Marketing (Marketing is the activity, set of institutions,
and processes for creating, communicating, delivering,
and exchanging offerings that have value for
customers, clients, partners, and society at large)
Production Concept (1890s-1920s): consumers will
prefer products that are widely available and
inexpensive. Selling Concept (1920s-1950s):
Demand gone down hence selling concept flourished.
Sell what ever factory is producing (SELL Concept
PUSH Oriented). Marketing Concept (1950s-Till
date): Bring customer satisfaction. (Marketing Concept
PULL Oriented). Societal Marketing (1980s – Now):
Keep society in mind when developing business
otherwise it is new marketing myopia.
Value from Firm’s perspective i.e. Net Present Value is
CLV (Value obtained from customer over life time
association). Application of CLV: helps in taking
decision whether to spend on advetisement for one
customer or not. Upselling: convincing to buy higher
valued product. CrossSelling: Selling complementry
product (Laptop with mouse).
Value from Customer’s Perspective is Customer
Perceived Value (CPV). These Values are Economic
(Benefits, cost), Psychological(satisfaction, feel good
factor), Functional (durability, ease of use, features).
Economic value to customer (EVC) = Total cost of
owning competitng product – Total cost of my product.
L5. Pioneer of customer & market research: P&G.
Needs are of two types: Utalitarian: Used for personal
purpose eg. Deodrant. Hedonic: Used for fun,
pleasure and more specific needs eg. Casual t-shirts.
Observational Research pioneer P&G. 40 Variants of
tide developed based on relentless observational
research by P&G across markets. Focus Group: 8-10
people gather, one is moderator and they discuss and
lot of insights are gathered. Ethnographic Study:
Spend time with community to understand actual needs
of customer and their problems faced. (Used by Gillete
Guard).
Failure of New Coke: (even after thorogh market
research they failed, pepsi made them do this blind
test). Best Remedy: consideration of effects of social
influence should become standard part of new product
dev process (NPD). Focus group is an important
qualitative technique that can reveal social interaction
effects.
Chotukool Sucess: Ethonographic research was
done. high-end insulation, low cost, battery operated.
Collaboration with post office for grass root reach and
reduction in distribution cost.
Tropicana Failure: they lost sight of experience their
customers have in supermarket.More focused on
reinvograting the pracking. This shows the Importance
of observation research.
Decoy (Popcorn) Effect: is the phenomenon whereby
consumers will tend to have a specific change in
preference between two options when also presented
with a third option that is asymmetrically dominated.
Bounded rationality is the idea that in decision-
making, rationality of individuals is limited by the
information they have, the cognitive limitations of their
minds, and the finite amount of time they have to make
a decision.
Anchoring and adjustment is a psychological
heuristic that influences the way people intuitively
assess probabilities.
L6 Same information but different presentation affect
market. For low priced purchases brand recall is
important. Brand building by Taj after 26/11 is classic
example. Segmentation is Dividing the market into
groups of (actual and/or potential) customers so that
each group is relatively homogenous with respect to its
characteristics, needs, evaluations or behaviors. The
groups are called market segments. It helps in
Optimizing effectiveness (by More targeted
marketing mix, Increased customer satisfaction, and
Higher CLV) and Optimizing cost-efficiency (by
Doing away with irrelevant differences to create single
offering for customers within each segment).
Characteristics of Good Segmentation is mutually
exclusive (ME) and collectively exhaustive (CE),
Homogenous within, Heterogenous across. Profile-
based segmentation: 1. Demographic (Social)
age(horlicks), income(automobile industry),
gender(fairness cremes). 2. Psychographical-- Life
style, health, risk taker. 3. Behavioral – use, buying
pattern, freq. Purchases. 4. Geographical – Region,
country(Food & aparel). Approaches to Segmentation
--- Qualitative (judgement based) and Quantitative
(Cluster based). Features to look for when segmenting
a new product: {price, variety, service, ambience,
layout, new products, quality} --> do statistical survey
and clustering to identify segments(ideal Size <6). -->
profile the segment (what potential cutomer want, who
are these customer, how to reach out to them). --> Now
understand their age, demo, pshyco, gender, age etc.
--> pick an appropriate channel to reach out and
communicate.
L7 Targeting is Selecting one or more markets to
enter. Criteria of Targeting: Segment attractiveness
(Segment’s ability to deliver value to the company and
its collaborators, how valued is segment) Segment
compatibility (Company’s ability to create superior
value relative to the competition, can you add value to
segment). Tageting approach based on segmenting:
Mass marketing (Tata Salt, dettol), One to One (BMW,
Subway, credited to dell for this marketing technique,
Panasonic POS). Segment-based marketing (Multiple
segments or single segment concentration), Niche
marketing: one or a few usually small segments.
Samsung sells a number of smartphones targeted at
different segments, whereas Apple has focused on the
premium segment of the market with its iPhone.
Prepared on 07/07/19 for MM (RM) QUIZ 1 by vk.