FOREWORD

Dear juniors,

With the impending Summer Placements, it was our obligation to help you guys scale the
peaks of the global FMCGs. We hope you are getting yourself acquainted to the Marketing
Pocketbook as a quick guide to several marketing concepts and interview tricks. But before
you drown yourself amidst the marketing depth, let us tell you a few important things
about this important document.

 First of all, this book is not something you should read thoroughly, in fact please
don’t waste your time reading every line in this compendium and focus only on the
Bullet Points & Examples. Keep the Marketing Pocketbook handy, refer to this
 document in case you need any detailed explanations. 
 Secondly, this book is not a substitute to Common Sense & Philip Kotler, but a
 complement.
  Finally, and most importantly, this book has been co-typed, compiled and pasted by
9 people but the authors and our inspirations run into millions. While the Marketing
Pocketbook was a completely original MAXI creation, simply put, the primer is not
original work, but then plagiarism is the fear of blank pages and it took a whole lot
of courage & midnight oil to fill these 75 odd pages as well.

We sincerely believe that this compendium shall help you guys brush up
important concepts and make life a lot easier during your SIP preparations.

“I dream of a world without plagiarism.

Now you may say I'm a dreamer...
But I'm not the only one”

Best Wishes
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TEAM MAXI mentioned in the following
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from the world of marketing
1. Marketing: “Marketing is a form of communication between you and your
customers with the goal of selling your product or service to them.” This is first definition you get
when you google. However, in simple terms remember that Marketing is an exchange process.

Exchange process can be defined as an act of obtaining desired object from someone (not always
monetary) by offering something of value in return. Nonprofit NGO’s doing marketing can be an
example of non-monetary.

Sales on the other hand is something which drives your main business (generating revenue) and
Marketing helps in creating an atmosphere for sales to happen.

Example of marketing activities:

 Handling incoming inquiries (Customer Relationship Management)
 Asking your current customers for referrals for more business
 Advertising and public relations. Direct mail and e-newsletters
 Special promotional events
 Merchandising and merchandise selection
 Getting articles published. Blogging
 Doing cold calls to set appointments
 Market research, customer surveys
 Branding, creating your sales message
 Design and creation of collateral materials
 Building and maintaining your web site, blog, Facebook page, Twitter
 Market planning and strategizing

Selling: Selling includes the activities that get customers to make a purchase. Examples are, an
insurance agent trying to sell insurance, a salesperson selling encyclopedias door to door. A few
things included in selling are: presenting, answering questions, making suggestions, doing
proposals or estimates, addressing concerns, negotiating, and most important, asking for the sale
and then completing the sales agreement, etc.

The Difference: The selling concept takes an inside-out perspective. It starts with the factory,
focuses on the company’s existing products, and calls for heavy selling and promoting to produce
profitable sales.
The marketing concept takes an outside - in perspective. It starts with a well-defined market,
focuses on customer needs, coordinates all the activities that will affect customers, and produces
profits through creating customer satisfaction.

Thus we can say that:

 Marketing is money OUT the door (marketing is a COST CENTRE)
 Selling is money IN the door (selling is a REVENUE CENTRE)

Marketing
Customer Focused
Product is designed as per customer needs
Profit through customer satisfaction
Emphasis on product planning and
developing as per customer needs
Selling
Product Focused
Revenue is generated from the product sold
Profit through sales maximization
Emphasis on selling the product already produced
2. STP: Segmentation is generally done on basis of demographics or psychographics.
While segments can be many, segments targeted is generally one.

3. MARKETING MIX (4P’S & 7P’S)

Product
A tangible object or an intangible service that is mass produced or manufactured on a large scale
with a specific volume of units. Intangible products are often service based like the tourism
industry & the hotel industry credits. Typical examples of a mass produced tangible object are
the motor car and the disposable razor.

Methods used to improve differentiate the product:

• Extension Strategies
• New Edition
• Improvement
• Changed packaging
• Technology
• Specialized Versions

There are three levels of product

 Core P r o d u c t : The n e e d t h a t it satisfies. Eg:

 BMW satisfies the need for transportation.
  Actual product: It is the product that you have/want to
have. Eg: Blue colored BMW with boss speakers and
sunroof etc.
  Augmented Product: It is the non-physical part of the product. It can also be said as the
excess that you get beyond the tangible product. Eg: Warranty of 3 years in your car,
customer service when you call their number, delivery at your doorstep, etc.

Price
The price is the amount a customer
pays for the product. It is determined
by a number of factors including
market share, competition, material
costs, product identity and the
customer's perceived value of the
product. The business may increase or
decrease the price of product if other
stores have the same product.

There are many ways to price a

product. Let's have a look at some of
them and try to understand the best
policy/strategy in various situations.

1. Premium Pricing
Use a high price where there is uniqueness about the product or service. This approach is used
where a substantial competitive advantage exists. Such high prices are charge for luxuries such as
Cunard Cruises, Savoy Hotel rooms, and Concorde flights.

2. Penetration Pricing/ Predatory Pricing

The price charged for products and services is set artificially low in order to gain market share.
Once this is achieved, the price is increased.

3. Trial Pricing
This is similar to penetration pricing but differs in the objective. Penetration pricing is used to
increase market share of the brand whereas trial pricing is used to increase trials for a new
product/ brand. Eg: Nivea face balm

4. Economy Pricing
This is a no frills low price. The cost of marketing and manufacture are kept at a minimum.
Supermarkets often have economy brands for soups, spaghetti, etc.

5. Price Skimming
This is opposite of Penetration pricing. Charge a high price because you have a substantial
competitive advantage. However, the advantage is not sustainable. The high price tends to
attract new competitors into the market, and the price inevitably falls due to increased supply.
Example would include Apple iPhones.

Premium pricing, penetration pricing, economy pricing, and price skimming are the four main
pricing policies/strategies. They form the bases for the exercise. However there are other
important approaches to pricing.
 6. Psychological Pricing
This approach is used when the marketer wants the consumer to respond on an emotional,
rather than rational basis. For example pricing apparels at Rs. 699 or Rs. 999; Garnier men’s white
face wash at Rs. 49

7. Product Line Pricing

Where there is a range of product or services the pricing reflect the benefits of parts of the range.
For example car washes. Basic wash could be $2, wash and wax $4, and the whole package $6.
Another example could be Gym packages.

8. Optional Product Pricing

Companies will attempt to increase the amount customer spend once they start to buy. Optional
'extras' increase the overall price of the product or service. For example airlines will charge for
optional extras such as guaranteeing a window seat or reserving a row of seats next to each other
or offering a life insurance.

9. Captive Product Pricing/ Bait and Hook Strategy

Where products have complements, companies will charge a premium price where the consumer
is captured. For example a razor manufacturer will charge a low price and recoup its margin (and
more) from the sale of the only design of blades which fit the razor.

10. Product Bundle Pricing

Here sellers combine several products in the same package. This also serves to move old stock.
Videos and CDs are often sold using the bundle approach.

11. Promotional Pricing

Pricing to promote a product is a very common application. There are many examples of
promotional pricing including approaches such as BOGO (Buy One Get One Free) or giving 20%
off, etc.

12. Geographical Pricing

Geographical pricing is evident where there are variations in price in different parts of the world.
For example rarity value, or where shipping costs increase price.

13. Value Pricing

This approach is used where external factors such as recession or increased competition force
companies to provide 'value' products and services to retain sales e.g. Value meals at McDonalds.

14. Cost Plus

Cost-plus pricing is a pricing method used by companies. It is used primarily because it is easy to
calculate and requires little information. There are several varieties, but the common thread in all
of them is that one first calculates the cost of the product, and then includes an additional
amount to represent profit. Cost-plus pricing is often used on government contracts, and has
been criticized as promoting wasteful expenditures.

15. Loss Leader

Loss leader or leader is a product sold at a low price (at cost or below cost) to stimulate other,
profitable sales. It is a kind of sales promotion, in other words marketing concentrating on a
pricing strategy. The price can even be so low that the product is sold at a loss. A loss leader is
often a popular article. How one makes profit is by selling other products or services along with
this and making net overall profit. Eg: Supermarkets selling one thing at exceptionally low price
and hence inviting footfall. These people end up buying a lot many things making an overall profit
for the supermarket owner.

Place
A channel of distribution
comprises a set of institutions
which perform all of the
activities utilized to move a
product and its title from
production to consumption.

Place is also known as

channel, distribution, or
intermediary. It is the
mechanism through which
goods and/or services are moved from the manufacturer/ service provider to the user or
consumer. There are six basic 'channel' decisions:

 Do we use direct or indirect channels? (e.g. 'direct' to consumer, 'indirect' via a wholesaler).
 Single or multiple channels.
 Cumulative length of the multiple channels.
 Types of intermediary.
  Number of intermediaries at each level (e.g. how many retailers in Southern India).
 Which companies as intermediaries to avoid 'intra-channel conflict' (i.e. in-fighting
between local distributors).

Selection Consideration - How do we decide upon a distributor?

  Market segment - the distributor must be familiar with your target consumer and segment.
 Changes during the product life cycle - different channels can be exploited at different
points in the PLC e.g. Foldaway scooters are now available everywhere. Once they were
 sold via a few specific stores.
 Producer - distributor fit - Is there a match between distributors’ polices, strategies,
 image, and yours? Look for 'synergy'.
  Qualification assessment - Establish the experience and track record of your intermediary.
 Training - How much training and support will your distributor require?
Promotion
Another one of the 4P's is
'promotion'. This includes all of
the tools available to the
marketer for 'marketing
communication'.
The elements of the promotions
mix are:

  Personal Selling
 Sales Promotion
 Public Relations
 Direct Mail
 Trade Fairs and Exhibitions
 Advertising
 Sponsorship

Communication Process

 Sender > Encoder > Message

 Media > Decode > Receiver > Response > Feedback

For example, a radio advert is made for a car manufacturer. The car manufacturer (sender) pays
for a specific advert with contains a message specific to a target audience (encoding). It is
transmitted during a set of commercials from a radio station (Message / media).

The message is decoded by a car radio (decoding) and the target consumer interprets the
message (receiver). He or she might visit a dealership or seek further information from a web site
(Response). The consumer might buy a car or express an interest or dislike (feedback). This
information will inform future elements of an integrated promotional campaign. Noise represents
thousands of marketing communications that a consumer is exposed to everyday, all competing
for attention.

The Promotions Mix

1. Personal Selling
Personal Selling is an effective way to manage personal customer relationships. The sales person
acts on behalf of the organization. They tend to be well trained in the approaches and techniques
of personal selling. However sales people are very expensive and should only be used where
there is a genuine return on investment. For example salesmen are often used to sell cars or
home improvements where the margin is high.

2. Sales Promotion
Sales promotion tends to be thought of as being all promotions apart from advertising, personal
selling, and public relations. For example, the BOGO promotion. Others include couponing,
money- off promotions, competitions, free accessories (such as free blades with a new razor),
introductory offers (such as buy digital TV and get free installation), and so on. Each sales
promotion should be carefully planned depending on the cost and its comparison with the next
best alternative.
3. Public Relations (PR)
Public Relations is defined as 'the deliberate, planned and sustained effort to establish and maintain
mutual understanding between an organization and its publics' (Institute of Public Relations). It is
relatively cheap, but certainly not cheap. Successful strategies tend to be long- term and plan for all
eventualities. All airlines exploit PR; just watch what happens when there is a disaster. The pre-
planned PR machine clicks in very quickly with a very effective rehearsed plan.

4. Direct Mail
Direct mail is very highly focused upon targeting consumers based upon a database. As with all
marketing, the potential consumer is 'defined' based upon a series of attributes and similarities.
Creative agencies work with marketers to design a highly focused communication in the form of a
mailing. The mail is sent out to the potential consumers and responses are carefully monitored.
For example, if you are marketing medical text books, you would use a database of doctors'
surgeries as the basis of your mail shot.

5. Trade Fairs and Exhibitions

Such approaches are very good for making new contacts and renewing old ones. Companies will
seldom sell much at such events. The purpose is to increase awareness and to encourage trial.
They offer the opportunity for companies to meet with both the trade and the consumer.

6. Advertising
Advertising is a 'paid for' communication. It is used to develop attitudes, create awareness, and
transmit information in order to gain a response from the target market. There are many
advertising 'media' such as newspapers (local, national, free, trade), magazines and journals,
television (local, national, terrestrial, satellite) cinema, outdoor advertising (such as posters, bus
sides).

7. Sponsorship
Sponsorship is where an organization pays to be associated with a particular event, cause or
image. Companies will sponsor sports events such as the Olympics or Formula One. The
attributes of the event are then associated with the sponsoring organization.

The elements of the promotional mix are then integrated to form a unique, but coherent
campaign.

Extended marketing mix

There are 3 more P’s namely People, Process and Physical evidence which form the crux of
Services Marketing.

What is significant about services is the relative dominance of intangible attributes in the make-
up of the “service product”. Services are a special kind of product. They may require special
understanding and special marketing efforts. The need for the extension is due to the high degree
of direct contact between the providers and the customers, the highly visible nature of the
service process, and the simultaneity of the production and consumption. While it is possible to
discuss people, physical evidence and process within the original-Ps framework (for example
people can be considered part of the product offering) the extension allows a more thorough
analysis of the marketing ingredients necessary for successful services marketing.
People
People are the most important
element of any service or
experience.
Perishability: Services tend to be
produced and consumed at the
same moment, and aspects of the
customer experience are altered
to meet the 'individual needs' of
the person consuming it. Most of
us can think of a situation where
the personal service offered by
individuals has made or tainted a
tour, vacation or restaurant
meal. Remember, people buy from people that they like, so the attitude, skills and appearance of
all staff need to be first class. Some ways in which people add value to an experience, as a part of
the marketing mix, are - training, personal selling and customer service.

Process
For the purposes of the
marketing mix, process is
an element of service that
sees the customer
experiencing an
organization’s offering. It's
best viewed as something
that your customer
participates in at different
points in time. Here are
some examples to help your build a picture of marketing process, from the customer's point of
view.
Example - Going on a cruise - from the moment that you arrive at the dockside, you are greeted;
your baggage is taken to your room. You have two weeks of services from restaurants and evening
entertainment, to casinos and shopping. Finally, you arrive at your destination, and your baggage
is delivered to you. This is a highly
focused marketing process.

Physical Evidence
Physical evidence is the material
part of a service. Strictly
speaking there are no physical
attributes to a service, so a
consumer tends to rely on
material cues. There are many
Examples of physical evidence, including some of the following:
 Packaging
 Internet/web pages
 Paperwork (such as invoices, tickets and dispatch notes)
 Brochures
 Furnishings
 Signage (such as those on aircraft and vehicles)
 Uniforms
 Business cards
 The building itself (such as prestigious offices or scenic headquarters)
 Mailboxes and many others

A sporting event is packed full of physical evidence. Your tickets have your team's logos printed
on them, and players are wearing uniforms. The stadium itself could be impressive and have an
electrifying atmosphere. You travelled there and parked quickly nearby, and your seats are
comfortable and close to restrooms and store.
Some organizations depend heavily upon physical evidence as a means of marketing
communications, for example tourism attractions and resorts (e.g. Disney World), parcel and mail
services (e.g. UPS trucks), and large banks and insurance companies (e.g. Lloyds of London)

4. TYPES OF ENTRY STRATEGIES

Type of entry strategy depends upon the market share that the company has. Market strategy
for a market leader, market challenger, market follower and market niche would be different.
The details of the kind of strategy to be followed is wonderfully summarized in brief in
(http://www.public.iastate.edu/~sjwong/pdf540/leader_follower_strategy.pdf)

5. CONCEPT OF CONSUMER
DERIVED VALUE
Marketing is about meeting the needs of your targeted market, but also providing them with
a value. This value is determined when subtracting the benefits a customer gets from the
product with the customer costs he does to get it.
Cost here is not only the monetary cost that the consumer gives to buy a particular product.
Cost is in terms of Psychic (the mind that he used to buy that product), Energy (the energy that
he spent in buying), Time (time spent by the consumer to buy a particular product), monetary
(actual price paid) and total cost (summation of all this).
Value derived out of this is image (what will people think of me), personnel (how does the staff
treat me), services (what all am I being offered), product (the actual tangible thing) and total
(summation of all the values). Only if the value derived is more than the cost incurred, we will
say that the consumer will be motivated to buy the product/ service.
6. AL RIES AND JACK Z TROUT
ON POSITIONING
A product's position is how potential buyers see the product. Positioning is expressed relative to
the position of competitors. The term was coined in 1969 by Al Ries and Jack Trout in the paper
"Positioning" is a game people play in today’s me-too market place" in the publication Industrial
Marketing. It was then expanded into their ground-breaking first book, "Positioning: The Battle
for Your Mind".

