KOTLER

KRASHER
2019
 INDEX
1. Defining Market for the new Realities
2. Developing Market Strategies and Plan
3. Creating Long term Loyalty Relationships
4. Collecting Information and Forecasting Demand
5. Conducting Market Research
6. Analyzing Customer
7. Analyzing Business
8. Tapping into Global Markets
9. Identifying Market Segment and Targets
10. Crafting the Brand Positioning
11. Creating Brand Equity
12. Addressing Competition and Driving Growth
13. Setting Product Strategy
14. Designing and Managing Services
15. Introducing new Market Offerings
16. Developing Pricing Strategies and Programs
17. Designing and Managing Integrated Marketing Communication
18. Managing Mass Communications
19. Managing Digital Communication: Online, Social, Media
20. Managing Personal Communication: Direct & Database Mrktng
Chapter 1
Defining Market for the
new Realities
 What is marketing?
Formal definition of Marketing as per American Marketing Association:
“Marketing is the activity, set of institutions, and processes for creating,
communicating, delivering, and exchanging offerings that have value for
customers, clients, partners, and society at large.”

“Marketing is the science and art of exploring,

“Marketing is about
identifying and
meeting human
and social needs.”
creating, and delivering value to satisfy the
needs of a target market at a profit. Marketing
identifies unfulfilled needs and desires. It
pinpoints which segments the company is
capable of serving best and it designs and
promotes the appropriate products and
services.” – Dr. Philip Kotler.

Needs, Wants and Demands

Needs Wants Demands

• States of felt deprivation • Wants are need satisfiers; • Wants for specific products
for basic human they are described in terms backed by an ability to pay.
requirement. of objects that will satisfy • Companies must not only
• The products which fall needs. measure how many people
under the needs category • Wants are shaped by want their product but also
of products do not require culture, society and how many are willing and
a push. individual personality. able to buy it.
 Different types of needs

Stated needs- The customer wants an inexpensive car.

Real needs- The customer wants a car whose operating cost, not initial price, is low.

Unstated needs- The customer expects good service from the dealer.

Delight needs- The customer would want an onboard GPS system.

Secret needs- The customer wants friend to see him/ her as a savvy customer.

Marketing concepts
Selling concept
Production concept Product concept
Consumers will buy
Consumers prefer Consumers favor products
products only if
products that are widely offering the most quality, the company aggressively
available and performance or promotes/sells these
inexpensive. innovative features. products

Marketing concept Holistic marketing concept

Acknowledges that
Being more effective
everything matters in
than competitors in marketing- a broad,
creating and delivering integrated perspective is
superior customer value. necessary.
 Marketing Management Tasks

The marketing management is the analysis, what target markets want, in order
to achieve the objectives of an organization. planning and implementation of
the programs designed to carry out exchanges with Therefore, an organization
undergoes different tasks to achieve its objectives ranging from developing
plans to creating long term value for the consumer.
Chapter 2
Developing Market
Strategies and Plan
A SWOT analysis evaluates
the internal strengths and
weaknesses, and the external
opportunities and threats in
an organization's
environment and facilitates
devising strategies thereby.

BCG matrix is a framework used

to evaluate the strategic position
of the business brand portfolio
and its potential. Based on the
market growth rate & brand’s
relative market share.

NESTLE’S BCG MATRIX

 The Ansoff Matrix, also called the
Product/Market Expansion Grid, is a tool used
by firms to analyze and plan their strategies for
growth and also analyze risk associated with
each strategy.
The four strategies of the Ansoff Matrix are:
 Market Penetration: It focuses on
increasing sales of existing products to an
existing market.
 Product Development: It focuses on
introducing new products to an existing
market.
 Market Development: It strategy focuses
on entering a new market using existing
products.
 Diversification: It focuses on entering a
new market with the introduction of new
products.

A value chain is a set of activities

that a firm operating in a specific
industry performs in order to
deliver a valuable product for the
market. The idea of the value chain
is based on the idea of seeing a
manufacturing organization as a
system, made up of subsystems
each with inputs, transformation
processes and outputs. While
primary activities relate directly to
the physical creation, sale,
maintenance and support of a
product or service; activities like
procurement and technology
development support them.
The set of tactical marketing tools – product, price, place and promotion enables the
firm to blend and produce the response it wants from the target market. It is the most
important set of decisions with regard to any product/service.

