Introduction to Fundamentals of Marketing

Marketing is a broad concept that encompasses various activities and processes aimed at promoting, selling, and delivering products or services to customers. It involves understanding customer needs and desires, creating and communicating value, and building strong customer relationships to ultimately achieve organizational goals.

Philip Kotler, known as the "father of modern marketing," has made significant contributions to the field of marketing management. Here are seven definitions of marketing management by Philip Kotler:

1. "Marketing management is the process of planning, organizing, implementing, and controlling marketing activities to facilitate exchanges that satisfy individual and organizational objectives."

2. "Marketing management is the art and science of choosing target markets and building profitable relationships with them."

3. "Marketing management is the analysis, planning, implementation, and control of programs designed to create, build, and maintain beneficial exchanges with target buyers for the purpose of achieving organizational objectives."

4. "Marketing management is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational goals."

5. "Marketing management is the process by which companies create value for customers and build strong customer relationships to capture value from customers in return."

6. "Marketing management is the process of understanding, creating, communicating, and delivering value to customers and managing customer relationships in ways that benefit the organization and its stakeholders."

7. "Marketing management is the art and science of identifying, creating, and delivering value to meet the needs of target markets, and in doing so, generate a profit for the organization."

These definitions highlight the multifaceted nature of marketing management and emphasize the importance of understanding customers, creating value, building relationships, and achieving organizational objectives.

Nature of Marketing Management: The nature of marketing management encompasses several key aspects that highlight its characteristics and functions within an organization. Here are some important elements of the nature of marketing management:

1. Customer Orientation: Marketing management is inherently customer-focused. It revolves around understanding and fulfilling customer needs, wants, and demands. Effective marketing managers constantly analyze customer behavior, preferences, and feedback to develop strategies that create value and build strong customer relationships.

2. Value Creation: Marketing management is concerned with creating value for customers. This involves developing products or services that meet customer needs and provide benefits that exceed their expectations. Marketing managers strive to differentiate their offerings by highlighting unique value propositions that set them apart from competitors.

3. Market Analysis and Research: Marketing management involves thorough market analysis and research. This includes studying market trends, competitor activities, customer demographics, and psychographics. Through market research, marketing managers gather insights to make informed decisions, identify opportunities, and adapt strategies to changing market conditions.

4. Strategic Planning: Marketing management requires strategic planning to set objectives, formulate marketing strategies, and allocate resources effectively. Marketing managers define target markets, develop positioning strategies, and create marketing plans that outline the specific actions and tactics to achieve organizational goals.

5. Integrated Marketing Mix: Marketing management encompasses the coordination and integration of the marketing mix elements, often referred to as the 4Ps: product, price, promotion, and place (distribution). Marketing managers make decisions regarding product design, features, pricing strategies, advertising campaigns, sales promotions, and distribution channels to deliver value to customers.

6. Relationship Building: Marketing management recognizes the importance of building and maintaining strong relationships with customers. Marketing managers employ various relationship marketing techniques, such as personalized communication, customer service, loyalty programs, and social media engagement, to foster customer loyalty, repeat purchases, and positive brand associations.

7. Performance Measurement: Marketing management involves measuring and evaluating marketing performance. Marketing managers use key performance indicators (KPIs) to assess the effectiveness of marketing initiatives, track sales, monitor customer satisfaction, and analyze market share. These metrics help inform decision-making and drive continuous improvement.

8. Adaptability and Agility: Marketing management operates in a dynamic and ever-changing environment. Marketing managers need to be agile and adaptable to respond to market shifts, emerging trends, and new technologies. They continuously monitor the market, gather feedback, and adjust marketing strategies to stay competitive and seize opportunities.

It is a dynamic and vital function within organizations, guiding the creation and delivery of value to customers while driving business success.

Importance of Marketing Management: Marketing management plays a crucial role in the success and growth of organizations. Here are some key reasons highlighting the importance of marketing management:

1. Customer Satisfaction: Marketing management focuses on understanding customer needs and desires, and developing products or services that meet those needs. By delivering value to customers and ensuring their satisfaction, marketing management helps build strong and loyal customer relationships, leading to repeat purchases and positive word-of-mouth.

2. Revenue Generation: Effective marketing management drives revenue generation by identifying target markets, developing marketing strategies, and implementing tactics to promote and sell products or services. By attracting customers, increasing brand awareness, and generating demand, marketing management directly contributes to the organization's financial performance.

3. Market Positioning: Marketing management helps organizations differentiate themselves from competitors and establish a favorable market position. Through strategic branding, positioning, and communication efforts, marketing management shapes the perception of the organization's offerings in the minds of customers, creating a competitive advantage.

