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Objectives

Be able to define marketing

and discuss its core concepts.
Be able to define marketing
management and compare the
five marketing management
orientations.
Understand customer
relationship management and
strategies.
Realize the major challenges
facing marketers in the new
connected millennium.

MARKETING MANAGING PROFITABLE CUSTOMER RELATIONSHIPS

QUESTION 1
1.Define Marketing
What is marketing? Many people think of marketing only as selling and advertising.
And no wonder every day we are bombarded with television commercials, direct-mail offers,
sales calls, and Internet pitches. However, selling and advertising are only the tip of the
marketing iceberg. Today, marketing must be understood not in the old sense of making a
sale telling and selling but in the new sense of satisfying customer needs. If the marketer
understands consumer needs; develops products and services that provide superior
customer value; and prices, distributes, and promotes them effectively, these products will
sell easily. In fact, according to management guru Peter Drucker, The aim of marketing is to
make selling unnecessary. Selling and advertising are only part of a larger marketing mix a
set of marketing tools that work together to satisfy customer needs and build customer
relationships. Broadly defined, marketing is a social and managerial process by which
individuals and organizations obtain what they need and want through creating and
exchanging value with others. In a narrower business context, marketing involves building
profitable, value-laden exchange relationships with customers. Hence, we define marketing
as the process by which companies create value for customers and build strong customer
relationships in order to capture value from customers in return.

QUESTION 2
Discuss how does social networking help the marketing activity?
Social media marketing is the process of gaining website traffic or attention
through social media sites. Social media marketing programs usually center on efforts to
create content that attracts attention and encourages readers to share it across their social
networks. The resulting electronic word of mouth (eWoM) refers to any statement consumers
share via the Internet (e.g., web sites, social networks, instant messages, news feeds) about
an event, product, service, brand or company. When the underlying message spreads from
user to user and presumably resonates because it appears to come from a trusted, third-

party source, as opposed to the brand or company itself, this form of marketing results
in earned media rather than paid media.

There are two basic strategies for engaging the social media as marketing tools:

The passive approach

Social media can be a useful source of market information and customer voice.
Blogs, content communities, and forums are platforms where individuals share their reviews
and recommendations of brands, products, and services. Businesses are able to tap and
analyze the customer voice generated in social media for marketing purposes in this sense
the social media is an inexpensive source of market intelligence which can be used by
marketers to track problems and market opportunities. For example, the internet erupted with
videos and pictures of iPhone 6 bend test which showed that the coveted phone would bend
merely by hand. The so called bend gate controversy created confusion amongst customers
who had waited months for the launch of the latest rendition of the iPhone. However, Apple
promptly issued a statement saying that the problem was extremely rare and that the
company had taken several steps to make the mobile device robust. Unlike traditional market
research methods such as surveys, focus groups and data mining which are time-consuming
and costly, marketers can now utilize social media to obtain live information about consumer
behavior. This can be extremely useful in a highly dynamic market structure in which we now
live.

The active approach

Social media can be used not only as public relations and direct marketing tools but
also as communication channels (targeting specific audiences with social media influencers)
and as customer engagement tools. Facebook and LinkedIn are leading social media
platforms where users can hypertarget their ads. Hypertargeting not only uses public profile
information but also information users submit but hide from others. There are several
examples of firms initiating some form of online dialog with the public to foster relations with
customers. According to Constantinides, Lorenzo and Gmez Borja (2008) "Business
executives like Jonathan Swartz, President and CEO of Sun Microsystems, Steve Jobs CEO
of Apple Computers, and McDonalds Vice President Bob Langert post regularly in their CEO

blogs, encouraging customers to interact and freely express their feelings, ideas,
suggestions or remarks about their postings, the company or its products". Using customer
influencers (for example popular bloggers) can be a very efficient and cost-effective method
to launch new products or services Narendra Modi current prime minister of India ranks only
second after President Barack Obama in number of fans on his official Facebook page at
21.8 million and counting. Modi employed social media platforms to circumvent traditional
media channels to reach out to the young and urban population of India which is estimated to
be 200 million. His appeal was further buttressed by the recent crowd turnout at Madison
square garden.

