Distinctive
Brand should be Preferred
The Market should be Consuming the Brand and
8. What is marketing ROI?
A Return on Marketing Investment (ROMI) analysis helps organizations
understand the effectiveness of their marketing spending. A ROMI analysis
examines business results in relation to specific marketing activity. The
benefit of this knowledge is that it allows marketers to focus their dollars
on programs that provide the greatest return.
The challenge of marketing
Marketers face many challenges today, including high growth expectations,
cutthroat competition, and the digital and social-media revolution.
Embracing MROI as a discipline can help build strong brands that generate
Better MROI starts with better objectives that are based in the
consumer decision journey (CDJ). Better marketing objectives, in
turn, shape better metrics.
Brand messaging is one of the most important determinants of MROI
success. It is more important to be clear on the most effective
messaging attributes for the given brand objective than it is to have a
precisely optimized marketing mix.
Marketing-mix analytics that don’t make sense to the end business
user are useless. Marketing-mix models should be informed by
industry knowledge, built with transparent assumptions, and delivered
in a way that makes sense intuitively to the business user.
Marketing-investment decisions need to factor in both short- and
long-term impact. Marketing mix models, for example, can capture
only short-term impact and must be augmented with long-term
(brand-building) impact estimates.
Future potential is a critical input. Spend should be biased toward
future growth, and not just optimized based on past performance.
Ultimately, driving marketing spend effectiveness comes down to
capabilities, processes, and talent. Invest in your organization (not just
your data) to build and sustain excellence in MROI
9. What is BCG matrix?
The BCG matrix, invented by the Boston Consulting Group, is a tool that
allows to classify and evaluate the products and services of a business. It is
a decision making tool in order to balance the activities of a company
among those which make profits, those who ensure growth, those which
constitute the future of the firm or those who are its heritage. With this tool
one is able to define the development policy of the company. The matrix
will position the products/services in two ways:
The rate of growth of the market;
The market share of a product/service offered facing the competitors
Positioning = the company has to place each of its products/services
on the matrix. Thus it is able to obtain information on the market
share of the product or service and the market growth.
Creating long-term value = the company should have a product
portfolio that includes products with high growth where it is
necessary to inject cash and products where growth is weaker but
which generate a lot of cash
They do not generate profits unless the company decides to invest resources
to maintain and even increase the market share (become potential stars).
They have a high demand for liquidity and the company must ask the
question: Invest or give up the product?
These are promising products for the company, they even can be considered
as leaders of the industry. The strategy is to boost these products by
appropriate investments to monitor the growth and maintain a position of
strength. These products require a large amount of cash but also contribute
to the company's profitability. They are becoming progressively « cash
cows » with market saturation.
These are products or services which are mature and which generate
interesting profits and cash, but need to be replaced because the future
growth will be lower. They must therefore be profitable because they can
finance other activities in progress (including « stars » and « question
These products are positioned in a declining market and highly competitive
and that the company wants to get rid of soon as they become too expensive
to maintain. The company must minimize the Dogs
The company must decide whether it still injects liquidity, otherwise it will
eliminate the dogs in the near future.
Other possible uses for the BCG Matrix are determining relative market
share and the market growth rate of a product line. The BCG Matrix can
help determine where a product is in its product life cycle and if there is a
possibility of growth for the market or product.
What is Ansoff matrix?
The purpose of this matrix is to help managers consider how to grow their
business through existing or new products or in existing or new markets. In
this way he was helping managers to assess the differing degrees of risk
associated with moving their organization forward.
Ansoff’s matrix suggests four
alternative marketing strategies which hinge on whether products are new
or existing. They also focus on whether a market is new or existing. Within
each strategy there is a differing level of risk. The four strategies are:
1. Market penetration – This involves increasing market share within
existing market segments. This can be achieved by selling more
products/services to established customers or by finding new
customers within existing markets.
2. Product development – This involves developing new products for
existing markets. Product development involves thinking about how
new products can meet customer needs more closely and outperform
the products of competitors.
3. Market development – This strategy entails finding new markets for
existing products. Market research and further segmentation of
markets helps to identify new groups of customers.