4. New Product Development: Marketing management plays a vital role in new product development. It involves conducting market research to identify opportunities, determining market demand, and guiding the product development process. By understanding customer preferences and market trends, marketing management helps organizations innovate and introduce new products or services to meet changing consumer needs.

5. Market Expansion: Marketing management helps organizations expand into new markets and reach a wider customer base. Through market analysis, segmentation, and targeting, marketing management identifies potential growth opportunities and develops strategies to enter new geographic regions or target new customer segments.

6. Building Brand Equity: Marketing management contributes to building and nurturing strong brand equity. By developing and executing branding strategies, marketing management enhances brand awareness, creates brand associations, and establishes a positive brand image. A strong brand reputation increases customer trust and loyalty, leading to long-term business success.

7. Strategic Decision Making: Marketing management provides valuable insights and data-driven analysis that informs strategic decision making within an organization. By monitoring market trends, customer behavior, and competitor activities, marketing management helps identify opportunities, anticipate challenges, and make informed decisions about pricing, product development, distribution channels, and promotional activities.

8. Adaptation to Market Changes: In today's dynamic business environment, marketing management is essential for organizations to adapt to market changes. By constantly monitoring the market, consumer preferences, and emerging trends, marketing management can quickly adjust strategies and tactics to remain relevant and competitive.

Marketing management is vital for organizations as it helps in satisfying customers, driving revenue generation, positioning the organization in the market, fostering innovation, expanding into new markets, building strong brands, enabling strategic decision making, and adapting to changing market dynamics. It is an essential function that contributes to the overall success and growth of organizations.

Marketing Mix:- The marketing mix refers to a set of tactical marketing tools or variables that a company combines to achieve its marketing objectives within a target market. It is also known as the 4Ps of marketing, which represent the four key elements that organizations can control to influence customers' buying decisions. The marketing mix consists of the following components:

1. Product: This element refers to the tangible or intangible goods or services that a company offers to its target market. It includes aspects such as product design, features, quality, packaging, branding, and variations.

2. Price: Price represents the monetary value assigned to a product or service. It involves determining the right pricing strategy, considering factors such as production costs, competition, customer perceptions of value, and overall business objectives. Pricing decisions can affect market positioning, demand, and profitability.

3. Promotion: Promotion involves the various activities and communication strategies employed to inform, persuade, and influence target customers about the product or service. It includes advertising, sales promotions, public relations, personal selling, direct marketing, and digital marketing efforts.

4. Place (Distribution): Place refers to the channels and methods through which the product or service is made available to customers. It encompasses decisions related to distribution channels, logistics, warehousing, transportation, inventory management, and retail location strategies. The goal is to ensure that the product or service is accessible to customers when and where they need it.

These four elements of the marketing mix need to be carefully integrated and harmonized to create a cohesive marketing strategy that aligns with the target market and organizational goals. The marketing mix allows companies to make strategic decisions and optimize their marketing efforts to effectively meet customer needs, gain a competitive advantage, and achieve desired business outcomes.

Marketing Environment:- The marketing environment refers to the external factors and forces that influence an organization's ability to operate effectively in the market and achieve its marketing objectives. It consists of both the microenvironment and macroenvironment, each impacting the organization in different ways. 

1. Microenvironment: The microenvironment consists of factors that are directly linked to the organization and have a more immediate impact on its marketing efforts. These include:

   a. Customers: The target market and the specific individuals or organizations that the company aims to serve. Understanding customer needs, preferences, and behavior is crucial for effective marketing.

   b. Suppliers: Companies rely on suppliers to provide necessary resources, such as raw materials or components, for the production and delivery of their products or services.

   c. Competitors: Other organizations that offer similar products or services and compete for the same target market. Understanding competitor strategies and positioning helps shape a company's own marketing efforts.

   d. Intermediaries: These include distributors, wholesalers, retailers, and other intermediaries that facilitate the movement of products from the producer to the end consumer.

   e. Marketing intermediaries: These are agencies, consultants, research firms, advertising agencies, and other entities that assist in the marketing process.

   f. Publics: Any group or entity that has an interest in or can affect the company's operations or reputation. This includes media, government agencies, shareholders, local communities, and advocacy groups.