Positioning is something (perception) that happens in the minds of the target market. It is the
aggregate perception the market has of a particular company, product or service in relation to
their perceptions of the competitors in the same category. It will happen whether or not a
company's management is proactive, reactive or passive about the on-going process of evolving a
position.

But a company can positively influence the perceptions through enlightened strategic actions.
In marketing, positioning has come to mean the process by which marketers try to create an
image or identity in the minds of their target market for its product, brand, or organization. It is
the 'relative competitive comparison' their product occupies in a given market as perceived by
the target market.

Re-positioning involves changing the identity of a product, relative to the identity of competing
products, in the collective minds of the target market.

De-positioning involves attempting to change the identity of competing products, relative to the
identity of your own product, in the collective minds of the target market.

T h e Process o f P o s i t i o n i n g:
Generally, the product positioning process involves:
 Defining the market in which the product or brand will compete (who the relevant buyers
are)
  Identifying the attributes (also called dimensions) that define the product 'space'
 Collecting information from a sample of customers about their perceptions of each
 product on the relevant attribute.
 Determine each product's share of mind
 Determine each product's current location in the product space.
 Determine the target market's preferred combination of attributes
(referred to as an ideal vector)
 Examine the fit between the position of your product and position of the ideal vector

In case of Services, you need to ask first your customers and then yourself, what value do clients
get from my services? How are they better off from doing business with me? Also ask: is there a
characteristic that makes my services different?
Write out the value customers derive and the attributes your services offer to create the first
draft of your positioning.
7. BCG MATRIX

Market share is the percentage of the total market that is being serviced by your company,
measured either in revenue terms or unit volume terms. The higher your market share, the
higher proportion of market you control.
The Boston Matrix assumes that if you enjoy a high market share you will normally be making
money (this assumption is based on the idea that you will have been in the market long enough
to have learned how to be profitable, and will be enjoying scale economies that give you an
advantage).
Market growth is used as a measure of a market's attractiveness. Markets experiencing high
growth are ones where the total market is expanding, which should provide the opportunity for
businesses to make more money, even if their market share remains stable.

D o g s: L o w M a r k e t S h a r e / L o w M a r k e t Gr o w t h: In these areas, your market presence is

weak, so it's going to take a lot of hard work to get noticed. Also, you won't enjoy the scale economies of
the larger players, so it's going to be difficult to make a profit.

Cows: High M a r k e t S h a r e / L o w M a r k e t Gr o w t h: In these areas, your market presence is weak,

so it's going to take a lot of hard work to get noticed. Also, you won't enjoy the scale economies of the
larger players, so it's going to be difficult to make a profit.

S t a r s: H i g h M a r k e t S h a r e / H i g h M a r k e t Gr o w t h: Use large amounts of cash; they are the

leaders in business so they should produce large amounts of cash as well. These are fantastic
opportunities, and you should work hard to realize them.

Q u e s t i o n M a r k s ( P r o b l e m C h i l d ) : L o w M a r k e t S h a r e / H i g h M a r k e t Gr o w t h :
These are the opportunities no one knows what to do with. They aren't generating much revenue right
now because you don't have a large market share. But, they are in high growth markets so the potential to
make money is there.

Question Marks might become Stars and eventual Cash Cows, but they could just as easily absorb
effort with little return. These opportunities need serious thought as to whether increased
investment is warranted.
8. ANSOFF MATRIX
The matrix allows marketers to consider ways to grow the business via existing and/or new
products, in existing and/or new markets – there are four possible product/market combinations.

Existing Products New Products

Existing Market Product Development
Markets Penetration
New Market Diversification
Markets Development

Ansoff's matrix provides four different growth strategies:

 Market Penetration - the firm seeks to achieve growth with existing products in their
 current market segments, aiming to increase its market share.
 Market Development - the firm seeks growth by targeting its existing products to new
 market segments.
 Product Development - the firms develops new products targeted to its existing market
 segments.
 Diversification - the firm grows by diversifying into new businesses by developing new
products for new markets.

The matrix illustrates, in particular, that the element of risk increases the further the strategy
moves away from known quantities - the existing product and the existing market. Thus, product
development (requiring, in effect, a new product) and market extension (a new market) typically
involve a greater risk than `penetration' (existing product and existing market); and diversification
(new product and new market) generally carries the greatest risk of all.

While the latter are usually followed with the same technical, financial, and merchandising
resources which are used for the original product line, diversification usually requires new skills,
new techniques, and new facilities. As a result it almost invariably leads to physical and
organizational changes in the structure of the business which represent a distinct break with past
business experience. For this reason, most marketing activity revolves around penetration.

The market penetration strategy is the least risky since it leverages many of the firm's existing
resources and capabilities. In a growing market, simply maintaining market share will result in
growth, and there may exist opportunities to increase market share if competitors reach capacity
limits. However, market penetration has limits, and once the market approaches saturation
another strategy must be pursued if the firm is to continue to grow.

Market penetration
Market penetration is the name given to a growth strategy where the business focuses on selling
existing products into existing markets. Market penetration seeks to achieve four main objectives:

 Maintain or increase the market share of current products – this can be achieved by a
combination of competitive pricing strategies, advertising, sales promotion and perhaps
 more resources dedicated to personal selling
 Secure dominance of growth markets
  Restructure a mature market by driving out competitors; this would require a much more
aggressive promotional campaign, supported by a pricing strategy designed to make the
 market unattractive for competitors
 Increase usage by existing customers – for example by introducing loyalty schemes A
market penetration marketing strategy is very much about “business as usual”. The
business is focusing on markets and products it knows well. It is likely to have good
information on competitors and on customer needs. It is unlikely, therefore, that this
strategy will require much investment in new market research.

Market development
Market development is the name given to a growth strategy where the business seeks to sell its
existing products into new markets.

There are many possible ways of approaching this strategy, including:

• New geographical markets; for example exporting the product to a new country
• New product dimensions or packaging: for example
• New distribution channels
• Different pricing policies to attract different customers or create new market segments

Product development
Product development is the name given to a growth strategy where a business aims to introduce
new products into existing markets. This strategy may require the development of new
competencies and requires the business to develop modified products which can appeal to
existing markets.

Diversification
Diversification is the name given to the growth strategy where a business markets new products
in new markets. This is an inherently more risk strategy because the business is moving into
markets in which it has little or no experience. For a business to adopt a diversification strategy,
therefore, it must have a clear idea about what it expects to gain from the strategy and an honest
assessment of the risks.

Diversification(new markets, new products): Virgin Cola, Virgin Megastores, Virgin Airlines,
Virgin Telecommunications are examples of new products created by the Virgin Group of UK, to
leverage the Virgin brand. This resulted in the company entering new markets where it had no
presence before.

9. B2B, B2C and C2C marketing

Customer to Customer (C2C) MARKETING
Customer 2 Customer or the commonly used acronym C2C is a new marketing mantra for Indian
firms and the foreign multinationals. Customer to Customer (C2C) markets are innovative ways to
allow customers to interact with each other. In customer to customer markets the business
facilitates an environment where customers can sell these goods and or services to each other.
The quality of a product is vital for the continued success of a business. A terrific marketing
strategy might bring a customer to your door, but if the product you deliver fails to satisfy, they
will never return. And worse, the best advertising of all, word-of-mouth, will turn against you.
"Customer 2 Customer includes all activities involving interaction between consumers. Customer
2 Customer activities include auctions between consumers that are facilitated by firms such as e-
bay, personal, classified ads, ad games etc."

Word of Mouth
"Personal communication about a product between target buyers and neighbours, friends, family
members and associates."
Let's understand the real meaning of Customer 2 Customer and Word of Mouth through an
illustration. This illustration mainly focuses on the success behind Toyota Qualis.
Toyota Qualis is a car that has a tag of a taxi, than that of a personal or a private car. And one of
the sole reasons behind the huge volume of sales is its taxi tag. Now how did they get this taxi
tag? It all happened because of the word of mouth – the best medium of advertisement. Private
taxis are the most roughly-driven cars and if these drivers swear by a car, then it's the best ad for
its reliability and toughness.
How were they able to win over these drivers? They won over them because they delighted
them. Delighted them means - they were able to provide delight to their customers by
understanding their specific personal interests, anticipating their needs, exceeding their
expectations, and making every moment and aspect of the relationship a pleasant - or better yet,
an exhilarating - experience. This illustration proves only one aspect of Customer 2 Customer i.e.
Word of mouth. Now coming to the second aspect, i.e. C2C's role in consumer decision making:
Often we find that in a consumer decision process several individuals get involved. Each of them
plays an influencing role. At times, more than one role may be played by an individual. These
roles are:
1. Initiator
This is the person who sows the seed in a prospective customer's mind to buy the product. This
person may be a part of the customer's family like spouse or parents. Alternatively the person
may be a friend, a relative, a colleague or even the sales person.
2. Influencer
Influencer is a person within or outside the immediate family of the customer who influences the
decision process. The individual perceived as an influencer is also perceived as an expert. In
consumer durable sale the dealer plays an influencing role.

3. Decider
He is the person who actually takes the decision. In a joint family often it's the head of the family
or the elders in the family who take a decision. But in nuclear and single families and with the
increase in the literacy among women and number of working couples, one finds more often than
not, decisions are joint. Husband, wife and even the entire family taking the decision, particularly
on major purchases, is quite common in urban and metro areas. The decider/s considers both
economic and non-economic parameters before selecting a brand.

It is important to note that the people who play these roles seek different values in the product
or service. The perception of the value is to a large extent influenced by their prior experience of
others, media reports and the marketing cues created by the firm. These values, which may also
be referred to as, market value is the potential of a product or service to satisfy customer's needs
and wants.
A real-life example is auctions, where sellers, who were initially customers themselves, sell goods
that they have bought to other individual customers.

Business to consumer (B2C) marketing

B2C marketing is one of the most popularly used strategies for effective market communication
and profitable business building. Business to consumer marketing is when a business markets
products to a consumer market. A consumer is a buyer of products that are not business related.
B2C products include goods and services such as food, clothes, cars, houses, phone services,
credit repair services, etc.
A B2C sale is to an individual. That individual may be influenced by other factors such as family
members or friends, but ultimately it’s a single person that pulls out their wallet.
B2C features a large target market, single step buying process and shorter sales cycle. Repetition
and imagery create its brand identity. B2C focuses on merchandising and point of buying
activities including coupons, displays and store fronts. Basically any business that offers a retail
product to the public comes under this type. In B2C markets, the brand encourages the shopper
to purchase, remain loyal and potentially pay a higher price.

The B2C internet marketing is one of the most advanced consumer marketing strategies that
revolutionized the business world. It not only helps in developing a direct contact between the
consumer and business house but also allows the businessman to advertise and sell his products
and services in an easy manner.
Now days with the advent of Internet, a businessman can make use of various online advertising
strategies which help to cater to wider section of potential market globally. Online advertising
strategies such as PPC and Podcast are counted among the most effective promotion
campaigning for any business. These advertisements can be displayed on various search sites so
that they are viewed by many people at the same time.

Making aware of company’s offerings via websites also helps the business house to successfully
cater the potential audience. Also, the online shopping facility provided through the websites
make the customers in availing the facilities and buying the products without wasting any time
and extra money to visit any physical store for making a desirable purchase.

It is not enough to just establish a business; the business should also flourish and produce profit.
To meet the objective, various strategies are used for good publicity. Among various business
market strategies, B2B marketing i.e. business to business marketing and B2C marketing i.e.
business to consumer marketing are being constantly talked about. A constant debate over the
two has created a B2B vs. B2C marketing situation in the business world. Though the purpose of
both is same i.e. business development and to generate profits but their approaches are
different. While B2B deals with transactions between two businesses, B2C marketing strategy
helps the business house in directly targeting the customers.
Examples
A family is at home on a Sunday night and is watching television. An advertisement appears that
advertises home delivered pizza. The family decides to order a pizza.
Walking down a supermarket aisle, a single man aged in his early 30's sees a hair care product
that claims to reduce dandruff. He pick's the product and adds it to his shopping cart.
A pensioner visits her local shopping mall. She purchases a number of items including her
favourite brand of tea. She has bought the same brand of tea for the last 18 years.

Business-to-Business (B2B) Marketing

Business to Business marketing is the practice of individuals or organizations (commercial
businesses, governments and institutions) facilitating the sale of their products or services to
other companies or organizations that in turn resell them, use them as components in products
or services they offer, or use them to support their operations. This is also known as Industrial
marketing.
In B2B, the customers can be:
1. Companies that consume products or services Eg. automakers, who buy gauges to put in their
cars
2. Government agencies – this includes centre, state and local governments
3. Institutions - schools, hospitals and nursing homes, churches and charities
4. Resellers – wholesalers, brokers and industrial distributors

A B2B sale is to an organization. B2B describes commerce transactions between businesses, such
as between manufacturer and a wholesaler, or between a wholesaler and a retailer. The volume
of B2B transactions is much higher than the volume of B2C transactions. The main reason is that
in any supply chain, there will be many B2B transactions, e.g. involving subcomponent or raw
materials, and only on B2C transaction, i.e. the finished good’s sale to customer. B2B Marketing is
driven purely on the basis of fewer, but larger, customers. It is very necessary to be able to
customize offering based on the buyer’s needs.

Some B2B Marketing Strategies:

• B2B Branding – Closely align corporate brands, divisional brands and product/service
brands and to apply brand standards to material often considered informal such as email
and other correspondence.
• Product – cost-saving or revenue-producing benefits of products/services should factor
throughout product development and marketing cycle.
• People – Usually, the target market for business products are smaller and have more
specialized needs. Thus, there can be multiple influencers on purchase decision, and these
need to be marketed to as well.
• Pricing – Business markets can pay premium prices if the pricing and payment terms are
structured well. This is particularly true in the case of a strong brand.
• Promotion – Specific trade shows, analysts, publications, blogs and retail/wholesale
outlets tend to be fairly common to each industry/product area. In essence, with proper
knowledge of your industry/product, the promo strategy almost writes itself.
• Place -- The importance of a knowledgeable, experienced and effective direct (inside or
outside) sales force is often critical in the business market. If you sell through distribution
 channels also, the number and type of sales forces can vary tremendously and your
success as a marketer is highly dependent on their success.

Business Marketing vs. Consumer Marketing

While consumer marketing is aimed at large demographic groups through mass media and
retailers, the negotiation process between the buyer and seller is more personal in business
marketing.
Marketing to a business trying to make a profit (Business-to-Business marketing) as opposed to
an individual for personal use (Business-to-Consumer, or B2C marketing) is similar in terms of the
fundamental principles of marketing. In B2C, B2B and B2G marketing situations, the marketer
must always:
• successfully match the product/service strengths with the needs of a definable target
market;
• position and price to align the product/service with its market, often an intricate balance;
and
• Communicate and sell it in the fashion that demonstrates its value effectively to the
target market.

10. 4 A’s of Rural Marketing

Rural market is widely different from the urban market because of many factors including income
level, social infrastructure, low shops availability and limited awareness.
Each company is making their way to Rural India. Most of them have studied the market and
analysed the things over there and ready
to fight at Rural India. There are some of
the companies which have already
written their success stories in rural
market. Companies like HUL, ITC, LG, and
Mahindra have given a new format for
rural marketing. They have done a great
job. Marketing mix is such an element in
rural market which gives the sense to
think of marketing activities: this 4A
model is similar to the 4P model of
Marketing mix, the difference it shows is
main streamline and rural market. 4A
perceived to be more customer
oriented. The 4A’s are affordability,
availability, awareness and acceptability.

