MM 1

MARKETING MANAGEMENT
Dr. MUKESH MISHRA

MARKETING MANAGEMENT:
DEFINITIONS
 1. “Marketing is the creation and delivery

of a standard of living”.
 2. “Marketing is a managerial and societal
process by which individuals and groups
obtain what they need and want through
creating, offering, and exchanging
products and services of value with
others”.
DEFINITIONS
3.Marketing is an organizational function

and a set of processes for creating,
communicating, and delivering value to
customers and for managing customer
relationships in ways that benefit the
organization and its stakeholders.
DEFINITIONS
 Marketing management is the

 art and science
 of choosing target markets
 and getting, keeping, and growing
 customers through
 creating, delivering, and communicating
 superior customer value.
WHAT IS MARKETED?
Marketers are
involved with 5. Persons
marketing ten
6. Places
types of entities:
1. Physical Goods 7. Properties
2. Services 8. Organizations
3. Experiences 9. Information
4. Events 10. Ideas
Good Marketing is No Accident
The roaring success of

four-wheeler Tata Ace,
in a market earlier
dominated by three-
wheeler load carriers,
was due to a deep
understanding of the
market needs and
customer requirements
Big on technology.
Small in size
 Tata Ace, a mini truck with the engine capacity of

less than one ton launched by Tata motors in 2005.
 The resounding success of Tata ace was due to
deep understanding of the market needs and the
customer requirement.
 The company realized that, as the Indian economy
was growing, there would be for smaller vehicles
that can navigate through the narrow roads and by
lanes of city, small towns and village
 In order to compete effectively with three wheeler

majors who dominated the market of small payload
vehicles, the company needed to offer better
solution to the customer.
 The solution lay down in the market, and that is
where the engineers went- to talk the transporters,
the small traders and the farmers- to learn what they
wanted.
 Discussion with potential customer and detailed
marker research indicated that potential customer
needed vehicles for last mile distribution for
carrying less than one ton load over short distances.
 Customer were willing to pay a marginally high

price for such product. But what come out more
strongly was the social status associated with four
wheeler.
 Based on customer insight, the company decided to
introduce a vehicle positioned as a Tata truck in
mini size with competitive price tag while
maintaining higher quality standards.
 Within 22 month of launch of vehicle, the company
rolled out the 1,00,000th ace , surpassing the
company optimistic target
Who Markets?
Marketers and prospects
 A marketer is someone who seeks a
response-attention, a purchase from other
parties called prospect.
 If two parties are seeking to sell something
to each other, we call them both marketers
Who Markets?
Market
 It is collection of buyers and sellers who
transact over a particular product or product
class
A Simple Marketing System
1-
Types of Demand
1. Negative demand- customer dislike the
product and may even pay price to avoid it.
2. Non existence demand- consumers may be
unaware of or uninterested in the product.
3. Latent demand- consumer may share a strong
need that cannot be satisfied by existing
product.
4. Declining demand- consumer begin to buy the
product less frequently or not at all.
Types of Demand
5. Irregular demand- Consumer purchases vary
on a seasonal, monthly, weekly, daily, or even
hourly basis.
6.Full demand- consumers are adequately buying
all the products put into market place.
7. Overfull demand- More consumer would like
to buy the product that can be satisfied.
8.Unwholesome Demand- Consumers may be
attracted to products that have undesirable
social consequences.
Structure of Flows in a Modern Exchange
Economy
Key Customer Markets
Consumer Markets Global Markets
Business Markets Nonprofit/ Government Markets

www.marutitruevalue.com
Functions of CMOs
 Strengthening the brands

 Measuring marketing effectiveness
 Driving new product development based on
customer needs
 Gathering meaningful customer insights
 Utilizing new marketing technology
Improving CMO Success
 Make the mission and responsibilities clear

 Fit the role to the marketing culture and structure
 Ensure the CMO is compatible with the CEO
 Remember that show people don’t succeed
 Match the personality with the CMO type
 Make line managers marketing heroes
 Infiltrate the line organization
 Require right-brain and left-brain skills
Core Marketing concepts
Needs, Wants and Demand
 Needs are basic human requirement
 Wants are needs directed to a product
 Demand is a want accompanied by buyers
ability to pay.
Today the challenge for the
marketer is that of converting needs to
wants to demands
 Marketers don't create needs: Needs preexist
markets. Marketers along with other societal factors,
influence wants.
Five type of needs
1.Stated need(the customer wants an inexpensive car)
2.Real needs(the customer wants a car whose
operating cost is low)
3.Unstated needs(the customer expects good service
from dealer)
4.Delight needs
5.Secret need (the customer wants friends to see him
as a savvy consumer)
Target Markets, Positioning and Segmentation
 A marketers can rarely satisfy everyone in
the markets.
 Marketers start by dividing the market into
segments.
 They identify and profile distinct groups of
buyers who might prefer or require varying
product mix by examining demographic,
psychographic, and behavioral differences
among buyer
 After identifying market segments, the
marketer then decides which present the
great opportunity-which are its target
market.
 For each, the firm develops a market
offerings ie positions in the minds of the
target buyers as delivering some central
benefits
 E.g. Scorpio (SUV) launched by M&M is
designed for people who prefer sturdy
vehicle that offers luxury and comfort
Positioning
Press ads of the

Scorpio focused on the
functional features of
the vehicle and the
television ads focused
on emotional benefits.
Offerings and Brands
 Company address needs by putting forth a
value proposition(functional, emotional and
self expressive benefits)
 A brand is an offering from a known
source.
the brand name carries many associations
in peoples mind that make up the brand
image
Value and Satisfaction
 The offering will be successful if it delivers
value and satisfaction to the target buyer.
 The buyer choose between different
offerings based on she perceive to deliver
the most value
 Value reflects the sum of the perceived
tangible and intangible benefits and costs to
the customer
 Value is a composition of quality service
and price (QSP) called the customer value
triad
 Value increases with quality and service
and decreases with price although other
factors can also play an important role in
our perception of value
 Marketing can be considered as
identification , creation , communication
delivery and monitoring of customer value.
 Satisfaction reflects person judgments of a
product perceived performance in
relationship with expectations.
 If performance falls short of expectation he
customer is dissatisfied and disappointed.
 If it matches expectations, the customer is
satisfied, if it exceeds them, the customer is
delighted.
Marketing channels
 To reach a target market, the marketers uses
3 kinds of marketing channels
 Communication channels deliver and
receive message from target buyers and
include newspaper, magazines, radio, tv,
billboard and internet.
 Distribution channels is used to display,
sell, or deliver the physical product or
services to the buyer or user.
 It include distributors,wholesalers,retailers and
agents.
 Service channels is used to carry out
transactions with potential buyers.
 It include warehouses, transportation
companies, banks, and insurance companies
that facilitate transactions.
Marketer face a design challenge in

choosing the best mix of communication,
distribution, and service channels for their
offering.
Supply Chain
 The supply chain is a longer channel stretching
from raw materials to components to final
products that are carried to final buyers
 Each company captures only a certain
percentage of the total value generated by
supply chains value delivery system.
 When a company acquires competitors or

expands upstream or downstream, it aim to
capture a higher percentage of supply chain
value.
Competition
 Competition includes all the actual and
potential rival and substitute a buyer might
consider
Marketing Environment
 It consists of the task environment and
broad environment
 The task environment includes the actor
engaged in producing, distributing, and
promoting the offering
 These are company suppliers, distributor
dealers, and the target customers.
 In the supplier group are material suppliers and
service suppliers, such as marketing research
agencies, ad agencies, banking and insurance
companies and transportation companies.
 The broad environment consists of six
components: demographic environment,
political-legal environment and socio
cultural ,technical, natural and economic
The marketplace isn’t what it used to be…
Information
Information technology
technology
Globalization
Globalization
Deregulation
Deregulation
Privatization
Privatization
Competition
Competition
Convergence
Convergence
Consumer
Consumer resistance
resistance
Retail
Retail transformation
transformation
New Consumer Capabilities
 A substantial increase in buying power
 A greater variety of available goods and services
 A great amount of information about practically
anything
 Greater ease in interacting and placing and
receiving orders
 An ability to compare notes on products and
services
 An amplified voice to influence public opinion
Company Orientation toward
the marketplace
The Production Concept
 It holds that consumers will prefer product
that are widely available and inexpensive.
 Manager of production oriented business
concentrate on achieving high production
efficiency, low costs and mass distribution
 This orientation make sense in developing
country
the marketplace
The Product Concept
 It proposes that consumers favor products that
offer the most quality, performance, or
innovative features.
 Manager in these organization focus on
making superior product and improving them
over time.
 But a new or improved product will not
necessarily be successful unless its priced,
distributed, and sold properly.
the marketplace
The selling concept
 This concept holds that a organization must
undertake an aggressive selling and promotion
effort.
 The selling concept is practiced most aggressively
with unsought goods, goods that buyer normally
don’t think of buying.
 Most firm also practice the selling concept when
they have over capacity. Their aim is to sell what
they make, rather than what the market wants.
the marketplace
The Marketing Concept
 The marketing concept holds that the key to
achieving organizational goals is being
more effective than competitors in creating,
delivering, and communicating superior
customer value to your chosen target
market.
Holistic Marketing Dimensions
the marketplace
 The holistic marketing concept is based on
development, design ,and implementation
of marketing programs, processes, and
activities that recognizes their breadth and
interdependencies.
 It is an approach that attempts to recognize
and reconcile the scope and complexities of
marketing activities
the marketplace
Relationship Marketing
 A key goal of marketing is to develop deep,
enduring relationships with people and
organization that directly or indirectly affect
the success of the firm`s marketing activities.
 Relationship Marketing aims to build mutually
satisfying long-term relationship with key
constituent in order to earn and retain business
the marketplace
 Four key constituents for relationship
marketing are customer, employees, marketing
partner (channels, suppliers, distributor,
agencies) and member of financial community
(shareholders, investors, analysts)
 To develop strong relationship with them
requires understanding their capabilities and
resources, needs, goals, and desires
the marketplace
 The ultimate outcome of relationship marketing is a
unique company assets called a marketing networks.
 A marketing networks consists of the company and
its supporting stakeholders-with whom it has build
mutually profitable business relationships
 The operation principle is simple:build an effective
network of relationships with key stakeholders, and
profits will follow.
 Attracting a new customer may cost five time as
much as doing a good enough job to retain an
existing one.
the marketplace
Integrated Marketing
 The marketers task is to devise marketing activities
and assemble fully integrated marketing programs to
create, communicate, and deliver value for customer.
 marketers should design and implement any one

marketing activity with all other activities in mind
 McCarthy classified these activities as marketing-

mix tools of four broad kinds, which he called 4ps of
marketing: product, price, place, and promotion.
The Marketing Mix
the marketplace
 The firm can change its price, sales force size, and
ad expenditures in the short run.it can develop new
product and modify its distribution channels only in
long run.
 The four ps represents the sellers view of marketing
tools available for influencing buyers
 From buyers point of view, each marketing tool is
designed to deliver a customer benefits.
 A complimentary breakdown of marketing
activities has been proposed that centers of
customer four dimensions are (SIVA) solution,
Information, Value and access
The New Four Ps
People
Processes
Programs
Performance
The New Four Ps
1.People-
It reflects , in part, internal marketing and
the fact that employees are critical to
marketing success.
It also reflect the fact that marketers must
view consumers as people to understand their
life more broadly, and not just as they shop
for and consume products and services.
The New Four Ps
2. Processes
It reflects all the creativity, discipline, and
structure brought to marketing management.
Only by instituting the right set of processes
to guide activities and program can a firm
engage in mutually beneficial ling term
relationship.
The New Four Ps
3.Programs
It reflect to firm consumer-directed activities
It encompasses the old four Ps as well as range
of other marketing activities that might not fit as
nearly into old view of marketing
These activity must be integrated such that their
whole is greater than the sum of their parts and
they accomplish multiple objectives for frim.
The New Four Ps
4. Performance
To capture range of possible outcome
measures that have financial and non financial
implications(profitability as well as brand
and customer equity) and implications beyond
the company itself(social responsibility, legal,
ethical and community related)
the marketplace
Internal Marketing
 It ensure that everyone in organization embraces
appropriate marketing principles, especially senior
management.
 It is the task of hiring , training, and motivating able
employees who want to serve customer well.
 Smart marketers recognize that marketing activities
within the company can be more important than
marketing activites directed outside the comapany
 It make no sense to promise excellent service befor
the companies staff is ready to provide it.
the marketplace
Performance Marketing
 It is understanding the returns to the business
from marketing activities and programs as well
as addressing broader concerns and their legal,
ethical, social, and environmental effects
 Top management is going beyond sales
revenue to examine the marketing score card
and intreprete what is happening to market
share, customer loss rate, customer
satisfaction, product quality, and other
measures
the marketplace
Financial Accountability
 Marketers are being increasingly asked to
justify their investments to sinior
management in financial and profitability
terms, as well in terms of building brand
and growing customer base.
 They are applying broader variety of
financial measures to assess the direct and
indirect value their marketing efforts create.
the marketplace
Social Responsibility Marketing
 The effect of marketing clearly extend beyond the
company and the customer to society as a whole.
 Marketers must carefully consider their role in
broader terms, and the ethical, environmental, legal,
and social context of their activities
 The societal marketing concept holds that the
organizations task is to determine the needs , wants,
and interest of the target market and to deliver the
desired satisfaction more efficiently and effectively
than competitors in away to preserve or enhances
the consumers and society long term well being.
Marketing Management Tasks
 Develop market strategies and plans
 Assess market opportunities and customer
value
 Choose value
 Design value
 Deliver value
 Communicate value
 Sustain growth and value
Marketing Environment
Objectives
 Understanding the behavior of key
environmental forces that have an implications
on marketing decisions.
 Grasp the technique available for environmental
scanning.
 Some important macro economic development.
Introduction
 It is very important for the marketer to

