Introduction to Marketing - Session 2 at ITM, Mumbai. Includes: Targeting  What is good marketing research?  Marketing research Questions  Types of information  Types of market research  Market research summary  Test Market  Define Target Audience  Estimate market potential  Analyze market share/share of customer  Track competitors  Identify market characteristics & trends  Analyze sales data  Sales forecasting: Existing / new products Product • Product Strategy • Product Essentials • Features and Benefits • Classifying products • Product line and mix • Branding • Packaging and LabellingTrademarks Positioning and Brand Building • The Art of Positioning is Marketing • Positioning the game of Mind and Heart • Brand is a Promise • Brand is owned by Customers • Understanding Brand Drivers • Brand Attributes • Brand Architecture • The Positioning Template

1. Introduction to Marketing
Week 2
NANDA KISHORE SETHURAMAN
ITM SEPTEMBER 2012

2. Agenda
 Targeting  Product
 What is good marketing research?  Product Strategy
 Marketing research Questions  Product Essentials
 Types of information  Features and Benefits
 Types of market research  Classifying products
 Market research summary  Product line and mix
 Test Market  Branding
 Define Target Audience  Packaging and Labeling Trademarks
 Estimate market potential  Positioning and Brand Building
 Analyze market share/share of  The Art of Positioning is Marketing
customer  Positioning the game of Mind and
 Track competitors
Heart
 Identify market characteristics &  Brand is a Promise
trends  Brand is owned by Customers
 Analyze sales data
 Understanding Brand Drivers
 Sales forecasting: Existing / new
 Brand Attributes
products
 Brand Architecture
 The Positioning Template

3. Segmentation, Targeting, Positioning
3

4. Research – An Introduction

5. The Process
Understand the environment and the market
Situation
Identify threats and opportunities
Analysis Assess the competitive position
Define the business scope and served market
Strategy segments
Establish competitive advantages
Development
Set performance objectives.
Product and channel decision
Marketing Communication decisions
Program Pricing
Development Personal selling decisions
Performance monitoring
Implementation Refining strategies and program

6. Marketing Research in Practice
Programmatic Research
 Develops market options through market segmentation,
market opportunity analysis, or consumer attitude and product
usage studies
Selective Research
 Tests different decision alternatives such as new product
testing, advertising copy testing, pre-test marketing, and test
marketing
Evaluative Research
 Evaluation of performance of programs

7. Marketing Decision Support Systems
Characteristics of MDSS:
 Interactive
 Flexible
 Discovery oriented
 User friendly

8. Marketing Decision Support Systems
Four components of MDSS:
 Database
 Reports and Displays
 Analysis capabilities
 Models

9. Gaining Insight from a MDSS
Manager
Modeling Display
Analysis Database
Environment

10. Participants in marketing research activities
Information Users
• General management
• Planning
• Marketing and sales managers
• Product managers
• Lawyers
Information Suppliers: Information Suppliers:
Inside Company Outside Company
• Marketing research department • Research consultants
• Sales analysis group • Marketing research suppliers
• Accounting department • Advertising agencies
• Corporate strategic planning

11. Marketing Research Process
 MR Process Evolves From Answers to Five Key
Questions
 Why should we do research?
 What research should be done?
 Is it worth doing the research?
 How should the research be designed to achieve the
research objectives?
 What will we do with the research?

12. Marketing Planning & Information System
MARKETING PLANNING AND INFORMATION SYSTEM
Planning system Information system
• Strategic plans • Databases
• Tactical plans • DSS
1. AGREE ON RESEARCH PROCESS
• Problems or opportunities
• Decision alternatives
• Research users

13. 2. ESTABLISH RESEARCH OBJECTIVES
• Problems or opportunities
• Decision alternatives
• Research users
Estimate
the value of NO Do not conduct
information marketing research
Is benefit >
cost
Yes

14. Yes
2. ESTABLISH RESEARCH OBJECTIVES
• Problems or opportunities
• Decision alternatives
• Research users
5. COLLECT THE DATA
6. PREPARE AND ANALYZE THE DATA
7. REPORT THE RESEARCH RESULTS AND PROVIDE
STRATEGIC RECOMMENDATIONS

15. The Marketing Research Process
Step 1
Research Purpose
 Problem or opportunity analysis
 Which problems or opportunities are anticipated
 What is the scope of the problems and the possible reasons?
 Evaluation of decision alternatives
 What are the alternatives being studied?
 What are the criteria for choosing among the alternatives?
 Research users
 Who are the decision makers?
 Are there any covert purposes?