While 4 P’s model is seller centric, 4 C’s model is consumer centric

and answers important questions from the consumer’s perspective.
Chapter 3
Creating Long term
Loyalty Relationships
 CREATING LONG – TERM LOYALTY
RELATIONSHIPS
“Successful Marketers are those who carefully cultivate customer satisfaction and loyalty”

Customer Oriented Organisation Chart Customer – Perceived Value

Customer Perceived Value (CPV) is the

difference between the prospective
customer’s evaluation of all benefits and
costs of an offering and the perceived
alternatives.
Total Customer Benefit is the perceived
monetary value of the bundle of economic,
functional and psychological benefits
customer expect from a given market
offeringbecause of the product, service,
people and image.
Total Customer Cost is the perceived
bundle of costs customers expect to incur in
evaluating, obtaining, using & disposing of
the given market offering.

When Dell shifted it’s customer service call centers to India

and Philippines to cut costs, understaffing frequently led to
30- minute waits to customers. With customer satisfaction
slipping, while competitors matched Dell’s product quality
and prices; they also offered better services. Dell’s market
share and stock price both declined sharply.

LOYALTY: A deeply held commitment to rebuy or repatronize a preferred product or service in the
future despite situational influences and marketing efforts having the potential to cause switching
behaviour.
VALUE PROPOSITION: It consists of the whole cluster of benefits the company promises to deliver; it
is more than the core positioning of the offering. For eg: VOLVO’S core positing has been
safety; but it provide other benefits such as good performance, design and safety for environment.
SATISFACTION: It is a person’s feeling of pleasure and disappointment that result from comparing a
product or service’s perceived performance to expectations.

Highly satisfied He also pays

QUALITY: It is the totality of features and
customer generally less attention to characteristics of a product or service
stays longer, buys competing that bear on it’s ability to satisfy stated
more, talks brands & is less or implied needs.
favourably about price sensitive. HIGHER QUALITY RESULTS IN HIGH
company.
CUSTOMER SATISFACTION, WHICH
SUPPORT HIGH PRICES AND LOWER
COSTS
 CUSTOMER LIFETIME VALUE: It describes the net present value of the stream of
future profits expected over the customer’s lifetime purchases.

THE
Target Market Managing The Customer Base:
MARKETIN Aware • Reducing the rate of customer defection.
G FUNNEL • Increasing the longevity of the customer
Open To Trial relationship.
Trier (Non • Enhancing the growth potential of each
customer through “share of wallet”, cross
Rejector)
Recent selling and up-selling.
The Marketing • Making low profitable customers profitable
Funnel identifies User
Regula or terminating them.
the percentage of
• Focusing disproportionate effort on high-
potential target
market at each
r Most
User profit customer.
stage in the Often
decision process, LO
Used
from merely aware YA
to loyal.
L

BRAND COMMUNITIES: It is a specialized community of consumers and employees whose identification and
activities are focused around the Brand.

THE HARLEY OWNERS GROUP

CUSTOMER RELATIONSHIP MANAGEMENT: It

is the process of carefully managing detailed
information about individual customers and all
customer touch points to maximize loyalty.

Eg: As part of a broad trend towards

personalization, Coca Cola has introduced
Freestyle dispensing machines that allow users
to customize their soft drink choices.
Chapter 4
Collecting Information &
Forecasting Demand
 CHAPTER 4: Collecting information and
forecasting demand

A PESTEL/PESTLE analysis is a tool used to identify the macro

(external) forces facing an organization. In marketing, before any
kind of strategy or tactical plan can be implemented, it is
fundamental to conduct a situational analysis. And the PESTEL forms
part of that and should be repeated at regular stages (6 monthly
minimum) to identify changes in the macro environment.
Marketers can obtain required information from Internal Data,
Marketing Intelligence and Marketing Research

Internal data - Data collected from sources within the company.

Marketing Intelligence - Monitoring, Collection and Analysis of

Data from publicly available sources related to customer,
competitors & development of market
Chapter 5
Conducting
Market Research
 MARKET RESEARCH
Market research consists of systematically gathering data about consumers and then
analysing it to better understand their needs .
To choose its latest chip flavor, Frito-Lay used social media to replace
focus groups and survey panels. The company has asked Facebook fans
to weigh in by having them click an “I’d Eat That” button next to
suggested new flavors. The results? Consumer tastes varied by location:
they found that a beer-battered onion-ring flavor is popular in
California and Ohio, while a churro flavor is a hit in New York.

