1. NMIMS, 2007-08 (Concepts & Environment)
Marketing Concepts
Needs, Wants, Demands
Needs Wants Demands
What Deprivation of Specific satisfiers of deeper needs Specific Wants for products
basic, satisfaction Wants are many Wants + purchasing power
Existing, few Ability & willingness
Influencers Natural, not Shaped by Social-family, friends, Shaped by status, Aspirations
created Peers or Institutional-Promotion
Instances Food, clothing, Needs food-Wants Mcdonalds Needs Car/TV, Wants Luxury
belonging Needs clothes-Wants Allen Solly Sedan/flat, As willing + able,
Demand Benz/Plasma TV
Marketers Existing, minimum Influence wants, Affordable&available Influence demand by making
influence, House Bank loan, EMls product attractive/aspirational,
3 Bed Room Status Duplex / Bungalow
Product-Offered to satisfy needs / wants
Product-tangible eg Books ; Service-Intangible eg Banking, Finance, Hospitality
Products also deliver services eg car-product & transportation-service, Mobile
Focus on products sans service risky eg TV, Fridge, AC without back-up Service Team-Risky
Brand-An identifying symbol/words/mark distinguishing a product/company from its competitors.
Branding is an essential part marketing.
Brand = (Functional + Economic + Emotonal) Value Propositions.
Nokia-Functional, Amul- Economic, Saffola- Emotional
Value Proposition- Bundle of benefits the product provides to fulfill customer needs and wants
Market (mercor-to buy Latin)
Potential + Existing customers sharing a common need/want, able & willing to engange/enter in
exchange to satisfy their needs/wants Eg Pharma Market=Doctors + Hospital + Trade
Economics-Buyers+ Sellers= Market, Marketers – Sellers is industry, Buyers is Market
Value (valere – latin – worth)-
Consumer’s estimate of the utility/capacity of a product/brand to satisfy their needs. Fair return.
Price is what you pay, value is what you get- Warren Buffet Mobiles- convergence
Customer-One who buys goods or services- Mother
Consumer-One who consumes, but may or may not have purchased- Kid
Client-A customer/consumer/ party who pays for professional services- Lawyer, Hotel, Consultancy
Prosumer: Producing consumers, active, regular and influencing consumers who also initiate feedback
Customer satisfaction: Core- Quality, service, value; Desire (Within an arms length of desire- coke),
customer delight (kingfisher airline), delivery (blue dart), service (icici bank, taj)
Marketing
Marketer  Mix + Strategy  Brand  Value  Customer
• Mission: Create a difference between company’s & competitors offering on a/an attribute/s
important to customers, to provide value, Scope.
• Identifying, creating, managing demand to provide value to a customer for a profit – Kotler

2. NMIMS, 2007-08 (Concepts & Environment)
• Mgmt process that identifies, anticipates, satisfies customer requirements profitability – CIM
• The right product, in the right place, at the right time, at the right price – Adcock
• Marshalling organizational resources to meet changing needs of the customer – Palmer
• Marketing is far too important to leave to the marketing department”, David Packard (HP)
1950
• Concept- Satisfaction of the Customer & their needs, focus of business activities. IBM
• Philosophy- Owned by everyone from within the organization
• Marketing is not only much broader than selling, but not a specialized activity at all. Marketing
encompasses the entire business. The whole business seen from the point of view of the
customer. Concern & responsibility for marketing must therefore permeate all areas of the
enterprise. A business has only 2 basic functions that produce result, marketing and
innovation, the rest are all costs – Peter Drucker
• “if marketing is seminally about anything, it is about .. differentiating what you do and how
you operate. All else id=s derivative of that and only that. “Theodore Levitt 1986”
• Holistic marketing: From product to customer focus, from selling products to satisfying
customers, visualizing broader ways to serve customers and assess how all departments affect