16. The Marketing Research Process (Contd.)
Step 2
Research Objective
 A statement, in as precise terminology as possible, of what
information is needed
 Should be framed to ensure information obtained will satisfy
research purpose
Research Question
Hypothesis Development
Research Boundaries

17. The Marketing Research Process (Contd.)
Research Question
 Asks what specific information is required to achieve the
research purpose
 Sample questions to determine if a specific advertisement
should be run:
 Will the advertisement be noticed?
 Will it be interpreted accurately?
 Will it influence attitudes?

18. The Marketing Research Process (Contd.)
Hypothesis Development
 A possible answer to a research question.
Generating a hypothesis
 Draw on previous research efforts
 Borrow from other disciplines such as:
 Psychology
 Sociology
 Marketing
 Economics
 Manager’s experience with related problems, coupled with
knowledge and the use of judgment

19. Source
• Theory
• Management experience
• Exploratory research
Research Research Research
Question Hypothesis Design
Purpose
Research
Objective

20. The Marketing Research Process (Contd.)
Step 3
Estimating the Value of Information
 Value depends on:
 Importance of decision
 Uncertainty that surrounds it
 Influence of research information on the decision

21. Illustrative Decision Models $ 4 million
Introduce Success
$ 1 million
Product A Failure
Do not
Introduce
$ 4 million
Success
Introduce
Product B -$ 2.5 million
Failure
Do not
Introduce

22. Research Design and Implementation
Research Design
The detailed blueprint to guide the
implementation of a research study toward
the realization of its objectives

23. Categories of Research
 Exploratory Research
 Used when seeking insights into the general nature of a problem, the
possible decision alternatives, and the relevant variables that need to be
considered
 Descriptive Research
 Provides an accurate snapshot of some aspect of the market
environment, such as:
 Consumer evaluation of the attributes of our product versus competing
products.
 The socioeconomic and demographic characteristics of the readership of a
magazine
 The proportion of all possible outlets that are carrying, displaying, or
merchandising our products
 Causal Research
 Used when it is necessary to show that one variable causes or determines
the values of other variables, a causal research approach must be used

24. Detective Funnel
Uses Combination of All Three Research
Techniques
 Exploratory techniques generate all possible
reasons for a problem
 Descriptive and Causal approaches narrow the
possible causes

25. Detective Funnel
Problem
Exploratory
Research
Descriptive
Possible Research
causes of the
problem
Causal
Research
Probable
Causes

26. Methods & Data Collection.

27. Data Sources
Secondary Data
Primary Data

28. Sources of Secondary Data
PRIMARY
•SALES/PATRONAGE RESULTS ( OUTCOMES )
DATA
•MARKETING ACTIVITY ( INPUTS )
SOURCES INTERNAL
•COST INFORMATION
RECORDS
•DISTRIBUTOR REPORTS AND FEEDBACK
•CUSTOMER FEEDBACK
DATA
SOURCES
ELECTRONIC
SECONDARY
DATA •GOVERNMENT
SOURCES •TRADE ASSOCIATIONS
•PERIODICALS
PUBLISHED
•NEWSPAPERS
DATA
•BOOKS
•ANNUAL REPORTS
PRINTED •PRIVATE STUDIES
EXTERNAL
SOURCES STANDARDIZED
SOURCES OF
•STORE AUDITS
MARKETING
•WAREHOUSE WITHDRAWAL SERVICES
DATA
•CONSUMER PURCHASE PANELS
•SINGLE SOURCE DATA
•NIELSEN’S TELEVISION INDEX
•STARCH SCORES
•ARBITRON PANEL
•MULTIMEDIA SERVICES
INTERNET

29. Uses of Secondary Data
Can solve the problem on hand all by its own
Can lead to new ideas and other sources
Helps to define the problem more clearly
Can help in designing the primary data collections
process
Helps in defining the population / sample
Can serve as a reference base

30. Benefits and Limitations of Secondary Data
Benefits Limitations
Low cost  Collected for some other
purpose
Less effort  No control over data
collection
Less time
 May not be accurate
At times, more  May not be in correct form
accurate  May be outdated
 May not meet data
At times, only way to requirements
obtain data  Assumptions have to be
made

31. Internal Sources of Secondary Data
Internal Records
 Accounting Data
 Sales Reports
 Inventory Management
 Customer Database

32. External Sources of Secondary Data
Published data sources (Census, publications of
various trade associations)
Trade directories
Computer retrievable databases ("online" databases)