Acceptability
Nokia 1100, LG Sampoorna TV (run way hit, with 100,000 sales in very first year), HUL Pure-IT are
the few examples of how MNC’s are customizing their products for rural markets with the aim of
low price, high quality. The insurance companies are not lagging behind in tapping this market.
They are tailoring made their products; HDFC Standard LIFE topped private insurers by selling
policies worth Rs 3.5 crore in total premium. The company tied up with non-governmental
organizations and offered reasonably-priced policies in the nature of group insurance covers.
Innovation is the key.

Availability
Ensuring availability of the product or service is another challenge with poor infrastructure. Coke
strategy “Coke is available where, even water is not available”, is successful via their popular hub
& spoke distribution model, where they are giving low cost ice-boxes to distributors. HUL is
ensuring availability of products by using unconventional transport methods like tractors, bullock-
carts and even boats in the backwaters of Kerala.

Affordability
Rural market is low price, high volume market, and companies like HUL has addressed it by
launching Lifebuoy atRs.2 for 50 gm. Cavinkare’s Chik shampoo for 50 paisa, Britannia Tiger
Biscuit for Rs.5, Marico’s Parachute for Rs.1, are the examples of how FMCG companies targeting
rural market with low pricing strategy.

Awareness
Radio, TV, street plays, remains the medium to advertise. Example: Coca-Cola uses a combination
of TV, cinema and radio to reach 53.6 per cent of rural households. It doubled its spend on
advertising on Doordarshan, which alone reached 41 per cent of rural households. Tag lines like
“thanda matlab Cocacola”, “what an idea sirjee”, creates rural feel. Godrej uses radio in local
language for its FMCG products, whereas HUL started Lifebuoy Swasthya Chetana’, as contact
program.

Conclusion
The rural market has immense potential to deliver welfare activities through new business models,
and companies have realised this. Various projects taken up by the private sector such as ITC’s e-
Choupal, HUL’s Project Shakti, Microsoft’s Project Shiksha and Google’s Internet bus among
various others, are assisting in generating not only awareness but also exploring the ways to
get into this still untapped market.

11. 4 C’s of Marketing

The traditional Marketing mix is a 4 P’s model and is business oriented. The 4 C’s model of
marketing on the other hand is more consumers oriented. Because of its focus on consumers, the
4 C’s model is mainly used for Niche Marketing. However, just like the traditional marketing mix,
it can also be used for mass markets. The four variables in the 4 C’s model are
 Consumer
 Cost
 Convenience
 Communication

Consumer – The principle of four C’s of marketing states that your customer should be your
prime focus. Unlike the traditional marketing mix where the primary focus is on Products, in the 4
C’s model, the primary focus is on the customer. Thus the companies which follow this model
believe in making products which satisfy their customers. They are generally ready to offer
customizable products and because they have a general set of target customers, this principle is
only applicable for smaller market segments and not for mass markets. For mass markets, the
traditional marketing mix can be used. Questions that need to be asked is Who is your customer -
or prospective customer? What are their needs? Where do they live; where do they work; and
what do they do for fun? Where do they get information?

Cost – Cost is equivalent to Pricing in the traditional marketing mix. Cost is a very important
consideration during consumer decision making and hence in the 4 C’s principle, the cost variable
is given special attention. The 4 C’s model generally plans on the basis of Customers and not
products. And hence they have to plan the cost of the product on the basis of their customer. If
you are targeting a SEC A segment, then the costing of the product needs to be premium to have
proper psychological positioning. On the other hand, if your product is for the SEC B and SEC C
classes, then it needs to have a lower costing. Thus over here, costing of the product depends on
the customer. Ask what will your product (or service) cost? How does this compare? What effect
will the cost of your product have on its perceived value (or position) in the competitive
marketplace? And most importantly, what are customers willing to pay?

Communication – The concept of communication remains same for both, the traditional
marketing mix as well as for the 4 C’s of marketing. Off course, the marketing communications for
a company following the 4 C’s of marketing is completely different as it needs a completely
different Segmentation, targeting and positioning. As said before, the 4 C’s of marketing are
generally used for Niche products. The media vehicles used for marketing communications for a
mass product and that for a niche product are different. A niche marketing company might use
more of BTL rather than ATL whereas in a mass marketing company, ATL communications are
very important. Ask yourself; How will you communicate your offering to customers? What
modes of communication are available to you (or your client)? Which will be most effective and
what will be the strategic mix of communications?

Convenience – Convenience is equivalent of distribution or placement of the traditional

marketing mix. When you have a niche customer base, the convenience of the customer in
acquiring your product plays a critical role. Take a niche product like Heavy machinery as an
example or even products like television and air conditioners. What if the companies who sell
these products do not give you delivery and installation? You will not buy the product as you
won’t be ready to pick up the machine and install it yourself. You will be looking out for your own
convenience. Thus convenience, like distribution, plays a critical role. The customer will not buy
your product if it is not convenient to him.

All in all, the traditional marketing mix model helps a company define its strategy more
efficiently. However, the 4 C’s model, although not much different, really helps if you are a
customer oriented firm.

12. (BTL) Below the Line and ATL

(Above the Line) Advertising
BTL (Below the Line): All advertising that can be targeted to our TG is termed as BTL. In other
words all advertisements where we can limit the visibility to a particular group of people based
on our desire is termed as BTL advertising.
This generally includes means other than the five major media - the press, television, radio,
cinema and outdoors; below-the-line advertising employs a variety of methods - direct mail,
sponsorship, merchandising, trade shows, exhibitions, sales literature and catalogues, and so on.
Below the line promotions are becoming increasingly important within the communications mix
of many companies, not only those involved in FMCG products, but also for industrial goods.

With the increasing pressure on the marketing team to achieve communication objectives more
efficiently in a limited budget, there has been a need to find out more effective and cost efficient
ways to communicate with the target markets. This has led to a shift from the regular media
based advertising.

Below the Line uses less conventional methods than the usual specific channels of advertising to
promote products, services, etc. than Above the Line strategies. These may include activities such
as direct mail, public relations and sales promotions for which a fee is agreed upon and charged
up front. Below the line advertising typically focuses on direct means of communication, most
commonly direct mail and e-mail, often using highly targeted lists of names to maximize response
rates.

Above the line is much more effective when the target group is very large and difficult to
define. But if the target group is limited and specific, it is always advisable to use BTL
promotions for efficiency and cost-effectiveness.

Examples
 Sales counters, beauty advisors, and dealer aids such as shade cards etc. – LAKME
  Search, email and online advertising
 Price Promotion: A discount to the normal selling price of a product, or More of the
product at the normal price

Examples of Campaigns
1. Nestle Milo school trials: Nestle Milo during the time of its launch in India was competing
against the market leader and well established Cadbury Bournvita. To change consumer (mostly
children) loyalty it ran a free trial programme across prominent schools of the country. It gave
free trials across schools in summer season using cold milk. This campaign helped generate trials
and purpose of Nestle was more than fulfilled.
2. ING Vysya Bank also launched a
social responsibility campaign,
which started on the Internet and
moved to on-ground. It launched a
website, www.kidzzbank.com, to
educate children about the
importance of saving money and
investing. Later, the initiative was
taken to underprivileged children in
South India.

3. Dabur India ran a school activation campaign in 500 schools across 21 cities to look for Super
Champs, promising to pay their entire school fees for a year. The primary objective of the activity
is to create awareness and drive consumer engagement for Dabur Chyawanprash and Dabur
Chyawan Junior, a newly launched malted drink.

4. Coca Cola launched the happiness wagon| happiness truck that goes to different college|
towns and villages. This truck has a vending machine, the difference being that the vending
machine gives the consumers more than
they order. This cements
the proposition of Coca
Cola of “open happiness”
and help increase brand
loyalty. This has also
successfully created a
buzz across the globe.
Thapar University in
Punjab was the first to
witness this in India.
Plans are to roll out this
campaign in other cities
of the country.

5. Vivel launched its FB page

to reach directly to its TG. It
came out with an application
that could give personalized
skin care solution. The
application was designed in a
manner to subconsciously
position Vivel as a skin care
expert in the mind of its
consumers. Apart from this
there was an option of
requesting a free sample. This
helped to generate trials in a
red ocean market. This received a good response amongst consumers with a total of more than
6500 requests of free sample in the first weekend of the application launch. Campaign is still up
and running at http://www.facebook.com/itcvivel

6. Most of the educational institutes like Career Launcher, Time and PT are holding informative
workshops and free tests for students which give a direct interaction of these institutes with the
target customer, and hence, a suitable platform to sell themselves.

7. Most of the pharmacy companies do BTL promotion by getting shelf-space through doctors to
display their products or by giving away free calcium tablets again through doctors, knowing that
for a patient a personal advice from a doctor would hold more value as compared to a
commercial advertisement.
8. ‘Igen’ – A cigarette brand was built through below the line marketing efforts. The brand of
cigarette was promoted through organizing parties for the BPO employees on weekly basis and
collecting their database and then making the cigarette available at their door steps, the exercise
was continued for quite a few months and a strong database and customer base was developed
for the brand among the BPO employees.

9. In the media space, Sab TV, the comedy channel from MSM India, devised an interesting
route to reach media planners and
buyers during the launch of
Bhootwala Serial, India's first horror
comedy. Breaking the clutter,
promoters dressed in scary ghostly
costumes went across all agencies
like Zenith Optimedia, Lodestar,
Lintas Media Group, Starcom,
Madison, Maxus, Mindshare and
Mindshare Fulcrum

10. Oreo launched Togetherness

bus to symbolize moments of family
togetherness. The bus will travelled
across the country as part of a
movement that provided parents
a platform to bond and encouraged them to spend more time with their family. The Oreo
Togetherness bus travelled across nine cities – New Delhi, Mumbai, Bangalore, Ahmedabad,
Pune, Lucknow,
Hyderabad, Kolkata and Mysore.

13. What is a Brand?

The AMA defines a brand as a name, term, sign symbol or design or a combination of them
intended to identify the goods or services of one seller or group of sellers and to differentiate
them from those of competitors.
Branding creates mental structures that help consumers organize their knowledge about
products and services in a way that clarifies their decision making and in the process provides
value to the firm.
A brand is a name or trademark connected with a product or producer. Brands have become
increasingly important components of culture and the economy, now being described as "cultural
accessories and personal philosophies".
A brand is the essence or promise that a product, service or company will deliver or be
experienced by a buyer.
The top 30 brands of 2014 according to Interbrand are below. It is highly recommended to read
up about these brands.

Brand Resonance
Establishing this pyramid of six
brand building blocks causes
high level of brand attachment
with customers.
Building brand equity:
 Choosing the brand elements-
brand names, URLs, taglines,
symbols, spokespeople etc
 The product/service and all
accompanying marketing
activities
 Leveraging secondary
associations like associations of
the product/company with the
country of origin etc
 Creating brand communities
 Internal branding
The psychological aspect of a brand can be different from the experiential aspect. The
experiential aspect consists of the sum of all points of contact with the brand and is known as
the brand experience. The psychological aspect, sometimes referred to as the brand image, is a
symbolic construct created within the minds of people and consists of all the information and
expectations associated with a product or service.

Brand Name
The brand name is often used interchangeably within "brand", although it is more correctly used
to specifically denote written or spoken linguistic elements of any product. In this context a
"brand name" constitutes a type of trademark, if the brand name exclusively identifies the brand
owner as the commercial source of products or services.

Brand identity
A product identity, or brand image are typically the attributes one associates with a brand, how
the brand owner wants the consumer to perceive the brand - and by extension the branded
company, organization, product or service. The brand owner will seek to bridge the gap between
the brand image and the brand identity. Effective brand names build a connection between the
brand personalities as it is perceived by the target audience and the actual product/service. The
brand name should be conceptually on target with the product/service (what the company
stands for). Furthermore, the brand name should be on target with the brand demographic.
Typically, sustainable brand names are easy to remember, transcend trends and have positive
connotations. Brand identity is fundamental to consumer recognition and symbolizes the
brand's differentiation from competitors.

14. Brand Extension

The use of an established brand to create a new product is called brand extension. This extension
can be in the same category (Line extension) or a different category (Category extension)

Line Extension
 Category Extension

Brand Extension
 Category Extension = New category with the same brand name
 Line Extension = Variants in the same category

Its advantages are:

 It helps in enhancing parent brand image.
 It helps in avoiding risk of developing new names.

Brand extension poses more risk than line extension. Its

major disadvantages are:
 Poorly executed extension of brand to
new product categories can jeopardize
 current image of parent brand.
 The image and financial figures of parent
brand may be endangered due to the
failure of strategy implementation.
 It cannibalizes sales of the parent brand.

15. Brand Equity

There are at least three perspectives from which to view brand equity:

Financial - One way to measure brand equity is to determine the price premium that a brand
commands over a generic product. For example, if consumers are willing to pay $100 more for a
branded television over the same unbranded television, this premium provides important
information about the value of the brand. However, expenses such as promotional costs must
be taken into account when using this method to measure brand equity.

Brand extensions - A successful brand can be used as a platform to launch related products. The
benefits of brand extensions are the leveraging of existing brand awareness thus reducing
advertising expenditures, and a lower risk from the perspective of the consumer. Furthermore,
appropriate brand extensions can enhance the core brand. However, the value of brand
extensions is more difficult to quantify than are direct financial measures of brand equity.

Consumer - based - A strong brand increases the consumer's attitude strength toward the
product associated with the brand. Attitude strength is built by experience with a product. This
importance of actual experience by the customer implies that trial samples are more effective
than advertising in the early stages of building a strong brand. The consumer's awareness and
associations lead to perceived quality, inferred attributes, and eventually, brand loyalty.

Strong brand equity provides the following benefits:

  Facilitates a more predictable income stream.
 Increases cash flow by increasing market share, reducing promotional costs, and
 allowing premium pricing
 Brand equity is an asset that can be sold or leased.

However, brand equity is not always positive in value. Some brands acquire a bad reputation that
results in negative brand equity. Negative brand equity can be measured by surveys in which
consumers indicate that a discount is needed to purchase the brand over a generic product.

Building and Managing Brand Equity

In his 1989 paper, Managing Brand Equity, Peter H. Farquhar outlined the following three stages
that are required in order to build a strong brand:

1. Introduction - introduce a quality product with the strategy of using the brand as a
platform from which to launch future products. A positive evaluation by the consumer
is important.
2. Elaboration - make the brand easy to remember and develop repeat usage. There should
be accessible brand attitude, that is, the consumer should easily remember his or her
positive evaluation of the brand.
3. Fortification - the brand should carry a consistent image over time to reinforce its place in
the consumer's mind and develop a special relationship with the consumer. Brand
extensions can further fortify the brand, but only with related products having a
perceived fit in the mind of the consumer.

Alternative Means to Brand Equity

Building brand equity requires a significant effort, and some companies use alternative means of
achieving the benefits of a strong brand. For example, brand equity can be borrowed by
extending the brand name to a line of products in the same product category or even to other
categories. In some cases, especially when there is a perceptual connection between the
products, such extensions are successful. In other cases, the extensions are unsuccessful and can
dilute the original brand equity.
 Brand equity also can be "bought" by licensing the use of a strong brand for a new product. As in
line extensions by the same company, the success of brand licensing is not guaranteed and must
be analysed carefully for appropriateness.

Managing Multi Brands

Different companies have opted for different brand strategies for multiple products. These
strategies are:

 Single brand identity - a separate brand for each product. For example, in laundry
detergents Procter & Gamble offers uniquely positioned brands such as Tide, Cheer, Bold,
 etc.
 Umbrella branding/ family branding - all products under the same brand. For example,
 Sony offers many different product categories under its brand.
 Multi-brand categories - Different brands for different product categories. Campbell Soup
 Company uses Campbell's for soups, Pepperidge Farm for baked goods, and V8 for juices.
 Family of names - Different brands having a common name stem. Nestle uses Nescafe,
Nesquik, and Nestea for beverages.

Brand equity is an important factor in multi-product branding strategies.

16. Brand Communities

 Consciousness of kind
 Shared rituals and beliefs
 Shared moral responsibility

Examples

17. Brand Rituals

Brand ritual is the performance of an act by the consumers as defined by the brand (Owners).
These days brand rituals are a common strategy adopted by marketers. Some rituals become a
part of our behaviour over time. Few examples are as follows:
1. Cadbury Oreo: - Oreo‘s “ Twist Lick Dunk” is a very popular ritual among kids.
2. Close up: - The HA-HA thing which we do by holding our palm in front of our mouth to check
the fresh breath.
3. Pepsi My can: - The way they hold the can in the ads to ask the viewers to do the same.

