Marketing Summers Primer

Akshay

Why do people believe that Amazon has the best customer service?

Why do travelers favour suntan lotion over coconut oil?

Why do people consider Sushi as gourmet? Its all about Marketing, honey!

Marketing
A management process responsible for identifying anticipating satisfying customer requirements profitably

Consumer Behaviour Model

Marketing Stimuli (Mix)
Place Price Product Promotion

Other Stimuli
Political Economic Social Technological

Consumer State of Being

Social Cultural Economic

Consumer State of Mind

Motivation Perception Learning Memory

Purchase Decision Process

Problem Recognition Information Search

Evaluation of Consideration Set

Purchase decision

Product Choice

Purchase Behaviour
Brand Choice Dealer Choice Purchase Amount Timing

Payment Terms

Basics
Consumer Focus Satisfying consumer needs (Maslows Model)
Basic (Level 1 and 2) Social Acceptance (Level 3) Social Envy (Level 4)

The Core of Marketing

Need
Felt when there is a conflict between desired state and the current state e.g. thirst, bath

Want
Manifestation of a need Specific, man-made, e.g. juice, water

Desire
Strong expression of a want e.g. owning a Harley Davidson or a Ferrari

 The Base 4

Mind your Ps

The basic value proposition Product Can be a product or service Consideration given by the consumer Includes strategies like offers, discounts

Price

Place

Availability at the right place, right time and in the right quantity Channels such as the internet, wholesalers or retailers

Communicating the value proposition and benefits offered by the product or service to the consumer Promoti Branding, PR, advertising, exhibitions, sales promotions on

The 7Ps of Services/B2B Marketing

Physical
Physical evidence for a consumer to know more about the experience of using a particular service Vital since the service is essentially intangible and lacks a physical form Pamphlets, testimonials, brochures

Process

Process followed during delivery of service e.g. processes followed by McDonalds, process at ICICI bank branches

People

The people in the organization who interface with the consumer Perception of service quality directly depends on the customer service provided by the people e.g. banking, insurance, wealth management

Communication Channel
TV Radio Maximum penetration Print Internet Mobile Social networks (word of mouth)

ATL/BTL
Above The Line
Promotional activities carried out through conventional forms of mass media Television Radio Print Billboards

Below The Line

Non-media advertising Flex/banners at Points of Purchase Through The Line (Combination of both)

Consumer Behaviour
Different buying behaviour in different situations Marketing strategy based on consumer behaviour Impulsive
Picking (Lays, Bingo, Biscuits) Unplanned Low-involvement Products

Variety Seeking
Switching

Consumer Behaviour
Brand Loyal Purchasing
Levis Jeans Van Heusen shirts Raymond Suits

Problem Solving
Crocin, D-Cold, Burnol, Dettol

Purposive
B2B, industrial marketing, high involvement products

STP The Essence

Segmentation (Homogeneity of needs)
Geographic (N, S, E, W) Demographic (age, gender, income) Psychographic (traits, values, lifestyles)
Thinkers, Achievers, Strivers, Experiencers

Behavioral (benefit-seeking, loyal, usage rates)

Differentiable (through different marketing mix) Measurable (in terms of size and profitability) Accessible (e.g. IT services in N/E regions?) Actionable (product can be customized to serve)

Demographic Segmentation
SEC - Socio-economic Class (Demographic) Urban SEC System (SEC A1, A2, B, C,D) Based on occupation and education of the head of the household Rural SEC (R1 to R4) System Based on the education of the head of the household and the type of housing

 Targeting
Assess segment attractiveness Market growth, competition, channel attractiveness

Positioning
Conveying the message of differentiation Creating Points of Parity and Points of Difference E.g. Low price, high quality, low calorie, refined etc. Positioning of Nirma (low price), Surf Excel Matic (high-quality), Rolls Royce (premium), Harley Davidson (iconic American)

PESTLE Framework
Used in SWOT analysis for strategic planning, marketing planning, product development Political
Tax laws, trade tariffs, trade restrictions

Economic
Growth rate, interest rates, inflation

Social
Health consciousness, attitudes, acceptance

Technological Legal Environmental

Porters 5 Forces Model

The Mother of all 2X2s

BCG Matrix Explained

Applications
Brand marketing, Product management Strategic management, Portfolio Planning Cash Cows Low growth and "mature" market To be "milked" continuously with as little investment as possible E.g. Dettol antiseptic, ITC Cigarettes