Apple has been the largest name in technology for years. This is not
necessarily because they are the most innovative. Instead, it is because
they use market research to find out exactly what their customers want
from their devices; they then figure out how to make those wants a
reality. Their “Apple Customer Pulse” research group is a prime
example. Because these are online surveys, the company is able to
compile and analyze the data faster, and the surveys are easy to
administer, without much effort. This makes the market research more
appealing to those that participate, as well as to the company. These
surveys have led to different designs and modifications of Apple
products. Such modifications include having bigger screens to view
videos and games more clearly

4 Types of Research Design approaches

Observational research is used to gather data by observing customers as they shop or consume
products. For Example, Large retail chains use new age technologies to understand consumer behavior

Focus group research is a gathering of 6 to 10 people carefully selected to discuss various topics at
length where the questions are based on the marketing research agenda. For Example: Gathering of
women by a cosmetic company to understand how they view the product and what they expect.

Survey research is used to assess thoughts, opinions, and feelings of larger set of customers by
standardized questionnaires through online or offline surveys, face to face interviews, telephonic
interviews etc. For Example, Researchers approach people in a mall and ask them to fill out surveys.

Behavioral research is to trace and analyze consumer purchase behavior from customer database
and in-store scanning data to make reliable conclusions For Example, Amazon analyses consumer
preferences based on usage patterns and then shows customized recommendations.
Chapter 6
Analyzing Customer
THE ENVIRONMENT
•Marketing Stimuli; Product, Price,
Place, Promotion
• Other; Economic, Technological,
Social, Cultural •E.g People buy more
sweets during festivals BUYERS ‘BLACK BOX’
•Buyer’s characteristics
•Buyer’s decision process
BUYER RESPONSES
•E.g People are more likely to choose
• Buying attitudes and preferences iphones if there are in upper middle
class
• Purchase behavior; what the buys, when,
where, and how much

• Brand engagements and relationships •E.g

People may select iphones for prestige

Psychological:
Motivation, Perception, Learning,
Cultural:
Beliefs and Attitudes Culture, Subculture and Social Class
E.g a consumer may buy Dettol over E.g a lady would choose sarees over
Savlon because he believes Dettol is salwar-suit because it’s her culture
better

Social:
Groups and social networks, Family,
Personal:
Age, Occupation, Economic
Roles and Status
situation, Lifestyle, Personality
E.g consumer buys a Timex watch
E.g people may eat out if they
instead of Fastrack because of its
don’t have time to cook (lifestyle)
prestige
 High involvement of Low involvement of
consumer consumer

When there’s Complex Buying Behavior Variety-seeking buying behavior

Significant E.g a consumer buying a car E.g a consumer may choose a new
differences Will first learn about attributes product brand just out of curiosity
between And options, then an to try something now
brands informed decision

When there’s Dissonance reducing buying

Habitual buying behavior
Few Behavior
E.g consumer doesn’t bother
differences E.g a consumer making a risky,
between product difference,
between infrequent purchase, but they
like table salt
brands see little different in brands

Evaluation of Alternatives: Post-purchase Behavior: further action is

Need Recognition: Consumer
Consumer uses info to evaluate taken based on satisfaction/ dissatisfaction
recognizes problem/need E.g
brands E.g you buy a phone E.g consumer is dissatisfied with his car, he
you’re hungry – you buy a burger regrets the pruchase
based on price

Information Search: Consumer is Purchase Decision: Consumer

motivated to search for more chooses a brand to purchase
info E.g before buying a car, you from
research through internet
 Behavioral decision theorists have
identified many situations in which
01 consumers make seemingly irrational
choices
Consumer behavior is very
constructive and context of
02
decisions really matter.

Representativeness Anchoring and

Availability Heuristic
Heuristic Adjustment heuristic
Consumer base their
Consumer base their Consumers arrive at an
predictions on the quickness
predictions on how initial judgement and then
and ease with a particular
representative or similar the adjust it based on
example of an outcome
outcome is to other examples additional information
comes to mind.

Prospect Theory maintains that consumers frame their

Framing decision alternatives in terms of gains and losses to value
function.