18. Buyer Decision Process

Research suggests that customers go through a five-stage decision-making process in any
purchase. This is summarized in the diagram below:

This model is important for anyone making marketing decisions. It forces the marketer to
consider the whole buying process rather than just the purchase decision (when it may be too
late for a business to influence the choice).

High and low involvement purchases:

Usually, marketers should try to change high involvement decision process to low involvement
decision process.

What influences consumer behavior?

 Cultural factors: Cultures and subcultures shape consumption patterns. For example,
 Americans spend more and save less while Indians are culturally disposed to save more.
 Social factors: The behavior of reference and aspirational groups of a consumer also
shapes his buying behavior. The influence of family and friends would be very strong.
Also, if a person wants to be a cricketer, the opinions and lifestyle of cricketers
(aspirational group) would strongly influence his buying behavior.
  Personal factors: Age, lifecycle, occupation personality also influence buying behavior.
 Self-Concept is an important influencer. If a person believes himself to be rugged and
outdoorsy, he would prefer brands that match his self-image. Such a person is more likely
to prefer a Harley Davidson to a fancy sports bike

19. Cause related marketing

Cause marketing or cause-related marketing refers to a type of marketing involving the
cooperative efforts of a "for profit" business and a non-profit organization for mutual benefit.
The term is sometimes used more broadly and generally to refer to any type of marketing effort
for social and other charitable causes, including in-house marketing efforts by non-profit
organizations.

Attracting and Retaining Customers: Companies that have engaged in Cause –Related Marketing
reports that those efforts help attract and build long- term relationships with customer. For
Example, affinity credit cards, in which a non-profit organization benefits each time a consumer,
uses the card to make a purchase, help credit card companies develop long term relationships
with consumers.

 Market Differentiation: For many companies, Cause- Related Marketing has helped
them to create an alternative and distinctive approach to brand advertising. CRM can
help companies distinguish themselves from their peers by offering the consumer the
opportunity to contribute to something more than the company’s bottom line.
National and International brands can better identify with their local markets by
linking themselves with community organizations, or with regional or
 nongovernmental organizations.
 Outreach to Niche Markets: Partnering with non-profit organizations can help a
company to connect with specific demographic or geographic markets. For Example,
Ford Motor Company successfully positioned itself among a formerly disengaged
target market – Women. In addition to its Substantial financial and in – kind
donations to Race events, The Ford Division of the Ford Motor Company has issued
thousands of public service announcements in an effort to both communicate a
critical health message to women and to enfold them into its brand identity.(Cause
Related Marketing A Conceptual Paradigm)

Examples in Indian context:

1. Tata Salt, the pioneers and undisputed leaders in the packaged and iodized Salt Category,
reiterated its commitment to the cause of educating underprivileged children and announced its
Desh Ko Arpan Programme. The Desh Ko Arpan Programme, Tata Chemicals Limited Contributes
10 paise for every kilo of Tata Salt, sold during specific periods, to the education of
underprivileged children. Child Relief and You (CRY) have been chosen as partners. The money
raised was Rs 33 lakhs in a period of one month.

2. P&G’s Shikha campaign: Every time you choose to buy a large pack of Tide, Ariel, Pantene,
H&S, Rejoice, Vicks VapoRub, Whisper, Gillette Mach 3 Turbo, Gillette series, Oral B, Duracell or
Pampers, P&G promises to contribute are helping thousands of underprivileged children across
India to access their right to education. Minimum contribution from P&G to Shiksha, irrespective
of sales will be Rs. 1 crore. Shiksha enabled the education of 33052 children in 435
communities in 2006.

20. Customer relationship management

At the core of this concept is the idea that it is much cheaper to keep an existing customer than
to get a new one.
Main aim: customer retention and customer satisfaction

We have to make list of the customers, these serve as the target lists. Strategy should be:
Save money by not marketing to those who are less likely to respond.
Make money by making relevant offers to those who need, or want or can afford or
products.
We build relationship with our best customers, resulting in higher loyalty, retention,
referral, spending rate and profits.

It is a process or methodology used to learn more about customers' needs and behaviours in
order to develop stronger relationships with them. CRM helps businesses use technology and
human resources to gain insight into the behaviour of customers and the value of those
customers.

According to industry view, CRM consists of:

 Helping an enterprise to enable its marketing departments to identify and target their
best customers, manage marketing campaigns and generate quality leads for the sales
 team.
 Assisting the organization to improve telesales, account, and sales management by
optimizing information shared by multiple employees, and streamlining existing processes
(for example, taking orders using mobile devices).
  Allowing the formation of individualized relationships with customers, with the aim of
improving customer satisfaction and maximizing profits; identifying the most profitable
 customers and providing them the highest level of service.
 Providing employees with the information and processes necessary to know their
customers understand and identify customer needs and effectively build relationships
between the company, its customer base, and distribution partners.

Personalization
Personalization in marketing involves making the marketing and the communication relevant to
the consumers. The availability and use of data has enabled the wave of personalization. For
example, using the Twitter and Facebook data of customers, Dell can create customizations
based on the preferences of the consumers.

21. Customer relationship Marketing

 Focuses on retaining existing Customers to create long-term value to the firm
 DOES NOT FOCUS on targeting new customers/acquisition of new clients
 It costs four-to-six times more to convert a customer than it does to retain one
  Directly linked to enhancing the levels of Customer Satisfaction
 It can be applied when there are competitive product alternatives for customers to choose
from and also when there is an on-going & periodic desire for the product or service.

Primary Objectives:

 Reduce Customer Turn-over/ Increase Customer Retention

 Increase Customer Loyalty
  Increase Customer Satisfaction
 Increasing switching barriers (especially when there are many competitors offering similar
products/services)

It relies upon the communication and acquisition of consumer requirements solely from existing
customers in a mutually beneficial exchange so as to create value.

It is empirically proven that a 5% improvement in customer retention can cause an increase in

profitability of between 25% and 85%.
One of the advantages of retaining customers is that these long-term customers may initiate
free word of mouth promotions and referrals, which is one of the most cost- effective
campaigns that a product can get.

Customers that stay with you tend to be satisfied with the relationship and are less likely to switch to
competitors, making it difficult for competitors to enter the market or gain market share.

Customer retention efforts involve considerations such as the following:

1. Customer valuation - describes how to value customers and categorize them according to
their financial and strategic value so that companies can decide where to invest for deeper
relationships and which relationships need to be served differently or even terminated.
 2. Customer retention measurement - This is simply the percentage of customers at the
beginning of the year that are still customers by the end of the year. In accordance with
this statistic, an increase in retention rate from 80% to 90% is associated with a doubling
of the average life of a customer relationship from 5 to 10 years. This ratio can be used
to make comparisons between products, between market segments, and over time.
3. Determine reasons for defection - Look for the root causes, not mere symptoms. This
involves probing for details when talking to former customers. Other techniques include
the analysis of customers' complaints and competitive benchmarking.
4. Develop and implement a corrective plan - This could involve actions to improve
employee practices, using benchmarking to determine best corrective practices, visible
endorsement of top management, adjustments to the company's reward and recognition
systems, and the use of "recovery teams" to eliminate the causes of defections

22. Differentiation
The market is flooded with similar products and offerings which has created a huge clutter of
brands and products. It is essential for a marketer to be able to differentiate his product to
break through the clutter. Differentiation based on product features has become a difficult task
with competitors taking no time in copying /adopting that feature. Differentiations based on
incremental product improvements /features have become difficult to develop and sustain in
the market.

Methods of differentiation:

1. Invest in R&D: India is an R&D and product development hub for most of the MNCs but
seldom Indian marketers were able to create breakthrough products for the Indian market.
Tata Nano has shown the world what Indian minds can do when inspired. The market is
moving in a direction where only those brands will succeed who can innovate.

2. Protect the Differentiation: An important determinant of a successful differentiation is

the brand’s ability to protect the differentiation. Smart brands use ingredient branding to
protect their key differentiators. Ingredient branding is where a particular product feature or
an ingredient is branded by the company. There are two kinds of ingredient brands.
a. Where the ingredient is owned by another company. Intel is a pioneer in ingredient
branding. Intel has built ingredient brands like Pentium, Celeron and Atom etc.
b. Where the feature/ingredient is owned by the company itself. Bajaj has a powerful
ingredient brand DTSI (which is also a patented technology) which it now uses for all
of its two wheeler brands.

3. Connect to a Relevant Need: Creating a sustainable differentiation is possible only when

brands become customer focused. When products become standardized, it is important for
marketers to create differentiation focusing on consumer needs. ‘Brand laddering’ is a
strategy that can be used by marketers to create differentiation on a need rather than on a
product feature (attribute to value). Raymond is a brand that has created a space for itself by
effectively laddering up to a customer need (Complete Man). The benefit of such a strategy
is that competitors will find it difficult to copy the differentiation since it is based on an
intangible attribute. The brand has created a unique powerful image which is sustainable
over time.
 4. Long Term Vision through Brand Charter: It is important for marketers to create a brand
charter which will spell out the long term vision for the brands, its differentiation and
positioning platforms, guidelines and strategies. Such a brand charter will guide the future
brand managers to create tactics which are in line with the overall brand vision. If a brand
chose to create intangible differentiation opportunities, there has to be a consistency in the
brand’s positioning and differentiation strategies. Brand Charter will help bring consistency
which will in turn facilitate create a sustainable differentiation.

Types of Differentiation:
Personnel Differentiation: By using better trained employees. Singapore airlines are well
regarded because of its flight attendants.
Channel Differentiation: By efficiently and effectively designing distribution channels coverage,
expertise and performance. Eureka Forbes water purifiers and vacuum cleaners gained popularity
due to their differentiated positioning through their direct to home channel. Examples: The
Himalaya drug company differentiates itself by using Ayurveda ingredients.

Product Positioning: In marketing, positioning has come to mean the process by which marketers
try to create an image or identity in the minds of their target market for its product, brand, or
organization. It is the 'relative competitive comparison' their product occupies in a given market
as perceived by the target market. Positioning means determining and communicating the central
benefit of the product in the minds of target buyers. For example, a car manufacturer might
target buyers for whom safety is a major concern. The company "positions" its cars as the safest
vehicles that customers can buy. Positioning starts with a product. A piece of merchandise, a
service, a company, an institution, or even a person. But positioning is not what you do to a
product. Positioning is what you do to the mind of the prospect. That is, you position the product
in the mind of the prospect. Brands usually position themselves using certain parameters. These
parameters highlight the most relevant features of its product and the image, the brands wishes
to portray to its consumers.

How to write a positioning statement:-

  For [target end user]
 Who wants/needs [compelling reason to buy]
  The [product name] is a [product category] that provides [key benefit]. 
  Unlike [main competitor],
 
The [product name] [key differentiation]

Product differentiation: Differentiation is the act of distinguishing your company's offering from
competitors' offerings in ways that are meaningful to consumers. You can differentiate products
physically or through the services your company provides in support of the product. In business
terms, to differentiate means to create a benefit that customers perceive as being of greater
value to them than what they can get elsewhere. It's not enough for you to be different--a
potential customer has to take note of the difference and must feel that the difference somehow
fits their need better. (Other words that mean virtually the same thing: Competitive Advantage;
Unique Selling Proposition; or Value Proposition.)
Products' physical distinctions include:
  Form—Size, Shape, Physical Structure; For Example, Aspirin Coating And Dosage 
  
Features—Such As A Word Processing Software's New Text-Editing Tool
 
Performance Quality—The Level At Which The Product's Primary Characteristics Function
  Conformance Quality—The Degree To Which All The Units Of The Product Perform Equally
  
Durability—The Product's Expected Operating Life Under Natural Or Stressful Conditions
  
Reliability—The Probability That The Product Won't Malfunction Or Fail
  
Reparability—The Ease With Which The Product Can Be Fixed If It Malfunctions
  
Style—The Product's Look And Feel

Design—The Way All The Above Qualities Work Together; (It's Easy To Use, Looks Nice, And Lasts A
Long Time)

Products' service distinctions include:

  
Ordering Ease—How Easy It Is For Customers To Buy The Product
  
Delivery—How Quickly And Accurately The Product Is Delivered
 
 Installation—How Well The Work Is Done To Make The Product Useable In Its Intended Location

  Customer Training—Whether Your Company Offers To Train Customers In Using The Product

 Consulting—Whether Your Company Offers Advising Or Research Services To Buyers Of The
Customer
Product

 Repair—How Well Your Company Helps Customers Keep The Product In Good
Maintenance And
Working Order

Keys to Successful Differentiation:

  Know Your Customers, Really, Really Well.
 
 Pick A Blend Of Differentiation Methods That, In The Eyes Of Your Customers, Truly Sets You Apart.
  Talk About Your Differentiation In Terms Of Customer Benefits. 
  
Tell Everyone About What Differentiates You--Often.
 
Keep Your Differentiation Fresh By Listening For Changing Customer Needs.

23. Experiential Marketing

Definition: Experiential marketing gives
customers an opportunity to engage and interact
with brands, products, and services in sensory
ways that provides exact and precise information.
Personal experiences help people connect to a
brand and make intelligent and informed
purchasing decisions. It's the difference between
telling people about features of a product or
service and letting them experience the benefits
for themselves.

Other Examples:

1) Hyundai “Drive-In” California event:

The event was organized to get a real feel of driving a Hyundai Car. They gave customers
a trial ride of Hyundai car on a special track made of obstacles. They were asked about
the pick-up, speed, control, handling and breaking comfortability, along with interiors of
 the car. http://www.youtube.com/watch?v=lHVjPydAiKE
http://www.youtube.com/watch?v=2PWWghyHpCQ&feature=related

2) Nokia 5800 Xpress Music Activation Launch

They had their associates helping the customers in activating the service and giving a
demo on how to use it. It was totally new to the market and the customers had no idea
about it. They opened several music outlets and gave the customers a real feel of Xpress
Music in Nokia Phones. They also had Nokia handsets to experiment with. This allowed
customers to actually analyse the quality of music and other handset features.
http://www.youtube.com/watch?v=3BN4n3Qihac&feature=related

24. Green Marketing

Green marketing is the marketing of products that are
presumed to be environmentally preferable to others. Thus
green marketing incorporates a broad range of activities,
including product modification, changes to the production
process, sustainable packaging, as well as modifying advertising.

GREEN PRODUCTS AND ITS CHARACTERISTICS

The products those are manufactured through green technology and that caused no
environmental hazards are called green products. Promotion of green technology and green
products is necessary for conservation of natural resources and sustainable development. We can
define green products by following measures:
• Products those are originally grown,
• Products those are recyclable, reusable and biodegradable,
• Products with natural ingredients,
• Products containing recycled contents, non-toxic chemical,
• Products contents under approved chemical,
• Products that do not harm or pollute the environment,
• Products that will not be tested on animals,
• Products that have eco-friendly packaging i.e. reusable, refillable containers etc.

CHALLENGES IN GREEN MARKETING

1. Need for Standardization

It is found that only 5% of the marketing messages from “Green” campaigns are entirely true and
there is a lack of standardization to authenticate these claims. There is no standardization to
authenticate these claims. There is no standardization currently in place to certify a product as
organic. Unless some regulatory bodies are involved in providing the certifications there will not
be any verifiable means. A standard quality control board needs to be in place for such labelling
and licensing.

2. New Concept
Indian literate and urban consumer is getting more aware about the merits of Green products. But it
is still a new concept for the masses. The consumer needs to be educated and made aware of the
environmental threats. The new green movements need to reach the masses and that will take
a lot of time and effort. By India's ayurvedic heritage, Indian consumers do appreciate the
importance of using natural and herbal beauty products. Indian consumer is exposed to healthy
living lifestyles such as yoga and natural food consumption. In those aspects the consumer is
already aware and will be inclined to accept the green products.

3. Patience and Perseverance

The investors and corporate need to view the environment as a major long-term investment
opportunity, the marketers need to look at the long-term benefits from this new green
movement. It will require a lot of patience and no immediate results. Since it is a new concept
and idea, it will have its own acceptance period.