customers satisfaction- delivery, service, performance
• Reserve marketing: Customer initiatives help design products marketing mix – PCs, Travel
• Experiential marketing: Customer experience/ simulate product before buying foods, CDs
Planning Process of anticipating future events & conditions to determine the best way to achieve
organizational objectives
• Marketing planning- Implementing planning activities to achieve marketing objectives
• Strategic planning- Adopting courses of action to achieve organizational objectives
• Tactical planning- Planning that guides the implementation of activities in the strategic plan
Management (Manus – Hand Latin) – Optimal utilization of resources to achieve objectives eg
Electricity
• Management is doing things right, leadership is doing right things – Peter Drucker
• Manager-Responsible for application & performance of knowledge- Peter Drucker
• Marketing Management- Demand management
Dimensional Differentiation of Selling VS Marketing
Dimension Selling Marketing
1 Concept Integral part of Marketing Broader concept, Includes Selling, Brand, MR,
Distribution, Promotion, Strategy, etc
2 Objective Transaction Exchange, Customer & Demand management
3 Target Buyer Needs/wants of the Customer
4 Focus Product Brand/Service
5 USP Price Value
6 Strategy Sales force & Promotion Marketing Mix
7 Period Short term Long term
8 Controls Sales, delivery, collection Customer Satisfaction, Market Share
9 Skills Selling, Communication Analytical
10 Orientation People Team
11 Begins When you have a product Much before and long after a produst
Organizational Orientation

3. NMIMS, 2007-08 (Concepts & Environment)
Production- PSUs
Product- Infosys
Selling- Sansui
Marketing- Hutch
Finance- SBI
Service- ICICI
Marketing Environment
M8 +C5 + PESTND (Case – Mobile Industry)
Surrounds & impacts the organization, 3 key perspectives- Macro, Micro and Internal environments.
Environment
Internal Micro Macro • Internal Envt-M8-
8 M’s 6C’s PESTND Important for
Men Components Political managing change
Material Corporate Economic • Internal Envt-C5-
Money Channel Socio-cultural Influences organization
Minutes Communication Technological directly, Relationship
Markets Customer Natural between firms & driving
Machines Competition Demographic forces
Methods Direct impact Out of direct control • Macro Envt-PESTND
Mind Influencing factors, but
Change management out of direct control,
environmental change
PEST ND
Political Factors
• Huge, influence policy & regulations and spending power of customers
• Government- VAT, WTO-GATT, Taxation, Reservations
Economic Factors
• Economy – Sensex, Forex, Interest rates, Inflation, Employment level, Per Capita, GDP,
Sociocultural Factors
• Ethnicity, local factors and issues, environmental issues- Bandra- Worli Sealink
• Attitudes to foreign products and services- KFC Bangalore, Language impact
• Cultural and religious factors- Mcdonalds French fries controversy, Nivea in Latin America
Technological Factors
• Technology- New, accessible, better, cheaper, innovation, investment intensive- ATM, Net
Natural Factors
• Raw material availability, Pollution, Environment, Monsoon - Pharmaceuticals
Demographics
• Age profile, Geriatrics, Life expectancy, Mortality, Geography, Consumption, Psychographics
Analyzing the Environment

4. NMIMS, 2007-08 (Concepts & Environment)
5 Forces Analysis
5 Forces Analysis (Porter)
• Analyses forces driving industry competition, intensity of
competition- Indian Hotels not Tatas
• Collective strength determines profit potential,
identifies areas where company can defend
• 5 Key areas- threat of entry & substitutes, power of
buyers & suppliers, competitive rivalry
The threat of entry
• Economies of scale- Production, coverage,
distribution- Reliance Polyester
• Entry/Exit Barriers- FDI, Retail
• Access to distribution channels- Shelf space
• Cost advantages- Bazee- Ebay
• Product Differentiation- Baby products- J&J
• Government policy- Insurance Sector
NB: Gambar lihat di situs aslinya
Will competitors retaliate?