Customers tend to:

• Segregate Gains • Integrate losses
Ex: make the sum of Ex: Withholding tax
Mental the parts seem grater from monthly
Accounting than the whole (list paychecks is less
benefits) aversive than large,
lumpsum tax
• Integrate smaller payments.
losses with larger
gains • Segregate small gains
Ex: Housebuyers are from large losses
more likely t o view Ex: Rebates on big
additional expenses purchases like car
favourably.
Chapter 7
Analyzing Business
 Chapter 7
Analyzing Business Markets
Organizational Buying is the
Business Market consists of all
decision making process by which
the organizations that acquire
formal organizations establish the
goods and services used in the
need for purchased products &
production of other products or
services and identify, evaluate and
services that are sold, rented or
choose among alternative brands
supplied to others.
and suppliers.
How are business markets different from consumer markets
1) Fewer, larger buyers 5) Inelastic Demand
2) Close supplier-customer 6) Geographically concentrated
relationship buyers
3) Professional purchasing 7) Fluctuating demand
4) Multiple buying influences 8) Direct Purchasing

THE BUYING CENTER

Stages in buying process

Problem Recognition

General need description &

Product Specification

Supplier Search

E - Procurement

Lead Generation

Proposal Solicitation

Spplier Selection

Order Routine Specification

Performance Review
Chapter 8
Tapping into
Global Markets
 Deciding whether to go abroad
Ways to enter the market
Deciding whether
to go abroad
1 INDIRECT EXPORT- Goods
sent through intermediaries
Which market to
2 DIRECT EXPORT- When
enter
companies decide to handle
their own exports
How to enter
3 LICENSING- foreign
company gets the trade
Deciding the secret to manufacture
marketing program JOINT VENTURE- foreign
4
and local investors share
Marketing ownership
organization
5 ACQUISITION- buying an
organization
6 FDI
Smaller packaging, lower prices How to
target
Focus on high frequency(mom & pop) stores
developing
markets:

Spend time observing the buyers

 Global product strategies

PRODUCT STANDARDIZATION- Some products are

easily adapted outside their country of origin, such is their
nature. Eg. Google, Twitter, Facebook, etc.

PRODUCT ADAPTATION STRATEGIES

Don’t
Adapt Develop
change
product new
product
product

Straight Product
change in
communi

extension adaptation
cation

Product
No

invention
Communication Dual adaptation
communi

adaptation
cations
Adapt

Global pricing strategies

PRICE ESCALATION- A Gucci bag of $120 in Italy being
sold for $240 in the US, after accounting for added fluctuations
which may increase costs

One can set prices in different countries the following ways:

1. UNIFORMLY 2. MARKET-BASED 3. COST-BASED
 TRANSFER PRICES- A company, when transferring
goods to its international subsidiary may charge high
prices(to avoid paying high income tax) or low prices to
enter and disrupt the new market. Both these practices are
illegal.

GRAY MARKETS- Channels alternate to authorized

ones to sell products legally. They harm the brand’s equity
as the goods may be tampered, defected.

COUNTERFEIT PRODUCTS- To put simply, fake

products. Eg. Tik Tok users showing off their Supreme
merchandise, not realising that it doesn’t retail in India.
Chapter 9
Identifying Market
Segment and Targets
Dividing market into distinct group of buyers who have different needs
or behaviour and might require varied marketing strategies.

Nation, Region , population density

Geographic (Urban, Sub-urban, Rural)

Age : Full Nest-I,1 child less than 6 yrs old, Full Nest-II,youngest
child under 6, Full Nest-III: all adult children
Demographic Gender : Women wearing denims with #shapemyworld
Life Stage : Bachelorhood, Honeymooners, Parenthood

Lifestyle : Culture-oriented, sports oriented, outdoor

oriented. Classification is done on three parameters:
Psychometric AIO-Activities, Interests and Opinions.
Personality : Compulsive, gregarious ,authoritarian ,ambitious

Loyalty Status: None, medium, strong, absolute

Usage Rate: Light, Medium, Heavy
Behaviourial Attitude towards Product: Enthusiastic, positive,
indifferent, negative, hostile

MEASURABLE ACCESSIBLE
Measurable refers to the The market segment
fact that the market should be reachable,
size and profiles of the particularly in
segments needs to terms of distribution
be measured. and communication