33. Practical Applications

34. New Product Research
New Product Research Process
 Generation of new product concepts
 Evaluation and development of those concepts
 Evaluation and development of the actual products
 Testing in the context of the marketing program
Need Identification
 Perceptual maps
 Social and environmental trends
 Benefit structure analysis
 Product users
 Focus-group interviews
 Lead user analysis
Concept Identification

35. New Product Research (Contd.)
Test Marketing
 Designing the sell-in market test
 Selecting the test cities
 Implementing and controlling the test
 Timing
 Measurement
 Costs of a test market
Controlled Distribution Scanner Markets (CDSM)
Projecting Trial, Repeat and Usage Rate Using Panel
Data

36. Other Applications
Pricing Research
 Research for Profit-oriented Pricing
 Research for Share-oriented Pricing
Distribution Research
 Warehouse and Retail Location Research
 Center-of-gravity Simulation
 Computerized Simulation Models
 Catchment Area Analysis
 Outlet Location Research
 Number and Location of Sales Representatives
 Sales effort approach
 Statistical analysis of sales data
 Field experiments
 Computerized models of sales force size and allocation by market and
by product line

37. Advertising Research
Criteria Copy Test Validity
 Recognition  Qualitative Research
 Recall
 Audience Impressions of
 Persuasion
the Ad
 Forced exposure, brand
 Adjective Checklist
preference change
 On-air tests -- brand  Eye Movement
preference change  Physiological
Customized Measures of Measurement
Communication / Attitude Budget Decision
Purchase Behavior
 Coupon stimulated
Media Research
 Measuring print vehicle
purchasing
 Split-cable tests audiences
Tracking Studies  Measuring broadcast
Diagnostic Testing vehicles audiences

38. Sales Promotion Research
Promotional Tools
 Price Discounts
 Features
 Displays
 Coupons / Rebates
 Sweepstakes
Promotional Strategy
 Hi-lo
 Every Day Low Price (EDLP)

39. Target Market
39

40. 40

41. Evaluating Segment Attractiveness
41

42. Let’s sell to segments with big eyes and lips
42

43. Factors driving a Target Marketing Strategy
43

44. Selling Ice Cream to Eskimos
44

46. Target Marketing Strategies
46
Broad

47. Target Marketing
Socially Responsible Targeting
 Some segments, especially children, are at special risk
 Many potential abuses on the Internet, including fraud
Internet shoppers
 Controversy occurs when the methods used are questionable
7 - 47

48. Products

49. What is a product?
A product is anything that can offered to market for
attention, acquisition ,use, consumption that might
satisfy a want or need.

50. Products
Tangible products Intangible products
GOODS SEVICES

51. Features of product
tangibility
Associated
attributes
Intangible
Features of attributes
product
Exchange Customer
value satisfaction

52. Levels of product
Unexpected features
Luxury features
Expected features
Basic features
Basic product

53. Classifying Products
Durables
Consumer products
Business products

54. Durables
Durables Services
Non-Durables

55. Consumer Products

56. Business products
Materials and parts
 Raw materials and parts
 Manufactured materials and parts
Capital items
 Installation
 Equiptment
Suppliers and business services
 Maintenance and repair items
 Operating suppliers

57. Raw Materials
Natural Products
Farm Products

58. Manufactured materials and parts

59. Capital items
Equipment
Installation

60. Suppliers and business services
Operating
Suppliers
Mainteinance
and repair items

61. Product mix

62. Product Mix
The assortment of products that a company offers to
a market
Width – how many different product lines?
Length – the number of items in the product mix
Depth – The no. of variants offered in a product line
Consistency – how closely the product lines are
related in usage

63. Product Line & Product Mix
LAMPS
•Table
•Ceiling
•Track
•Desk

64. Product Mix
Product Product Product
Line 1 Line 2 Line 3
LAMPS TABLES CHAIRS
•Table •Kitchen •Dining Room
•Ceiling •Dining Room •Living Room
•Track •End •Bedroom
•Desk •Coffee •Outdoor
•Outdoor •Desk
•Conference
•Computer

65. PRODUCT MIX EXAMPLE
Width (# of product lines)
Hair Care Salty Dental Soft Drinks
Snacks Care
Depth (# of items)
Shampoo Chips Tooth Brush Cola
Conditioner Nuts Tooth Paste Ginger Ale
Hair Spray Crackers Dental Floss Root Beer

66. Factors influencing change in product mix
Changes in market demand
Cost of production
Quantity of production
Changes in company desire
Competitors actions and reactions

67. Product Mix Strategies
Expansion of product mix
Contracting or dropping the product mix
Alteration of existing product s
Trading up/trading down strategies