4. Diversification – This involves moving new products into new
markets at the same time. It is the most risky strategy. The more an
organization moves away from what it has done in the past the more
uncertainties are created. However, if existing activities are
threatened, diversification helps to spread risk.
Mckinsey’s 7’s framework:
The model is most often used as a tool to assess and monitor changes in the
internal situation of an organization.
The model is based on the theory that, for an organization to perform well,
these seven elements need to be aligned and mutually reinforcing. So, the
model can be used to help identify what needs to be realigned to improve
performance, or to maintain alignment (and performance) during other
types of change.
Whatever the type of change – restructuring, new processes, organizational
merger, new systems, change of leadership, and so on – the model can be
used to understand how the organizational elements are interrelated, and so
ensure that the wider impact of changes made in one area is taken into
The 7S model can be used in a wide variety of situations where an
alignment perspective is useful, for example, to help you:
Improve the performance of a company.
Examine the likely effects of future changes within a company.
Align departments and processes during a merger or acquisition.
Determine how best to
implement a proposed
Strategy: the plan devised to maintain and build competitive advantage over
Structure: the way the organization is structured and who reports to whom.
Systems: the daily activities and procedures that staff members engage in to
get the job done.
Shared Values: called "superordinate goals" when the model was first
developed, these are the core values of the company that are evidenced in
the corporate culture and the general work ethic.
Style: the style of leadership adopted.
Staff: the employees and their general capabilities.
Skills: the actual skills and competencies of the employees working for the
10. What is an SBU?
A Strategic Business Unit (SBU) is a basic organization unit for which it is
meaningful to formulate a separate competitive strategy. Typically the SBU
is a business providing a single product or a number of closely related
products that serve a well-defined product-market combination and
compete with a well-defined set of competitors.
General Electric is an example of a company with this sort of business
organization. General Electric has 49 SBUs.
A value chain is the whole series of activities that create and build value at
The value chain is made of primary activities and support activities.
Primary involves inbound logistics (getting the material in for adding value
by processing it), operations (which are all the processes within the
manufacturing), outbound (which involves distribution to the points of
sale), marketing and sales (which go sell it, brand it and promote it) and
after sale service.
Supply chain management (SCM) is the oversight of materials,
information, and finances as they move in a process from supplier to
manufacturer to wholesaler to retailer to consumer. Supply chain
management involves coordinating and integrating these flows both within
and among companies. It is said that the ultimate goal of any effective
supply chain management system is to reduce inventory (with the
assumption that products are available when needed). As a solution for
successful supply chain management, sophisticated software systems with
Web interfaces are competing with Web-based application service
providers (ASP) who promise to provide part or all of the SCM service for
companies who rent their service.
Supply chain management flows can be divided into three main flows:
The product flow
The information flow
The finances flow
The product flow includes the movement of goods from a supplier to a
customer, as well as any customer returns or service needs. The information
flow involves transmitting orders and updating the status of delivery. The
financial flow consists of credit terms, payment schedules, and
consignment and title ownership arrangements.
11. What is CRM? What is ―Share of Wallet‖? What is Customer Life
Customer Relationship Management is a business strategy that enables
organizations to get closer with their customers, to better serve their needs,
improve customer service, enhance customer satisfaction and thereby
maximize customer loyalty and retention. The present business scenario
assigns great emphasis on managing business customers. Organizations are
quickly recognizing that in order to survive competition it is important to
grab customer attention with unique brand identity and superior service
levels. Businesses which initially focused on finance / sales / marketing
management are now shifting their priority towards customer relationship
management. CRM solutions are flooding the market with easy-to-use tools
to manage business customer.
CRM, Customer Relationship Management is a business philosophy
towards customers. To focus on their needs and improve customer
relationships, with a view to maximize customer satisfaction. It
encompasses the variety of technology employed to streamline customer
interaction to find, acquire and retain customers
Wallet share is a marketing metric used to calculate the percentage of a
specific consumer's spending for a type of good or service that goes to a
particular company. For example, if a consumer spends Rs: 60 a month at
fast food restaurants and Rs: 30 of that amount is spent at McDonald's,
McDonald's has a 50% wallet share for that customer. The term is
sometimes expressed as share of wallet (SOW).