2. Macroenvironment: The macroenvironment consists of broader societal and environmental factors that affect the organization and the overall market. These factors are usually beyond the company's control but have significant long-term implications for its marketing efforts. The key elements of the macroenvironment are:

   a. Demographic Factors: Characteristics of the population, such as age, gender, income, education, and cultural diversity, that influence consumer behavior and market trends.

   b. Economic Factors: The overall economic conditions, including GDP, inflation, employment rates, and consumer spending power, which impact consumer purchasing behavior and market demand.

   c. Technological Factors: Advances in technology and their impact on products, services, and how business is conducted. Technological developments can create new opportunities or disrupt existing markets.

   d. Socio-cultural Factors: Social and cultural influences that shape consumer attitudes, values, beliefs, and lifestyles. These factors impact consumer preferences, buying behavior, and the acceptance of marketing messages.

   e. Political and Legal Factors: Government regulations, policies, and political stability that affect business operations and marketing activities. Compliance with laws, consumer protection regulations, and industry-specific regulations is essential.

   f. Environmental Factors: Growing concern for environmental sustainability, climate change, and ethical practices. Organizations need to consider ecological and environmental impacts in their marketing strategies.

   g. Competitive Factors: The overall competitive landscape, industry structure, and market trends. Understanding industry dynamics and competitive forces helps organizations adapt their marketing strategies accordingly.

   h. Technological Factors: Advances in technology and their impact on products, services, and how business is conducted. Technological developments can create new opportunities or disrupt existing markets.

Understanding and adapting to the marketing environment is crucial for organizations to identify opportunities, mitigate risks, and develop effective marketing strategies that resonate with target customers and align with the broader societal context.

Consumer Behaviour:- The “Consumer” more generally refers to anyone engaging in any of the activities (evaluating, acquiring, using or disposing of goods and services) used in the definition of consumer behaviour.

Consumer behaviour is a decision process and physical activity individuals engage in when evaluating, acquiring, using or disposing of goods and services.

Consumer behavior is the study of consumers’ action during searching for, purchasing, using, evaluating and disposing of products and services they expect will satisfy their need. It helps marketers in understanding consumer decision-making process.

 

Consumer behaviour can be defined as “activities people undertake when obtaining, consuming, and disposing of products and services” is provided and detailed.

 

Consumer behavior is the process whereby individuals decide what, when, where, how and from whom to purchase goods and services.                                                     - Walters and Paul

 

Consumer behaviour as “The dynamic interaction of cognition, behaviour and environmental events by which human beings conduct the exchange aspect of their lives.

- American Marketing Association (AMA)

Consumer behaviour refers to the actions and decision processes of people who purchase goods and services for personal consumption.

 - Peter D. Bennett, ed. Dictionary of Marketing Terms, 2nd ed. 1995

 

 

Consumer Buying Process:- In consumer buying process, generally, the purchaser passes through five distinct stages in consumer buying process namely need or problem recognition, information search, alternative evaluation, purchase decision and post-purchase behaviour.

1.      Stage of Problem Recognition:- The recognition of a need is likely to occur when a consumer is faced with a ‘problem’. A buying process starts when a consumer recognises that there is a substantial discrepancy between his current state of satisfaction and expectations in a consumption situation.

2.      Stage of Information Search:- After need arousal, the behaviour of the consumer leads towards a collection of available information about various stimuli i.e. products and services in this case from various sources (personal, public, commercial, experiential) for further processing and decision-making.

3.      Stage of Alternative Evaluation:- Once interest in a product(s) is aroused, a consumer enters the subsequent stage of evaluation of alternatives.

When evaluating potential alternatives, consumers tend to use two types of information:

a)      a list of brands (or models) from which they plan to make their selection

b)      the criteria they will use to evaluate each brand (or model).

Cognitive evaluation: When the consumer uses objective choice criteria.
Affective evaluation: Using emotional reasons for evaluating the alternatives.

4.      Stage of Purchase Decision:- Finally, the consumer arrives at a purchase decision. Purchase decisions can be one of the three viz. no buying, buying later and buy now. No buying takes the consumer to the problem recognition stage. A postponement of buying can be due to a lesser motivation or evolving personal and economic situation. If positive attitudes are formed towards the decided alternative, the consumer will make a purchase.

There are three more important considerations in taking the buying decision:

• Attitude of others such as wife, relatives and friend.
• Anticipated situational factors such as expected family income, expected total cost of the product and the expected benefits from the product.
• Unanticipated situational factors, like accidents, illness etc.

5.      Stage of Post Purchase Behaviour:- Post-purchase behaviour refers to the behaviour of a consumer after his commitment to a product has been made. So post-purchase behaviour leads to three situations, namely customer is satisfied; customer is delighted and the customer is dissatisfied.

Factors Influencing Consumer Behaviour:- The consumer decision process explains the internal process as well as individual behaviour for making product or service decisions.

Cultural Factor:-

Culture: The set of basic values, perceptions, wants, and behaviours learned by a member of society from family and other important institutions.

Consumers live in a complex social and cultural environment. The types of products and services they buy can be influenced by the overall cultural context in which they grow up to become individuals.