monitor the environmental forces and take
necessary steps to negate/take advantage of
them before competition
 In India many industries lost their competitive
advantage to relatively new entrant in 1980
and thereafter
 HM and premier automobiles lost their pre
eminent position in the Indian market to Maruti
800
Introduction
 Titan watches herald a new era of watches and

shock the giant HMT.
 Today south Korean brand LG and Samsung are the
principal players leaving behind the Indian
Companies like Videocon.
 Analysis of the external environment consists of
identification of opportunities and threats and
tracking it to particular sources.
 E.g. A small family with a one child means the
emergence of a child market where all parental
attention is focused on this child
Needs and Trends
1.Fad
 A fad is unpredictable, short-lived, and
without social, economic and political
significance.
 A company can cash in on a fad, but getting
it right is more a matter of luck and good
timing than anything else.
Needs and Trends
2.Trend
 A trend is a direction or sequence of events
that has some momentum and durability
 Trends are more predictable and durable
than fads. A trend reveals the shape of
future and provide many opportunities. E.g.
physical fitness.
Needs and Trends
3.Megatrends
 It is a large social, economic, political, and
technological changes that are slow to form, and
once in place, they influence us for some time 5-10
years.
 E.g. young employees
companies and their suppliers, marketing
intermediaries, customers, competitors, and public
all operate in a macro environment of forces and
trends, increasingly global that shape opportunities
and poses threats
Environmental Forces
Demographic
Political-Legal Economic
Technological Socio-Cultural
Natural
Demographic Environment
 The main demographic force that marketers

monitor is population, because people make up
the markets.
 Marketers are keenly interested in the size and
growth rate of population in cities, region, and
nations; age distribution and ethnic mix;
educational level; household patterns; and
regional characteristics and movements
a)Age composition
 a marketer needs to understand the age
composition in a country. This will help them
to decide their optimal marketing mix and
also take strategic decisions regarding
entering a particular market segment.
 E.g. about 72% of Indian market is a young
market consisting of people in the age group
of 5-44 years
b) Sex structure of population and role of women

 Besides the age , it is necessary to break up
population according to sex and study the role of
women in Indian society.
 E.g. more and more women have taken to working
and to professional careers and hence one observes
an increase in the no. of working couples
 To help her and the family, many time-saving
appliances like cooking range , washing machine,
vacuum cleaner, as well ready to eat foods are
available in the market.
c) Role of Man
 Today man is perceived as more caring, concerned
and sensitive.
 He is continuously searching for new avenues of
growth for himself and other family member
 His relation with his family, peer group, and
opposite sex, has changed.
 He perceives entertainment as very important for
the family, so long as it does not lead to
extravaganza.
d)The new urban child

 This child is more responsible, disciplined, career-
minded, and conscious for family values.
 He or she has a role in the purchase and consumption
of all products and services.
 A highly ambitious, confident, and aware child, dreams
for becoming rich and famous like D Ambani, s
tendulakar or Bill gates, therefore role models are
parents, the rich, and celebrities.
 Fashion plays an important part. But for him, adopting
fashion product is dependent on the peer groups
influence.
e) Occupation and Literacy profile

 A major determinants of market structure in counties like india
is the literacy rate of the population,
 this is so because it affects the demand for information and
also the quality of demand for other products and services.
 As in 2001, about 65.4% of Indian were literate.75%of Indian
males were literate as opposed to 54% of women. the Indian
market has been on ascent so far as literacy is concerned.
 The occupational profile of the population also affects the
media choice and product demand,
 E.g. a shirt or suiting exclusively for the professional
executive sells best when advertised in business magazines
Economic Environment
 The available purchasing power in an economy

depends on current income, prices, savings,
debt and credit availability
 Marketer must pay attention to ternds affecting
purchasing power because they can have
strong impact on business, especially for
companies whose product are geared to high-
income and price sensitive consumers
• Wage inflation – annual wage increases in a particular
sector will depend on the supply of labour in that sector.
Where there is scarcity of supply, wages usually increase
(e.g. doctors).
• Price inflation – how much consumers pay for goods and
services is dependent on the rate of supply of those goods
and services.
• Gross domestic product per capita – combined output of
goods and services in a particular nation determines
relative wealth between countries when comparisons are
calculated per member of the population.
• Income, sales and corporation taxes – typically operating in all

countries around the world usually at different levels, substantially
affecting how we market goods and services.
• Exchange rates – the relative value of a currency vis-à-vis

another currency impacts on businesses operating in foreign
markets or holding financial reserves in other currencies.
• Export quota controls and duties – there are often restrictions

placed on the amounts (quotas) of goods (and services) that any
particular firm or industry can import into a country, depending on
to which trading bloc or country a company or firm is exporting.
 The economic environment affects the demand

structure of any industry or product. in order to
assess the impact of these forces.
 It is necessary that a marketer examines the
following factors in great detail.
 Gross National Product
 Per capita income
 Balance of Payments Position
 Trends the prices of goods and services
Income Distribution
 A marketer needs to understand the distribution of
income to reach more meaningful conclusions about
taking specific decisions.
 77.7% of urban households in India have a monthly
income of up to Rs 3000.Urban households with a
monthly income between Rs3001 and 6000 are
estimated to about 16.2% and another 4% with a
monthly household income of Rs 60001- 10,000.
Only about 2.15 of urban household have monthly
income of over Rs 10000.
The NCAER has classified Indian consumers into 5 categories

according to annual house hold income
 Destitute :Below Rs 16,000(Not active Participant in market
exchange for a wide range of goods)
 Aspirants: Between Rs 16001 and 22,000(New entrant in
consumption system due to increase in their real income)
 Climbers :Between Rs 22001 and 45000(Have desire and
willingness to buy, but have limited cash at hand)
 Consuming Class: Between Rs 45000 and 215000 (household
that form the majority of consumers; have money and willing to
spend)
 Very rich : Over Rs.2,15,000(those who have money and own a
wide range of products)
 The no. of households classified as the rich is estimated to

grow by 95% from the year 95-96 to 2006-2007, the
consuming class by 132%, and the climber class by 51%.
 The percentage of aspirants is expected to decline by 54%
and the destitute by about 50%
 The rich class in urban areas is estimated to increase by
400%, where as rural India indicate a growth of 200%
 The climber are estimated to grow by 145% in urban areas
and by 119% in rural areas.
 It is expected that the urban areas are likely to register a
sharper reduction in households belonging to the aspirants
and destitute category than the rural areas.
Cultural Environment
 Cultural forces are the most difficult uncontrollable variable to
predict. It is important for marketer to understand and
appreciate the cultural values of the environment in which they
operate.
 The element that build up the cultural environment are
Language, aesthetic(art, drama, music, folk), Religion and
education.
 Changes in cultural environment affect consumer behavior,
which affects sales of products.
 Culture has a large impact on the consumption habit of people.
since culture is homogeneous within a group. so there is
similarities in choice which need to be paid attention by
marketing manager
 E.g. Mc D, KFC, Kelloggs
Natural Environment
 The deterioration of the natural
environment is a major global problem.
 There is a great concern about Green House
Gases in the atmosphere due to burning of
fossil fuels.
 About the depletion of the ozone layer due
to certain chemical and global warming and
about the growing water shortage.
Natural Environment
 The campaign against Coca-cola by the local
community in Kerla, alleging the environmental
deterioration and shortage of drinking water in the
vicinity of the plant, is an example of the increasing
environmental consciousness.
 Steel companies and public utilities have had to
invest billions of dollars in pollution-control
equipment and more environmentally friendly fuels.
 The soap industries increased its product
biodegradability.
Technological Environment
 Every new technology is a force for `creative
destruction` transistor hurt vacuum tube industry,
Xerography hurt the carbon paper business.
 Marketer should monitor the following four trends
in technology:
A) accelerating pace of change
 Many of today's common products were not
available 40 years ago.
 Electronic researchers are building smarter chip to
make our cars, homes and office connected and
more responsive to changing conditions
Technological Environment
b) Some of the most exciting work today is taking
place in biotechnology, computers,
microelectronics, telecommunication and designer
materials
c)Varying R&D Budgets
 Increasing opportunities emerging as a result of
globalization are forcing many companies in South
Asia to increase their R&D efforts.
d)Increased regulation of technological change
 Gov. has expanded its agencies power to investigate
and ban potentially unsafe product
Political-Legal Environment
 It consists of laws, government agencies,
and pressure group that influence and limit
various organization and individuals.
 These laws sometimes also create new
opportunities for business.e.g. Recycling
 Major trend in political –legal environment
are
a) Increase in business legislation
 Its main purpose are to protect companies
from
 To protect consumers from unfair business
practices
 To protect the interests of society for
unbridled business
b)Growth of special interest group
 in order to protect interest of consumer Gov. passed
legislation consumer protection act 1986. under this act
following 6 rights of consumer were recognized
 safety
 Information
 Choice
 Representation
 Redressal
 Consumer education
The Political Environment: Business-
Government Relations
Several ways marketers conduct business
 government relations in various countries include:
 Lobbyist firms, with key industry knowledge, are

engaged either permanently or as needed.
 Using public relations consultancies, e.g. Public
Relations Consultants Association of India, can be
commissioned for their political services.
 A politician can be paid a fee to give political advice on
matters of importance to an organization, where this is
legal within that particular jurisdiction, and that
politician is not serving directly within the government
in question on the same portfolio as that on which they
are advising.
The Political Environment: Business-
Government Relations
An in-house public relations manager might
handle government relations directly.
An industry association can be contacted to
lobby on behalf of members (e.g. the
International Marine Contractors Association
(IMCA) is the international trade association
representing offshore, marine, and underwater
engineering companies).
A politician may be invited directly to join the
board of directors, board of trustees, or board
of advisers of an organization.
Environmental Scanning
• According to Aguilar (1967), environmental
scanning is the process of gathering information
about a company’s external events and
relationships, in order to assist top management in
its decision-making, and so develop its future
course of action.
• It can be regarded as the internal communication of
external information about issues that may
potentially influence an organisation’s decision-
making process, focusing on the identification of
emerging issues, situations and potential threats in
the external environment (Albright, 2004).
Information Requirements for
Environmental Scanning
• Customer and competitor information –
 including competitors’ prices, competitors’ new product introductions,
competitors’ advertising/promotional programmes, competitors’ entry into new
markets and new product technologies, customers’ buying habits, customers’
product preferences, customers’ demands and desires.
• Company resources and capabilities
 including company’s R & D capabilities and resources, company’s advertising
and promotions resources, company’s sales capabilities/resources, company’s
financial capabilities/resources, company’s management capabilities/resources.
• Suppliers of labour and funds

 including availability of external financing, availability of labour and new
manufacturing technologies (Beal, 2000
Environmental Scanning Process
Understanding Task/Performance Environment
The performance environment consists of those organizations that

either directly or indirectly influence an organization’s operational
performance. There are three main types:
1.Those companies that compete against the organization in the
pursuit of its objectives.
2.Those companies that supply raw materials, goods, and services and
those that add value as distributors, dealers, and retailers, further
down the marketing channel.
3.Those companies that have the potential to indirectly influence the
performance of the organization in the pursuit of its objectives. These
organizations often supply services such as consultancy, financial
services, or marketing research or communication agencies.
Industry Analysis: Porter’s Five Forces
1. Threat that new competitors will enter the

market
2. Threat posed by substitute products
3. Bargaining power of buyers
4. Bargaining power of suppliers
5. Intensity of rivalry between the current
competitors
Industry Analysis: Porter’s Five Forces
Demand Forecasting
Importance
 One major reason for undertaking marketing
research to identify market opportunities.
 Once the research is complete, the company
must measure and forecast the size, growth and
profit potential of each market opportunity.
 Sales forecasts are used by finance to raise the
needed cash for investment ond operations.
Forecasting and
Demand Measurement
 How can we measure market demand?
– Potential market
– Available market
– Target market
– Penetrated market
The Measure of Market
Demand
 Companies can prepare as many as 90 different type
of demand estimates for six different product levels,
five space leveles,and three time period.
Potential Market
 It is the set of consumers who profess a sufficient
level of interest in a market offer,however consumer
interest is not enough to define a market for
marketers unless they also have sufficient income
and access to the product.
The Measure of Market
Demand
Available Market
 It is a set of consumers who have interest, income, and
access to a particular offer
Target market
 It is the part of qualified available market the company
decides to pursue. The company might decide to
concentrate its marketing and distribution effort on south
Asian market.
Penetrated Market
 It is a set of consumers who are buying the company`s
product.
A Vocabulary for
Demand Measurement
Market Demand
Market Forecast
Market Potential
Company Demand
Company Sales Forecast
Company Sales Potential
The concept of Demand
Market Demand
 Market demand for a product is the total
volume that would be bought by a defined
customer group in a defined geographical area
in a defined time period in a defined marketing
environment under a defined marketing
program
 Market demand is not a fixed number, but
rather a function of stated condition. For this
reason it is known as market demand function
Market Demand Functions
 The distance between the market minimum
and the market potential shows the overall
market sensitivity of demand.
Market Forecast
 Only one level of industry marketing
expenditure will actually occur. The market
demand corresponding to this level is
called market forecast
Market potential
 Market potential is the limit approached by
market demand as industry marketing
expenditures approaches for given marketing
environment.
Product penetration percentage
 It is the percentage of ownership or use of a
product or service in population. Company
assume that lower the product penetration
percentage, the higher the market potential
Company Demand
 Its company`s estimated share of market
demand at alternative levels of company
marketing effort in a given time period
 It depends on how the company`s products,
price and communications are perceived
relative to competitors
Company Sales Forecast
 Once the company have estimated company
demand, their next task is to choose a level
of marketing effort.
 Company sales forecast is the expected
level of company sales based on a chosen
marketing plan and an assumed marketing
environment.
Sales Quota(Target)
 is the sales goal set for a product line,
company division, or Sales person.
 It’s a managerial device for defining
stimulating sales effort, often set slightly
higher than estimated sale to stretch the
sales force effort.
Sales budget
 It is a conservative estimate of the expected
volume of sales, primarily for making
current purchasing, production, and cash
flow decisions.
 Its based on the need to avoid excessive risk
and is generally set slightly lower than sales
forecast
Estimating Current Demand
Total Market Potential
 It’s the maximum sales available to all
firms in an industry during a given period,
under a given level of industry marketing
efforts and environmental conditions
 Total market potential= (potential number
of buyers) X (average quantity purchased by a
buyer )X (the price)
Chain Ratio Methos