A market DIFFERENTIABLE
segment
should be a The market’s
homogenous group
characteristics must
with clearly defined
characteristics such as age provide supporting data
group, socio-economic for a marketing position
background and brand perception or sales approach
SUSBSTANTIAL ACTIONABLE
 Mass Marketing
Telecom companies, Personal Hygiene
Products

Segmented Marketing Local Marketing

Six different laundry detergent brands in Shopkick-special offers and rewards
USA by P&G for checking into client stores

Niche marketing Individual Marketing

Stance- selling socks as main product Stitch Fix- Rolls Royce Bespoke – customized cars for
online personalized styling to women unique experience

Evaluating and Selecting Market Segments

1
Single Segment Concentration:
Concentrated Marketing where the firm
gains a strong knowledge of segments

2
Product Specialization: The needs and acquires a strong market
presence
firm makes a certain product that

3
it sells to several different market
segments. Selective Specialization: a firm selects
a number of segments. Each objectively

45
attractive and appropriate, there may be
little or no synergy between the segments
Market Specialization: The firm
concentrates on serving many needs
of a particular customer.
Full Market Coverage: The firm attempts
to serve all customer groups with all
products they may need. E.g. Coca Cola (non-
alcoholic beverage segment), Microsoft
(Software Market) etc.
 Product
Variability

Market
Variability
Competitors
strategies

Perceptual Positioning Map shows consumer perception of

their brands versus those of competing product on
important buying dimension
Chapter 10
Crafting the
Brand Positioning
 Positioning is the act of designing the company’s offering and
I image to occupy a distinctive place in the mind of the target market.

Attributes or benefits consumers strongly associate with a

Points of brand, positively evaluate, and believe they could not find
Difference (POD) to the same extent with a competitive brand

Points of Parity Associations that are not necessarily unique to the brand
(POP) but may be shared with other brands

Criteria for PODs:

Desirable: Deliverable:
Desirable:
• Relevance Deliverable:
• Feasibility
• Relevance
• Distinctiveness • Feasibility
• Communicability
• Distinctiveness
• Believability • Communicability
• Sustainability
• Believability • Sustainability

Various Product Differentiation

Product Form Features Performance Conformance Durability

Reliability Reparability Style Design Ordering ease

Delivery Installation Customer Customer Maintenance

training consulting
 Distinct Profits rise Different
Limited Life
Stages and fall strategies

Products have a Product sales pass Profits rise and fall Products require
limited life through distinct at different stages different strategies
stages each with in each life cycle
different challenges stage
and opportunities

Common
PLC
Patterns Product Life Cycle

Introduction Stage
01 • Pioneer Advantage
Growth Stage
02
Maturity Stage
03 • Market Modification
• Product Modification
• Marketing Program Modification Decline Stage
04
Market Segmentation Strategies:
(a) Market Fragmentation Stage
(b) Market Consolidation Stage
Chapter 11
Creating Brand Equity
What is a Brand and Branding
A brand is 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 is endowing products and services with the
power of brand.

Role of Brands
Create Barriers Serve as a Secure price
Signify Quality competitive advantge
to Entry premium
Identify the Simplify product Organize Offer legal
marker handling accounting protection

What is branding:
Brand equity is the added value endowed on products and services, which
may be reflected in the way consumers, think, feel, and act with respect to
the brand.

Key benefits of Brand Equity

• Improved perception of product performance
• Greater Loyalty
• Less vulnerability to competitive marketing
• Less vulnerability to marketing crisis
• Larger Margins
• Additional Brand Extension opportunities
Choice Criteria
• Memorable
• Meaningful
• Likeable
• Transferable
• Adaptable
• Protectable

Branding Strategy
Develop new Apply existing Use a combination Secure price
brand elements brand elements of new and old premium
Chapter 12
Addressing Competition
And Driving Growth

•Market Leader
•It has the largest market share in the
relevant product in the industry. It has a
dominant position in the market. In India,
well-known market leaders are Maruti
Suzuki in cars, Hero Honda in two-
wheelers, Hindustan Unilever in
consumer packages goods, and so forth.
•Market Challenger
•Also known as runner-up firms. They
occupy second, third and lower ranks in
an industry. They are capable to attack
the leader and other competitors.
Sometimes, capable challengers can
overtake the leader, too. Tata Motors
and Hyundai in cars, Bajaj Auto in two-
wheelers, Procter and Gamble in
consumer packaged goods are some of
the market challengers in India.