4. Avoiding Green Myopia

The first rule of green marketing is focusing on customer benefits i.e. the primary reason why
consumers buy certain products in the first place. Do this right, and motivate consumers to
switch brands or even pay a premium for the greener alternative. It is not going to help if a
product is developed which is absolutely green in various aspects but does not pass the customer
satisfaction criteria. This will lead to green myopia. Also if the green products are priced very high
then again it will lose its market acceptability.

EXAMPLES OF GREEN MARKETING IN INDIA:-

1. Digital Tickets by Indian Railways :- Recently IRCTC has allowed its customers to carry
PNR no. of their E-Tickets on their laptop and mobiles. Customers do not need to carry the
printed version of their ticket anymore.

2. No Polythene carry bags for free :-Forest & Environmental Ministry of India has ordered
to retail outlets like BigBazar,More,Central,D-Mart etc that they could provide polythene
carry bags to customers only if customers are ready for pay for it.

3. Green IT Project: State Bank of India:-By using eco and power friendly equipment in its
10,000 new ATMs, the banking giant has not only saved power costs and earned carbon
credits, but also set the right example for others to follow. SBI is also entered into green
service known as “Green Channel Counter”. SBI is providing many services like; paper less
banking, no deposit slip, no withdrawal form, no checks,no money transactions form all
these transaction are done through SBI shopping & ATM cards. State Bank of India turns
to wind energy to reduce emissions. The wind project is the first step in the State Bank of
India's green banking program dedicated to the reduction of its carbon footprint and
promotion of energy efficient processes, especially among the bank's clients.

4. Lead Free Paints from Kansai Nerolac:- Kansai Nerolac has worked on removing
hazardous heavy metals from their paints. The hazardous heavy metals like lead, mercury,
chromium, arsenic and antimony can have adverse effects on humans. Lead in paints
especially poses danger to human health where it can cause damage to Central Nervous
System, kidney and reproductive system. Children are more prone to lead poisoning
leading to lower intelligence levels and memory loss.
 5. Wipro's Green Machines:-Wipro Infotech was India's first company to launch environment
friendly computer peripherals. For the Indian market, Wipro has launched a new range of
desktops and laptops called Wipro Greenware. These products are RoHS (Restriction of
Hazardous Substances) compliant thus reducing e-waste in the environment.

25. Guerilla Marketing

Guerrilla Marketing: The concept of guerrilla marketing is an unconventional system of
promotions that relies on time, energy and imagination rather than a big marketing budget.
Typically, guerrilla marketing campaigns are unexpected and unconventional; potentially
interactive; and consumers are targeted in unexpected places. The objective of guerrilla
marketing is to create a unique, engaging and thought-provoking concept to generate buzz. The
term was coined and defined by Jay Conrad Levinson in his book Guerrilla Marketing.

Principles of Guerilla Marketing

Levinson identifies the following principles as the foundation of guerrilla marketing:

 Guerrilla marketing is specifically geared for the small business and entrepreneur.
 It should be based on human psychology instead of experience, judgment, and guesswork.

 Instead of money, the primary investments of marketing should be time, energy, and
 imagination.
  The primary statistic to measure your business is the amount of profits, not sales.
 The marketer should also concentrate on how many new relationships are made each
 month.
 Create a standard of excellence with an acute focus instead of trying to diversify by
 offering too many diverse products and services.
 Instead of concentrating on getting new customers, aim for more referrals, more
 transactions with existing customers, and larger transactions.
  Forget about the competition and concentrate more on cooperating with other businesses.
  Guerrilla Marketers should always use a combination of marketing methods for a campaign.
 Use current technology as a tool to empower your business.
Examples
 Axe Body Spray uses custom stickers
attached to the classic “exit man” signs
that are so commonplace in
establishments everywhere. The added
stickers create a story about the
familiar exit man – and to think all this
time we thought he was escaping from
a fire!

 Discovery Channel reminds beach
goers about upcoming Shark Week by
placing these bitten boards along
beaches

 Colgate creates toothbrush-shaped
wooden popsicle sticks to inset into ice
cream bars, reminding children (and
adults) of the importance of brushing.
Presumably the importance of
brushing with Colgate.

Some other examples

 26. Image &
Emotional Marketing
“Rational only generates interest in the product
the ultimate driver is emotion”

The practice of emotional marketing is all about

getting your target audience to connect with your
product, service, and brand at a very basic and
fundamental level - the level of emotions. Emotions
drive our behaviour; the world is driven by
emotions. Rational thought leads customers to be
interested but it is emotion that sells. People really
aren't much interested in attributes; they want to
know if they can have a product that suits their
personality. It is all about values. Emotional
marketing is better in many instances than rational
marketing that focuses on product attributes.

Emotional marketing appeals include personal and social needs, such as: security, comfort,
happiness, acceptance, self-esteem, and status, achievement, saving money, or making money.
These are basic underlying feelings that drive our decisions and buying behavior. It may be a need
for financial security, which is associated with an image of a safe investments and insurance, or it
could be a desire for status and achievement, reinforced by the mental picture of luxury
possessions.

Your marketing can target positive emotions through the use of unusual words, word rhythms
and rhymes, colors or shapes, pictures, numbers, or symbols, which reveal the associated feelings
of a previous experience, like the pleasant smell of food cooking, or a day at the beach. Appealing
to an underlying desire that triggers an automatic memory image can cause an emotional
response that reinforces logical thoughts, which converge and lead to a buying decision.

Rather than using ads with dull corporate speak, unfamiliar industry jargon, or selling how good
you are, try tapping into the direct process of brain patterns and emotional images with sharp,
specific, and relevant details that can sway the buying choices of your potential customers.

Nike succeeds because its core belief - its brand promise, its love of the potential for the athlete
inside everyone lives inside the people in Beaverton. When that love is manifested in their gear,
consumers manifest it in their own lives." The result is not only an emotional connection but an
individual one.
Having a one-to-one relationship in today's marketplace is essential for market dominance. Other
examples can be seen with other top brands such as Starbucks, Porsche, and so on. These
products and services make an emotional connection with the people they serve.

The Starbucks Example –

Starbucks is one of the strongest global brands around – without following the marketing text
book. It’s complicated logo is not memorable, and most people will not be able to recreate it if
you ask them to. They will describe it as “something green” “roundish” with a “person or
something” in the middle. The slogan is not memorable either, and before you rack your brains,
Starbucks doesn’t have one. The packaging and collateral are nothing special and I challenge you
to find an advertisement in any magazine. Starbucks does advertise, but uses emails as the
preferred medium.

So what is the success factor of the Starbucks brand? The emotional experience of its consumers
– they feel sophisticated and part of what many brand experts refer to as a "coffee house"
community. For the Starbucks community, coffee is not just a beverage, but it is a ritual, a habit, a
treat, and a satisfying reward all rolled in one. That’s the reason why Starbucks’ cup sizes are
"grande" and "venti," not medium or large. Each cup of coffee is also freshly made by a "barista"
at a separate counter and never behind a wall or out of sight from the customer. The Starbucks
store has tables and chairs for congregating or reading and working, and many have plush sofas
and armchairs. Many Starbucks also have Internet connection for their customers’ convenience.

A few marketing techniques work well in emotional marketing:

 Word of mouth - people trust other people that tell them your product works or if it is the
 best.
  Forums - this is basically electronic word of mouth.
 Trials - if you have concrete results, and the people who participated in the trials are
satisfied, you have proof that your product works, which appeals to people's sceptical
side. Testimonials - again, people trust other people. If people are willing to take the time
to give a testimonial, others will know you have a great product.

Emotional Marketing may also include “Sensory-emotional” marketing.

Some examples - Singapore Airlines and Starbucks

“*Singapore Airlines+ not only employs the more common consistent visual themes one might
expect from an airline, but incorporates the same scent, Stefan Floridian Waters, in the perfume
worn by flight attendants, in their hot towels, and other elements of their service.” Consumers
then link the airline to the scent and, should they be smell Stefan Floridian Waters again, will be
reminded of the airline and the pleasant emotions it brought them. Starbucks also uses a scent,
the smell of freshly ground coffee beans, in its business. In a separate article by Roger Dooley, he
reports that, “The most startling change is that the firm will go back to grinding coffee in its
stores for the sole purpose of improving the coffee aroma. Presumably, it’s cheaper to ship the
coffee pre-ground in sealed packages, but Starbucks management apparently feels that any
productivity loss at the stores will be offset by improved customer loyalty and higher sales.
27. Line Extension
Line Extension: A product line extension is the use of an established product’s brand name for a
new item in the same product category. Line extensions happen when the brand launches the
new product in the same category targeting a new segment through new forms, colors, added
ingredients, package sizes etc. Product Extensions help in the growth stage of PLC.

Examples:

 Surf, Surf Excel, Surf Excel Blue

 Coke, Diet Coke, Vanilla Coke
  Clinic All Clear, Clinic Plus
 Colgate going onto Colgate fresh, Colgate total, Colgate Cibaca

A line can comprise related products of various sizes, types, colors, qualities, or prices. Line
depth refers to the number of product variants in a line. Line consistency refers to how closely
relate the products that make up the line are. Line vulnerability refers to the percentage of sales
or profits that are derived from only a few products in the line.

When you add a line extension that is of better quality than the other products in the line, this is
referred to as trading up or brand leveraging.

A Word of Caution - Although we might tend to think that Line Extension leads to more sales due
because of more products and the company is anyways leveraging the brand equity that it has
created. But it can sometime lead to drop in sales too, because it creates confusion in the minds
of the consumer as to what the brand means. On example of that is 7Up. It became popular as a
Lemon Uncola but in 1978 introduced many flavours such as 7Up Gold and Cherry 7Up and various
diet versions too. As a result its sales dropped from 5.7% of the soda beverage market to 4.2%.

Line extension is to offer a new product under the same brand name, in the same product
category. The parent brand covers a new product within a product category it currently serves,
such as with new flavours, forms, colours and ingredients.

Its advantages are:

 It helps in strengthening the brand power and keeps the brand live, modern and
 contemporary.
  It helps in satisfying the changing desires of customers that is variety-seeking.
  It reduces risk associated with new product introduction in customers and distributors.
 It provides a convenient route for infusing new values into an ongoing brand and gaining
 presence in new market.
  It decreases the cost of gaining distribution and trial.
 It increase efficiency of promotional expenditures and allow for packaging and labeling
efficiencies.

Its disadvantages are:

 In case of failure it would affect the product itself and slight connections with the brand
 image.
 Chances of eating up the market share of the original product (cannibalization).

Some examples
28. Marketing Myopia
Marketing Myopia is the lack of vision on the part
of companies, particularly in failing to spot
customer’s desires through excessive product
focus.

Marketing Myopia is the failure to define an

organization's purpose in terms of its function
from the consumers' point of view. For example,
railway companies that define their markets in
terms of trains, rather than transportation, fail to
recognize the challenge of competition from cars,

airlines, and buses. It is therefore necessary to define the needs of the consumer in more
general terms rather than product-specific terms.

Marketing Myopia is the short sighted look of the managers in wrongly identifying the category
and goals of the company, not looking at the whole industry of the product neglecting the fields
of opportunities in their area of industry, not listening to the customer's real needs.

Marketing Myopia is a short sighted and inward looking approach to marketing that focuses on
the needs of the firm instead of defining the firm and its products in terms of the customers'
needs and wants. Such self-centred firms fail to see and adjust to the rapid changes in their
markets and, despite their previous eminence, falter, fall, and disappear. This concept was
discussed in an article (titled 'Marketing Myopia,' in July-August 1960 issue of Harvard Business
Review) by Harvard Business School emeritus professor of marketing, Theodore C. Levitt (1925-),
who suggests that firms get trapped in this bind because they omit to ask the vital question,
"What business are we in?"

Example
The expulsion of Jaswant Singh from the BJP points to the party falling prey to what's termed
'Marketing Myopia'. With Jaswant, one of the only symbols of urban sophistication in an
otherwise rustic party, gone, the BJP has lost its last hope at connecting with a rapidly changing
voter demographic in India.
Liberalized urban India seeks sophistication in their lifestyle. A party saddled with symbols, real
(read, the people) and contrived (read, the brand) that seem like they are a throwback to yore,
will find it increasingly difficult to connect with voters who want move forward and leave behind
cultural hangovers of the past. Of course, the party bets it will connect with 'less sophisticated'
masses who identify with what's rural and rustic. But tell you what; even the 'less sophisticated'
crave urban sophistication. And the mass media has presented to them on a platter, a lifestyle
that they may not for the moment enjoy, but surely crave. After all, who amongst the citizenry
looks to staying still?

Staying stuck to relics of the past and the soon to be obsolete present?

It’s the 'moving on' masses the BJP will miss if it holds on to what it calls ideology. The inability
to see the future and design offerings that will be relevant in that future to come, is what's
termed, Marketing Myopia. And not knowing that isn't ideology that matters, and that it’s about
what the voter wants, is a learning that's imperative. It’s a learning of what businesses know
keeps them alive and kicking.

29. Non-Conventional
Advertising mediums
Non-traditional advertising is a form of advertising that is atypical. Non-traditional advertising
can encompass alternative media and outdoor media. New emerging methods of advertising,
the use of mediums that break from traditional advertising models. More traditional companies
find it difficult to embrace non-traditional advertising, but are slowly becoming more aware and
open-minded that it is a way of reaching consumers with a greater impact. There are two parts
of such advertisements; the virtual world of engagement and the Physical world of engagement.

Online Advertising: Display Ads or banner ads are small, rectangular boxes containing text and
perhaps a picture that companies pay to place on relevant Web sites. Traditional these banners
were placed on top of the web site or on the side panels, however now Youtube videos also
have such ads below the video. Interstitials: advertisements often with a video or animation that
pops up between changes on a Website. Ads for Johnsons & Johnsons’s Tylenol headache
reliever would appear on brokers’ web sites.

Sponsorships: Companies get their name of the web site by sponsoring certain content on the
site. Online Communities: many companies sponsor online communities whose members
communicate through postings, instant messaging and chat discussions about special interests
to the company’s brands and products. GlaxoSmithKline when launched their first weight-loss
drug ‘Alli’, they sponsored a weight-loss online community.

Social Media: Companies use social networking websites as a platform for advertising too. They
project display ads to focus on their target audience using information given by users on the
website.

Mobile Marketing: Every 2 minute mobile episode of Fox’s show Prison Break starts with a 10
second message that show cases Toyotas new subcompact sedan Yaris.
 Place advertising: Or out of home advertising, is a broad category including many creative and
unexpected forms to grab customer’s attention. The rationale is that markers are better off
reaching people where they work, play and of course shop.

Billboards have been transformed and now use colourful digitally produced graphics,
backlighting, sounds movement and usual 3 dimensional images.
Example: the Nokia N97 Live online Billboard ad, which displays the N97 screen with scrolling text.

Product placement in movie: Movie Viruddh, where Amitabh Bachchan and John Abraham
discuss the benefits of Westerm Union. Movie Taal where coke products are displayed during a
song.

Product Sampling: Giving free samples of the product at malls or through other means.

Contextual Advertising: Contextual advertising is a form of targeted advertising for

advertisements appearing on websites or other media, such as content displayed in mobile
browsers. The advertisements themselves are selected and served by automated systems based
on the content displayed to the user.

Wrapped Vehicles can include public transportation buses, trucks, shuttles, vans, automobiles,
etc. This high-impact format reaches both pedestrian and vehicular traffic and provides market
penetration by traveling throughout the target region. Entirely covered by full-colour advertising
design, which is specifically for the vehicle. The customized overall design of this format provides
eye-catching attention, promotional value and makes a statement about the advertiser.

Guerilla marketing efforts such as street teams are a form of non-traditional advertising. It is a
way of getting the viewer’s attention without them expecting it. This kind of advertising uses a
surprise effect to tantalize the viewer when they are in a situation where they would not typically
find media.
30. Product Life Cycle (PLC)
and Strategies
It describes the stages a product goes through from
when it was first thought of until it finally is removed
from the market. A product's life cycle (PLC) can be
divided into several stages characterized by the
revenue generated by the product. If a curve is drawn
showing product revenue over time, it may take one of
many different shapes, an example of which is shown
below
The life cycle concept may apply to a brand or to a
category of product. Its duration may be as short as
a few months for a fad item or a century or more for
product categories such as the gasoline powered
automobile.