NAME :

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MARKETING ENVIRONMENT
QUESTION 1
Explain 5 types of customer market
Customers play the most significant part in business. In fact the customer is the
actual boss in a deal and is responsible for the actually profit for the organization. Customer
is the one who uses the products and services and judges the quality of those products and
services. Hence its important for an organization to retain customers or make new
customers and flourish business. To manage customers, organizations should follow some
sort of approaches like segmentation or division of customers into groups because each
customer has to be considered valuable and profitable.
Customers can be of following types:
1. Loyal Customers- These types of customers are less in numbers but promote more
sales and profit as compared to other customers as these are the ones which are
completely satisfied. These customers revisit the organization over times hence it is
crucial to interact and keep in touch with them on a regular basis and invest much
time and effort with them. Loyal customers want individual attention and that
demands polite and respectful responses from supplier.

2. Discount Customers- Discount customers are also frequent visitors but they are
only a part of business when offered with discounts on regular products and brands or
they buy only low cost products. More is the discount the more they tend towards
buying. These customers are mostly related to small industries or the industries that
focus on low or marginal investments on products. Focus on these types of

customers is also important as they also promote distinguished part of profit into
business.

3. Impulsive Customers- These customers are difficult to convince as they want to do

the business in urge or caprice. They dont have any specific item into their product
list but urge to buy what they find good and productive at that point of time. Handling
these customers is a challenge as they are not particularly looking for a product and
want the supplier to display all the useful products they have in their tally in front of
them so that they can buy what they like from that display. If impulsive customers are
treated accordingly then there is high probability that these customers could be a
responsible for high percentage of selling.

4. Need Based Customers- These customers are product specific and only tend to buy
items only to which they are habitual or have a specific need for them. These are
frequent customers but do not become a part of buying most of the times so it is
difficult to satisfy them. These customers should be handled positively by showing
them ways and reasons to switch to other similar products and brands and initiating
them to buy these. These customers could possibly be lost if not tackled efficiently
with positive interaction.

5. Wandering Customers- These are the least profitable customers as sometimes they
themselves are not sure what to buy. These customers are normally new in industry
and most of the times visit suppliers only for confirming their needs on products. They
investigate features of most prominent products in the market but do not buy any of
those or show least interest in buying. To grab such customers they should be
properly informed about the various positive features of the products so that they
develop a sense of interest.
An organization should always focus on loyal customers and should expand or multiply the
product range to leverage impulsive customers. For other types of customers strategies
should be renovated and enhanced for turning out these customers to satisfy their needs and
modify these types of customers to let them fall under loyal and impulsive category.

QUESTION 2
Explain macro environment and micro environment
Macro-Environment
The macro-environment refers to all forces that are part of the larger society and affect the
micro-environment. It includes concepts such as demography, economy, natural forces,
technology, politics, and culture. Factors affecting organization in Macro environment are
known as PESTEL, that is: Political, Economical, Social, Technological, Environmental and
Legal.
Demography refers to studying human populations in terms of size, density, location, age,
gender, race, and occupation. This is a very important factor to study for marketers and helps
to divide the population into market segments and target markets. An example of
demography is classifying groups of people according to the year they were born. These
classifications can be referred to as baby boomers, who are born between 1946 and
1964, generation X, who are born between 1965 and 1976, and generation Y, who are born
between 1977 and 1994. Each classification has different characteristics and causes they
find important. This can be beneficial to a marketer as they can decide who their product
would benefit most and tailor their marketing plan to attract that segment. Demography
covers many aspects that are important to marketers including family dynamics, geographic
shifts, work force changes, and levels of diversity in any given area.
Another aspect of the macro-environment is the economic environment. This refers to
the purchasing power of potential customers and the ways in which people spend their
money. Within this area are two different economies, subsistence and industrialized.