Price cuts, promotional onslaught, technology – Mobiles
The power of buyers
Monopoly, Oligopoly, Cartelling- Tyre, Vitamin manufacturers
The power of suppliers
• Switching costs high – technology, distribution – Tata GSM
• Power Brand- Amul, Integration- Tata Tea- Barista
• Fragmentation, consolidation, integration
The threat of substitutes
• Disruptive innovations- Mobiles- convergence affects 32 industries
• Need substitution- Better toothpaste reduces need for dentist, Diagnostics can avoid diseases
• Generic substitution- Stop smoking cigarettes, Gutka ban
• Technology- Blue tooth, Java
Competitive Rivalry
• High, where entry is likely/threat of substitute products/suppliers/buyers control the market
FMCG, Pharma, IT
• Pre-emptive eg leader drops price/intensifies promotion to scuttle new competitor entry
Effective 5-Force Analysis
• Structural analysis and competitive strategy for defending/increasing market share
• Strategic moves to influence balance of force
• Anticipating and exploiting change to emerge stronger
PEST Analysis (Porter)

5. NMIMS, 2007-08 (Concepts & Environment)
• Environmental analysis preceding the marketing process
• Should be continuous & feed all aspect of planning
SWOT Analysis (Case)
• Tool for auditing organization and environment
• 1st Stage of planning, helps marketers focus on key issues
• Identify key issues & objectives, use with other audit & analysis tools, like PEST / 5-Forces
• Strength & weaknesses- internal factors, Opportunities & threats-external
• Strengths- Specialty, economies, reputation, innovation, service, tech, location, quality
• Weaknesses- lack of strengths
• Opportunities- Competition, innovation, technology, regulatory
Successful SWOT analysis guidelines
• Short, simple and fair analyses especially about strengths & weaknesses of your organization
• Anticipation of PEST factors in the industry, Avoid grey areas
• Competitive analysis through benchmarking, popular tool, quick & easy to learn
Disadvantages
• Can be very subjective, Not very reliable, Bias steps in
• Two people rarely come-up with the same final version of SWOT
• Use only as a guide
Marketing Mix (Neil H. Borden)
• Marketing ‘tactics’ or tools or ‘4Ps’ (McCarthy)
• Other Ps- Pace, People, Policy, Process, Packaging, etc
• Car-Mix of Engine, Mileage, Looks, Price, Features, Quality, EMI options
• Mix element vary leading to different strategies, perception & value proporsitions
Product Price
Brand, features, design, quality, range Strategies,
Warranty, AMC, service, size, Credit,
packing, performance Costs
Promotion Place
Sales promotion, Personal Selling, Advertising, Channels, location, coverage,
Sponsorship, Multi-level Marketing, Direct Transportation, inventory, width,
Marketing, Trade fair & Expositions Spread, reach, shippers
Promotion
• Marketing communication
• Objectives- Sales, attract/retain/covert, trial, awareness, remind, reassure
• Retention Levels- reading 10%, listening 20%, Audio-visual 70%; Sight, Sound, Motion
effective. Integrate individuals promotion mix components for effective communication
Promo Tools / Mix (SPPASM DT)
Sales Personal Public Advertisin Sponsorship MLM Direct Trade Fair
Promotion Selling Relations g Expo
Contests Presentations Inserts Advts Events Residual Database Demos
Coupons Samples Press kit Hoardings Period Income Mailers Brochures
Low Demo Seminars Banners Theme Network CRM Teach-
finance Commission info
Personal Selling- (Car, Insurance)

6. NMIMS, 2007-08 (Concepts & Environment)
• Effective but expensive way to manage personal customer relationships (Medical
Representative)
Sales Promotion- (Akai/Aiwa/Sansui)