3M filled a container with money and let it at a bus stop. The glass is a special "Security Glass" that
is touted as "unbreakable".

The main stages of the product life cycle are:

 Development – Designing/Developing of the Product/Service

 Introduction – Introducing the product/service into the market
  Growth – when sales are increasing at their fastest rate
 Maturity – sales are near their highest, but the rate of growth is slowing down, e.g. new
competitors in market or saturation
 Decline – final stage of the cycle, when sales begin to fall

Stage 1: Development
As soon as you put pen to paper, this is where the PLC of the product/service begins. This is the
time where you will design and develop your product/service with all the direct costs that may be
incurred such as wages, materials for prototypes, research, etc.
During development, a product/service may never move onto the next stage because you may decide
that the risk is too high to launch the product/service. It is important that you recognize any risk
during this time as small businesses will be affected if the product/service does not prove to be
successful once introduced: the costs of development and introduction may never be recovered
where larger companies can usually compensate for unsuccessful products.
Within this stage, the product has not yet been introduced to the market and consequently there are
no sales. The expenditure of development has also created a loss.
Stage 2: Introduction
When the product is introduced, sales will be low until customers become aware of the product and
its benefits. Some firms may announce their product before it is introduced, but such
announcements also alert competitors and remove the element of surprise. Advertising costs
typically are high during this stage in order to rapidly increase customer awareness of the product
and to target the early adopters. During the introductory stage the firm is likely to incur additional
costs associated with the initial distribution of the product. These higher costs coupled with a low
sales volume usually make the introduction stage a period of negative profits.
During the introduction stage, the primary goal is to establish a market and build primary demand
for the product class. The following are some of the marketing mix implications of the
introduction stage:

Product: one or few products, relatively undifferentiated

Price: Generally high, assuming a skim pricing strategy for a high profit margin as the early adopters
buy the product and the firm seeks to recoup development costs quickly. In some cases a penetration
pricing strategy is used and introductory prices are set low to gain market share rapidly.
Place: Distribution is selective and scattered as the firm commences implementation of the
distribution plan.
Promotion: Promotion is aimed at building brand awareness. Samples or trial incentives may be
directed toward early adopters. The introductory promotion also is intended to convince potential
resellers to carry the product.

Stage 3: Growth
The growth stage is a period of rapid revenue growth. Sales increase as more customers become
aware of the product and its benefits and additional market segments are targeted. Once the
product has been proven a success and customers begin asking for it, sales will increase further as
more retailers become interested in carrying it. The marketing team may expand the distribution at
this point. When competitors enter the market, often during the later part of the growth stage, there
may be price competition and/or increased promotional costs in order to convince consumers that
the firm's product is better than that of the competition. During the growth stage, the goal is to gain
consumer preference and increase sales. The marketing mix may be modified as follows:

Product: New product features and packaging options; Improvement of product quality.
Price: Maintained at a high level if demand is high, or reduced to capture additional customers.
Place: Distribution becomes more intensive. Trade discounts are minimal if resellers show a
strong interest in the product.
Promotion: Increased advertising to build brand preference.

Stage 4: Maturity
The maturity stage is the most profitable. While sales continue to increase into this stage, they do
so at a slower pace. Because brand awareness is strong, advertising expenditures will be reduced.
Competition may result in decreased market share and/or prices. The competing products may be
very similar at this point, increasing the difficulty of differentiating the product. The firm places
effort into encouraging competitors' customers to switch, increasing usage per customer, and
converting nonusers into customers. Sales promotions may be offered to encourage retailers to
give the product more shelf space over competing products.
During the maturity stage, the primary goal is to maintain market share and extend the product life
cycle. Marketing mix decisions may include:
Product: Modifications are made and features are added in order to differentiate the product from
competing products that may have been introduced.
Price: Possible price reductions in response to competition while avoiding a price war.
Place: New distribution channels and incentives to resellers in order to avoid losing shelf space.
Promotion: Emphasis on differentiation and building of brand loyalty. Incentives to get
competitors' customers to switch.

Stage 5: Decline
Eventually sales begin to decline as the market becomes saturated, the product becomes
technologically obsolete, or customer tastes change. If the product has developed brand loyalty,
the profitability may be maintained longer. Unit costs may increase with the declining production
volumes and eventually no more profit can be made.

During the decline phase, the firm generally has three options:
 Maintain the product in hopes that competitors will exit. Reduce costs and find new uses
 for the product.
 Harvest it, reducing marketing support and coasting along until no more profit can be made.
 Discontinue the product when no more profit can be made or there is a successor product.

The marketing mix may be modified as follows:

Product: The number of products in the product line may be reduced. Rejuvenate surviving
products to make them look new again.
Price: Prices may be lowered to liquidate inventory of discontinued products.
Prices may be maintained for continued products serving a niche market.
Place: Distribution becomes more selective. Channels that no longer are profitable are phased out.
Promotion: Expenditures are lower and aimed at reinforcing the brand image for continued products.

Extending the Product Life Cycle

 Extension strategies extend the life of the product before it goes into decline. Again
 businesses use marketing techniques to improve sales. Examples of the techniques are:
 Advertising – try to gain a new audience or remind the current audience
  Price reduction – more attractive to customers
 Adding value – add new features to the current product, e.g. improving the specifications
on a smartphone
  Explore new markets – selling the product into new geographical areas or creating a
 version targeted at different segments
 New packaging – brightening up old packaging or subtle changes

Limitations of the Product Life Cycle Concept

The term "life cycle" implies a well-defined life cycle as observed in living organisms, but products do
not have such a predictable life and the specific life cycle curves followed by different products vary
substantially. Consequently, the life cycle concept is not well-suited for the forecasting of product
sales. Furthermore, critics have argued that the product life cycle may become self-fulfilling. For
example, if sales peak and then decline, managers may conclude that the product is in the decline
phase and therefore cut the advertising budget, thus precipitating a further decline.

Summary
The PLC model is only part of the marketing mix and is used to determine the different stages that
a product or service can be expected to go through. By using the model as guidance, effective and
timely marketing will take the product/service through each stage and can be planned in advance
(the marketing plan. The PLC model illustrates that profits are highest during the stages of growth
and maturity and so it is good business to integrate extension strategies during this time to
maintain high profit levels.

Strategies at the different stages of Product Life Cycle

1. Introduction stage of PLC
The need for immediate profit is not a pressure. The product is promoted to create awareness. The
strategy is adopted on the basis of Price and Promotion levels.

2. Growth stage of PLC

During the growth stage, the firm uses several strategies to sustain rapid market growth.
  Improves product quality and adds new features and improved styling.
 Adds new models and flanker products (i.e., products of different sizes, flavors, and so
 forth that protect the main product).
 It enters new market segments.
 It increases its distribution coverage and enters new distribution channels.
  It shifts from product- awareness advertising to product- preference advertising.
 It lowers price to attract the next layer of price – sensitive buyers.
 3. Maturity stage of PLC
Three potentially useful ways to change the course for a brand are market, product, and marketing
program modification.
Sales volume = no. of brand users * usage rate per user
Market Modification Strategies
 Expand the no. of brand users
 Convert nonusers
 Enter new market segments
  Attract competitors’ customers
  Increase the usage rate among users
 Have consumers use the product on more occasions
 Have consumers use more of the product on each occasion
  Have consumers use the product in new ways
 Product modification - Trying to stimulate sales by modifying the product’s characteristics
through:
o Quality improvement: Aims at increasing the product’s functional performance. Eg:
Aashirvaad, Annapoorna, Pillsbury, Naturefresh
o Feature improvement: Aims at adding new features, such as size, weight, materials,
additives, and accessories that expand the product’s performance, versatility, safety,
or convenience.
o Style improvement: Aims at increasing the product’s aesthetic appeal. Eg; New car
models, New Coke

4. Decline Stage of PLC

At this point there is a downturn in the market. For example more innovative products are
introduced or consumer tastes have changed. Strategies for this stage include
 Increase investment – to dominate or strengthen its competitive position
  Maintain its investment level until the uncertainties about the industry are resolved
 Decrease its investment level selectively, by sloughing off unprofitable customer groups,
 while simultaneously strengthening its investment in lucrative niches
 Harvesting investment to recover cash quickly
 Divest the business quickly by disposing of its assets as advantageously as possible

31. Recession Marketing

Recession: A significant decline in activity across the economy, lasting longer than a few months.
It is visible in industrial production, employment, real income and wholesale-retail trade. The
technical indicator of a recession is two consecutive quarters of negative economic growth as
measured by a country's gross domestic product (GDP).

What’s wrong with simply cutting costs?

 Employees approach
Indiscriminate Cost decision making Leads organizations Inefficient
Cutting through a loss to aim Low Operations
minimizing lens

Pessimism
Reduced Customer
Lower Quality permeates the
Satisfaction
Organization

Hence to obtain a balance we must,

 Put Customer Needs Under The Microscope
  Take a Scalpel rather than a Cleaver to Marketing Budget
 Nimbly adjust strategies and product offerings

New Customer Segments evolving during a Recession,

 The Slam – on – the –Brakes
 o Most Vulnerable
o Hardest hit financially
o Reduce Spending
 Pained But Patient
o Tend to be resilient and optimistic for long run
o Economize but less aggressively
o Largest Segment
 Live for Today
o Carries on with purchases as usual
o Unconcerned about savings
o Urban and Young
o More likely to rent than to own
o Spend on XP rather on Stuffs
 Comfortably Well – Off
o Feel secure
o Consume at near pre-recession levels
o Little selective about purchases
o Top 5% Income Bracket
Product Categories during Recession,
 Essentials: Central to customer’s well-being
 Treats: Indulgences, whose immediate purchase is justified
 Postponables: Desired items, whose purchase can be reasonably put off
 Expendables: Perceived as unnecessary or justified
Finding the right strategy,
Strategy 1: Streamline Product Portfolio
 Reduce complexity in product lines featuring too many marginally performing sizes and
 flavours
  Encourage innovations in core product improvement
 Realignment with market conditions
 Efficient allocation of marketing costs
Strategy 2: Improve Affordability
 Businesses compete on price
 Discounts, cash-backs at POS, better than delayed value propositions
 Carefully monitor consumer’s perception of ‘normal price levels’
 Premium brands shouldn’t move down market; rather introduce a “Fighter Brand”
 Configure “Key Retail Price Points”
 Reducing item or serving sizes

Strategy 3: Bolster Trust

  Customers seek familiar, trusted brands as a safe choice in trying times
 Reassuring messages, reinforcing an emotional connect with the brand
 Demonstrate empathy
 Loyalty programs rewarding small but frequent purchasers
 Educate customers on how to shop smart and save money

32. Sales & Trade Promotions

Sales promotion is specifically defined as “short-term incentives to encourage the purchase or sale
of a product or service” (Kotler and Armstrong). It is a very successful strategy employed by sales
people across the globe to augment sales in pre dominantly in short term.

The majority of sales promotion drives are concentrated to make an instant impact. The objective is to
make the purchase happen immediately and this is done by various means such as free product
samples, rebates, premiums (some product that comes with the item being sold, can even be used to
induce trials), purchase reward or “loyalty” programs (in case of airlines and book reading stores
like Just me), point of purchase promotions, discount coupons, contests and games. Contrary to
popular belief individual persons are not the only ones who are target audience for the sales
promotion but even the business customers, retailers and whole-sellers are targeted through the
activities. Promotions in trade are a good example for the latter category of buyers or sellers.

Apart from promoting quick sales response, sales promotions are also used to build long-term
relationships with stakeholders (can be sellers, buyers or simply transporters).An example that we
will instantly connect with is the frequent flyers program or frequent readers program where in the
users are credited with the loyalty points that can be used to derive additional privileges during the
subsequent purchases of product or service. With loyalty programs the customers get hooked to a
particular product or service provider and this results in repeat purchases by the same set. The
additional benefit that seller derives from this is the data that they obtain which can be used to
estimate the buying habits of the customers.

33. Sports Marketing

A subdivision of marketing which focuses both on the promotion of sports events and teams as
well as the promotion of other products and services through sporting events and sports teams. It is
a service in which the element promoted can be a physical product or a brand name.

Sports Marketing can be divided into three sectors:

 Technique Advantages
Free samples Induce trial
Attract new customers
Speed up adoption
Free trial Overcomes market
Door-to-door couponing resistance
Very selective
High redemption rate
Direct-mail couponing High Targetability
At-home coverage
High redemption rate
Newspaper couponing Quick and convenient
Geographically targetable
Low cost
Magazine/supplement Targeted audience
couponing
Effective coverage
Increases in readership
Money refund Generates new business
Reinforces brand loyalty
In-or-near pack Increases product sales
premiums
Modest distribution cost
Self-liquidating Low cost
premiums
Boosts brand image
Price pack Moves merchandise
Keeps up visibility
Contests/sweepstakes No purchase required
Increases brand awareness
Trading stamps and No extra expense for
promotional games consumer
Creates store preference
Point-of-purchase Effective stimulation
displays
Warranties Effective in influencing a
purchase decision
 The first is the advertising of sport and sports associations such as the Olympics, Spanish
 Football league and the NFL. Eg: IPL
 The second concerns the use of sporting events, sporting teams and individual athletes to
 promote various products. Eg: Rahul Dravid for Gillette.
 The third is the promotion of sport to the public in order to increase participation. Eg: Star
Sports sponsoring Valhalla 2015 for promoting Kabaddi.
Disadvantages
Expensive
Lacks precision
Cumbersome
Costly to administer
Time consuming
Needs careful supervision
Lead time needed
Needed
Costly
Dependent upon list quality
Low redemption rate
Retailers may complain
Requires careful planning
Can become expensive
Consumers neglect to clip
Slow redemption rate
Results can be slow
Modest impact
Bonus to loyal buyers
Pilferage problem
Modest sales impact
May be too popular
Not selective
May cheapen brand image
Expensive
Modest participation
Consumer boredom
Expensive
Requires dealer cooperation
Expensive and labour intensive with
a product problem
34. Types of Advertising
Advertising is the promotion of a company's products and services, carried out primarily to drive
up its sales. It is also done to build a brand identity, communicate changes in old products, or
introduce new product/services to the customers. Advertising has become an essential element of
the corporate world, and hence, companies allot a considerable amount of resources towards their
advertising budget. There are several reasons for advertising, some of which are:
 Increasing the sales of the product/service.
  Creating and maintaining a brand identity or brand image.
 Communicating a change in the existing product line.
 Introduction of a new product or service.
 Increasing the buzz-value of the brand or the company.

Advertising can be classified in different ways.

1. According to the medium used, advertising is of the following types:

 Print Advertising – Newspapers, Magazines, Brochures, Fliers

 Outdoor Advertising – Billboards, Kiosks, Tradeshows and Events
  Broadcast advertising – Television, Radio and the Internet
 Covert Advertising/Product placement – Advertising in Movies (Canon in ‘Barfi’)

2. Advertising can also be categorized as the following:

  Surrogate Advertising – Advertising Indirectly (Cigarettes, Alcohol)

 Public Service Advertising – Advertising for Social Causes (Polio Campaign, Sarva
 Shiksha Abhiyaan)
 Celebrity Advertising (Obama)
 Infomercials
  Business to Business advertising
 Co-op advertising

3. On the basis of intent, Advertising can be split into two main types:
 Persuasive advertising - this tries to entice the customer to buy the product by informing
 them of the product benefit.
Informative advertising - this gives the customer information. Mostly done by the
government (e.g. health campaigns, new welfare benefits).

35. USP, ESP

Definition: The factor or consideration presented by a seller as the reason that one product or
service is different from and better than that of the competition.

The problem is this:

When you attempt to be known for everything, you don’t become known for anything..
Let’s look at two hypothetical companies as an example.
Company number one offers web design, social media marketing, search engine optimization (SEO),
copywriting, conversion optimization, PPC, and more. Company number two offers SEO and
copywriting services, but they don’t offer web design, social media marketing, conversion
optimization, etc.

Now let’s consider a customer – an experienced CEO who’s looking for an SEO copywriter who
can write content for his website. He also knows about both companies.

When he considers company one, he thinks of them as a web design company, and he doesn’t even
know they do SEO copywriting because they’re best known for their web design. When he thinks
about company two, he thinks of them as an SEO copywriting company, since that’s their specialty.