Area Market potential
Because company must allocate their marketing
budget optimally among their best territories,
they need to estimate the market potential of
different cities, states, and nation
Two methods are the market-buildup method,
used primarily by business marketers, and
multiple factor index method, used primarily for
consumer marketers
a) Market buildup method
 Calls for identifying all the potential
buyers in each market and estimating their
potential purchases.
 It produces accurate results if we have a
list of all potential buyers and a good
estimate of what each will buy.
 Its mostly applicable in B2B market.
b)Multiple factor Index method
As the customer of consumer companies are
too numerous, its difficult to list them.
So, consumer companies estimate market
potential either by using exiting market
indexes or by developing their own market
indexes.
 The RK SWAMY BBDO Guide to urban
markets uses about 18 variables with proper
weightages to develop market indexes for
about 784 towns with population over
50,000 spread over 21 states and 3 union
territories of India, accounting for about
77% of urban population.
 MICA Rural Market Ratings use six variables
with proper weightages to develop
index(rating) for 459 districts based on 1991
census.
 Company can develop their own indexes for
markets bases on some assumptions
 e.g. Pharma company may assume that
potential for drugs in a particular geographical
market will be a function of (1) population of
the area,(2) per capita income, and (3) the
number of physicians in the market.
 so , drug buying index in Delhi
=(a X population of Delhi as a
percentage of national population)+(b X per
capita income of Delhi as a percentage of
national per capita income)+(c X Number of
physician in Delhi as a percentage of number
of physician in India).
 a, b and c are determined using past sales and
other data
 Many companies compute other area
indexes as a guide to allocating marketing
resources
 Company use Brand development index,
which is the ratio of brand sales to category
sales expressed in percentage term.
Estimating Current Demand:
Area Market Potential
Multiple-Factor Index
estimating future market
demand
 Company in India normally use some variant of the
time series method for estimating future demand.
 However some large company use sophisticated
econometric models for forecasting.
 This involve a three stage process of preparing
macroeconomic forecast first, followed by industry
forecast, and than a company sales forecast.
 Large companies either employ business economists
or outsource the work to business consulting or
marker research firms.
Forecasting process
Determine
Develop forecasting independent and Forecast objectives
procedure dependent variables
Select forecasting Evaluate performance

results against the
analysis method
forecasts
Comprehend total
forecasting procedure
Present all the
assumptions about Make and finalize
Collect, collate, data the forecast
gather and analyze
data
Forecasting Approaches
 Two basic approaches:

• Top-down or Break-down approach
• Bottom-up or Build-up approach
 Some companies use both approaches to increase

their confidence in the forecast
Steps followed in Top-down / Break-
down Approach
 Forecast relevant external environmental factors
 Estimate industry sales or market potential
 Calculate company sales potential = market potential
x company share
 Decide company sales forecast (lower than company
sales potential because sales potential is maximum
estimated sales, without any constraints)
Steps followed in Bottom-up / Build-up
Approach
 Salespersons estimate sales expected from their

customers
 Area / Branch managers combine sales forecasts
received from salespersons
 Regional / Zonal managers combine sales
forecasts received from area / branch managers
 Sales / marketing head combines sales forecasts
received from regional / zonal managers into
company sales forecast, which is presented to
CEO for discussion and approval
Popular methods in forecasting
Qualitative methods
Sales force Delphi

Expert opinion Survey of buyer’s
composite technique
expectation
History analogy
Quantitative methods
Naïve method Trend method

Test marketing
Exponential
Moving average Regression method smoothening
Executive opinion method
 Most widely used
 Procedure includes discussions and / or average of all
executives’ individual opinion
 Advantages: quick forecast, less expensive
 Disadvantages: subjective, no breakdown into subunits
 Accuracy: fair; time required: short to medium (1 – 4 weeks)
Delphi method
 Process includes a coordinator getting forecasts separately
from experts, summarizing the forecasts, giving the summary
report to experts, who are asked to make another prediction;
the process is repeated till some consensus is reached
 Experts are company managers, consultants, intermediaries,
and trade associations
Delphi Method (Continued)
 Advantages: objective, good accuracy
 Disadvantages: getting experts, no breakdown into subunits,
time required: medium (3/4 weeks) to long (2/3 months)
Sales force composite method
 An example of bottom-up or grass-roots approach
 Procedure consists of each salesperson estimating sales.
Company sales forecast is made up of all salespersons’ sales
estimates
 Advantages: Salespeople are involved, breakdown into
subunits possible
 Disadvantages: Optimistic or pessimistic forecasts, medium to
long time required
 Accuracy: fair to good (if trained)
Survey of Buyers’ Intentions Method
 Process includes asking customers about their
intentions to buy the company’s products and
services
 Questionnaire may contain other relevant
questions
 Advantages: gives more market information,
can forecast new and existing products, good
accuracy
 Disadvantages: some buyers’ unwilling to
respond, time required is long (3-6 months),
medium to high cost
Historical Analogy Method
This is used for forecasting the demand for product
or service for which there is no past demand data.
Sometimes, product may be new, but organization

might have marketed other product earlier with
features similar to those of the new product
So, marketing personnel may use the historical
analogy between the two products and derive the
demand for the new product using historical data of
earlier product
Quantitative methods of
Forecasting
1 .Test Marketing
 This method is useful for forecasting sales
of new product which has no historical figure
 It can also be used for estimating sales for an
established product in a new territory
 Major methods used for consumer- product
market testing include
Forecasting
a)Full-blown test markets
 It consists of the company choosing a few
representative cities, in which full promotion
campaign is introduced, similar to what
would be done in National Marketing
 The duration of test market varies from a few
month to one year, depending on the
repurchase period of the new product
Forecasting
 Buyer surveys are carried out to get information
about consumer attitude, usage and satisfaction
towards new product.
 If the test markets show high trial and repurchase
rates, the product should be launched nationally
 If they show a high trial rate and low purchase rate,
the new product should be redesigned or dropped
 If they show a low trial rate and high repurchase
rate the product is acceptable but more consumer
should try it
 If the both are low, the new product should be left
permanently
Forecasting
b. Controlled test marketing
 The company with new product hires a research
firm and gets a panel of stores at specific
geographic locations.
 The research firm delivers the new product to the
panel of stores, arranges promotions at the stores,
and measures the sales of the new product
 The research firm also interviews sample
consumers to get their perceptions on the new
products
 Both full blown test markets and controlled test
marketing expose the new product to the
competitors
Forecasting
c) Simulated Test Marketing
 In this method, about 30-40 consumers are
selected, based on their brand familiarity
and preferences in a particular product
category.
 These shoppers are shown commercials or
print advertisement of well known product,
and also the new product, without any
specific mention.
Forecasting
 These consumers are given small amount
of money and asked to buy any items in a
store.
 The researcher of the company notes how
many consumers buy the new product and
competing products.
 These consumer are interviewed to find
reasons of buying or not buying, and later,
after usage of the new product,
satisfaction level and repurchase intentions
Forecasting
2. Time Series Analysis
 It is a series of techniques that make
forecasts based on the past pattern of data.
 These data are collected, observed, and
recoded at regular intervals of time.
 These methods are useful when the market
forces are somehow stable and the market
show least erratic behavior.
 Actions taken by the firm and competitors
move are not taken into account
Forecasting
 It uses chronological ordered raw data.
historical data are used to project future sales,
however future events are often different from
past event which make the accuracy of such
methods far less than 100%.
 By studying the hstorical correlation of the
sales level over the time, a sales manager can
identify a trend and find a general indication
of the possible continuation of the time
series.
Forecasting
 The major advantage of time series analysis
is its objectivity as it is based on the
established record of historical data.
 The sales manager can undertake time series
analysis in 4 ways
 The change that has occurred as a result of
general tendency of data to increase or
decrease are known as secular movement.
 Changes that have taken place during the
period of 12 months as a result of change in
climate, weather condition and festivals are
termed as seasonal variation
Forecasting
 Changes that have taken place as a result
of boom and depression are called cyclic
variation.
 Changes that have taken place as a result
of such unpredictable forces as floods,
earthquakes, famines, etc. are classified as
irregular or erratic variations
Forecasting
 If there is a change in the company`s
effort in the form of wearing out of
advertising, excess of sales promotions,
alteration in prices, opening of new
distribution outlets, or discovery of new
use of product, any such change may affect
the time series and the trend may shift
dramatically, thereby reducing the
accuracy level of method used for
forecasting.
Trend forecast of Sales
Observed sales Forecasted sales
Sales il n
e
n d
T re
Time
.
Naïve Method
 The simplest trend projection is known as naive
projection
 In this approach, the sales of future period are
forecasted as the value of the sales of the previous
period
Next Year’s Sales = This Year’s Sales X This Year’s Sales

Last Year’s Sales
Method of semi-averages
In this method available data are divided into two parts, usually with
equal number of years on both the parts
Year Sales
1993 102
1994 105
1995 114
1996 110
1997 108
1998 116
1999 112
The average of the first three years will be:
102+105+114 321
----------- = -------- = 107
3 3
Similarly, for the last three years,
108 + 116 + 112 336
---------------------- = --------- = 112
3 3
Method of semi-averages
 These two points, 107 and 117, will be

plotted to their corresponding middle
years.i.e 1994 and 1998. by joining these
two points, we get the trend line, which can
be extended to get future value
Moving Average Method
 In this method, average value for a no. of
years is taken and this average is taken as
the normal or trend value for the unit of
time falling at the middle of period covered
in the calculation of the average.
 In this method, the forecaster estimates
sales based on an average of previous time
period
Moving Average Method
The 3-yearly moving average can be computed with the
following formula:
a+b+c b+c+d c+d+e d+e+f
--------- , ----------- , ---------- , --------- , ………….
3 3 3 3
Exponential smoothing method
• It is similar to the moving- average forecasting method
• The forecaster is allowed to vary the weights assigned to
past data points
• It allows consideration of all past data, but less weight is
placed on data as it ages
• Exponential smoothing is basically a weighted moving
average of all past data
• The method is used to forecast only one period in the
future
• Exponential smoothing techniques vary in terms of how
they address trend, seasonality, cyclical and irregular
influences
 While using this method, a probability-

weighting factor, or smoothing constant, is
selected arbitrarily.
 This factor is usually between 0.1 and 0.5
but can range from something greater than
zero to something less than 1.0.
 This value determines how sensitive the
forecast will be to past data.
Next years sales= a(this years sales)+(1-a)(This

years forecast)
 Let sale of this year is 50,000 and this year
forecast was Rs 40,000. let a was given a value of
0.2
 The forecast of next year would be
0.2X(50,000)+(0.8)x(40,000) = Rs 42,000
Correlation analysis
•a correlation is basically the degree of linear
association between two variables where one variable
is treated as independent variable and sales as the
dependent variable
• sales managers look for variables that correlate with or
relate to sales
• correlation analysis involves the determination of whether a
relation exists, and if it does, then measuring it, testing
whether it is significant, and establishing the cause and
effect relation
• the degree of relationships between the variables is called
co-efficient of correlation
 When the two variable are moving in the
same direction they are positively correlated
and when in opposite direction they are
negatively correlated.
 When only two variable are studied, it is
simple correlation, but when the no. of
variables increases to more than two. Sales
manager can conduct multiple correlation.
 If the ratio of change is constant it is linear
correlation and if not constant it is nonlinear
correlation
 Sales manager also look for variable that
relate to competitive market place.
 Factor like new store openings, the no. of
new product launches, and the frequency of
sales promotion campaigns undertaken by
the competitors can also be taken as
independent variables influencing the
dependent variable i.e. sales
Regression Analysis
 It is another form of correlation technique.
It reveals the average relationship between two
variables and this make estimation or
prediction possible.
 It is used to incorporate independent factors
that are thought to influence sales in
forecasting procedures
 The independent variable are developed
through correlation analysis or based on
previously observed relationship.
Regression Analysis
 Simple regression models have only one
independent variable. Multiple regression
uses two or more than two independent
variable such as population and sales force
size, or population income and sales force
size..
 The relationship between the dependent and
independent variables can be of two types
Regression analysis
Sales
Sales
Population Population
(Liner Relationship) (Curvilinear Relationship)