Subsistence economies are based more in agriculture and consume their own industrial
output. Industrial economies have markets that are diverse and carry many different types of
goods. Each is important to the marketer because each has a highly different spending
pattern as well as different distribution of wealth.
The natural environment is another important factor of the macro-environment. This includes
the natural resources that a company uses as inputs that affects their marketing activities.
The concern in this area is the increased pollution, shortages of raw materials and increased
governmental intervention. As raw materials become increasingly scarcer, the ability to
create a companys product gets much harder. Also, pollution can go as far as negatively
affecting a companys reputation if they are known for damaging the environment. The last
concern, government intervention can make it increasingly harder for a company to fulfill their
goals as requirements get more stringent.
The technological environment is perhaps one of the fastest changing factors in the macroenvironment. This includes all developments from antibiotics and surgery to nuclear
missiles and chemical weapons to automobiles and credit cards. As these markets develop it
can create new markets and new uses for products. It also requires a company to stay ahead
of others and update their own technology as it becomes outdated. They must stay informed
of trends so they can be part of the next big thing, rather than becoming outdated and
suffering the consequences financially.
The political environment includes all laws, government agencies, and groups that influence
or limit other organizations and individuals within a society. It is important for marketers to be
aware of these restrictions as they can be complex. Some products are regulated by both
state and federal laws. There are even restrictions for some products as to who the target
market may be, for example, cigarettes should not be marketed to younger children. There
are also many restrictions on subliminal messages and monopolies. As laws and regulations
change often, this is a very important aspect for a marketer to monitor.
The final aspect of the macro-environment is the cultural environment, which consists of
institutions and basic values and beliefs of a group of people. The values can also be further
categorized into core beliefs, which passed on from generation to generation and very
difficult to change, and secondary beliefs, which tend to be easier to influence. As a marketer,
it is important to know the difference between the two and to focus your marketing campaign
to reflect the values of a target audience.

When dealing with the marketing environment it is important for a company to become
proactive. By doing so, they can create the kind of environment that they will prosper in and
can become more efficient by marketing in areas with the greatest customer potential. It is
important to place equal emphasis on both the macro and micro environment and to react
accordingly to changes within them.

Micro-Environment
The company aspect of micro-environment refers to the internal environment of the company.
This includes all departments, such as management, finance, research and
development, purchasing, operations and accounting. Each of these departments has an
impact on marketing decisions. For example, research and development have input as to the
features a product can perform and accounting approves the financial side of marketing
plans and budget in customer dissatisfaction. Marketing managers must watch supply
availability and other trends dealing with suppliers to ensure that product will be delivered to
customers in the time frame required in order to maintain a strong customer relationship.
Marketing intermediaries refers to resellers, physical distribution firms, marketing services
agencies, and financial intermediaries. These are the people that help the company promote,
sell, and distribute its products to final buyers. Resellers are those that hold and sell the
companys product. They match the distribution to the customers and include places such
as Wal-Mart, Target, and Best Buy. Physical distribution firms are places such as
warehouses that store and transport the companys product from its origin to its destination.
Marketing services agencies are companies that offer services such as conducting marketing
research, advertising, and consulting. Financial intermediaries are institutions such as banks,
credit companies and insurance companies.

Another aspect of micro-environment is the customer market. There are different types of
customer markets including consumer markets, business markets, government
markets, international markets, and reseller markets. The consumer market is made up of
individuals who buy goods and services for their own personal use or use in their household.
Business markets include those that buy goods and services for use in producing their own
products to sell. This is different from the reseller market which includes businesses that
purchase goods to resell as is for a profit. These are the same companies mentioned as
market intermediaries. The government market consists of government agencies that buy
goods to produce public services or transfer goods to others who need them. International
markets include buyers in other countries and includes customers from the previous
categories. Competitors are also a factor in the micro-environment and include companies
with similar offerings for goods and services. To remain competitive a company must
consider who their biggest competitors are while considering its own size and position in the
industry. The company should develop a strategic advantage over their competitors.