Below are some of the important cultural factors given:

·         Culture

·         Subculture

·         Social Class

Social Factors:- Social factors, in turn, reflect a constant and dynamic influx through which individuals learn different consumption meanings. Below are some of the important social factors given:

·         Family

·         Reference Groups

·         Roles and status

Personal Factors:- A person’s consumption behaviour is shaped by his personal characteristics. Below are some of the important personal Factors given:

·         Age

·         Income

·         Personality

·         Self-concept

·         Occupation

·         Lifestyle

·         Gender

Psychological Factors:- Psychological factors also influenced consumers. Internal psychological factors also direct the decision-making process. These factors influence the reason or ‘why’ of buying.

Below are some of the important psychological factors given:

·         Motivation

·         Learning

·         Attitudes and Beliefs

·         Perception

Economic Factors:- Economic factor also has a significant influence on buying decision of consumer behavior.
Below are some of the important economic factors given:

·         Personal and Family Income

·         Income Expectations

·         Consumer Credit

·         Liquid Assets

Unit II

Market Segmentation:- Market segmentation is the method for achieving maximum market response from initial marketing resources by recognizing differences in the response characteristics of various parts of the market. In this sense market segmentation is the strategy of divide and conquer, i.e., dividing market in order to conquer them.

 

Market segmentation enables the marketers to give better attention to the selection of customers and offer an appropriate marketing mix for each chosen segment or a group of buyers having homogenous demand. Each subdivision or segment can be selected as a market target to be reached with a distinct marketing mix.

 

Market segmentation is defined as the segmentation or division of markets into various homogenous groups of customers, each of them reacting differently to promotion, communication, pricing and other variables of the marketing mix. Market segments should be formed in such a way that difference between buyers within each segment is as small as possible.

Market segmentation is a marketing strategy that involves dividing a broad target market into subsets of consumers who have common needs, and then designing and implementing strategies to target their needs and desires using media channels and other touch-points that best allow to reach them.

As per SJ.Skinner, “Market segmentation is the process of dividing a total market into groups of consumers who have relatively similar product needs.” 

According to Philip Kotler, “Market segmentation is sub-dividing a market into distinct and homogeneous subgroups of customers, where any group can conceivably be selected as a target market to be met with distinct marketing mix”.

 

According to William J. Stanton, “Market segmentation consists of taking the total heterogeneous market for a product and dividing it into several sub-market or segments, each of which tends to be homogeneous in full significant aspects”.

 

According to R. S. Davar, “Grouping of buyers or segmenting the market is described as market Segmentation.”

According to Schiffman and Kanuk, “Market Segmentation can be defined as the process of dividing a market into distinct subsets of consumers with common needs or characteristics and selecting one or more segments to target with a distinct marketing mix”.

The bases for market segmentation can be broadly classified into following groups:

1. Customer based segmentation

2. Product related segmentation

3. Competition related segmentation.

 

1. Customer Based Segmentation:- Customer based segmentation further classifies as follows:

a. Geographic Location of Customers:- The starting point of all market segmentation is the geographic location of customers. It helps the firm in planning the marketing offer. The common method is to classify according to rural and urban, metro or non-metro markets. There are also other classifications like district and block markets. We all know that here was the perception that the rural markets are different from urban markets and naturally the product promotion, pricing and distribution were accordingly designed to meet those markets.

But now with the development of technology and the advent of various modes of communication like TV, the customers in the rural areas are much exposed and are more aware of the availability market. Today the rural customer buys the same branded product which is purchased by urban customer.

b. Demographic Characteristics:- Factors like age, sex, income, occupation, family size, education; marital status is used singly or in combination to segment the market.

i. Age:- Age is one of the most important factors for segmenting the market. The market the producer should know for what age group his product could be most suited so that he can plan his pricing policy, advertisement policy, marketing policy and strategy accordingly.

 For example, Cloth market or Garment market may be segmented on this basis of age as –

Children b/w the age group of 3-12yrs

Children b/w the age group of 13-15yrs

Teenagers’ b/w the age group of 16-20yrs

Adults’ b/w the age group of 21-30yrs and so on

ii. Income:- The manufacturer should also bear in mind while preparing his marketing policy, the income of the prospective buyers of his product. Consumer’s needs, behaviour, persuasion etc. differ in different income groups. For example, people in high-income group prefer quality of goods, design, fashion-oriented products, etc. hence they can be motivated on these factors. People in low-income group attract towards low price.

iii. Sex:- Marketers may also be divided on the basis of sex i.e., male and female. Some products are exclusively produced for women while some others are for men. For example, Lip Stick is meant for a woman and on the other hand Shaving cream is only meant for men.

iv. Occupation:- Occupation is also another variable in segmenting the market. An individual’s employment does definitely affect the consumption; different categories of segments can be identified like doctors, consultants, entrepreneurs, lecturers etc.

v. Education:- Education of the consumer also affects the preference and taste. The choice of literate person would obviously differ from that of an illiterate, as a literate he would be having a lot of exposure to the outside worlds where as an illiterate although exist the same environment would lack the ability to understand, when we look at all these aspects it is easy to indicate that education plays an important role in the life of an individual as it creates awareness about the environment, the availability of different products in the market and awareness about their rights.