68. Product management
Planning
Forecasting
Marketing of products of a company is product
management

69. Objectives of product management
To design product strategies
To spot market opportunities
To develop strategies for each stage of product life
cycle
To generate new product ideas

70. Product Innovation – New Product Types

71. Importance of new product
To meet consumer needs and wants
To meet competition
To increase profits
To avoid threats from substitutes

72. New Product Development Process
Step 1. Idea Generation
Systematic Search for New Product Ideas
 Internal sources
 Customers
 Competitors
 Distributors
 Suppliers
Step 2. Idea Screening
Process to spot good ideas and drop poor ones
Technically feasibility
Financially viable

73. New Product Development Process
Step 3. Concept Development & Testing

74. New Product Development Process
Step 4. Marketing Strategy Development

75. New Product Development Process
Step 5. Business Analysis
Step 6. Product Development

76. New Product Development Process
Step 7. Test Marketing

77. New Product Development Process
Step-8 commercialization
Introducing the product into the market
Introducing the product into the market

78. Profit per unit Product category sales
(real dollars)
Product Life Cycle
Life cycle
extension
Profit/unit
Sales
(real dollars)
Introduction
Maturity Decline or
extension
Competitive
Growth turbulence
Time (years)
Source: Reprinted with permission from p. 60 of Analysis for Strategic Marketing Decisions, by George Day. Copyright © 1986 by West Publishing
Company. All rights reserved.
8-78
8-3

79. Marketing Strategies: Introduction Stage
Sales
Sales Low sales
Low sales
Costs
Costs High cost per customer
High cost per customer
Profits
Profits Negative
Negative
Marketing Objectives Create product awareness and
Create product awareness and
Marketing Objectives trial
trial
Product
Product Offer a basic product
Offer a basic product
Price
Price Use cost-plus basis
Use cost-plus basis
Distribution
Distribution Build selective distribution
Build selective distribution
Advertising
Advertising Build awareness among innovators,
Build awareness among innovators,
early adopters
early adopters

80. Marketing Strategies: Growth Stage
Sales
Sales Rapidly rising sales
Rapidly rising sales
Costs
Costs Average cost per customer
Average cost per customer
Profits
Profits Rising profits
Rising profits
Marketing Objectives
Marketing Objectives Maximize market share
Maximize market share
Product Offer product extensions, service,
Offer product extensions, service,
Product warranty
warranty
Price
Price Penetration Pricing
Penetration Pricing
Distribution
Distribution Build intensive distribution
Build intensive distribution
Advertising
Advertising Build awareness in the mass market
Build awareness in the mass market

81. Marketing Strategies: Maturity Stage
Sales
Sales Peak sales
Peak sales
Costs
Costs Low cost per customer
Low cost per customer
Profits
Profits High profits
High profits
Marketing Objectives Maximize profit while defending
Maximize profit while defending
Marketing Objectives
market share
market share
Product
Product Diversify brand and models
Diversify brand and models
Price
Price Price to match or best competitors
Price to match or best competitors
Distribution
Distribution Build more intensive distribution
Build more intensive distribution
Advertising
Advertising Stress brand differences and benefits
Stress brand differences and benefits

82. Marketing Strategies: Decline Stage
Sales
Sales Declining sales
Declining sales
Costs
Costs Low cost per customer
Low cost per customer
Profits
Profits Declining profits
Declining profits
Marketing Objectives Reduce expenditure and milk the
Reduce expenditure and milk the
Marketing Objectives
brand
brand
Product
Product Phase out weak items
Phase out weak items
Price
Price Cut price
Cut price
Distribution Go selective: phase out unprofitable
Go selective: phase out unprofitable
Distribution outlets
outlets
Advertising
Advertising Reduce to level needed to retain
Reduce to level needed to retain
hard-core loyal customers
hard-core loyal customers

83. Causes of New Product Failures
Overestimation of Market Size
Product Design Problems
Product Incorrectly Positioned, Priced or Advertised
Costs of Product Development
Competitive Actions
Technical problems
Poor planning
Inadequate promotion
Poor packing
Fault pricing

84. Segmentation, Targeting, Positioning
84

85. Positioning
Positioning:
 The place the product occupies in consumers’ minds
relative to competing products.
 Typically defined by consumers on the basis of important
attributes.
 Involves implanting the brand’s unique benefits and
differentiation in the customer’s mind.
 Positioning maps that plot perceptions of brands are
commonly used.
7 - 85

87. Choosing a Positioning Strategy
Topics  Differentiation can be based on
 Products
 Identifying possible  Services
competitive advantages  Channels
 People
 Choosing the right  Image
competitive advantage
 Choosing a positioning
strategy
7 - 87