 Dogs
Low growth, low market share Should be hived off or divested e.g. ITC Infotech

Question Marks (Problem Child)

High growth, low market share Analyze carefully in order to determine whether they are worth the investment required to grow market share e.g. Fiama De Wills, Vivel, Sunfeast

Rising Stars
Invest: High growth, high market share Hotels and Agri-business for ITC Group

 Limitations
Linkage between market share and profitability is questionable A low market share product may actually be very profitable and vice versa

Ansoff Growth Matrix

e.g. Dettol tried to promote its disinfectant as a medical antiseptic as well as a household cleaning product (market development) ITC Bingo chips (product development) Virgin Group (diversification)

The Product Life Cycle

A product has a limited life during which it poses different challenges these have to be managed

 Introduction Phase (Innovators)

Costs high (promotion and marketing) Sales volume low No/little competition Demand has to be created

Growth Phase (Early Adopters)

Reduced costs due to economies of scale Sales volume increases significantly Competition increases with few new players in establishing market Maximize market share

 Maturity Phase (Majority)

Costs are very low Sales volume peaks Increase in competitive offerings Prices tend to drop due to the proliferation of competing products brand differentiation, feature diversification Industrial profits go down

 Saturation and Decline Phase (Laggards)

Costs become counter-optimal Sales volume decline or stabilize Prices, profitability diminish Profits through cost cutting Focus on production/distribution efficiency rather than increased sales

Sales and Distribution

Colgate Palmolive Factory Stock Transfer

Carrying and Forwarding Agents Primary Sale

Stockist Secondary Sale Wholesaler Retailer Offtake / Tertiary Sale Customer

Sales and Distribution N/w

Statistics
HUL
4,000 stockists 6.3 million retailers Entire urban population + 250 million rural consumers

Marico
1,000 distributors 2,500 stockists 1.6 million retailers 18 million Indian households

Sales Objectives
Place of the Marketing Mix Target-driven (push strategy) Making the product available at the right place, right time and right quantity

Other Segmentation Models

Globals Strivers Seekers Aspirers
Project Shakti, Swasthya Chetna

Customizin g products Smaller stock & services keeping for the lesser units (SKU) privileged

Deprived (Bottom of Pyramid)

Marketing Warfare
Defensive
Only the market leader should consider Best defensive strategy is the courage to attack yourself Blocking strong competitive moves E.g. Colgate Dental Cream Market leader consistently defensive positioning v/s Close-up, Pepsodent Built up defenses on all price points and varieties

 Attack
Usually practiced by challenger(s) to the market leader Attack a weakness in the leaders position Car rental firm Avis attacked market leader Hertz with purely offensive strategies. Avis talked of being perfect because of the number two tag Burger King claims its burgers are bigger and taste better than McDonald's Have It Your Way Campaign attacks McDonald's inflexible consistent production line

Flanking
Practiced by the other smaller players Flanking move played in uncontested territory Tactical surprise is the key Pursuit (follow-up) is equally important Types
Geographical Segmented

Nirmas exclusive foray in the low-price segments

Guerilla Usually implemented by firms who are smaller in market position/resource base than the firm they attack Find a segment of the market small enough to defend No matter how successful you become, never act like the leader Be prepared to leave at a moment's notice Babool, Chandrika, Medimix

Marketing Myopia
Be customer-oriented rather than product-oriented Hollywood Faced an increased competition from television Business of entertainment rather than moviemaking Cadburys Business of spreading joy (rather than chocolate making) Coca-Cola Business of quenching thirst Drops of Joy positioning

Some Tips
Read up on leading brands of the leading FMCGs Know more about the leading brands and the companies they belong to for various product categories like foods, hair care, personal care etc. Most interviews are form-based HUL interview involves questions on competing brands

India FMCG Snapshot

Company Colgate Palmolive Dabur Sales Revenue YoY (%) 4076 6040 16.2 16.0 QoQ (%) 4.2 -0.4

Godrej Consumer HUL ITC Marico Nestle Tata Tea

3616
42157 38997

26.3
21.1 18.4

33.0
11.1 -0.9

6009 10356 11356

28.1 23.5 12.3

28.5 -5.1 -3.6