The final aspect of the microenvironment is publics, which is any group that has an interest in
or impact on the organizations ability to meet its goals. For example, financial publics can
hinder a companys ability to obtain funds affecting the level of credit a company has. Media
publics include newspapers and magazines that can publish articles of interest regarding the
company and editorials that may influence customers opinions. Government publics can
affect the company by passing legislation and laws that put restrictions on the companys
actions. Citizen-action publics include environmental groups and minority groups and can
question the actions of a company and put them in the public spotlight. Local publics are
neighborhood and community organizations and will also question a companys impact on
the local area and the level of responsibility of their actions. The general public can affect the
company as any change in their attitude, whether positive or negative, can cause sales to go
up or down because the general public is often the companys customer base. And finally
those who are employed within the company and deal with the organization and construction
of the companys product.

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SEGMENTATION, TARGETING & POSITIONING

QUESTION 1
Explain the 3 basic categories of target marketing strategy?
Target marketing means identifying specific market segments within a larger audience
and targeting them with ad campaigns. This process is commonplace in marketing and helps
companies get more value for their advertising investment. It goes against historical
approaches to marketing whereby companies would simply pay to deliver messages to mass
markets without considering the waste in paying to reach consumers who would never buy.

By targeting select markets, businesses with tight budgets can get more return from their
advertising dollars.
Segmentation
Market segmentation involves grouping your various customers into segments that have
common needs or will respond similarly to a marketing action. Each segment will respond to
a different marketing mix strategy, with each offering alternate growth and profit
opportunities.
Some different ways you can segment your market include the following;

Demographics which focuses on the characteristics of the customer. For example

age, gender, income bracket, education, job and cultural background.

Psychographics which refers to the customer group's lifestyle. For example, their
social class, lifestyle, personality, opinions, and attitudes.

Behaviour which is based on customer behaviour. For example, online shoppers,

shopping centre customers, brand preference and prior purchases.

Geographical location such as continent, country, state, province, city or rural that the
customer group resides.

Targeting
After segmenting the market based on the different groups and classes, you will need to
choose your targets. No one strategy will suit all consumer groups, so being able to develop
specific strategies for your target markets is very important.
There are three general strategies for selecting your target markets:

Undifferentiated Targeting: This approach views the market as one group with no
individual segments, therefore using a single marketing strategy. This strategy may be
useful for a business or product with little competition where you may not need to tailor
strategies for different preferences.

Concentrated Targeting: This approach focuses on selecting a particular market niche

on which marketing efforts are targeted. Your firm is focusing on a single segment so you
can concentrate on understanding the needs and wants of that particular market intimately.
Small firms often benefit from this strategy as focusing on one segment enables them to
compete effectively against larger firms.

Multi-Segment Targeting: This approach is used if you need to focus on two or more
well defined market segments and want to develop different strategies for them. Multi

segment targeting offers many benefits but can be costly as it involves greater input from
management, increased market research and increased promotional strategies.
Prior to selecting a particular targeting strategy, you should perform a cost benefit analysis
between all available strategies and determine which will suit your situation best.

Positioning
Positioning is developing a product and brand image in the minds of consumers. It can also
include improving a customer's perception about the experience they will have if they choose
to purchase your product or service. The business can positively influence the perceptions of
its chosen customer base through strategic promotional activities and by carefully defining
your business' marketing mix.
Effective positioning involves a good understanding of competing products and the benefits
that are sought by your target market. It also requires you to identify a differential advantage
with which it will deliver the required benefits to the market effectively against the
competition. Business should aim to define themselves in the eyes of their customers in
regards to their competition.

QUESTION 2
What is marketing positioning? Explain 7 varities of bases for positioning bases.