• Incentive to buy, ensure trial, D2C through trade BOGOF, Coupons, Discounts, Contests, Trial
Public Relation (PR)- (Political parties/top companies/IPO)
• Subtle inserts used in image building, firefighting- impact if managed well, economical, if long-
term
Direct (Credit card/insurance company mailers)
• Targeted communication- update database, response monitoring, multiple use 2% response
• Mailers of contests, EMI options, transfer of credit, mail order catalogues, CRM
Trade Fairs and Exhibitions (Print/Auto/Pharma/IT Expo)
• Trade, product display / demonstration/awareness/trial, recent decline due to internet
Advertising
• ‘Paid for’ communication, difficult to measure Ad impact (Amul bylines excellent, sales
impact). Helps develop attitudes/create awareness/communicate message, elicit response
• Type of Ads- FRESHEN- Fear, Rational, Emotional, Social, Humour, Ethical, Negative
• Media- Print- Newspaper/magazine/journals (local, national, trade, specialty)/ pamphlets
Electronic- TV/ radio Virtual- Internet, Mobiles Outdoor- Hoarding/Banners/kiosks/transport (
bus, train, taxi, vans) Captive- Theatres, train compartments, Cable TV
Sponsorship (Femina-Miss India)
• Organization pays to associate with an event/cause- Sahara- Indian Cricket/Hokey/Olympics
• Event attributes then associate with sponsor- Pepsi- Youth, Sahara- Patriotism
Multi-Level Marketing (HerbalLife, Amway)
• Networking, Residual Income, Flexi-timings, Initiators earn maximum, financial schemes-
suspect
Promotional Spend Methods- (Half my Ad- spend is wasted, but which hall? John Wanamaker)
• Affordable- Amount decided on supposed affordability, ignores promo needs
• % of sales- Anticipated sales, not guided by opportunities, promo- spend varies, % basis
arbitrary
• Competitive parity- Share of voice, Assumes competitive spend- collective industry wisdom-
debatable, Own opportunities/strength/reputation not considered- IIPM highest print spender
• Objective & Task Method- Define objective/tasks, allocate promo-spend, difficult to
implement
Full VS Push: Push – Sales Force + Trade Promotion, Pull – Advertising + Customer Promotion
Strategies differ across industry players, traditionally HLL – Push and P&G – Pull strategy worldwide
Promotion Mix Strategy – ICICI
Place (distribution/channel/intermediary)
• Set of institutions performing activities to move product from production to consumption-
Bucklin
• Functions- Order Processing, Warehousing, Inventory, Transportation, Collections
• Ensures- Availability, Visibility (Dikhta hai voh bikhta hai), Movement, CRM, Feedback
• Width- Trade coverage, Reach- Customer coverage, Depth- Brand coverage
• Growing impact of convergence- internet, mobile, retail, revolution
1-Level 2-Level 3-Level 4-Level 5-Level
Manufacturer Manufacturer Manufacturer Manufacturer Manufacturer
C&F C&F

7. NMIMS, 2007-08 (Concepts & Environment)
Stockiest Stockiest
Retailer Retailer Retailer
Consumer Consumer Consumer Consumer Consumer
Industrial, IT IT Hardware Retail/Malls Garments Pharma/FMCG
Channel Intermediaries
• Distributor (C&F)- Bulk to smaller packs, handle major area, supply to stockists
• Wholesalers (Stockists)- Resell to retailers, storage, coverage essential
• Others- Commission agents, co-operative (farmers), Indentors (Imports), agents (magazine)
• Retailers- Strong customer influence, consumption/purchase pattern insight, service
• Specialty (Sport), Supermarket (Big Bazar) Convenience (Kirana), Factory Outlets, Warehouse,
Direct sellers (Encyclopedia)- D2D, Vending Machine (Tea, Coffee), co-operative (Apna Bazar,
Grahak Peths, Societies), Chain stores (Monginis)
• Internet (Service)- Channel margins and inventory costs major saving- can be passed, hence