What is Marketing Research?
Marketing research is the systematic

design, collection, analysis, and reporting
of data and findings relevant to a specific
marketing situation facing the company.
ITC Used Extensive Market
Research before launching the
Sunfeast range of biscuits
Types of Marketing Research Firms
Syndicated- Specialty-
Custom
service line
Types of Marketing Research Firms
1. Syndicate service
 These firm gather consumer and trade information,
which they sell for fee. E.g. Nielsen, IMRB,
NCAER.
2. Custom
 These firms are hired to carry out specific projects.
They design the study and report the findings
3.Speciality Line
 These firm provide specialized research service
e.g. Anugrah MADISON for rural market
The Marketing Research Process
Define the problem
Develop research plan
Collect information Make

decision
Analyze information
Present findings
Step 1: Define the Problem
 Define the problem

 Specify decision alternatives
 State research objectives
Problem definition
Step 2: Develop the Research Plan
Data Research
Sources Approach
Research Sampling
Instruments Plan
Contact
Methods
Step 2: Develop the Research Plan
1.Data Source
 The researcher can gather secondary data,
primary data or both.
 Secondary data are data to see whether the
problem can be Partly or wholly solved
without collecting costly primary data
Research Approaches
Observation
Observation
Ethnographic
Ethnographic
Focus
Focus Group
Group
Survey
Survey
Behavioral
Behavioral Data
Data
Experimentation
Experimentation
Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 4-164
Research Approaches
a)Observational Research
 Researchers can get fresh data by observing
the relevant actors and settings, observing as
they shop or as they consume products.
b)Ethnographic research
 It is a particular observational research
approach that uses concepts and tools from
anthropology and other social science
discipline to provide deep understanding of
how people live and work.
Research Approaches
c) Focus Group research

A focus group is a gathering of six to ten people who are
invited to spend few hours with skilled moderator in
order to discuss a product, service, organization, or any
other marketing entity.
d) Survey Research
 It is the best suited for descriptive research. Companies
undertake surveys to learn about people`s knowledge,
beliefs, preferences, and satisfaction. It requires
development of a survey instrument, usually a
questionnaire, which the respondents are asked to fill up.
Focus Group in Session
Research Approaches
e) Behavioral Data
 Customer actual purchase reflect preferences and are
normally more reliable than memory based statements
made in surveys.e.g. Many high-income group customer
don’t buy expensive customer goods, while some low
income consumer ends up buying expensive products,
contrary to tier stated preferences in the survey
f)Experimental Research
 The purpose of experimental research is to capture
cause-and –effect relationships by eliminating
explanation of the observed findings.
Research Instruments
Questionnaires
Qualitative Measures
Technological Devices
Questionnaire Do’s and
Don’ts
 Ensure questions are free  Avoid negatives
of bias  Avoid hypotheticals
 Make questions simple  Avoid words that could be
 Make questions specific misheard
 Avoid jargon  Use response bands
 Avoid sophisticated  Use mutually exclusive
words categories
 Avoid ambiguous words  Allow for “other” in fixed
response questions
Question Types—Dichotomous
In arranging this trip, did you contact American

Airlines?
 Yes  No
Question Types—Multiple
Choice
With whom are you traveling on this trip?
 No one
 Spouse
 Spouse and children
 Children only
 Business associates/friends/relatives
 An organized tour group
Question Types—Likert Scale
Indicate your level of agreement with the following

statement: Small airlines generally give better service
than large ones.
 Strongly disagree
 Disagree
 Neither agree nor disagree
 Agree
 Strongly agree
Question Types—Semantic Differential
American Airlines
Large ………………………………...…….Small
Experienced………………….….Inexperienced
Modern……………………….…..Old-fashioned
Question Types—Importance Scale
Airline food service is _____ to me.

 Extremely important
 Very important
 Somewhat important
 Not very important
 Not at all important
Question Types—Rating Scale
American Airlines’ food service is _____.

 Excellent
 Very good
 Good
 Fair
 Poor
Question Types—
Intention to Buy Scale
How likely are you to purchase tickets on American

Airlines if in-flight Internet access were available?
 Definitely buy
 Probably buy
 Not sure
 Probably not buy
 Definitely not buy
Question Types—Completely Unstructured
What is your opinion of American Airlines?

Question Types—Word Association
What is the first word that comes to your mind when

you hear the following?
Airline ________________________
American _____________________
Travel ________________________
Question Types—Story Completion
“I flew American a few days ago. I noticed that the

exterior and interior of the plane had very bright
colors. This aroused in me the following thoughts and
feelings.” Now complete the story.
____________________________________________
____________________________________________
____________________________________________
____________________________________________
____________________________________________
______________
Question Types—Picture
(Empty Balloons)
4-181
Question Types—Thematic Apperception
Test
Make up a story that reflects what you think is

happening in this picture.
Qualitative Measures
Word
Word Association
Association
Projective
Projective Techniques
Techniques
Visualization
Visualization
Brand
Brand Personification
Personification
Laddering
Laddering
4
a) Word association
 Ask subjects what words come to mind when
they hear brand name. the primary purpose of
freedom association task is to identify the
range of possible brand association in
consumer minds
b) Projective Technique
 Give people an incomplete stimulus and ask
them to complete it. One such approach is
bubble exercise.
c) Visualization
 It requires people t create collage from magazine photos or
drawing to depict their perceptions
d) Brand personification
 Ask subjects what kind of person they think of when the brand
is mentioned Ìf the brand were to come alive as a person,
what would be it like, what would it do, where would it
liveètc.
e) Laddering
 A series of increasingly more specific `why` questions can
reveal consumer motivation, and consumer deeper more
abstract goals.
Technological Devices
Galvanometers
Tachistoscope
Eye cameras
Audiometers
GPS
Sampling Plan
 Sampling unit: Who is to be surveyed?

 Sample size: How many people should be
surveyed?
 Sampling procedure: How should the
respondents be chosen?
Table 4.2 Types of Samples
Probability Samples Nonprobability

 Simple random Samples
 Systematic random  Convenience
 Stratified random  Judgment
 Cluster  Quota
 snowball
Types of Sample
Probability sampling
A sampling procedure in which each element of
the population has a fixed probabilistic chance of
being selected for the sample
a)Simple Random Sampling-
A probability sampling technique in which each
element of population has a equal probability of
selection
Types of Sample
b) Systematic Sampling
A probability sampling technique in which the
sample is chosen by selecting a random starting point
and then picking every nth element in succession from
the sampling frame.
c) Stratified Sampling
A probability sampling that uses a two step process
to partition the population into subpopulations or
strata. Elements are selected from each stratum by a
random procedure
Types of Sample
c) Cluster Sampling
First, the target population is divided into
mutually exclusive and collectively
exhaustive sub population called cluster.
Then, a random sample of clusters is selected
based on a probability sampling technique
Types of Sample
Non Probability sampling
a) Convenience Sampling
A sampling technique that attempts to obtain a
sample of convenient elements. The selection of
sampling units is left on primarily to the interviewer.
b) Judgmental Sampling
A form of convenience sampling in which the
population elements are purposely selected based on
the judgment of the researcher.
Types of Sample
c) Quota Sampling
A technique that is two stage restricted
judgmental sampling. The first stage consists
of developing control categories or quotas of
population elements. In the second stage,
sample elements are selected based
convenience of judgment.
Types of Sample
d) Snowball sampling
A technique in which an initial group of
respondents is selected randomly. Subsequent
respondents are selected based on referrals or
information provided by initial respondents.
This process may be carried out in waves by
obtaining referrals for referrals
Contact Methods
Mail Questionnaire
Telephone
Interview
Personal
Interview
Online
Interview
4
Pros and Cons of Online Research
Advantages Disadvantages
 Inexpensive  Small samples
 Fast  Skewed samples
 Accuracy of data,  Technological
even for sensitive problems
questions  Inconsistencies
 Versatility
What is a
Marketing Decision Support System
(MDSS)?
A marketing decision support system is a
coordinated collection of data, systems,
tools, and techniques with supporting
hardware and software by which an
organization gathers and interprets relevant
information from business and environment
and turns it into a basis for marketing
action.
Barriers Limiting the Use of
Marketing Research
 A narrow conception of the research

 Uneven caliber of researchers
 Poor framing of the problem
 Late and occasionally erroneous findings
 Personality and presentational differences
Typical Problems in Rural
Research
 Low literacy levels require innovations in
questionnaire design scales
 Wide geographical dispersion requires long
travels
 A large number of languages and dialects,
requiring multiple translations
 Non-availability of working population at
normal places of residence
 Poor access to women respondents
 Villages layout based on caste lines, requiring
innovative sampling
What is a
Marketing Information System (MIS)?
A marketing information system consists
of people, equipment, and procedures to
gather, sort, analyze, evaluate, and
distribute needed, timely, and accurate
information to marketing decision makers.
Information Needs Probes
 What decisions do you regularly make?

 What information do you need to make these
decisions?
 What information do you regularly get?
 What special studies do you periodically request?
 What information would you want that you are
not getting now?
 What are the four most helpful improvements that
could be made in the present marketing
information system?
Internal Records and
Marketing Intelligence
a) Order generation, processing, delivery, and payment
cycle
b)Payment history
c)Sales management information, giving details on a firm`s
sales, market share, profitability, and trend in each
market
d) Brand Monitor
e) Product performance Report
Several software are available which provide integrated
market information at three level
 Transaction processing level
 Managerial and operational level
 Strategic level.
Sales
Order-to-Payment
Information
Cycle
System
Databases, Marketing
Warehousing, Intelligence
Data Mining System
a) The order- to- Payment Cycle

 Sales representatives, dealers, and
customers send orders to the firm. The
sales department prepares invoices,
transmits copies to various departments,
and back order out of stock items, shipped
items generate shipping and billing
documents that go to various departments
b) Sales information System

 Marketing manager need timely and accurate
reports of current sales.
 E.g. Reliance petroleum uses hand- held
billing machines, which can be taken near the
vehicle for dispensing the bill after collecting
the cash.the data from these machines can be
transferred to computer in computer readable
file format to enable further processing in
financial accounting package
c) Databases, Data Warehousing, and data Mining

 Companies organize their information into databases-
customer databases, product databases, salesperson
databases- and combined data from different databases
 Companies warehouse these data and make them easily
accessible to decisions makers.
 By hiring analysts skilled in sophisticated statistical
methods, they can mine the data and garner fresh
insight into neglected customer segment, recent
customer trends and other usefull information.
Managers can cross-tabula6t customer information
with product and salesman information
The Marketing Intelligence
System
 It is a set of procedures and sources

manager use to obtain everyday
information about developments in the
marketing environment.
 The internal records system supplies result
data, but the marketing intelligence system
provides happening data
Steps to Improve Marketing Intelligence
Train
Train sales
sales force
force to
to scan
scan for
for new
new developments
developments
Motivate
Motivate channel
channel members
members to
to share
share intelligence
intelligence
Network
Network externally
externally
Utilize
Utilize aa customer
customer advisory
advisory panel
panel
Utilize
Utilize government
government data
data resources
resources
Purchase
Purchase information
information
Collect
Collect customer
customer feedback
feedback online
online
What is MKIS?
‘MKIS (MIS) is a set of procedures and

methods for the regular, planned collection,
analysis and presentation of information for
use in marketing decisions’
American Marketing Association