Accordingly based on education, the Indian Market can be segmented as illiterates, literates-high school, college and university educated.

vi. Marital Status:- Marital status is another demographics variable used. The behavioral of single and married people differs. Married people are more conservative than unmarried people.

vii. Family Size and Structure:- Markets may also be segmented on the basis of size of family Refrigerators and cookers are produced in different sizes to suit the needs of families of different sizes.

c. Psychographics Variables:- No two consumers act in the same manner though they two may be of the same age, from the same profession, same education and have same income. Each of the customers may have different attitudes because of personality and life-style differences. Markets are using psychographics variables to segment their market.

For example, Citibank, Diners card, Titan Watch, Savvy has used Psychographics variables to segment its market and distance itself from all others, including Femina. Savvy Women is identified as the highly liberated independent strong women, who have a definite plan in the society and to whom career would be extremely important.

d. Buyer Readiness:- Buyers are at different stages of readiness. People may be unaware, people who are aware but are not interested, people who are interested and desires to buy and those who will buy the product. The relative proportion of buyers at different stages will affect the marketer’s tasks.

2. Product Related Segmentation:- Different customers use the same product in different situations for example; Rasna – for parties, unexpected guests, and a drink for quenching thirst etc. A market makes the product versatile so that it can be used in different situation. A consumer may buy different brands of the same product for different situations for e.g., saree for kitty party, work place. 

Thus depending upon the situation, a product or a brand may be selected by the customers. Knowing these situations marketer can plan the positioning strategy. Another product related variable is the benefit segmentation. The marketer identifies benefits that the customer looks for when buying a product.

3. Competition Based Segmentation:- The success in marketing depends on the number of loyal customers. Customer loyalty therefore is an important factor to determine the competitive position of the firm.

On the basis of brand loyalty further the market could be classified as:

i. Hard core loyal – These are the customers who buy the same brand, for examples Newspaper readers, tea drinkers etc.

ii. Soft-core loyal – Customers who are loyal to two or three brands in a product group, for e.g., Housewife buying toilet soap (Lux, Cinthol, Pears). The marketers have to watch such customers and shift them to the core loyal.

iii. Switchers – Customers who never stick to a brand. This is a slipping market segment for the marketer. The marketer has to find out why customers keep switching from brand to brand and from the existing to the competing brand. This can help the firm to strengthen its competitive position in the market. The marketer should also take into amount factors like price, non-availability of brands, indifferent habit etc.

Segmentation of target markets has several advantages.

 

1. Determining market opportunities: Market segmentation enables to identify market opportu­nities. The marketer can study the needs of each segment in the light of current offerings by the competitors. From such study, the marketer can find out the current satisfaction of customers.

Segments with low level of satisfaction from present offering may represent excellent market opportunities. For example, customers may not be satisfied with the current offering of water purifiers in terms of product or after-sale service. Such situation enables a marketer to launch a new range of water purifiers and market them well.

 

2. Adjustments in marketing appeals: Sellers can make best possible adjustments of their product and marketing appeals. Instead of one marketing programme aimed to draw in all potential buy­ers, sellers can create separate marketing programmes designed to satisfy the needs of different customers. Proper advertising and sales promotional appeals can be made depending on the target audience.

 

3. Developing marketing programmes:

Companies can develop marketing programmes and bud­gets based on a clearer idea of the response characteristics of specific market segments. They can budget funds to different segments depending on their buying response.

 

4. Designing a product:

Market segmentation helps in designing products that really match the demands of the target audience. Products with high market potential can be designed and directed to meet the satisfaction of the target market.

 

5. Media selection: It helps in selection of advertising media more intelligently and in allocating funds to various media. The funds are allocated to various media depending on the target audi­ence, impact of the media, competitor advertising, and so on.

 

6. Timing of marketing efforts: It helps in setting the timings of the promotional efforts so that more emphasis is placed during those periods when response is likely to be at its peak. For instance, consumer goods can be heavily advertised to Christians during Christmas season and to Hindus during Diwali time.