Increasing wallet share is often easier than increasing market share, which
is a business' proportion of all the spending in a particular industry or
product market. Strategies aimed at gaining wallet share include trying to
increase the average amount that a customer spends per visit, encouraging
more frequent visits and fostering customer loyalty and retention.
Customer Lifetime Value (CLV) is defined as the total dollars flowing from
a customer over the entire relationship with that customer. Predicting what
a customer is going to spend over their lifetime requires significant
statistical analysis. CLV describes the net present value of stream of future
profits expected over the customer‘s lifetime purchase. There should
always be efforts made to increase CLV of customer. Loyalty economics
quantify the differences in customer lifetime value between promoters,
detractors and passives. The first step to understanding those differences is
quantifying the lifetime value of your average customer. Cost of acquiring
customer is very high.
12. What is a Value Proposition? Explain in detail with Examples?
A business or marketing statement that summarizes why a consumer should
buy a product or use a service. This statement should convince a potential
consumer that one particular product or service will add more value or
better solve a problem than other similar offerings.
1. All Benefits - Most managers when asked to construct a customer
value proposition, simply list all the benefits they believe that their
offering might deliver to target customers. The more they can think of
the better. This approach requires the least knowledge about
customers and competitors and, thus, results in a weaker marketplace
2. Favorable Points of Difference - The second type of value proposition
explicitly recognizes that the customer has alternatives and focuses on
how to differentiate one product or service from another. Knowing
that an element of an offering is a point of difference relative to the
next best alternative does not, however, convey the value of this
difference to target customers. A product or service may have several
points of difference, complicating the customer's understanding of
which ones deliver the greatest value. Without a detailed
understanding of customer's requirements and preferences, and what it
is worth to fulfill them, suppliers may stress points of difference that
deliver relatively little value to the target customer.
3. Resonating Focus - The favorable points of difference value
proposition is preferable to an all benefits proposition for companies
crafting a customer value proposition. The resonating focus value
proposition should be the gold standard. This approach acknowledges
that the managers who make purchase decisions have major, ever-
increasing levels of responsibility and often are pressed for time. They
want to do business with suppliers that fully grasp critical issues in
their business and deliver a customer value proposition that's simple
yet powerfully captivating. Suppliers can provide a customer value
proposition by making their offerings superior on the few attributes
that are most important to target customers in demonstrating and
documenting the value of this superior performance, and
communicating it in a way that conveys a sophisticated understanding
of the customer's business priorities.
For example, if you’re online bookstore has average selection, decent
prices, delivery, a guarantee, good customer service, and a website, why
would anyone buy from you? There’s surely a competitor who beats you in
at least some of those aspects.
13. What is a Promotional Mix? What is IMC and what are its tools?
It refers to all the decisions related to promotion of sales of products and
services. The important decisions of promotion mix are selecting
advertising media, selecting promotional techniques, using publicity
measures and public relations etc.
There are various tools and elements available for promotion. These are
adopted by firms to carry on its promotional activities. The marketer
generally chooses a combination of these promotional tools.
Following are the tools or elements of promotion. They are also called
elements of promotion mix:
Advertisement can be defined as the ―paid form of non-personal
presentation and promotion of idea, goods or services by an identified
sponsor. It is an impersonal presentation where a standard or common
message regarding the merits, price and availability of product or service is
given by the producer or marketer. The advertisement builds pull effect as
advertising tries to pull the product by directly appealing to customer to buy
Sales promotion refers to short term use of incentives or other promotional
activities that stimulate the customer to buy the product. Sales promotion
techniques are very useful because they bring:
(a) Short and immediate effect on sale.
(b) Stock clearance is possible with sales promotion.
(c) Sales promotion techniques induce customers as well as distribution
(d) Sales promotion techniques help to win over the competitor.
Personal selling means selling personally. This involves face to face
interaction between seller and buyer for the purpose of sale. The personal
selling does not mean getting the prospects to desire what seller wants but
the concept of personal selling is also based on customer satisfaction
Apart from four major elements of marketing mix, another important tool
of marketing is maintaining Public Relations. In simple words, a public
relations means maintaining public relations with public. By maintaining
public relations, companies create goodwill. Public relations evaluate
public attitudes; identify the policies and procedures of an organization
with the public interest to earn public understanding and acceptance.