When it comes time to choose a business to provide this service, which do you think he’ll choose?
The one who’s known for web design generally, or the one who’s known for SEO copywriting
specifically?

The answer is number two.

Now of course, there are always exceptions. A large digital marketing agency can become known
for many services and can fulfill all of those services since they have many employees and
multiple departments.

But if a smaller business wants to steal some market share from a larger competitor, they’re better
off making a stand for something and becoming known for that thing rather than trying to do
everything. Remember, if you want to stand out, i.e. if you want to “have a unique selling
proposition,” your business needs to stand for something because that’s what you’ll become
known for. It’s impossible to stand for everything.
Starbucks is another successful business that makes for a great case study on unique selling
propositions. They went from a small coffee shop in Washington to one of the most recognized
brands in America, and they transformed this country from a nation of Folgers drinkers to a nation
of coffee connoisseurs.

How did they do it? You guessed it–they developed a unique selling proposition.

To become familiar with Starbucks’ unique selling proposition, you can ask this question: “What
does Starbucks stand for, and what is it that they’re known for?” The answer is simple: They stand
for premium coffee beverages, and they’re known for the same.

They don’t stand for premium coffee beverages AND the lowest prices. If they did, they wouldn’t
stand out from corner gas stations. Because they take a stand to provide premium coffee, they stand
out from the corner gas stations that sell cups of coffee for $0.99. If they instead tried to compete
head to head with gas stations on price, quality would suffer, and their product wouldn’t be
unique. They wouldn’t be able to stand for premium coffee.

They also don’t stand for premium coffee AND gourmet breakfast sandwiches AND the most
amazing smoothies AND the best prices. Yes, they’ve offered those products in different forms for
different periods of time, but that’s not what they stand for. They’re not trying to be known as the
amazing coffee, sandwich, AND smoothie place, and they’re not trying to compete head to head
with McDonalds or Jamba Juice. Instead, they’re the convenient premium coffee cafe that happens
to also sell breakfast sandwiches and smoothies if you want one while you’re picking up your
delicious coffee.
Some good current examples of products with a clear USP are:
Head & Shoulders: "You get rid of dandruff"
Domino's Pizza: "You get fresh, hot pizza delivered to your door in 30 minutes or less—or it's free."
FedEx: "When your package absolutely, positively has to get there overnight."

ESP’s are your products/service/companies emotional levers that help the prospect to buy. They
are the “beneath the service” triggers to creates emotion.
It is about, whether your product/service make the prospect:
* Feel important
* Feel valued
* Feel part of a unique group or select band of people
* Feel whole
* Feel remembered
* Feel attractive
* Feel trendy
* Feel hip
* Feel safe
* Feel accepted
For example, Toyota Prius enables its customers to reduce their carbon emissions whilst joining an
elite club of owners including several Hollywood A-list celebrities

36. Different types of

distribution channels
Manufacturers and consumers are two major components of the market. Intermediaries perform
the duty of eliminating the distance between the two. There is no standardised level which proves
that the distance between the two is eliminated. Based on necessity the help of one or more
intermediaries could be taken and even this is possible that there happens to be no intermediary.
Their description is as follows:

(A) Direct Channel or Zero Level Channels: When the manufacturer instead of selling the goods to
the intermediary sells it directly to the consumer then this is known as Zero Level Channel. Retail
outlets, mail order selling, internet selling and selling

(B) Indirect Channels: When a manufacturer gets the help of one or more middlemen to move
goods from the production place to the place of consumption, the distribution channel is called
indirect channel. Following are the main types of it:
1. One Level Channel:
In this method an intermediary is used. Here a manufacturer sells the goods directly to the retailer
instead of selling it to agents or wholesalers. This method is used for expensive watches and other
like products. This method is also useful for selling FMCG (Fast Moving Consumer Goods). This
channel is clarified in the following diagram:

2. Two Level Channel:

In this method a manufacturer sells the material to a wholesaler, the wholesaler to the retailer and
then the retailer to the consumer. Here, the wholesaler after purchasing the material in large
quantity from the manufacturer sells it in small quantity to the retailer.
Then the retailers make the products available to the consumers. This medium is mainly used to sell
soap, tea, salt, cigarette, sugar, ghee etc. This channel is more clarified in the following diagram:
 3. Three Level Channel:
Under this one more level is added to Two Level Channel in the form of agent. An agent facilitates
to reduce the distance between the manufacturer and the wholesaler. Some big companies who
cannot directly contact the wholesaler, they take the help of agents. Such companies appoint their
agents in every region and sell the material to them.
Then the agents sell the material to the wholesalers, the wholesaler to the retailer and in the end
the retailer sells the material to the consumers.

The following types of Channel Memberships are possible:

Intensive distribution - Where the majority of resellers stock the 'product' (with convenience
products, for example, and particularly the brand leaders in consumer goods markets) price
competition may be evident.

Selective distribution - This is the normal pattern (in both consumer and industrial markets)
where 'suitable' resellers stock the product.

Exclusive distribution - Only specially selected resellers or authorized dealers (typically only one
per geographical area) are allowed to sell the 'product'.

37. Principles of Retail

Marketing Strategies
 The customer is the most important person in your business
The customer holds the key to every successful retail operation. Based on my 20 years' of
experience with a number of different retail businesses, this article will introduce you to the
journey to make your business customer-focused, and realise the potential you have to make your
retail business a success. The main retail principle to master is the customer; the customer should
be the centre of your business and everything you do must revolve around that customer. Knowing
them, and focusing on them in everything you do, will help you grow your business and your team
— the customer is king.

 Retail is detail
One of the most famous principles in retailing is, of course, “retail is detail” — this is where the
challenge lies: how do you become more detailed and what detail should you focus on? You need
to address and improve your understanding of your customer. To do this, every retailer must
focus on the detail and get the detail right the majority of the time. Mistakes are OK, but you
must learn from them and do not repeat your mistakes. Customers will allow you some mistakes,
but too many will turn them away; understanding the detail is a key skill to master in retail.

 Understand the four Ps

This is a very old principle but still has validity. This retail principle will help you understand the
overall foundations of a retail business; the 4 Ps: Product, Price, Place, Promotion. These are the
basic foundations of a successful retail business.
 Product: You need products that your customers want to buy and a product range that will satisfy
your customers’ needs and desires. The products must also deliver a profit for you to have a
successful business;
Price: Price must be consistent across the marketing mix and meet all requirements for your
business. You need to price your product range at the correct level for the customers to be able to
buy your products, and for them to gain value from your products. This could mean pricing high
or low — this very much depends upon your customer offering;
Place: You must provide somewhere for your customers to purchase your product, be that a
physical store, a catalogue or an e-commerce website;
Promotion: Once you have a product — at the right price, in a place where the customer can
access it — you need to tell them about this and promote your business and your products; make
sure your customers know that you and your products exist and are available for them to enjoy.

 Go the extra mile for your customer

Providing great customer service starts with understanding and knowing your customer; however,
knowing them is the start of the journey and you will need to deliver more than just customer
service. To be successful you must deliver world-class customer service; you must “go the extra
mile for the customer”. You and your team must continually go the extra mile for the customer,
each time delivering just a little more than they expect. Doing this each time you and your team
interact with your customers will win them over and make them loyal over a long period of time.

 Location
The final retail principle is: Location. History has dictated that this is one of the most important
factors in the success of a physical store, and still to this day it will have a major impact on your
success. The best location of your store will be dictated by your brand and product strategies. For
example, a supermarket operation needs a car park and a high fashion store needs to be in a high
fashion area that attracts the right customers for the store. I would argue, however, that location
has less effect now than previously, due to two main factors: the first being the flexibility of the
customers; now we often travel more, and the second being the internet.

The internet has changed our shopping habits and will continue to do so. E-commerce websites
have opened up the world of “non-geographic” retail — a retail world without the need to visit
the physical store. The emergence of “E-tail” from retail has been the biggest change over the
past 20 years.

The journey from retail to E-tail has been quick, and we need to embrace the world of E-tail
and ensure we understand its effects on our customers. The E-tail world is growing significantly
and with new technologies, such as iPads and mobile commerce, it will continue to change the
opportunities in the world of retail.

38. Luxury market in India

Luxury retail in India has been a fascinating journey from a socio-economic perspective. Projected
as the next China for luxury goods consumption, the Indian economy has evoked a lot of interest
globally given its statistics of some of the highest disposable incomes and increase in the number
of millionaires.
The last couple of years have seen a profusion of luxury brands into the Indian market: from stand-
alone stores in five star hotels to luxury Malls, these labels which were previously only seen in
international fashion magazines and high streets abroad, were now household names in India. With
one of the highest levels of disposable incomes, the well-travelled Indian luxury consumer is being
wooed by all.

Luxury clothing, fragrances, premium footwear, home electronics and high-end watches have
achieved good penetration among male Indian consumers, but items such as cufflinks, belts,
wallets, luxury wines, Champagnes and cigars still rate low on the wish-lists of many Indian men
seeking luxury brands. Among women, jewelry, cosmetics and skincare can already boast high
levels of awareness, followed by categories such as underwear, handbags and mobile phones.

Low- penetration sectors that are yet to make an impact include gourmet food, tableware and
imported furniture.

39. What is competitive advantage?

Competitive advantage is a position of a company in a competitive landscape that allows the
company earning return on investments higher than the cost.
Competitive Advantage - Definition
A competitive advantage is an advantage over competitors gained by offering consumers
greater value, either by means of lower prices or by providing greater benefits and service that
justifies higher prices.

Competitive Strategies
Following on from his work analyzing the competitive forces in an industry, Michael Porter
suggested four "generic" business strategies that could be adopted in order to gain competitive
advantage. The four strategies relate to the extent to which the scope of a businesses' activities
are narrow versus broad and the extent to which a business seeks to differentiate its products.

The four strategies are summarized in the figure below:

The differentiation and cost

leadership strategies seek
competitive advantage in a broad
range of market or industry
segments. By contrast, the
differentiation focus and cost
focus strategies are adopted in a
narrow market or industry.

Strategy - Differentiation
This strategy involves selecting one
or more criteria used by buyers in a market - and then positioning the business uniquely to meet
those criteria. This strategy is usually associated
with charging a premium price for the product -
often to reflect the higher production costs and
extra value-added features provided for the
consumer. Differentiation is about charging a
premium price that more than covers the
additional production costs, and about giving
customers clear reasons to prefer the product
over other, less differentiated products.
Examples of Differentiation Strategy: Mercedes
cars; Bang & Olufsen

Strategy - Cost Leadership

 With this strategy, the objective is to become the lowest-
cost producer in the industry. Many (perhaps all) market
segments in the industry are supplied with the emphasis
placed minimizing costs. If the achieved selling price can
at least equal (or near) the average for the market, then
the lowest-cost producer will (in theory) enjoy the best
profits. This strategy is usually associated with large-scale
businesses offering "standard" products with relatively
little differentiation that are perfectly acceptable to the
majority of customers. Occasionally, a low-cost leader will
also discount its product to maximise sales, particularly if
it has a significant cost advantage over the competition
and, in doing so, it can further increase its market share.

Examples of Cost Leadership: Nissan; Tesco; Dell

Computers, Xiaomi, Micromax, One Plus One

Strategy - Differentiation Focus

In the differentiation focus strategy, a business aims to differentiate within just one or a small
number of target market segments. The special customer needs of the segment mean that there
are opportunities to provide products that are clearly different from competitors who may

be targeting a broader group of customers. The important issue for any business adopting this
strategy is to ensure that customers really do have different needs and wants - in other words
that there is a valid basis for differentiation - and that existing competitor products are not
meeting those needs and wants.

Examples of Differentiation Focus: any successful niche retailers; (e.g. The Perfume Shop); or
specialist holiday operator (e.g. Carrier)

Strategy - Cost Focus

 Here a business seeks a lower-cost
advantage in just on or a small number
of market segments. The product will
be basic - perhaps a similar product to
the higher-priced and featured market
leader, but acceptable to sufficient
consumers. Such products are often
called "Me-too's".

Examples of Cost Focus: Many smaller

retailers featuring own-label or
discounted label products.
(http://tutor2u.net/business/strategy/competitive_advantage.htm)
McDonald’s – Value for money & service

40. What is defined as BOP Market?

The bottom of the pyramid is
the largest, but poorest socio-
economic group. Although they
don’t have a high purchasing
power parity, but by their sheer
number there is a lot of money
in the market. Contrary to the
popular view, BOP consumers
are getting connected and
networked. They are rapidly

exploiting the benefits of information networks. Distribution

access to the BOP markets is very difficult and therefore
represents a major impediment for the participation of large
firms and MNCs. Initiatives like E-choupal (ITC) and Shakti
(HUL) are a part of it
Check Article: https://hbr.org/2012/06/reality-check-at-the-bottom-of-the-pyramid
 41. What is
innovation?
Give Example
of disruptive
innovation.
Disruptive innovation is a term used in business and technology literature to describe
innovations that improve a product or service in ways that the market does not expect,
typically by lowering price or designing for a different set of consumers.

A disruptive technology or disruptive innovation is a term describing a technological innovation,

product, or service that uses a "disruptive" strategy, rather than an "evolutionary" or
"sustaining" strategy, to overturn the existing dominant technologies or status quo products in a
market. Disruptive innovations can be broadly classified into low-end and new-market disruptive
innovations. A new-market disruptive innovation is often aimed at non-consumption, whereas a
lower-end disruptive innovation is aimed at mainstream customers who were ignored by

established companies. It has been systematically shown to the research community that most
disruptive innovations are in a minority compared to revolutionary innovations which introduce
an innovation of higher performance to the market. Examples of true disruptive innovations, i.e.
innovations that are lower in performance and lower cost, succeeding are rare.

Christensen distinguishes between "low-end disruptions" which targets customers who do not
need the full performance valued by customers at the high-end of the market and "new-market
disruption" which targets customers who have needs that were previously unserved by existing
incumbents.
"Low-end disruption" occurs when the rate at which products improve exceeds the rate at which
customers can adopt the new performance. Therefore, at some point the performance of the
product overshoots the needs of certain customer segments. At this point, a disruptive
technology may enter the market and provide a product which has lower performance than the
incumbent but which exceeds the requirements of certain segments, thereby gaining a foothold
in the market. In low-end disruption, the disruptor is focused initially on serving the least
profitable customer, who is happy with a good enough product. This type of customer is not
willing to pay premium for enhancements in product functionality. 3M launched a projector for
Rs 30000 (existing options started at Rs 1.5-2 Lacs) with limited features aimed at simple office
use for presentations and low graphic content projection.
"New market disruption" occurs when a product fits a new or emerging market segment that is not
being served by existing incumbents in the industry. The Linux operating system (OS) when
introduced was inferior in performance to other server operating systems like Unix and Windows NT.
But the Linux OS is inexpensive compared to other server operating systems. After years of
improvements Linux is now installed in 84.6% of the world’s 500 fastest supercomputers.

Innovations in marketing:
  Colgate #WhatTheBlack
 TVS Scooty Balancing wheels
 The Sachet Revolution
(http://indiatoday.intoday.in/story/The+right+package/1/2710.html)
 Wikipedia took the Academic Industry by storm. The sales of Encarta & Britannica hit
all-time lows in their 244 year legacy. It finally stopped printing in 2012, unable to
keep up with competition.
42. What is integrated marketing
communication (IMC)?
A management concept that is designed to make all aspects of marketing communication such
as advertising, sales promotion, public relations, and direct marketing work together as a unified
force, rather than permitting each to work in isolation so that they speak consistently with one

voice all the time, every time. For example, if a company markets its product as being customer
friendly, it should be reflected in all aspects starting from any phone conversation with them
and friendly salesman at the store location to prompt after-sales service.