88. Choosing a Positioning Strategy
Topics • How many differences to
promote?
 Unique selling proposition
 Identifying possible
 Several benefits
competitive advantages
• Which differences to promote?
 Choosing the right
Criteria include:
competitive advantage  Important
 Choosing a positioning  Distinctive
strategy  Superior
 Communicable
 Preemptive
 Affordable
 Profitable
7 - 88

89. Choosing a Positioning Strategy
Topics • Value propositions represent
the full positioning of the brand
 Identifying possible
• Possible value propositions:
competitive advantages  More for More
 Choosing the right  More for the Same
competitive advantage  More for Less
 Choosing a positioning  The Same for Less
strategy  Less for Much Less
7 - 89

90. Developing a Positioning Statement
Positioning statements summarize the company or
brand positioning
 EXAMPLE: To (target segment and need) our (brand) is
(concept) that (point-of-difference)
7 - 90

91. Communicating the Positioning
Companies must be certain to DELIVER their value
propositions.
Positions must be monitored and adapted over time.
7 - 91

92. Market Segmentation Process
6. Develop Marketing
Mix for Each Target Segment Market
5. Develop Positioning Positioning
for Each Target Segment
4. Select Target
Segment(s)
Market
3. Develop Measures
of Segment Attractiveness
Targeting
2. Develop Profiles
of Resulting Segments
1. Identify Bases Market Segmentation
for Segmenting the Market

93. Brand Identity Prism
(KAPFERER)

94. KAPFERER represents brand identity diagrammatically as a
six-sided prism as shown below:
Constructed Source/Sender
E I
x n
t t
e e
r r
n n
a a
l l
i i
s s
a a
t t
i i
o o
n n
Constructed Receiver

95. Brand Identity Prism
Physique according to him is the basis of the brand.
 E.G. the physique of Philips is “technology and reliability”
while for the brand Tata it is “trust”
Personality is same as Aaker, it answers the question
“what happens to this brand when it becomes a
person?”
Culture symbolizes the organization, its country-of-
origin and the values it stands for.
 E.G. traditional brands like balsara, dabur and zandu.

96. Brand Identity Prism
Relationship is the handshake between consumer
and the organisation.
 E.G. the relationship with “safola” is safety.
Reflection is the consumer’s perception for what the
brands stands for.
 E.G. coke’s image more attract youth.
Self-image is what the consumer think of himself.
 E.G. benz Car owner think that since he has bought the car he
is treating himself to one of the best car in the world.

97. Let us understand the model in detail…

98. What is a Brand???
“ A Brand is a complex symbol. It is the intangible
sum of a product’s attributes, its name, packaging
and price, its history, reputation, and the way it’s
advertised. A brand is also defined by consumer’s
impression of people who use it, as well as their own
experience ”
- David Ogilvy

99. Now let us look at how Brand Experience is differentiated…

100. Brand Experience are of Two types

101. The External Brand Experience includes
Name
Logo
Advertising
Brand Identity
Environments
Products & Service

102. The Internal Brand Experience includes
Business Process
Customer Relations
Brand Values
Training
Quality
Staff Motivation
Recruitment Policies
Technology etc..

103. Now let us look at the Brand Identity Prism based on
Kapferer model and the 6 key dimensions in it

104. -Name -Logo -Business Process -Customer Relations
-Advertising -Brand Identity -Brand Values -Training
-Environments -Products & Service -Quality -Staff Motivation
-Recruitment Policies -Technology etc..
Constructed Source
E I
x n
t t
e e
r r
n n
a a
l l
i i
s s
a a
t t
i i
o o
n n
Constructed Receiver

105. Physical
 Product features, symbols & attributes
Personality
 Character & attitude
Relationship
 Beliefs & association
Culture
 Set of Values
Reflection
 Customer’s view of the brand
Self-Image
 Internal mirror of customer as user of brand

106. Let us now understand the prism with some examples…

107. For Sify India let us look at how they have built the brand basis the
Kapferer Model

108. Sify India
Physical
 Kite Symbol, Online Access
Personality
 Innovative & Tech savvy
Culture
 Customer centric & Indian
Self -image
 "net" way of life empowered
Reflection
 Consistent & dependable performer
Relationship
 Best guide to the net

109. Sify India
 Physical
 Kite Symbol, Online Access
 Personality
 Innovative & Tech savvy
 Culture
 Customer centric & Indian
 Self -image
 "net" way of life empowered
 Reflection
 Consistent & dependable performer
 Relationship
 Best guide to the net

110. End of Day 2