The components of a
computerised MKIS
Data Bank
Statistical Display Marketing

MKIS
Bank unit Manager
Model
Bank
The components of a
computerised MKIS
 Data bank - raw data e.g historical sales
data, secondary data
 Statistical bank - programmes to carry-out
sales forecasts, spending projections
 A model bank - stores marketing models e.g
Ansoff’s matrix, Boston Matrix
 Display unit - VDU and keyboard
Analyzing Consumer Markets
Analyzing Consumer Markets
 How do consumer characteristics influence
buying behavior?
 What major psychological processes influence
consumer responses to the marketing program?
 How do consumers make purchasing
decisions?
 How do marketers analyze consumer decision
making?
Hariyali Kisaan Bazaar:
Connecting with Customers
Hariyali Kisaan Bazaar:
Connecting with Customers
 Successful marketing requires that companies
fully connect with their customers.
 Adopting a holistic marketing orientation means
understanding customers—gaining a 360-degree
view of both their daily lives and the changes that
occur during their lifetimes so the right products
are always marketed to the right customers in the
right way.
 DSCL’s Hariyali Kisaan Bazaar provides a wide
range of products and services relevant to the
target segment—Indian farmers—based on deep
customer insight.
What Influences
Consumer Behavior?
Cultural
Cultural Factors
Factors
Social
Social Factors
Factors
Personal
Personal Factors
Factors
Cultural Factors
 Consumer behavior is the study of how
individuals, groups, and organizations select,
buy, use, and dispose of goods, services,
ideas, or experiences to satisfy their needs and
wants.
 Marketers must fully understand about the
theory and reality of consumer behavior.
 Culture subculture and social class are
particularly important influences on consumer
buying behavior.
Cultural Factors
 Culture is the fundamental determinant of persons
wants and behavior. The growing child acquires a
set of values, perceptions, preferences, and
behaviors through his family and other key
institutions
 A child growing up in a traditional middle-class
family in India is exposed to following values:
respect and care for elders, honesty and integrity,
hard work, achievement and success,
humanitarianism, and sacrifice.
 A child growing up in the US is exposed to the
following values: achievement and
success, ,efficiency and practicality, progress,
material comfort, individualism, freedom.
Subcultures
Nationalities
Nationalities
Religions
Religions
Racial
Racial groups
groups
Geographic
Geographic regions
regions
Cultural Factors
 Each culture consists of smaller subcultures
that provide more specific identification and
socialization for their members.
 Subculture includes nationalities, religions,
racial groups, and geographic regions.
 When subculture grow large and affluent
enough, companies often design specialized
marketing programs to serve them.
Cultural Factors
 Multicultural marketing grew out of careful
marketing research, which revealed that different
ethnic and demographic niches did not always
respond favorably to mass marketing advertising.
Social Class
 All human societies exhibit social stratification.
Stratification sometimes takes the form of a caste
system, more frequently it takes the form of social
classes, relatively homogeneous and enduring
divisions in a society, which are hierarchically
ordered , whose member share similar value,
interests and behavior. Social class in US are as
below
Social Classes
Upper uppers
Lower uppers
Upper middles
Middle class
Working class
Upper lowers
Lower lowers
Social Classes
A1
A2
B1
B2
C
D
E1
E2
Social classes
 Virtually all human societies exhibit social stratification,
most often in the form of social classes, relatively
homogeneous and enduring divisions in a society,
hierarchically ordered and with members who share
similar values, interests, and behavior.
 Indian marketers use a term called Socio-Economic

Classification (SEC), which uses a combination of the
education and occupation of the chief wage earner of the
household to classify buyers in urban areas.
Social classes
 This classifies all the urban households into eight
broad categories, namely, A1, A2, B1, B2, C, D,
E1, and E2; with A1 signifying the highest purchase
potential and E2 signifying the lowest.
 For the rural areas, the system uses the occupation

of the chief wage earner of the household and the
type of house to classify households into four broad
categories from R1 to R4 in the descending order
of purchase potential.
Social Classes
Characteristic of social Classes
 Those within each class tend to behave more
alike than person from different social classes
 Social class differ in dresses, speech patterns,
recreational preferences, and many other
characteristics.
 Social classes show distinct product and brand
preferences in many areas, including clothing,
home furnishing, leisure activities.
 Social classes differ in media preferences.
Social factor
Social factor which affect our buying
behavior are
1.Reference Group
2.Family
3.Role and Status
Reference Groups
Membership
Membership groups
groups
Primary
Primary groups
groups
Secondary
Secondary groups
groups
Aspirational
Aspirational groups
groups
Dissociative
Dissociative groups
groups
Social factor
 A person reference groups are all the groups that have
direct( face to face ) or indirect influence on their
attitudes or behavior.
 Groups having a direct influence are called membership
group. Some of these group are primary groups with
whom the person interacts fairly continuously and
informally, such as family, friends, neighbors, and
coworkers.
 People also belong to secondary group such as
religious, professional, and trade union groups, which
tend to be more formal and require less continuous
interaction
Social factor
 Reference group influences members in many
ways. they expose an individuals to new
behavior and life style, they influence attitudes
and self –concept, and they create pressures for
conformity that may affect product and brand
choices
 People are also influence by the groups to
which they don’t belong. Aspirational group
are those a person hope to join, dissociative
groups are those value or behavior an
individuals rejects
Social factor
 Where reference group influence is strong,
marketers must determine how to reach and
influence the groups opinion leader.
 An opinion leader is a person who offers informal
advice or information about a specific product or
product category such as which of the several
brands is best or how a particular product may be
used.
 Opinion leaders are highly confident, socially
active, and involved with the category.
 Marketer try to reach opinion leaders by identifying
their demographic and psychographic
characteristics, identifying the media they read, and
directing message to them
Provogue uses teenage icons as brand ambassadors and a
youth targeted website to connect to its customers
Radio Shack Targets Women with
Female Store Managers
Social factor
2. Family
 The family is the most important consumer buying
organization in the society, and family members
constitute the most influential primary reference
group. There are two family in the buyer life
a) The family of Orientation
 It consists of parents and siblings. from parents a
person acquire an orientation towards religion,
politics, a sense of personal ambition, self worth,
and love.
b) The family of Procreation
 It consist of one`s spouse and children. In a
countries where parent live with grown children,
their influence can be substantial.
Social factor
3. Role and Status
 A person participates in many groups- family, clubs,
organizations. Group often are an important source
of information and help to define norms of
behavior.
 We can define a person`s position in each group to
which he belongs in terms of role and status.
 A role consists of the activities a person is expected
to perform. Each role carries a status.
 A VP marketing has more status than sales manager,
sales manager has more status than an office clerk .
People chose a product that reflect and
communicate their role and actual or desired status
in society. Marketers must be aware of the status
Personal Factors
Age
Self- Life cycle
concept stage
Lifestyle Occupation
Values Wealth
Personality
Personal Factors
1. Age and Stage in The Life Cycle
 People buy different goods and services over a
life-time . Taste in food , clothes and furniture, and
recreation is often age related.
 Consumption is shaped by the family life cycle.
Trends like delayed marriage, children migrating
to distant cities or abroad for work leaving parents
behind, tendency of professionals/ working couple
to acquire assets such as house or automobile in
the early stages of career has resulted in different
opportunities for marketers at different stages in
the consumer life cycle.
 Marketer should also consider critical life events
or transitions- marriage, childbirth, illness ,
relocation, divorce, career change, as giving rise to
new need.
Age and Stage of Lifecycle
The Family Life Cycle
Personal Factors
b) Occupation and Economic circumstances

 Occupation also influences consumption
patterns. Marketers try to identify the
occupational groups that have above average
interest in their product and service.
 Product choice is greatly affected by economic
circumstances: spendable income, saving and
assets and attitude toward spending and saving.
Personal Factors
c) Personality and Self concept

 Each person has personality characteristics that
influence his behavior.
 By personality we mean a set of distinguishing human
psychological traits that lead to relatively consistent and
enduring response to environmental stimuli.
 Such traits are self –confidence, dominance, autonomy,
deference, sociability, defensiveness and adaptability.
 Personality can be a useful variable in analysing
consumer brand choice. Consumer are likely to choose
those brands whose personalities match their own.
Brand Personality
Sincerity
Sincerity
Excitement
Excitement
Competence
Competence
Sophistication
Sophistication
Ruggedness
Ruggedness
Personal Factors
 Consumers often choose and use brands

that have a brand personality consistent
with their own actual self concept(how we
view ourselves), although the match may
instead be based on the consumer`s ideal
self concept(how we would like to view
ourselves) or even on the other self
concept(how we think other see us).
Lifestyle Influences
Multi-tasking
Time-starved
Money-constrained
Personal Factors
d) Lifestyle and values

 People from the same subculture, social class, and
occupation may lead quite different lifestyles.
 A lifestyle is a person`s pattern of living in the
world as expressed in activities, interest, and
opinions.
 Marketers search for relationship between their
products and lifestyle groups. E.g a computer
manufacturer might find that most of the computer
buyer are achievement oriented and than aim the
brand more clearly at achiever lifestyle.
Lifestyle and Values
Personal Factors
 Lifestyles are shaped partly by whether consumers

are money constrained or time constrained
 Consumer who experience time famine are prone to
multitasking, doing two or more things at the same
time. They will also perform tasks because time is
more important than money. Companies aiming to
serve them will create convenient products and
services for this group.
 Consumer decisions are also influenced by core
value, the belief systems that underlie attitudes and
behaviors. who target consumers in the basis of
their values belief that with appeal to people inner
selves, it is possible to influence their ourselves-
their purchase behavior.
Faysal Bank of
Pakistan has
extended
banking hours
for time-
pressed
executives.
Stimulus Response Model
(Understanding Consumer Behavior)
 Marketing and environmental stimuli enter the
consumer consciousness, and a set of
psychological process combine with certain
consumer characteristics to result in decisions
processes and purchase decisions.
 Marketer task is to understand what happens in
the consumers consciousness between the
arrival of the outside marketing stimuli and the
ultimate purchase decisions
Model of Consumer Behavior
Key Psychological Processes
Motivation Perception
Learning Memory
Motivation
 Some need are biogenic; they arise from

physiological states of tension such as hunger,
thirst ,and discomfort.
 Other needs are psychogenic; they arise from
psychological states of tension such as need for
recognition, esteem , or belonging.
 A need becomes a motive when it is aroused to
a sufficient level of intensity to drive us to act.
Motivation
Maslow’s Herzberg’s
Freud’s Hierarchy Two-Factor
Theory of Needs Theory
Behavior Behavior Behavior is

is guided by is driven by guided by
subconscious the lowest, motivating
motivations unmet need and hygiene
factors
Maslow’s Hierarchy of Needs
Herzberg’s Two-Factor
Theory
Freud's Theory
 It assumed that the psychological forces shaping
people`s behavior are largely unconscious, and that
person can not fully understand his or her own
motivations.
 When a person examines specific brands, he will react to
not only to their stated capabilities, but also to other,
less conscious cues such as shape size, weight, material,
color and brand name.
 A technique called laddering lets us trace a persons
motivation from the stated instrumental ones to more
terminal ones. Then the marketer can decide at what
level to develop the message and appeal.
Maslow`s Theory
 This theory explains why people are driven
by particular needs at particulate times
 Human heeds are arranged in a hierarchy
from most to least pressing-physiological
needs, safety needs, socials needs, esteem
needs, and self actualization needs.
Herzberg`s Theory
 Herzberg developed a two factor theory that distinguishes
dissatisfied(factor that cause dissatisfaction) from
satisfiers( factors that cause satisfaction).
 The absence of dissatisfies is not enough to motivate a
purchase; satisfier must be present
 E.g. A computer that does not come with a warranty would be
a dissatisfied. Yet the presence of a product warranty would
not act as a satisfier or motivator of a purchase, because it is
not a source of intrinsic satisfaction.
 Marketer should do their best to avoid dissaisfiers.although
these things will not sell a product, they might easily unsell it.
 Marketer should identify the major satisfiers or motivators of
purchase in the market and then supply them.
Perception
Selective Attention
Selective Retention
Selective Distortion
Subliminal Perception
Perception
 A motivated person is ready to act. How he act is influenced by his
view of the situation.
 Perception are more important than reality, because it is the perception
that affect consumers actual behavior
 Perception is the process by which we select, organize, and interpret
information inputs to create a meaningful pictures of the world.
 Perception is not only depends on the physical stimuli but also on the
stimuli's relationship to the surrounding field and on conditions with
each of us.
 E.g. Talkative salesperson
 People can emerge with different perceptions of the same object
because of three perceptual process, selective attention, selective
distortion and selective retention.
Perception
1.Selective Attention
 Attention is allocation of processing capacity
to some stimulus.
 The average person may be exposed to over
1500 adds or brand communication a day.
Since we can not possibly attend to all these,
we screen most stimuli out of out- a process
called selective attention.
 The real challenge is to explain which stimuli
people with notice
Perception
2. Selective Distortion
 Selective distortion is the tendency to
interpret information in a way that fits our
preconceptions. Consumer will often distort
information to be consistent with prior brand
and product belief and information.
 Selective distortion can work to the advantage
of marketers with strong brands when
consumers distort neutral or ambiguous brand
information to make it more positive
Perception
3. Selective retention
 Most of us donts remember much of the
information to which we are exposed, but we
do reatin information that supports our
attitude and beliefs.
 Because of selective retention we are likely
to remember good point about a product and
forgot good point about competiting product
Perception
4.Subliminal Perception
 Marketers embeds covers, subliminal
message in ads or packaging. Consumers
are not consciously aware of them, yet
they affect behaviour
Learning
 When we act , we learn. Learning induces changes in our

behavior . Most human behavior is learned, although much
learning is incidental
 Learning theorists believe that learning is produced through
interplay of drives, stimuli, cues, responses, and reinforcement
 A drive is a strong internal stimulus impelling action. cues are
minor stimuli that determine when, where, and how a person
responds. E.g. Brand and subrand.
 We generalize our response to similar stimuli. A counter
tendency of generalization is discrimination. It means we have
learned to recognize differences in sets of similar stimuli and
can adjust our responses accordingly
Learning
 Learning theory teaches marketers that they can build