economical, death of distance, geographically disperse market, niche products reach wider
audience, low entry barriers, display variety & functionality, interactive, Payment Risky,
gaining popularity, delivery costly- Books, CDs, medicine, travel, tourism
• 3rd Party Logistic (AirFreight, GATI)- tremendous scope
Channel Decisions
• Direct or indirect channels/single or multiple channels
• Length of channel
• Types of intermediaries/Number of intermediaries at each level
• Which intermediaries? Avoid intrachannel conflict- Nike
The Retail Revolution Case
Price
• Fit between crucial financial component-cost & marketing component-value
• Center-stage in marketing wars, inter-firm rivalry-Mobile Industry
• Product differentiation blunted- Surf-Ariel, Mature product/Markets- TVs
• Economic Value Proposition- Titan- High priced brands inspite of local & grey market
competition
• Objective- Profits/ROI, competitive position, demand, costs, survival, product, Portfolio, Entry
Pricing Methods
• By cost- Cost Plus and Break Even
• By competition- Going rate, competitive pricing, cartelling- Tyre industry, sealed bids (tenders)
• Customer Oriented- Perceived Value (Lifestyles), Auctions (Bazee), Value-Buffett, McDonalds
Pricing Strategies
• Penetration- HQLP- NPL, Entry, Attract, Ensure trial- Amul
• Premium- HQHP- Sustainable advantage- Bose Speakers, Benz
• Economy- Functionally & Value-, Nirma, Supermarket- own brand
• Skimming- LQHP- Significant advantage, unsustainable- Reliance Mobile
• Rip-Off- Medium quality, very high price- Pricey Hotels/ Restaurant
• 1,5,9- coexist in same market till buyers insist on quality, price, value
• 2,3,6- ways to attack 1,5,9 as 2 = HQMP, 3 = HQLP, 6 = MQLP
• 4,7,8 overpricing wrt quality- customers feel ‘taken’, bad oral publicity, avoid
Exercise- Gives examples of Price
each pricing strategy High Medium Low
Quality High 1- Premium 2- High Value 3- Penetration
(Quality is only Medium 4- Over-charging 5- Medium Value 6- Good Value
indicative) Low 7- RipOff/Skimming 8- False Economy 9- Economy

8. NMIMS, 2007-08 (Concepts & Environment)
Other Pricing Strategies
• Psychological- Bata, Mobile Airtime Tariffs
• Geographical- Medicine/Electronics across countries or Urban/Rural- Electronics
• Promotional- Extensive usage, if successful-copied, if unsuccessful-financial drain
• Loss leader- Factory outlets
• Special Discount/Rebates- BOGOF, % Off, Sale
• Financing- EMIs, Low interest rates
• Warranties/AMCs- Extended warranties, TVs-Onida 4 year warranty, Free AMC
• Psychological Discounting- Prices slashed 399 to 199, Baazee
• Old for New- New for Old discounts- Exchange offers- Van Heusen, TVs
• Price Point- Cadburys- Re1- Éclair, Rs2-Chocky, Rs5-5star, Rs50-Heroes, RS100-(Heroes)
• Value- Superstores- Big Bazaar
Discriminatory- Same brand/ service, 2 price
• Customer segment- Student discount
• Product form- Ketchup- 100gm-20, 250gm-45, 500gm-75
• Image- Hotels- Taj Palaces (Premium), Resorts (Lifestyle), Hotels (Business), Indione (Budget)
• Location- Theatres- Stall-50, Balcony-75, Dress Circle-100, Stadium- Pavilion, Stands
• Time- Seasonal- Cheaper/costlier during season, Happy Hours, Bakeries-25% off after 8pm
Product Mix- Profitable brands take care of others in the portfolio
• Product line- full range in all segments- Maruti Cars 2 Lacs at every 25000 intervals
• Optional feature pricing- Ford Ikon-Insurance+Deck+Central Lock+Auto Cop Free
• Captive product- Cameras/Razors cheaper but consumables – Film / Blades costly
• 2-Part- Esselworld-admision + rides, Airtime + SMS/VMS/STD
• By-Product- Lubricants with petrol
• Product bundling- Season tickets, Time share