 

7. Efficient use of resources: By tailoring marketing programme to individual market segments, management can do a better marketing job and make more efficient use of the marketing resources. For example, a small firm can effectively use its limited resources – money, sales force, etc. – in one or two segmented markets rather than unsuccessfully aiming at a wider market.

 

8. Better service to customers: Market segmentation enables a company to concentrate its market­ing efforts in a particular market area, thereby, providing a better service to the target customers. Proper marketing segmentation can facilitate customer satisfaction.

 

9. Helps in fixing prices: The marketing segmentation also enables to fix prices of the goods and services. Since different market segments have different price perceptions, it is necessary to adopt different pricing strategies for the markets. For instance, the prices for lower-income groups have to be lower and the product and promotional efforts are adjusted accordingly.

 

10. Assist in distribution strategies: Segmentation also assists in adopting suitable distribution strategies. Different market segments may require different distribution mix. For example, if the product is of very high quality intended to target the upper class, then it must be distributed at prestigious outlets located at selective places.

Market Targeting:- Market targeting is a process of selecting the target market from the entire market. Target market consists of group/groups of buyers to whom the company wants to satisfy or for whom product is manufactured, price is set, promotion efforts are made, and distribution network is prepared.

A company cannot concentrate on all the segments of the market. The company can satisfy only limited segments. The segments the company wants to serve are called the target market, and the process of selecting the target market is referred as market targeting. Market segmentation results into dividing total market into various segments or parts.

Such segments may be on the basis of consumer characteristics or product characteristics or both. Once the market is divided into various segments, the company has to evaluate various segments and decide how many and which ones to target. It is simply an act or process of selecting a target market.

Company may opt for any one of the following strategies for market targeting based on the situations:

1. Single Segment Concentration:

It is the simplest case. The company selects only a single segment as target market and offers a single product. Here, product is one; segment is one. For example, a company may select only higher income segment to serve from various segments based on income, such as poor, middleclass, elite class, etc. All the product items produced by the company are meant for only a single segment.

Single segment offers some merits like:

Ø  Company can gain strong knowledge of segment’s needs and can achieve a strong market position in the segment.

Ø  Company can specialize its production, distribution, and promotion.

Ø  Company, by capturing leadership in the segment, can earn higher return on its investment.

It suffers from following demerits like:

Ø  Competitor may invade the segment and can shake company’s position.

Ø  Company has to pay high costs for change in fashion, habit, and attitude. Company may not survive as risk cannot be diversified.

Ø  Mostly, company prefers to operate in more segments. Serving more segments minimizes the degree of risk.

 

2. Selective Specialization:

In this option, the company selects a number of segments. A company selects several segments and sells different products to each of the segments. Here, company selects many segments to serve them with many products. All such segments are attractive and appropriate with firm’s objectives and resources.

There may be little or no synergy among the segments. Every segment is capable to promise the profits. This multi-segment coverage strategy has the advantage of diversifying the firm’s risk. Firm can earn money from other segments if one or two segments seem unattractive. For example, a company may concentrate on all the income groups to serve.

3. Product Specialization:

In this alternative, a company makes a specific product, which can be sold to several segments. Here, product is one, but segments are many. Company offers different models and varieties to meet needs of different segments. The major benefit is that the company can build a strong reputation in the specific product area. But, the risk is that product may be replaced by an entirely new technology. Many ready-made garment companies prefer this strategy.

4. Market Specialization:

This strategy consists of serving many needs of a particular segment. Here, products are many but the segment is one. The firm can gain a strong reputation by specializing in serving the specific segment. Company provides all new products that the group can feasibly use. But, reduced size of market, reduced purchase capacity of the segment, or the entry of competitors with superior products range may affect the company’s position.

5. Full Market Coverage:

In this strategy, a company attempts to serve all the customer groups with all the products they need. Here, all the needs of all the segments are served. Only very large firm with overall capacity can undertake a full market coverage strategy.

Market Positioning:- Marketing positioning is the process of developing a marketing mix that puts the product in a unique position to the targeted segments for attracting potential buyers. Marketing positioning involves arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers, which is accomplished through formulating competitive positioning for a product and a detailed marketing mix.

A product’s position is how consumers define the product on important attributes. It indicates the place the product occupies in consumers’ minds relative to competing products.

Market Positioning Strategies:- To be successful, a company should decide on the number and type (s) of differences planning to promote. Let us now have some idea of how a company can decide on this issue. There are differences in opinions among marketing experts and writers about how many differences a company should promote.

Some argue that it is always wise to find one suitable attribute and promote that aggressively, highlighting the company’s strength in it. The need to invest distinctive benefits in a product gives rise to the concept of the Unique Selling Proposition or USP. This is the feature or feature in a product that offers unique benefits not found in its competitors.