demand for a product by associating it with strong
drives, using motivation cues, and providing positive
reinforcement.
 A new company can enter the market by appealing to
the same drives that competitors use ,and by providing
similar cues, because buyers are more likely to transfer
loyalty to similar brands(generalization); or company
might design its brand to appeal to it a different set of
drives and offer strong cue inducements to
switch(discrimination)
Memory
 All the information and experiences we encounter as we
go through life can end up in our long term memory.
 Associative network memory model views LTM as a set
of Nodes and Links. Nodes are stored information
connected by links that varies in strength.
 We can think a consumer brand knowledge as a node in
memory with variety on linked association. The strength
and organization of these associations will be important
determinant of the information we can recall about the
brand.
 Brand association consist of brand related thoughts,
feelings, perception image, experiences beliefs, attitudes,
and so on that become linked to the brand node.
The Buying decision Process
Consumer Buying Process
Problem Recognition
Information Search
Evaluation
Purchase Decision
Postpurchase
Behavior
Problem Recognition
 The buying process starts when the buyer recognizes a
problem or need triggered by internal or external stimuli.
With an internal stimulus, one of the person`s normal
needs rise to a threshold level and becomes a drive. a
need can be aroused by an external by an external
stimulus.
 Marketers need to identify the circumstances that trigger
a particular need by gathering information from a
number of consumers.
 Marketer may need to to increase consumer motivation
so a potential purchase gets serious consideration.
Information Search
a) Information Search
a)Personal- Family, friends, neighbors
b)Commercial- adv, websites, salespersons,
dealer, packaging, displays.
c)Public- Mass media, consumer-rating
organization
d)Experimental- Handling, examining, using
the product
Successive Sets Involved in Consumer
Decision Making
Information Search
b)Search Dynamics
 Through gathering information, the consumer learns
about competing brands and their features.
 Out of total set individual consumer will come to
know only a subset of these brand known as
awareness set.
 Some brands, the consideration set, will meet initial
buying criteria, as the consumer gather more
information, only a few the choice set, will remain
strong contenders. The consumer makes a final
choice from this set.
Information Search
 Marketers need to identify the hierarchy if
attributes that guide consumer decision
making in order to understand different
competitive forces and how these various
set get formed.
 Company must strategize to get it brand
into the prospect awareness, consideration
and choice set
Evaluation of Alternatives
 How does the consumer process competitive brand
information and make a final value judgment?
 There are several processes, and the most current
models see the consumer forming judgments largely
on a conscious and rational basis.
 First the consumer is trying to satisfy the need.
second, the consumer is looking for certain benefits
from the product solutions. third, the consumer sees
each product as a bundle of attributes with varying
ability for delivering the benefits sought to satisfy
this need
 Consumers will pay the most attention to
attributes that deliver the sought-after benefits.
We can segment the market for a product
according to attributes important to different
consumer group.
a)Belief and Attitude
 Through experience and learning, people
acquire beliefs and attitudes. This in turn
influence buying behaviour
B) Expectancy-Value model
 A consumer arrive at attitudes towards various
brands through an atribute evaluation
procedure.we develop a set of beliefs about
where each brand stands on each attribute,
 This model of attitude formation posits that
consumer evaluate products and services by
combining their brand beliefs- the positives
and negatives –according to importace
Expectancy-Value model
Evaluation Of Alternatives
 Suppose a consumer assigned 40% of the
importance to memory capacity, 305 to graphic
capability, 20% to weight and size and 10% to
price
 Then perceived value of each computer
computer A= .4(8)+.3(9)+.2(6)+.1(9)= 8
Computer b =7
Computer C =6
Computer D =5
Purchase Decision
Non Compensatory models of consumer Choice
 Consumer often take mental shortcut using simplified
choice heuristics. Heuristics are rules of thumb or mental
shortcuts in the decision process
a) Conjunctive heuristic-
 The consumer sets a minimum acceptable cutoff level
for each attribute and choose the first alternative that
meets the minimum standard for all attributes
b) Lexicographic heuristic
 The consumer choose the best brand on the basis of its
perceived most important attribute.
Stages between Evaluation of
Alternatives and Purchase
Post Purchase Behaviour
 Post purchase satisfaction
 Post purchase Action
 Post purchase use and Disposal
How Customers Use and Dispose of
Products
DIFFUSION OF INNOVATIONS
CHAPTER OUTLINE …
A. The diffusion process.

B. The adaptation process.
A. The diffusion process…
 Diffusion: is a macro process concerned with the spread of

a new product from its source to the consuming public.
 More precisely, diffusion is the process by which the

acceptance of an innovation (a new product) is spread
by communication (mass media, sales person) to
members of a social system (a target market) over a
period of time.
 In other words, diffusion is a process looks at what is

happening in the market after the introduction of a
product under a normal condition.
 The spread of an innovation throughout the economy or

the relevant set of potential users
The diffusion process
(contn.)
Diffusion of Innovations:-
A process by which an innovation is communicated through certain
channels over time among the members of a social system.
The diffusion process
(contn.)
 EXAMPLE:-
The s-curve for diffusion:-
Shows how the number of users of a new technology

grows over time (usually measured as a share of potential
users).
– Begins trending upward very slowly

– At some point becomes much steeper (as the
technology spreads rapidly)
– Eventually flattens out because there are fewer and
fewer potential users that have not already adopted.
Graph shows the diffusion of some major consumer

inventions in the United States during the past 100 years.
U.S. diffusion of major inventions
100
90
80 Telephone
70 Refrigerator
60
Share (%)
Washing machine
50
40
30 VCR
20
10 Electric Service
0
1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000
Year
289
Four Main Elements in the
Diffusion of Innovations
1. The innovation
2. Communication channels
3. Time
4. A social system
Innovation…
 An idea, object, or process
 Perceived as new
 By an individual or organization
State
Objects Processes
Stateof
ofAffairs
Affairs(SOA)
(SOA)System
System
Relationships Events SOAs

291
 The innovation of product means the existence of
new product.
 Various approaches have been taken to

define a new product or a new service, these can
be classified as – firm oriented, product oriented,
market oriented and consumer oriented
definitions.
Stages in the
innovation-decision process
for an individual
Knowledge
Persuasion
Decision
Implementation
Confirmation
Stages in the
for an individual
Knowledge Awareness
Awareness--What
Whatisisitit
How-to
How-to--HowHowdoes
doesititwork
work
Principles
Principles--Why
Whydoes
doesititwork
work
Stages in the
for an individual
Persuasion
Seeks innovation-evaluation information
Knowledge
Mass
Massmedia
media
Persuasion Personal
Personalinteractions
interactions
295
Stages in the
for an individual
Adoption:
Adoption:AAdecision
decisiontotomake
makefull
fulluse
use
Decision ofofan
aninnovation
innovationasasthe
thenext
nextcourse
courseofof
Seeks innovation-evaluation information action.
action.
Rejection:
Rejection:AAdecision
decisionnot
nottotoadopt.
adopt.
Knowledge Active
ActiveRejection:
Rejection:consider
considerbutbutthen
thennot
not
adopt.
adopt.
Persuasion Passive
PassiveRejection:
Rejection:Never
Neverconsidering.
considering.
Decision
Stages in the
for an Invention:
Invention:The
individual Theprocess
processbybywhich
whichaa
new
newidea
ideaisisdiscovered
discoveredor orcreated.
created.
Re-invention:
Re-invention:The Thedegree
degreetotowhich
which
an
aninnovation
innovationisischanged
changedor or
Knowledge modified
modifiedby bythe
theuser
userin
inthe
theprocess
process
of
ofits
itsadoption
adoptionandandimplementation.
implementation.
Persuasion Re-invention
Re-inventionisisnotnotnecessarily
necessarilybad
bad
Decision
Implementation
Stages in the
for an individual
Adoption
Adoptionandandimplementation
implementationisisnot
notthe
thelast
last
stage.
stage.
Individuals
Individualsoften
oftenseek
seekconfirmation
confirmationafter
after
Knowledge adoption.
adoption.
Did
DidIIdodothe
theright
rightthing?
thing?
Discontinuance:
Discontinuance: a decisiontotoreject
a decision rejectan
aninnovation
innovation
Persuasion after having previously adopted it.
after having previously adopted it.
Decision
Implementation
Confirmation
298
Communication
Channels
 Communication channels are the means by which
messages get from one individual to another. The
nature of the information exchange will effect the
transfer.
Type of channels:-
Mass media -- efficient, awareness knowledge
Interpersonal -- effective, persuasive
 Heterophily / Homophily
Pairs if individuals alike/different in beliefs,
education, social status,etc.
Communication more effective when homophily
Nature of diffusion implies.
TIME…
 Time is the backbone of the diffusion process.
 Relative speed with which an innovation is adopted by members of a

social system.
 Differences in the rate of adoption of the same innovation in different

social systems.
 Some innovations are more readily adopted than others
 Some social systems are more ready to adopt innovations than others.
300
Social System
 The diffusion of a new product usually takes place in a social setting
frequently referred to as a social system.
 A set of interrelated units that are engaged in joint problem solving to

accomplish a common goal.
 Structure
Formal - designed
Informal - Interpersonal networks
 Norms
Established behavior patterns for the members of a social system. They
define a range of tolerable behavior and serve as a guide or a standard for
the members of a social system.
B. The adaptation process.
 Rogers defines "the adoption process as the mental

process through which an individual passes from first hearing
about an innovation to final adoption".
 A series of stages consumers go through, from learning of a

new product to trying it and deciding to purchase it regularly
or to reject it.
 It describes the behaviour of consumers as they purchase new

products and services.
Stages in the Adoption Process
(The stages buyers go through in
accepting a product)
 Awareness: Consumer becomes aware of the new

product, but lacks information about it.
 Interest: Consumer seeks information about

new product.
 Evaluation: Consumer considers whether trying the

new product makes sense.
 Trial: Consumer tries new product on a small

scale to improve his or her estimate of its
value.
 Adoption: Consumer decides to make full and

regular use of the new product.
Stage Buyer’s response
Awareness The buyer becomes aware of the product
Interest The buyer seeks information and is receptive to learning

about the product
Evaluation The buyer considers the product’s benefits and decides

whether to try the product
Trial The buyer examines, tests, or tries the product to determine

if it meets his or her needs
Adoption The buyer purchases the product and can be expected to use
it again whenever the need for this general type of product
arises
Analyzing Business Market
Chapter objective
 What is the business market, and how does

it differ from the consumer market?
 What buying situations do organizational
buyers face?
 Who participates in the business-to-
business buying process?
Chapter Objective
 How do business buyers make their

decisions?
 How can companies build strong
relationships with business customers?
 How do institutional buyers and
government agencies do their buying?
What is Organizational
Buying?
Organizational buying refers
to the decision-making process by which
formal organizations establish the need
for purchased products and services, and
identify, evaluate, and choose among
alternative brands and suppliers.
The Business Market versus
Consumer Market
 The business market consists of all the
organizations that acquire goods and services
used in production of other product or service.
 The major industry making up business market
are agriculture, forestry, fisheries; mining;
manufacturing ;construction ;transportation;
communication etc
Characteristics of Business Markets
 Fewer, larger  Multiple sales calls

buyers  Derived demand
 Close supplier-  Inelastic demand
customer  Fluctuating
relationships demand
 Professional
 Geographically
purchasing concentrated
 Many buying buyers
influences  Direct purchasing
a)Fewer , larger buyer

 The business market deals with far fewer,
much larger buyer then the consumer market
does.
 The fate of tyre company and other auto
motive part depend upon major automobile
manufacturing companies to get as the
original equipmnt manufacturer
(OEM)supplier of tyre
b)Close supplier-customer relationship

 Because of smaller customer base and the
importance and power of larger cutomer, supplier
are frequently expected to customize their
offerings to individual business customer needs.
C)Professional Purchasing
 Business goods are often purchased by trained
purchase agent. Many of buying instruments
requires quotations, proposals, and purchase
contracts are not found in consumer buying.
D) Multiple Buying influences

 More people typically influence busines buying
decision. Buying committee consists of technical
expert and even senior management.
 Business marketers need to send well trained sales
representative and sale team to deal with well trained
buyer.
E) Multiple sales call
 In the case of capital equipment sale for a large project
it may take many attempts to fund a project and the
sales cycle- between quoting a job and delivering the
product
F) Inelastic demand
 The total demand of many business goods and services
is inelastic- that is not much affected by price change,
some manufacture are not going to buy much more
leather if the price of leather falls, nor will by less
leather if the price rise unless they can find satisfactory
substitutes.
G)Fluctuating demand
 The demand for business goods and services tends to
be more volatile than the demand of consumer goods
and service. A given percentage increase in consumer
demand can lead to a much higher percentage in
demand for plant and equipment needed for additional
production
G) Geographically concentrated buyers
 Different type of industry in India tend to get
concentrated in specific regions of different states
e.g. automobile and auto ancillary in Nasik and
pune. Pharma in near by Ahmadabad.
Geographical concentration of producers helps to
reduce the selling cost. Business market need to
monitor regional shifts of certain industries.
H) Direct Purchasing
 Business buyers often buy directly from
manufactures rather than through intermediaries,
especially items that are technically complex.
Buying Situation
Straight
Straight rebuy
rebuy
Modified
Modified rebuy
rebuy
New
New task
task
Buying Situation
A) Straight Rebuy
 In a straight rebuy,the purchasing department reorders supplies
on a routine basis and chooses from suppliers on an approved
list. Their goal is to get a small order and then enlarge their
purchase share over time.
B) Modified Rebuy
 The buyer wants to modify product specifications, prices,
delivery requirement to the other terms.
C) New Task
 A Purchaser buys a product or service for the first time such as
an office building. The greater the cost or risk, the lrger the
no. of participants and greater their information gathering.
 It is the marketer greatest opportunity and challenge. The
process passes through several stages: awareness, interest,
evaluation, trial and adoption.
Systems Buying and Selling
Turnkey solution System

desired; subcomponents
bids solicited assembled
Prime Second-tier
contractors contractors
The Buying Center
Initiators
Initiators
Users
Users
Influencers
Influencers
Deciders
Deciders
Approvers
Approvers
Buyers
Buyers
Gatekeepers
Gatekeepers
The Buying Center
a) Initiators
 Users or other in organization who request that something be
purchase
b) Users
 Those who use the product or services. In many cases, the
users initiate the buying proposal and help and help define the
product requirement.
c)Influencers
 People who influence the buying decision, often by helping
define specifications and providing information for evaluating
alternatives
d) Deciders
 People who decide on product requirements or on suppliers
The Buying Center
e)Approvers
 People who authorize the proposed actions of
deciders or buyers
f)Buyers
 People who have formal authority to select the
suppliers and arrange the purchase term
G) Gatekeepers
 People who have the power to prevent sellers or
information from reaching members of the buying
center
Of Concern to Business
Marketers
 Who are the major decision participants?
 What decisions do they influence?
 What is their level of influence?
 What evaluation criteria do they use?
Sales Strategies
Key Buying
Small Sellers Influencers
Multilevel
Large Sellers In-depth
Selling
Stages in the Buying Process:
 Problem recognition
 General need description
 Product specification
 Supplier search
 Proposal solicitation
 Supplier selection
 Order-routine specification
 Performance review
a) Problem Recognition
 The buying process begins when some one in the
company recognizes a problem or need that can met
acquiring a good or service. The recognition can be
triggered by by internal or external stimuli.
 Internal stimuli might be that company decides to
develop a new product or and needs new equipment and
material.
 Externally the buyer may get new ideas at a trade show,
see an ad, or receive a call from a sales representative
who offer a better product or a lower price
 Business markets can stimulate problem recognition by
direct mail, telemarketing and calling prospects
b) General Need Description and Product