Public does not mean only customers, but it includes shareholders,
suppliers, intermediaries, customers etc. The firm‘s success and
achievement depends upon the support of these parties for example, firm
needs active support of middle men to survive in market, it must have good
relations with existing shareholders who provide capital. The consumers
‘group is the most important part of public as success of business depends
upon the support and demand of customers only
An effective marketing mix must meet customer needs better than
competitors. Various elements of the marketing mix must be in sync with
one another. It must also be mindful of the company‘s resources. The target
customer has to be understood in terms of his level of need, his ability and
willingness to pay a particular amount for his needs being served, the way
he would like the product to be delivered, and his most preferred method of
accessing information from the company. Once the target customer is
identified and understood, marketers need to understand how he chooses
among rival offerings. A company needs to understand the choice criteria
that the customer uses in evaluating offerings of different companies. The
marketing mix should reflect the customer‘s choice criteria.
14) What is Media Planning and Media Buying? What is the difference
between “Above-the-line” (ATL) and “Below-the-line” (BTL) Advertising?
Media planning is generally the task of a media agency and entails finding
media platforms for a client's brand or product to use. The job of media
planning involves determining the best combination of media to achieve the
marketing campaign objectives.
In the process of planning the media planner needs to answer questions
How many of the audience can be reached through the various media?
On which media (and ad vehicles) should the ads be placed?
How frequent should the ads be placed?
How much money should be spent in each medium?
Choosing which media or type of advertising to use is sometimes tricky for
small firms with limited budgets and know-how. Large-market television
and newspapers are often too expensive for a company that services only a
small area (although local newspapers can be used). Magazines, unless
local, usually cover too much territory to be cost-efficient for a small firm,
although some national publications offer regional or city editions.
Metropolitan radio stations present the same problems as TV and metro
newspapers; however, in smaller markets, the local radio station and
newspaper may sufficiently cover a small firm's audience.
Media buying, a sub function of advertising management, is the
procurement of media real estate at an optimal placement and price. The
main task of media buying lies within the negotiation of price and
placement to ensure the best possible value can be secured for an
advertisement. The type of people who negotiate the price of these
advertisements are labeled "Media Buyers" in the workplace. Increasingly,
the job of a Media Buyer online is being done in real-time with advanced
Above The Line (ATL) advertising is where mass media is used to
promote brands and reach out to the target consumers. These include
conventional media as we know it, television and radio advertising, print as
well as internet. This is communication that is targeted to a wider spread of
audience, and is not specific to individual consumers. ATL advertising tries
to reach out to the mass as consumer audience.
Below the line (BTL) advertising is more one to one, and involves the
distribution of pamphlets, handbills, stickers, promotions, brochures placed
at point of sale, on the roads through banners and placards. It could also
involve product demos and samplings at busy places like malls and market
places or residential complexes. For certain markets, like rural markets
where the reach of mass media like print or television is limited, BTL
marketing with direct consumer outreach program me do make the most
15. What is advertising? What are the Principles of Advertising? What is
the difference between Advertising and PR and Publicity?
Advertising is a non-personal form of promotion that is delivered through
selected media outlets that, under most circumstances, require the marketer
to pay for message placement. Advertising has long been viewed as a
method of mass promotion in that a single message can reach a large
number of people. But, this mass promotion approach presents problems
since many exposed to an advertising message may not be within the
marketer’s target market, and thus, may be an inefficient use of
promotional funds. However, this is changing as new advertising
technologies and the emergence of new media outlets offer more options
for targeted advertising.
Advertising also has a history of being considered a one-way form of
marketing communication where the message receiver (i.e., target market)
is not in position to immediately respond to the message (e.g., seek more
information). This too is changing. For example, in the next few years
technologies will be readily available to enable a television viewer to click
a button to request more details on a product seen on their favorite TV
program. In fact, it is expected that over the next 10-20 years advertising
will move away from a one-way communication model and become one
that is highly interactive.