To understand the concept, let us take the example of holiday marketing companies. Several holiday companies specialize in the organization of package tours aimed at the young (18-30) travel market. While the product offered is similar in many respects, companies focusing on this market segment seek ways to differentiate their product from others.

Thus, company ‘A’ may emphasize that their hotels are used exclusively by their customers. In contrast, company ‘B’ may place stress on the added adventure and, company ‘C’ may focus on the blatant sexual promise of their holidays. USP basically highlights on picking one attribute and trying to be number one in that attribute.

There are many attributes available to which a company may pick one and try to establish it as number one because number one always draws more attention than others. The attributes could be ‘quality,’ ‘service,’ ‘price,’ ‘value,’ ‘reliability,’ ‘safety,’ ‘speed,’ ‘customization,’ ‘modern’ etc.

Marketers can adopt various positioning strategies.

Ø  Products can be positioned on specific product attributes – Sunsilk keeps hair soft and shining.

Ø  Products can be positioned on the needs they satisfy or the benefits they give – Peps Flouride prevents tooth decay.

Ø  Products can also be positioned on usage occasions – no Eid without Banoful vermicelli.

Ø  Products can also be positioned for certain classes of users – Lifebuoy for athletes.

Ø  A product can also be positioned against a competing product. For example, in its ads, Citibank VISA compares itself directly with American Express, saying, “You’d better take your VISA card because they don’t take American Express.”

Ø  Another approach is to position the product away from competing products. For many years, 7-up has positioned itself as the “Un-cola,” the fresh and thirst-quenching alternative to Coke and Pepsi.

Ø  Products are also positioned for different product classes. For example, some hair creams are positioned against hair oils. Marketers often use a combination of the strategies discussed above.

Repositioning:- Repositioning refers to the process of altering the existing space a brand occupies in the brains of the customers. In simple terms, it is a process of changing how the target market perceives the brand or its offering with respect to its –

                    i.  Features, and

                  ii.  Competitors.

With repositioning, the business tries to change the way the customer view the brand without always altering the bond between the customer and the business. It involves changing the brand’s promise and personality with an updated or refreshed –

·         Marketing mix,

·         Brand identity,

·         Target customer, and

·         Brand essence.

Reasons For Repositioning:- A brand would want to change the customer perception because of innumerable industry related, brand related, future related, competition related, and customer related reasons. Some of them are –

Increased Competition:- Often times, increased competition in the market results in the lack of perceived differentiation of the brand compared to its competitors. This requires the brand to reposition itself in order to highlight its particular advantages.

Faulty Existing Positioning:- There are cases when a brand is –

·         Under-positioned: The existing positioning is too weak or vague to make customers associate emotions, traits, feelings, and sentiments with it.

·         Over-positioned: The existing positioning is too narrowly defined which restricts its growth.

Either condition is bad for the brand and requires it to reposition itself.

Evolved Products:- When the business invests in a substantial product improvement, it is likely to offer additional benefits and cater to a wide audience. This often requires the brand to reposition itself.

Marketing Mix:- Marketing Mix is a strategy which a company uses to formulate a product/service offering for its customers. Marketing mix strategy is created using the 4Ps of marketing - Product, Place, Price, Promotion and 7Ps in case of service- Physical Evidence, People, Process. The term Marketing Mix is attributed to Neil Bordon. The term is named marketing mix because it suggest how a marketer mixes various elements (Product, Price, Place, Promotion etc) in order to make a relevant/just right offering to the customer. The main objective of marketing mix strategy is to make the right product at correct price at the right place with right promotion.

Product Marketing Mix:- When a company is offering products or goods, it comes under the purview of the product marketing mix. It talks about the product strategies, pricing strategies, place where the products are distributed and promotional strategies. Elements of a product marketing mix can be explained in detail as below:

1) Product : It is the main part of the offering, the product itself. It is most important aspect of the mix. Product is something which has some functional value and can be used by the customer to achieve something. A marketer needs to define his product very carefully thinking about its value, its USP, features, competition etc

2) Price : Pricing the second most important element in our marketing mix. This is value we will get in exchange for our product. This is what the customer will pay in return for the utility of the product. Pricing is mainly determined by the cost of the product and also how much the customer would be willing to pay. If we price it too high no one buys, if we price it too low, company makes losses. So we have to devise the right pricing strategy to make our marketing mix perfect.