Specification
 The buyer determines the needed items general

characteristics and required quantity.
 For complex item buyers will work with
others-engineers,users-to define characteristics
sch as reliability, durability, or price.
 Business marketer can help by describing how
their products meet or even exceed the buyers
need
c)Supplier search
 The buyer next tries to identify the most appropriate suppliers
through trade directories, contact with other companies, trade
ad, trade shows, and the internet.
d)Proposal Solicitation
 The buyer next invites qualified suppliers to submit proposals. If
the item is complex or expensive, the buyer will require a
detailed written proposal from each qualified suppliers. After
evaluating the proposals, the buyer will invite few suppliers to
make formal presentations.
 Business marketer must be skilled in researching, writing, and
presenting proposals, written proposal should be marketing
documents that describe value and benefits in customer terms
e) Supplier selection
 Before selecting a supplier, the buying
center will specify desired supplier
attributes and indicate their relative
importance.
 To rate and identify the most attractive
supplieres,buying centers often use supplier
evaluation model
Table 7.3 Vendor Analysis
Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 7-329

 Order-Routine Specification
 Performance review
Institutional and Govt.Markets
 The insti. Market consist of school college
and univ. hospital etc.
Identifying Market Segments
and Targeting
Chapter Objective
 What are the different levels of market

segmentation?
 How can a company divide a market into
segments?
 How should a company choose the most
attractive target markets?
 What are the requirements for effective
segmentation?
Effective Targeting
Requires…
 Identify and profile distinct groups of
buyers who differ in their needs and
preferences
 Select one or more market segments to
enter
 Establish and communicate the distinctive
benefits of the market offering
Introduction
 Companies can not connect with all customer in

large, broad, or diverse market. But they can divide
such markets into groups of consumers or segments
with distinct needs and wants.
 A company then need to identify which market
segments it can serve effectively.
 This decision requires a keen understanding of
consumer behavior and careful strategic thinking..
 To develop the best market plans, managers need to
understand what makes each segment unique and
different
Levels of Market
Segmentation
Mass Marketing
 In mass marketing , the seller engages in the
mass production, mass distribution, and mass
promotion of one product to all buyer
Now a days most company are turning to

micromarketing at one of four level- segments
, niches, local areas, and individuals
Levels of Market
Segmentation
a)Segment Marketing
 A market segment consists of group
customers who share a similar set of needs
and wants.
 Segment marketing offers key benefits over
mass marketing. The company can offer
better design , price and can also fine tune the
marketing program and activities to better
reflects competitors marketing
Flexible Marketing Offerings
 Naked solution:  Discretionary

Product and service options: Some
elements that all segment members
segment members value options but
value not all
Preference Segments
 Homogeneous preferences exist when

consumers want the same things
 Diffused preferences exist when
consumers want very different things
 Clustered preferences reveal natural
segments from groups with shared
preferences
Levels of Market
Segmentation
b) Niche Marketing
 A niche is a more narrowly defined customer
group seeking a distinctive mix of benefits.
E.g. Ezee, Crack, Astha, QTV
 As the customer have distinct set of needs ,
they will pay premium to the firm that best
satisfies them: the niche is fairly small but has
size, profit, and growth potential and is
unlikely to attract other competitors; nicher
gain certain economies through specialization
The Himalaya
Drug Company
serves a growing
niche market by
focusing on
ayurvedic
medicines and
health
supplements
Levels of Market
Segmentation
C) Local Marketing
Target marketing is leading to marketing
programs tailored to the needs and wants of
local customer group in trading areas. E.g.
NRI Branches., local courier company,
Spiderman3 in Bhojpuri. Bharti Matrimony.
Levels of Market
Segmentation
d) Individual Marketing
 We can call it as customized marketing or
one to one Marketing. E.g. Asian Paints
and other paints company. Ruff n Tuff
(Arvind Mills) ready to Stitch jeans.
Segmenting Consumer Markets
Geographic
Geographic
Demographic
Demographic
Psychographic
Psychographic
Behavioral
Behavioral
Geographic Segmentation
 It calls for division of the market into different

geographical units such as nations, states, regions,
country city.
 In India one of the major geographical segmentation
variable is the division of Markets into rural and Urban
areas.
 Rural and urban markets differ on the no. of important
parameter such as literacy levels, income, spending
power
 Geographical markets also vary in their product
requirement. Inverter coolers and AC. Coffee and tea.
Demographic Segmentation
Age
Age and
and Life
Life Cycle
Cycle
Life
Life Stage
Stage
Gender
Gender
Income
Income
Generation
Generation
Social
Social Class
Class
 In demographic segmentation, we divide the

market into groups on the basis of variables
such as age, family size,m family life cycle,
gender, income , occupation, education,
religion generation, nationality and social
class.
 Demographic variable are important because is
often associated with consumer needs and
wants and they are easily measurable.
a) Age and Life-cycle Stage

 Consumers wants and abilities change with
age. Therefore, age and life-cycle stages
are important variables to define segments.
 E.g. J&J baby Soap, Peers Pink Soap,
cartoon Network. MTV and VTV for
youngsters
b)Life Stage
 Persons in the same part of life cycle may
differ in their life stage
 Life stage define a persons major concern,
such as getting married, deciding to buy a
home , sending child to school, taking care of
older family members.
 Insurance c companies offer schemes for
people who are planning their retirement life.
C) Gender
 Gender differentiation has long been applied
to product categories such as clothing,
hairstyle, cosmetics and magazines.
 Some products have been positioned as more
masculine arnd more feminine..
 Park avenue, positioned as a masculine brand,
where as a range of women's apparel under
the brand Be.
Dove Targets Women
d)Income
 Income segmentation is a long- standing
practice in a variety of products and
services.
 Nirma washing Powder was launched as
lowest price detergent in India.
 C K Prahlad BOP
e) Generation
F) Social Class
Psychographic Segmentation
 Psychographic is the science of using

psychology and demographic to better
understand consumers.
 In psychographic segmentation, buyers are
divided into different groups on the basis of
personality traits, lifestyle and value. People
within the same demographic group can
exhibit very different psychographic profiles.
 E.g. Mc D Jhtka and Halal process.
 Titan watches have a wide range sub brand

within their Titan range such as , Edge, regalia,
Nebula, and Raga to appeal different lifestyle
segment.
 One of the most popular commercially
available classification system based of
psychographic measurement is sri consulting
Business intelligence VALS framework
The VALS Segmentation System
 The main dimension of VALS segmentation framework

are consumer Motivation (horizontal Dimension) and
consumer resource(Vertical dimension)
 Consumer are inspired by three primary motivation-
ideals, achievement and self expression
 Those motivated by ideals are guided by knowledge and
principles.
 Those motivated by achievement look for product and
services that demonstrate success to their peers
 Those motivated by self expression desire social and
physical activity, variety, and risk
 Personality traits such as energy, self

confidence, intellectualism, novelty seeking,
innovativeness, impulsiveness, leadership and
vanity-in conjunction with key demographic-
determines an individual resources
 Different level of resources enhance or
constrain a persons expression of his or her
primary motivation.
The four group with higher resources are

1.Innovators- successful, sophisticated, active
“take-charge” people with high self esteem.
Purchaser often reflect relatively
upscale,niche oriented products and services.
2. Thinker- Mature, satisfied, and reflective

people motivated by ideals and who value
order, knowledge and responsibility.
They seek durability, functionality, and value
in products.
3. Achiever- successful, goal-oriented people who

focus on career and family.
They favor premium producs that demonstrate
success to their peers.
4.Experiencers-young, enthusastics, impulsive
people who seeks variety and excitement.
They spend a comparatively high proportion of
income on fashion, entertainment and socializing.
The four groups with lower resources are

1.Believers-Consrvative,conventional, and
traditional people with concrete beliefs
2.Strivers-Tendy and fun-loving people who are
resource-constrained.
They favor stylish products that emulates the
purchases of those with greater material wealth.
3. Makers- Practical, down to earth, self

sufficient people who likes to works with their
hands.
4.Survivors-Elderly,passive people concerned
about change and loyal to their favorite brands.
Behavioral Segmentation
Decision Roles Behavioral Variables
 Initiator  Occasions
 Influencer  Benefits
 Decider  User Status
 Buyer  Usage Rate
 User  Buyer-Readiness
 Loyalty Status
 Attitude
Decision Roles
 People play five roles in a buying decision:
influencer, decider, buyer, and user.
 Recognition of the different buying roles and
specification of the people who play these
roles for specific product or services are vital
for marketers.
 This is specially used for designing the
communication strategy.
Behavioral Variables
a) Occasions- Arches, gift pack, Kurkure. Marketer
should know at what occasion consumer are using
their products and make strategy accordingly.
b) Benefits
 Buyers are classified according to the benefits that
seek. Many product categories offer different
product targeted at people who seek different set of
benefits such as basic cleaning , conditioner,
dandruff free shampoo.
c)User Status
 Every product has its nonusers, exusers,
potential users, first time users, and regular
users,
 The key to attracting potential user, or
nonuser, is understanding the reasons they are
not using. Do they have deeply held attitude,
beliefs, or behaviors or just lack of knowledge
of the product oe brand benefits and usage?
d) Usage Rate
 Markets can be segmented into light,
medium and heavy product users. Heavy
users are often a small percentage of
market but account for a high percentage
of total consumption
The Brand Funnel Illustrates Variations in
the
Buyer-Readiness Stage
 Aware
 Ever tried
 Recent trial
 Occasional user
 Regular user
 Most often used
Loyalty Status
Hard-core
Split loyals
Shifting loyals
Switchers
Behavioral
Segmentation Breakdown
The Conversion Model
Convertible Shallow Average Entrenched
Users Nonusers
Strongly Weakly
Ambivalent Available
unavailable unavailable
Segmenting for Business Markets
Demographic
Demographic
Operating
Operating Variable
Variable
Purchasing
Purchasing Approaches
Approaches
Situational
Situational Factors
Factors
Personal
Personal
Characteristics
Characteristics
Patterns of
Target Market Selection
Market Targeting
Patterns of
Marketing Targeting
 Once the firm has identified its market
opportunities, it must decide how many and
which ones to target.
 Marketer are increasingly combining
several variables in an effort to identify
smaller better defined target groups
Competitive Forces
Competitive Forces
 Michale Porter has identified five forces
that determine the intrinsic long run
attractiveness of a market or market
segment.
 These forces are industry competitors,
potential entrants, substitutes, buyers, and
suppliers.
 The treat these forces pose are as follows
Competitive Forces
1.Threat of intense segment rivalry
 A segment is unattractive if it already contains
numerous, strong, or aggressive competitors.
 Its even more unattractive if its stable or declining, if
plant capacity must be added in large increments, if
fixed cost or exit barriers are high, or if competitors
have high stakes in staying in the segment.
 These condition will lead to frequent price wars,
advertising battles, and new product introduction and
will make it expensive to compete. The cellular phone
market has seen fierce competition due to segment
rivalry.
Mobile service
providers
compete with
each other
through
innovative
marketing
ideas
Competitive Forces
2.Threat of new entrants
 The most attractive segment is one in which entry barriers are
high and exit barriers are low. few new firm can enter the
industry, and poorly performing firm can easily exit.
 When both entry and exit barriers are high, profit potential is
high, but firm face more risk because poorer-performing firms
stay in and fight it out.
 When both entry and exit barriers are low, firms easily enter
and leave the industry, and the return are stable and low
 The worst case is when entry barriers are low and exit barriers
are high: here the firm enter during good times but find it hard
to leave during bad time . e.g. airlines industry.
Competitive Forces
3.Threat of substitute product
 A segment is unattractive when there are actual or
potential substitutes for the product. Substitute place
a limit on prices and on profits.
 If technology advances or competition increase in
these substitute industries, price and profit are likely
to fall.
4.Threat of buyers growing bargaining power
 A segment is unattractive if buyer possess strong or
growing bargaining power.
Competitive Forces
 Buyers bargaining power grows when they become
more concentrated or organized, when the product
represent a significant fraction of the buyers cost,
when the product is undifferentiated, when buyers
switching cost are low.
5.Threat of suppliers growing bargaining power
 A segment is unattractive if the companys suppliers
are able to raise prices or reduces quantity supply .
e.g. Oil company
Identifying Competitors
 We can examine competition from both an industry
and market point of view.
 An industry is a group of firm that offer a product or
class of product that are close substitute of one
another.
 Marketer classify industries according to the number
of sellers, degree of product differentiation;
presence or absence of entry, mobility, and exit
barriers; cost structure; degree of vertical
integration; and degree of globalization.
Identifying Competitors
 Using the market approach, we define competitors
as companies that satisfy the same customer need.
 Coca-Cola , focused on its soft drink business,
missed seeing the market of coffee bars and fresh
fruit juice bars that eventually impinged on its soft
drink business.
 The market set of competition reveals a broader set
of actual and potential competitors than competition
defined in just product category term.
Effective Segmentation
Criteria
 Not all segment scheme are useful. Similarly,
not all types of segmentation are useful.
 It is important to recognize that a marketer
needs to use relevant variables to segment a
market. Eg segmenting a market based on on
age is not possible for salt , but segmentation
should be based of health.
 To be useful, market segments must rate
favorably on five key criteria
Criteria
a) Measurable
 The size , Purchasing power, and
characteristics of the segments can be
measured.
b)Substantial
 The segments are large and profitable enough
to serve. A segment should be largest
possible homogeneous group worth going
after with a tailored marketing program.
Criteria
C)Accessible- the segment can be effectively
reached and served
D)Differentiable
 The segments are conceptually
distinguishable and respond differently to
different marketing mix element and
programs
e) Actionable
 Effective programs can be formulated for
attracting and serving the segment.
Evaluating and selecting the
Market segments
a) Single segment Concentration
 Company is concentrating on single segment
b) Selective Specialization
 A firm selects a no. of segments, each
objectively attractive and appropriate. There
may be little or no synergy among the
segments, but each promise to be money
maker
 The multisegment strategy has the advantage
of diversifying the firm`s risk
Evaluating and selecting the
Market segments
c) Product Specialization
 The firm makes a certain product that it
sells to several different market segment.
 E.g. microscope
d)Full Market coverage
 The firm attempt to serve all customer
groups with all the product that might need
Patterns of
Figure 8.5 Segment-by-Segment Invasion
Plan
Positioning
 Positioning is the act of designing the company`s