Benefits
 IMC creates competitive advantage, boost sales and profits, while saving money, time
 and stress.
 IMC wraps communications around customers and helps them move through the
various stages of the buying process.
  The organisation simultaneously consolidates its image, develops a dialogue and
 nurtures its relationship with customers.
 This 'Relationship Marketing' cements a bond of loyalty with customers which can
 protect them from the inevitable onslaught of competition.
 IMC also increases profits through increased effectiveness. At its most basic level, a unified
message has more impact than a disjointed myriad of messages. In a busy world, a consistent,
consolidated and crystal clear message has a better chance of cutting through the 'noise' of
 other messages.
 At another level, initial research suggests that images shared in advertising and direct mail
boost both advertising awareness and mail shot responses. So IMC can boost sales by
stretching messages across several communications tools to create more avenues for
 customers to become aware, aroused, and ultimately, to make a purchase
 Carefully linked messages also help buyers by giving timely reminders, updated information
and special offers which, when presented in a planned sequence, help them move comfortably
 through the stages of their buying process.
 IMC also makes messages more consistent and therefore more credible. This reduces risk in
the mind of the buyer which, in turn, shortens the search process and helps to dictate the
 outcome of brand comparisons.
Finally, IMC saves money as it eliminates duplication in areas such as graphics and photography
since they can be shared and used in say, advertising, exhibitions and sales literature. Example :
http://softdrinkcolawar.blogspot.in/2012/12/coca-cola-intergrated-marketing.html

43. What is so special in marketing

of services?
A service is the action of doing something for someone or something. It is largely intangible. A
product is tangible (i.e. material) since you can touch it and own it. A service tends to be an
experience that is consumed at the point where it is purchased, and cannot be owned since is quickly
perishes. A person could go to a café one day and have excellent service, and then return the next day
and have a poor experience. So often marketers talk about the nature of a service as:

Lack of ownership: Right of ownership is not taken to the service, since you merely experience
it. For example, an engineer may service your air-conditioning, but you do not own the service,
the engineer or his equipment. You cannot sell it on once it has been consumed, and do not take
ownership of it.

Intangibility: Service is intangible and cannot have a real, physical presence as does a product.
For example, motor insurance may have a certificate, but the financial service itself cannot be
touched i.e. it is intangible.
 Inseparability: Service is inseparable from the point where it is consumed, and from the
provider of the service. For example, you cannot take a live theatre performance home to
consume it (a DVD of the same performance would be a product, not a service.

Perishability: Service is perishable in that once it has occurred it cannot be repeated in exactly the
same way. For example, once a 100 metres Olympic final has been run, there will be not other for 4
more years, and even then it will be staged in a different place with many different finalists

Heterogenity: since the human involvement of service provision means that no two services will
be completely identical. For example, returning to the same garage time and time again for a
service on your car might see different levels of customer satisfaction, or speediness of work.
Differentiating between Goods and Services
Goods Services
A physical commodity A process or activity
Tangible Intangible
Homogenous Heterogeneous
Production and distribution are separation Production, distribution and consumption are
from their consumption simultaneous processes
Can be stored Cannot be stored
Transfer of ownership is possible Transfer of ownership is not possible

The marketing mix (4P’s) has seen an extension and adaptation into the extended marketing mix
for services, also known as the 7P's - physical evidence, process and people.
Physical evidence

In the service of providing MBA education, the way the campus looks like, the quality of
furniture, the greenery form a part of the physical evidence

It is the material part of a service. Strictly speaking there are no physical attributes to a service,
so a consumer tends to rely on material cues. There are many examples of physical evidence,
including some of the following:
 Packaging. Internet/web pages.
 Paperwork (such as invoices, tickets and dispatch notes). Brochures.
  Signage (such as those on aircraft and vehicles).
  Uniforms.
 The building itself (such as prestigious offices or scenic headquarters). Mailboxes and
many others
People
An essential ingredient to any service provision is the use of appropriate staff and people.
Recruiting the right staff and training them appropriately in the delivery of their service is
essential if the organisation wants to obtain a form of competitive advantage. Consumers make
judgements and deliver perceptions of the service based on the employees they interact with.
Staff should have the appropriate interpersonal skills, attitude, and service knowledge to
provide the service that consumers are paying for. Many British organizations’ aim to apply for
the Investors In People accreditation, which tells consumers that staff are taken care of by the
company and they are trained to certain standards.
 Process
Refers to the systems used to assist the organization in delivering the service. Imagine you walk
into Burger King and you order a Whopper Meal and you get it delivered within 2 minutes. What
was the process that allowed you to obtain an efficient service delivery? Banks that send out
Credit Cards automatically when their customers’ old one has expired again require an efficient
process to identify expiry dates and renewal. An efficient service that replaces old credit cards
will foster consumer loyalty and confidence in the company.

At each stage of the process, markets:


  all elements of the marketing mix. Process, physical evidence and people
Deliver value through
enhance services.
  Feedback can be taken and the mix can be altered. 
  
Customers are retained, and other serves or products are extended and marked to them.

 can be tailored to the needs of different individuals, experiencing a similar service at
The process itself
the same time.

Customer Service: Many products, services and experiences are supported by customer services
teams. Customer services provided expertise (e.g. on the selection of financial services), technical
support (e.g. offering advice on IT and software) and coordinate the customer interface (e.g.
controlling service engineers, or communicating with a salesman). The disposition and attitude of
such people is vitally important to a company. The way in which a complaint is handled can mean
the difference between retaining or losing a customer, or improving or ruining a company's
reputation. Today, customer service can be face-to-face, over the telephone or using the Internet.
People tend to buy from people that they like, and so effective customer service is vital. Customer
services can add value by offering customers technical support and expertise and advice.

Training: All customer facing personnel need to be trained and developed to maintain a high
quality of personal service. Training should begin as soon as the individual starts working for an
organization during an induction. The induction will involve the person in the organization's
culture for the first time, as well as briefing him or her on day-to-day policies and procedures. At
this very early stage the training needs of the individual are identified. A training and
development plan is constructed for the individual whom sets out personal goals that can be
linked into future appraisals. In practice most training is either 'on-the-job' or 'off-the-job.' On-
the-job training involves training whilst the job is being performed e.g. training of bar staff. Off-
the-job training sees learning taking place at a college, training centre or conference facility.
Attention needs to be paid to Continuing Professional Development (CPD) where employees see
their professional learning as a lifelong process of training and development.

44. What is Viral Marketing?

Viral Marketing is known as a word of mouth or these days with the increased use of the
internet “word of mouse” with the objective of marketing the product of a company via tools
such as social media networking sites like Orkut, Facebook, social media sharing sites such as
Youtube etc. or sites which have a social connect such as Twitter, Blogspot etc.

In short it can be defined as any strategy which uses individuals to pass on a marketing message
to others; creating scope for exponential growth in the company’s spread of the intended
 message. Companies could even use non-internet mediums such as phone SMS etc. t market their
products. The two basic differentiators of viral marketing from other marketing mediums are:
 It is rather inexpensive in its use and also value for money since at times it may be
more effective a marketing tool than contemporary marketing media. For example:
 Cadbury using the Gorilla advertising campaign
 Its uses the basic tenet of a virus in its spreading i.e. its spreads from one person to
another just as a virus would spread.

Prominent examples of viral marketing are:

 When Hotmail launched, much of its early success was due to the virality of the sigline
that it attached to every outgoing email inviting the recipient to join. One of the earliest
 examples of viral marketing on the internet
 Subservient Chicken - the creepy webcam site made for a Burger King campaign allowed
people to control a guy in a chicken suit. It went viral almost instantly and for a few weeks
 was everywhere
 Will It Blend - One of the most recent best viral marketing campaign examples, Blendtec’s
will it blend video series shows scientists testing if various household items will blend in their
 super-powerful blender. This campaign leveraged the popularity of online video sharing sites
 Dove Evolution Video - Part of a campaign by Dove, this video showed how models’ beauty is
often artificial, and really struck a chord with its intended audience of female viewers

45. What is Word Of Mouth Marketing?

Word of mouth is a reference to the passing of information from person to person. Originally the
term referred specifically to oral communication (literally words from the mouth), but now
includes any type of human communication, such as face to face, telephone, email, and text
messaging.

Characteristics of Word of Mouth

Word of mouth also takes many forms online or off-line. Three noteworthy characteristics are:

1. Credible—People trust others they know and respect, word of mouth can be highly
influential.
2. Personal—Word of mouth can be a very intimate dialogue that reflects personal facts,
opinions, and experiences.
3. Timely— It occurs when people want it to and when they are most interested, and it
often follows noteworthy or meaningful events or experiences.

Whose Word of Mouth Matters?

According to Mintel, 34% of US Internet users who bought a product or service based on a
recommendation got that tip from a friend or relative, while one-quarter bought based on
advice from a spouse or domestic partner.
Word of mouth and India

In the case of India, 87 per cent of those who use the Internet trust others’ advice rather than
any kind of advertising, proving that word-of-mouth is the most powerful advertising tool, a
press release issued by the research agency found. Newspapers come second in the ‘most
trusted list’, with 77 per cent saying so. Opinions expressed online and on brands’ Web sites
were the third and fourth most trusted at 73 and 72 per cent, ahead of television, which came
fifth as only 65 per cent said they were trustworthy.

India comes fourth among the top ten countries which trust in recommendations from
consumers, with Hong Kong topping the list with 93 per cent. Most of the top ten markets that
rely most on

“Recommendations from consumers” are in Asia. They include Taiwan, Indonesia, South Korea
and the Philippines.

Word of Mouth Marketing (WOMM) is a form of promotional campaign which operates through
an Individual’s personal recommendations of specific brands, products or services.

Like its literal meaning, word-of-mouth marketing spreads from one person to another outside
of a formalized setting, without heavy intervention by advertisers.

A recommendation from someone familiar and trust-worthy is the easiest path to a product
sale, link or new subscriber. This is because, recommendations are generally perceived as
incentive-free, unlike the obvious motivation of advertisers, who may over-promise in a bid to
increase sales.

If you want to sell more products, get more affiliate commissions or just gain more new readers
or supporters for your website, word of mouth marketing is one the most powerful ways to do
so.
What better way to spread your brand than to have an army of supporters constantly talking
about or referencing it online or offline, through conversations or links?

1. Leverage Existing Social Networks. Online communities have a tightly knit group of users
who can help to increase brand awareness for the product. Tap into these communities
with tools or content targeting their specific sub-culture and you are likely to get a lot of
attention. These can include applications for platform-specific websites like Facebook,
Firefox and WordPress, which each have a large body of users.
2. Target the Influencers. Look for individuals who are trend-setters or authorities on a specific
topic. They should preferably be individuals who have many personal connections or a large
and loyal audience. If these people spread your message, your website or product will very
easily be disseminated within a targeted group of potential users. Identify these influencers,
build a relationship with them and market through their existing sphere of social influence.
Examples of influencers include celebrities, power users on social websites and popular
webmasters or bloggers with many loyal supporters.
3. Exclusivity and Scarcity. Many websites or businesses launch virally by offering a limited
number of site invites. Some dangle the bait of limited edition products or temporal
discounts. Combine this with influencer marketing and you’ll have an excellent method to
disseminate brand awareness for new websites, products or services. Exclusivity invites
 curiosity and scarce products generate consistent demand and conversation. Remember
how people were incessantly asking for or writing about Gmail, where someone had to
invite you to open an account, a while ago?
4. Micro-Market. While online viral marketing leverages the interconnectedness of the web to
spread unique content or user-supported promotional schemes, micro-marketing focuses on
marketing to the individual by providing highly customizable products. Nike and Puma’s
Mongolian Buffet are examples of micro-marketing schemes which allow you to design and
purchase your own unique sneaker online. Micro-marketing can be combined with scarcity
and existing social networks to generate word-of-mouth exposure.
5. Industry Marketing. Instead of focusing directly on customers, focus on the people who
can build your brand. Instead of seeking for thousands of views from a wide audience,
make your mark within a niche community (like Sphinn) to build relationships and
leverage-able connections. Get recommendations from others in the similar industry to
be mentioned, promoted or included in an industry-specific ranking or recommendations
list. This builds your overall brand within a specific niche, which in turns promotes your
site to traditional media and buyers looking in from the outside.

Successful examples ( http://www.adweek.com/sa-article/best-word-mouth-136683 )


Gmail - Google did no marketing, they spent no money. They created scarcity by giving out
Gmail accounts only to a handful of "power users." Other users who aspired to be like these
power users aspired for a Gmail account and this manifested itself in their bidding for Gmail
 invites a Gmail account
on eBay. Demand was created by limited supply; the cachet of having
caused the word of mouth, rather than any marketing activities by Google.

 
Tupperware popularization

 
Popularization of text messaging (SMS)
 
Popularization of chat (Instant messaging)

Unsuccessful examples


Hotmail - Hotmail "piggybacked" on personal emails from one person to another to publicize
their free email service. At a time when few people had email, the first and only free email
service in the marketplace was appealing and novel -- hence their rapid adoption and spread.
However, the same "piggybacking" technique currently employed by all free email providers
(except Gmail) no longer works. Furthermore, the Hotmail users did not voluntarily pass it
on; they had no choice about Hotmail adding the "sign up" link at the end of their personal
 emails.

Burger King's Subservient Chicken - Burger King's marketing program called Subservient
Chicken did indeed generate a lot of word of mouth, but the word of mouth was about the
marketing campaign instead of the product that was being marketed. Also, those marketing
efforts which rely on being edgy or on some kind of stunt often fade quickly when the
 since it won't be edgy the second time around.
novelty or edge wears off. Finally, this type of marketing is not reproducible or sustainable


McDonald's LincolnFry - a fake blog was discovered, and it generated lots of negative word of mouth and
little participation.
46. What is ATL, BTL, TTL?
Below the line (BTL), Above the line (ATL), and Through the Line (TTL), in organizational business
and marketing communications, are advertising techniques.

Promotion can be loosely classified as "above the line" or "below the line".
Promotional activities carried out through mass media, such as television, radio and newspaper,
are classed as above the line promotion.

The terms "below the line" promotion or communications, refers to forms of non-media
communication, even non-media advertising. Below the line promotions are becoming
increasingly important within the communications mix of many companies, not only those
involved in FMCG products, but also for industrial goods.

"Through the line" refers to an advertising strategy involving both above and below the line
communications in which one form of advertising points the target to another form of
advertising thereby crossing the "line". An example would be a TV commercial that says 'come
into the store to sample XYZ product'. In this example, the TV commercial is a form of "above
the line" advertising and once in the store, the target customer is presented with "below the
line" promotional material such as store banners, competition entry forms, etc.

47. What are Porter’s Five Forces?

Michael Porter's Five Forces is probably the most famous framework used in preparing for the
case interviews. It has endured as one of the frameworks most talked about by many in and out
of the consulting field. Although the Five Forces is an excellent framework in helping you
organize your thoughts, like any other framework we cover in this guide, its analysis is not
complete. The Five-Forces should be used in conjunction with other frameworks to enable you
to fully understand the issues at hand. Further, we only briefly touch on this framework here,
but we have included more detailed material of Porter's work later in this guide.

Five primary forces:

1) The threat of new entrants

2) The bargaining power of buyers/customers
3) The bargaining power of suppliers
4) The threat of substitute products
5) Rivalry with competitors

Attractiveness of the market depends upon:

  Intense competition allows minimal profit margins
 
Mild competition allows wider profit margins

Barriers to Entry:
There are a number of factors that determine the degree of difficulty in entering an industry:

 Economies of scale
 Product differentiation
  Capital requirements vs. switching costs
 Access to distribution channels
 Cost advantages independent of scale
 Proprietary product technology
 Favorable access to raw materials
 Favorable location
 Government subsidies
 Learning curve
 Government policy

Bargaining Power of Buyers

A buyer group is powerful if:
 It is concentrated or purchases large volumes relative to seller's sales
 The products it purchases front the industry are standard or undifferentiated
 It faces few switching costs
 Buyers pose a credible threat of backward integration
 The industry's product is unimportant to the quality of the buyer's products or services
 The buyer has full information

Bargaining Power of Suppliers:

A supplier group is powerful if it is not obliged to contend with other substitute products for
sales in the industry
 The industry is not an important customer of the supplier group
 The supplier group is an important input to the buyer's business
 The supplier group's products are differentiated or it has built up switching costs
 The supplier group poses a credible threat of forward integration

Substitute Products:
Substitute products that deserve the most attention are those that:

  Compete in price with the industry's products

 
Are produced by industries earning high profits

Rivalry:
Rivalry among existing competitors increases if:

  Numerous or equally balanced competitors exist

  
Industry growth is slow
  
Fixed costs are high
  
There is lack of differentiation or switching costs
 
Capacity is augmented in large increments