3) Place: Also called the Distribution. If we are making a product as the right price, that is not enough, we need to make it available at the right place too. The customer mostly would not come to you until and unless our product and price is unbeatable. The product needs to be where customer is likely to buy. If we are soft drink manufacturer and the product is not available in grocery stores, supermarkets, restaurants etc then the first two elements of marketing mix are of no use and the offering fails.

4) Promotion : Also referred to as Communication about the product. This is the 4th element in marketing mix which means the communication done about the product to the customer. Advertising on TV, print and digital media would come under promotion.

Product Levels:- Customers will choose a product based on their perceived value of it. Satisfaction is the degree to which the actual use of a product matches the perceived value at the time of the purchase. A customer is satisfied only if the actual value is the same or exceeds the perceived value. Kotler attributed five levels to products:

The five product levels are:

Core benefit:- The fundamental need or want that consumers satisfy by consuming the product or service. For example, the need to process digital images.

Generic product:- A version of the product containing only those attributes or characteristics absolutely necessary for it to function. For example, the need to process digital images could be satisfied by a generic, low-end, personal computer using free image processing software or a processing laboratory.

Expected product:- The set of attributes or characteristics that buyers normally expect and agree to when they purchase a product. For example, the computer is specified to deliver fast image processing and has a high-resolution, accurate colour screen.

Augmented product:- The inclusion of additional features, benefits, attributes or related services that serve to differentiate the product from its competitors. For example, the computer comes pre-loaded with a high-end image processing software for no extra cost or at a deeply discounted, incremental cost.

Potential product:- This includes all the augmentations and transformations a product might undergo in the future. To ensure future customer loyalty, a business must aim to surprise and delight customers in the future by continuing to augment products. For example, the customer receives ongoing image processing software upgrades with new and useful features.

Product Mix:- Product Mix, product assortment, or product portfolio is the categories of products that a firm offers. In other words, the product mix is the number of product lines a firm has under its umbrella. Moreover, this concept belongs to the Marketing stream. There could be one or more products under a product line. All the product lines together constitute a product mix.

For example, Coca-Cola deals in soft drinks, juices, and more. These are its product lines. A product line includes similar items that a company makes or the products that a consumer uses together. A company, however, may have separate product lines.it has four dimensions:

Width:- The number of product lines that a firm has suggested is what is called the width of a product mix. For example, If Coca-Cola sells only juices and soft drinks, it means it has two product lines. And, if it also sells mineral water, it would mean it has three product lines.

Length:- The length refers to the products in a product mix. For instance, if a company has 4 product lines, and under each product line it has four products each, then the length of the company’s product is 16.

Depth:- It is the total number of variations of a product in a product line. The differences can be in the form of size, flavor, or any other product characteristic. For example, Colgate, in its toothpaste product line, sells different flavors of toothpaste, such as Colgate advanced, Colgate active salt, and more. Moreover, if it sells in various sizes, that will also count as depth. Suppose, Colgate sells toothpaste in three sizes and two flavors, it would mean a depth of six.

Consistency:- It means the relationship between the products in a product mix. The relation is mainly about the production and distribution channels. More consistency is advantageous for a company as it would mean lower costs and better distribution. Moreover, more compatibility also means brand image aligning with the products that a company makes. Nestle, for example, has more consistency in its product line.

Introduction to Branding:- Branding is a process which involves creating a specific name, logo, and an image of a particular product, service or company. This is done to attract customers. It is usually done through advertising with a consistent theme.

Branding aims to establish a significant and differentiated presence in the market that attracts and retains loyal customers. A brand is a name, term, symbol,  or other feature that distinguishes an organization or product from its rivals in the eyes of the customer. Brands are used in business, marketing, and advertising.

Features of Branding:- They are as follows-

1.  Targetability :- Branding should be planned according to the targeted audience. No business firm can target the entire population. Business owners should identify the type of people who are buying their products and services. Research should be done on the basis of age, gender, income, the lifestyle of their customers, etc.

2.    Awareness:- The percentage of people who are aware of a brand is known as brand awareness. Well established companies have the benefit of a high level of brand awareness. Brand awareness can be increased with the help of advertisement on TV, radio, newspaper or social media marketing and advertising. Logos also help companies build brand awareness, as people often recognize brands by these symbols or diagrams.

3.     Loyalty:- Brand loyalty is the highest achievement or apex of any company. A customer who buys the product of a particular company extensively is known as a brand loyalist. Many consumers prefer using certain brands of clothing, deodorants or tubes of toothpaste, for example. They like how these brands benefit them. Brand loyalty can be build by staying in touch with the customers, asking them for their reviews.

4.  Consistency:- Consistency is necessary for a brand. A brand must remain consistent. Small businesses make numerous promises in commercials and ads about their brands, and consumers expect companies to continue living up to these promises. Their products should also be effective.