offering and image to occupy a distinctive place in
the minds of the target market.
 The goal is to locate the brand in the minds of
consumers to maximize the potential benefits to the
firm
 A good brand positioning helps giude marketing
strategy by clarifying the brands essence, what goals
it helps the consumer achieve and how it does so in
a unique way.
Brand Positioning
 With an identity in place and a value
proposition specified, implementation
begins.
 Communication objectives need to be
established, and execution planned and
implemented.
 The place to start is with a brand position
statement-the cornerstone of comn.program
Brand Positioning
 Brand position is the part of the brand identity
and value proposition that is to be actively
communicated to the target audience and that
demonstrates an advantage over competing
brands.
 The four salient characteristics of a brand
position as reflected by phrases(Part, target
audience, actively communicated,tra
demonstrate advantage)
g
Brand Positioning
1.A Part of the Identity/Value Proposition
 For some brands,the brand dentity and value
proposition do combined into a compact
statement that can serve (perhaps minor
adjustment) as the brand position, but not in all
the cases
 E.g. Mc D cleanliness
 Brand position can be changed without the
identity or value proposition of which it is a
subsets.
Brand Positioning
The Target Audience
 The brand position should also target a
specific audience, which may be a subset of
the brand`s target segment.
Active Communication
 It implies that there should be a specific
communication objectives focused on
changing or strengthening the brand image
or brand-customer relationship.
Brand Positioning
 This objective should be accompanied by
measurement.
 If the goal is to create or improve the friend
relationship, an agree-disagree scale could
be developed
 Such scales could be used both in testing on
communication programs and in tracking
their impact.
Brand Positioning
Brand Position and the Brand Image
 Brand image reflects current perceptions of a
brand
 Brand position is more aspirational,reflectin
perceptions that the strategists want to have
associated with the brand.
 In creating a brand position, a useful step is to
compare brand identity with the brand image on
different image dimensions

Brand Positioning
Dimension Brand Identity Brand Image
(Goal) (Current Reality)
Product Premium beer Premium beer
User Young(in spirit or Middle-aged

body)
Personality Fun, Humorous Fun, Humorous
Functional benefits Superior Flavor Superior Flavor
Emotional benefits Social group (None)

acceptance
Brand Positioning
 Comparison of the identity with the image
will usually result communication tasks
being reflected in a brand position
statement.
a.Augmenting an Image
 A brand image might be too restrictive,
while the identity points the way to adding
other segment or application.
Brand Positioning
 The brand position therefore attempt to add
association to the brand image and to soften
restrictive perceptions.
b.Reinforcing on Image
 The brand image should not dictate the
position(or identity),but neither should it be
ignored
 Often an effective brand position will reinforce
and exploit an image strength.
g
Brand Positioning
c.Diffusing an Image
 Sometimes specifying what a brand is not is
as important to the integrity of the
communication program as specifying what it
is.
 Specifying that the brand is not exclusively
for middle-aged users suggests visuals
imagery to avoid as well as imagery to
include.
Brand Positioning
3.Demonstrate an advantage
 The position should specify a point of
superiority that is a part of value
proposition
 The point of advantage should resonate
with customers and be differentiating i.e.
represent something different from what a
competitors provide.
Positioning Strategy
 Positioning strategy is aimed at building
brand differentiation within the value frame
of the target by market.
 The need for competitive positioning is
primarily triggered by emergence of intense
competition in most of the product
categories.
 The competition implies imminent product
similarity and loss of identity.
Positioning Strategy
 Positioning is increasingly seen as a device
to gain control over market by means of
customer pulling brand differentiation
 The four question that can reveal the totality
of a brand are
 Who am I?
 What am I?
 For whom am I?
 Why me?
Who am I?
 Answering this question would reveal the
origin or pedigree of the brand: where it
belongs or where it comes from.
 Identifying family or origin could give a
brand a competitive advantage by allowing it
to draw positives strengths of family.
 There r two option
g
Who am I?
1.Positioning by corporate identity
 Brands draws a direct connection with the
corporate identity and seek to play on its
credential.
 Sometimes ,firms use the corporate brand
name to label their entries in various product
categories.e.g LG,Samsung.
 A separate brand is launched by revealing the
corporate connection by a statement `From a
house of….` or À quality product of
Who am I?
2.Positioning by brand endorsement
 In this case a successful brand is used as an
endorser of a new entry.
 Dabur uses its successful brand vatika to
promote product like shampoos and soap.
 Nestle used Maggi name to promote ketcup,
 Raymonds Park Avenue brand endorses
soap ,belts aftershave.
What am i?
 In this strategies, a brands functional
capabilities r used for positioning purpose.
1.Category Positioning
 This involves making a product jump over
the category it originally belongs to and
positioning it in a different way.
 Suryansh brand of diamonds r positioned as
an investment, not as a piece of jewellery.
What am i?
2.Benefit positioning
 This strategy involves choosing a unique,
not-yet-offered benefits to position the brand
 Fructies shampoo is positioned asfor strong
hair. All Clear shampoo is positioned as a
anti-dandruff shampoo offering the benefit of
dandruff removal.
g
What am i?
3.Usage and Use Time Positioning
 A brand may choose to preempt a particular
usage or usage time for positioning purpose.
 Livon hair lotion is positioned as something
to be used after shampoo to detangle hair.
 Nescafe aims to position the coffee brand as a
morning beverage(Get the day started)
g
What am i?
4.Price-quality Positioning
 A brand can choose to occupy a distinct
position on price-quality spectrum.
 At the bottom end it means an economy,
like Nirma,Breeze both low quality, low
price position.
 At the top end, it means premium position.
surf Excel and Ariel. PeterEngland,Louis
PhiliPPe from Madura Garments
For whom am i?
 This strategies looks at the target market for
positioning the brand.
 Depending upon the segmentation scheme
used to divide the market,a brand can focus
on a specific customer group for positioning
purpose.
 This reveals the brands appeal to other
group, but greater relevance is achieved for
the target group.
For whom am i?
1 Demographic Group
 Variables like age,sex,education could be used
to divide the market.
 Clinic Shampoo is positioned as a shampoo for
young school-going girls market.
 Zandu Kesri jeevan is positioned as a strength
tonic for old people.
 Lenovo Notebook is positioned as a laptop
meant for professionals in the industries.

For whom am i?
2.Behavioral
 The usage volume differs in the market and this
gives rise to groupings like light, heavy and
medium user segments.
 A brand may choose to use his classification to
position itself.
 Rath Vanaspati focus on the professional
caterers segment known for bulk consumption.
g
For whom am i?
3.Psychographic
 A brand can be positioned according to the
psychographic traits of the people
 Pepsi positioned as a drink of what they call
`New generation or generation next.
 Asian Paints is positioned as the brand for a
group of self –expressive people
Why me?
 This group involves positioning the brand on
the basis of a unique reason
 A brand must have a unique benefits or
attribute to give the prospects a reason to buy.
 Medimix ayurvedic soap is positioned as made
from 24 different herbal ingredients.
 Anchor White boosts of being a vegetarian
toothpaste.
 J&J `No tears Shampoo` is positioned as a
non-hurting shampoo.
Developing and establishing
Brand Positioning
 A good positioning has a “foot in present and
foot in future”
 The result of positioning is the successful
creation of Customer focused value
proposition.
 Positioning requires that marketers define and

communicate similarities and differences
between their brand and its competitors.
Developing and establishing
Brand Positioning
Specifically, deciding on a positioning requires:
(1) determining a frame of reference by
identifying the target market and relevant
competition,
(2) identifying the optimal points of parity and
points of difference brand associations given
that frame of reference, and
(3) creating a brand mantra to summarize the
positioning and essence of the brand
Defining Associations
Points-of-difference Points-of-parity
Attributes or benefits Associations that are
consumers strongly not necessarily
associate with a
unique to the brand
brand, positively
but may be shared
evaluate, and believe
with other brands
they could not find to
the same extent with
a competitive brand
 Points-of-difference (PODs) are attributes or
benefits that consumers strongly associate with
a brand, positively evaluate, and believe they
could not find to the same extent with a
competitive brand.
 Associations that make up points-of-difference
may be based on virtually any type of attribute
or benefit. Strong brands may have multiple
points-of-difference.
 Points-of-parity (POP) are attribute or
benefit associations that are not necessarily
unique to the brand but may in fact be shared
with other brands. These types of associations
come in two basic forms: category and
competitive.
• Category points-of-parity are attributes or benefits
that consumers view as essential to a legitimate and
credible offering within a certain product or service
category.
Competitive points-of-parity are associations
designed to overcome perceived weaknesses of the
brand. A competitive point-of-parity may be
required to either
 (1) negate competitors’ perceived points-of-
difference or
 (2) negate a perceived vulnerability of the brand as
a result of its own points-of-difference.
THANK YOU ALL FOR
YOUR PARTICIPATION IN
THIS PROGRAMME

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MARKETING MANAGEMENT

Dr. MUKESH MISHRA

 1. “Marketing is the creation and delivery

3.Marketing is an organizational function

 Marketing management is the

The roaring success of

 Tata Ace, a mini truck with the engine capacity of

 In order to compete effectively with three wheeler

 Customer were willing to pay a marginally high

Business Markets Nonprofit/ Government Markets

 Strengthening the brands

 Make the mission and responsibilities clear

Press ads of the

Marketer face a design challenge in

 When a company acquires competitors or

 marketers should design and implement any one

 McCarthy classified these activities as marketing-

 It is very important for the marketer to

 Titan watches herald a new era of watches and

 The main demographic force that marketers

b) Sex structure of population and role of women

d)The new urban child

e) Occupation and Literacy profile

 The available purchasing power in an economy

• Income, sales and corporation taxes – typically operating in all

• Exchange rates – the relative value of a currency vis-à-vis

• Export quota controls and duties – there are often restrictions

 The economic environment affects the demand

The NCAER has classified Indian consumers into 5 categories

 The no. of households classified as the rich is estimated to

 Lobbyist firms, with key industry knowledge, are

• Suppliers of labour and funds

The performance environment consists of those organizations that

1. Threat that new competitors will enter the

Chain Ratio Methos

Select forecasting Evaluate performance

 Two basic approaches:

• Bottom-up or Build-up approach

 Some companies use both approaches to increase

 Salespersons estimate sales expected from their

Sales force Delphi

Naïve method Trend method

Sometimes, product may be new, but organization

Next Year’s Sales = This Year’s Sales X This Year’s Sales

 These two points, 107 and 117, will be

 While using this method, a probability-

Next years sales= a(this years sales)+(1-a)(This

(Liner Relationship) (Curvilinear Relationship)

Marketing research is the systematic

Define the problem

Develop research plan

Collect information Make

 Define the problem

c) Focus Group research

In arranging this trip, did you contact American

Indicate your level of agreement with the following

Airline food service is _____ to me.

American Airlines’ food service is _____.

How likely are you to purchase tickets on American

What is your opinion of American Airlines?