Market positioning An effort to influence consumer perception of a brand or product

relative to the perception of competing brands or products. Its objective is to occupy a clear,
unique, and advantageous position in the consumer's mind.
(1) Using Product characteristics or Customer Benefits as a positioning strategy
This strategy basically focuses upon the characteristics of the product or customer benefits.
For example if I say Imported items it basically tell or illustrate a variety of product
characteristics such as durability, economy or reliability etc. Lets take an example of
motorbikes some are emphasizing on fuel economy, some on power, looks and others stress
on their durability. Hero Cycles Ltd. positions first, emphasizing durability and style for its
cycle. At time even you would have noticed that a product is positioned along two or more
product characteristics at the same time. You would have seen this in the case of toothpaste
market, most toothpaste insists on freshness and cavity fighter as the product
characteristics. It is always tempting to try to position along several product characteristics,
as it is frustrating to have some good characteristics that are not communicated.

(2) Pricing as a positioning strategy Quality Approach or Positioning by Price-Quality

Lets take an example and understand this approach just suppose you have to go and buy a
pair ofjeans, as soon as you enter in the shop you will find different price rage jeans in the
showroom say price ranging from 350 rupees to 2000 rupees. As soon as look at the jeans of
350 Rupees you say that it is not good in quality. Why? Basically because of perception, as
most of us perceive that if a product is expensive will be a quality product where as product
that is cheap is lower in quality. If we look at this Price quality approach it is important and
is largely used in product positioning. In many product categories, there are brands that
deliberately attempt to offer more in terms of service, features or performance. They charge
more, partly to cover higher costs and partly to let the consumers believe that the product is,
certainly of higher quality.
(3) Positioning strategy based on Use or Application Lets understand this with the help
of an example like Nescafe Coffee for many years positioned it self as a winter product and
advertised mainly in winter but the introduction of cold coffee has developed a positioning
strategy for the summer months also. Basically this type of positioning-by-use represents a
second or third position for the brand, such type of positioning is done deliberately to expand
the brands market. If you are introducing new uses of the product that will automatically
expand the brands market.

(4) Positioning strategy based on Product Process Another positioning approach is to

associate the product with its users or a class of users. Makes of casual clothing like jeans
have introduced designer labels to develop a fashion image. In this case the expectation is
that the model or personality will influence the products image by reflecting the
characteristics and image of the model or personality communicated as a product user. Lets
not forget that Johnson and Johnson repositioned its shampoo from one used for babies to
one used by people who wash their hair frequently and therefore need a mild people who
wash their hair frequently and therefore need a mild shampoo. This repositioning resulted in
a market share.
(5) Positioning strategy based on Product Class In some product class we have to
make sure critical positioning decisions For example, freeze dried coffee needed to positions
itself with respect to regular and instant coffee and similarly in case of dried milk makers
came out with instant breakfast positioned as a breakfast substitute and virtually identical
product positioned as a dietary meal substitute.
(6) Positioning strategy based on Cultural Symbols In todays world many advertisers
are using deeply entrenched cultural symbols to differentiate their brands from that of
competitors. The essential task is to identify something that is very meaningful to people that
other competitors are not using and associate this brand with that symbol. Air India uses
maharaja as its logo, by this they are trying to show that we welcome guest and give them
royal treatment with lot of respect and it also highlights Indian tradition. Using and
popularizing trademarks generally follow this type of positioning.

(7) Positioning strategy based on Competitors In this type of positioning strategies, an

implicit or explicit frame of reference is one or more competitors. In some cases, reference
competitor(s) can be the dominant aspect of the positioning strategies of the firm, the firm
either uses the same of similar positioning strategies as used by the competitors or the
advertiser uses a new strategy taking the competitors strategy as the base. A good example
of this would be Colgate and Pepsodent. Colgate when entered into the market focused on to
family protection but when Pepsodent entered into the market with focus on 24 hour
protection and basically for kids, Colgate changed its focus from family protection to kids
teeth protection which was a positioning strategy adopted because of competition.