1. Make people stop and pay attention
First, the advertisement should make people stop what they’re doing and
pay attention. Most consumers view advertisements as interruptions and
automatically ignore the messages. The advertisement needs to be engaging
and catch their interest. However, catching someone’s interest isn’t enough.
Many advertisements attract attention through gimmicks and jokes, but the
important parts of the message—the company’s name or product—don’t
stick with the customer. An effective advertisement is interesting and also
informative, staying in the customer’s mind after he or she has moved on.
2. Advertise in the right places
From television to the Internet to the newspaper, there are plenty of places
to advertise—but marketing mediums are not created equally. Choose the
advertising platforms that are most relevant to your audience and create ads
designed especially for the venues. For example, a restaurant might create a
morning radio commercial advertising their new breakfast sandwiches
while simultaneously advertising a dinner special on local evening
television. Think about what the customers will be doing when they see the
ad and plan a message that is tuned to their interests.
3. Appeal to emotion and reason
To create an effective advertisement, it’s essential to understand why
people buy products and services. There are certainly logical reasons at
hand based on the customer’s needs, but most consumers also base their
purchases on emotional reasons. The most successful advertisements
simultaneously appeal to a customer’s rational and emotional sides. Catch
your customer’s attention first with an emotional
appeal that will make him or her want the product, and then follow up with
rational reasons to convince the customer that he or she needs the product.
4. Focus on frequency
Most people ignore advertisements, therefore customers typically need to
be exposed to your message about three times before they will become
aware of what you’re offering. Of course, the first three exposures aren’t
enough to guarantee a sale. Most consumers generally need 9-12 exposures
to a message before they are ready to make a decision or a purchase. That
means that it’s important to run your ads frequently—and in many cases,
across multiple platforms—if you hope to reach a wider audience and
increase your sales.
5. Coordinate the advertising efforts
To increase customer awareness about your product, coordinate your
marketing efforts so that each advertisement clearly reflects your company
and your brand. Consumers are more likely to take note of your business
when you have an integrated marketing plan that includes advertisements
across multiple platforms. By using the same theme of your television
commercial in a magazine ad or on a website banner, customers will
become more aware of what you’re selling and they’ll be more likely to
remember your company’s name when they’re finally ready to buy.
Difference between PR and Advertising
PR and advertising often go hand in hand but they are two completely
different things with a completely different goal and overall effect. While
advertising is exclusively focused on promotion of products or services
with an aim to encourage target audience to buy, PR is specialized in
communication with the public and media.
Just like advertising, PR often helps increase the sales as well and may
include elements of marketing. However, it is mainly focused in creating
positive publicity about a particular company, organization or individual
and maintains a good reputation in the public. By doing so, PR helps create
a relationship between let’s say a commercial company and its customers
who are more likely to choose the products from a company
They have a good opinion over those from a firm they have never heard off
before or save heard something negative about it.
The Effect on the Public
The public reacts very differently to an add than to a newspapers article or a
TV report. They know very well when they are reading/looking an add and
the information they are communicated is perceived with a certain degree
of skepticism. They know that the add wants to persuade them to buy a
particular product or service and will either believe or disbelieve the
information they are communicated. But when they are communicated
news about a new product or service through a third party, for example a
newspapers or online article they perceive it as informative and worthy of
their attention. A press release for instance does not directly encourage
them to buy but it often achieves just that by creating a positive image
about the product/service or its manufacturer, or both.
Neither a professionally led marketing nor PR campaign is inexpensive.
The cost depends greatly on who you hire but generally, PR is a lot less
expensive than advertising. But it is also true that PR has a lot less control
over the way their clients are presented by the media in comparison to paid
ads that oblige the media to publish them unchanged. At the same time, a
press release is published only once by a single media, while the adds can
be published over and over again.
But given that press releases and other PR tools to attract publicity usually
achieve a greater impact on the target audience, there is no need for
repetition of the same stories over and over again to attract attention of the
public like this is usually the case with ads. In addition, an article or TV
cover of purely informative nature is more likely to led the target audience
believe the content of the adds. As a result, PR campaigns often precede
or/and accompany marketing campaigns or are an integral part of
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