•Market Follower
•The firms that prefer to follow the leader
rather than to challenge them are called
the followers. They do not face the leader
directly. Some followers are capable to
challenge but they prefer to follow.
However, market followers always react
strongly in case of any loss. They decide to
provide similar offers by copying the
market leader.
•Market Nicher
•An alternative to being a follower in a
large market is to be a leader in a small
market, or niche. Smaller firms normally
avoid competing with larger firms by
targeting small markets of little or no
interest to the larger firms.

Marketing Strategies for Challengers:

Marketing Strategies for Leaders:
- Defining strategic objectives and
•- Expanding Total Market
opponents
•- Defending current market share
- Choosing general attack strategies
•- Expanding market share
- Choosing specific attack strategies

Broad Marketing
Strategies for
Different
Competitors
Marketing Strategies for Nichers:
Marketing Strategies for Followers: - End-use specialist
- Counterfeit - Vertical level specialist
- Customer size specialist
- Cloner - Specific customer specialist
- Imitator - Geographic specialist
- Product/ Product line specialist
- Adaptor
- Event specialist
 •A period of slow sales growth.
Introduction
•Profits are nonexistent because of heavy expenses.

•A period of rapid market acceptance.

Growth
•Substantial profit improvement.

•A slowdown in sales growth as the product has achieved acceptance by most

potential buyers.
Maturity •Profits stabilize or decline because of increased competition.

•Sales show a downward drift.

Decline
•Profits erode.

Style, Fashion and Fad Life Cycles

Style Fashion Fad

•A style has a cycle that it
runs through that show a
mix of increased and
decreased sales over
time. The longest lasting
trend, style can be related
to almost any product.
•As opposed to style, •Fads are the most
fashion is a more steady unreliable trends as they
progression of a trend. have a quick rise, peak,
Fashion starts out, and steep decline all in a
increases steadily, short period of time. Fads
plateaus, and then are usually driven by
decreases proportionally consumer support and
to a decline. immediate brand
popularity.
Chapter 13
Setting Product Strategy
 • Anything that is offered to market for attention, acquisition, use,
consumption that satisfies need or want.

PRODUCT • Non Durable : Tangible goods normally consumed in one or a few uses
• Ex. Shampoo, facewash
• Durable : Tangible goods that normally survive many uses: refrigerator

• Intangible, inseparable, variable, and perishable products that normally

SERVICE require more quality control, credibility, and adaptability

• Example: haircuts, legal advice

Encompasses all possible augumentations

Potential and transformations the product might
undergo in future
Product

Augmented Produt or service that exceeds customer

expectation
Product Example: Complementary breakfast with room

Expected
Set of attributes buyers normally expect
Product Example: A clean bed, frsh towels, working
lamps
Basic Product
The hotel room includes a bed, bathroom
towel desk, dresser, closet
Core
Benefit Service or benefit customer is really buying
Example : A hotel guest buys rest and sleep.

Convenience- Frequently
Shopping- Less frequently bought,
bought, minimum buying efforts
comparison of price, style, quality.
and comparison. Eg- detergent,
Eg. Furniture, clothing. Deeper sales
grocery. Low priced and readily
support is provided.
available.
 Specialty- Unique
characteristics and brand,
special purchase efforts.
Eg- Lamborghini, designer
clothes. These are not
compared generally.
Unsought- Not known by
consumers or not considered for
buying.
EgPre planned funeral services.
They require extensive
promotions.

1. Form: this includes size, shape, physical structure.

2. Features: they supplement the basic function of the product. Company must
compare customer value v/s company cost for each potential feature.
3. Customization: requires gathering and using information about consumers. Mass
customization is the ability of a company to meet each customer’s requirements.
4. Performance quality: it is the level at which a product’s primary characteristics
operate.
four performance levels- low, average, high, and superior. The level must be
appropriate to the target segment and not necessarily the best.
5. Conformance quality: the degree to which all produced units is identical and meets
the promised specifications.
6. Durability: buyers generally pay more for more durable products. However, the extra
price must not be excessive and the product must not be subject to rapid technological
obsolescence
7. Reliability: probability that a product will not fail within a specified time period.
8. Reparability: the ease of fixing a product when it malfunctions or fails
9. Style: the product’s look and feel. Creates distinctiveness that is difficult to copy.

1. Ordering ease: ease of placing an order

2. Delivery: includes speed, accuracy, and care throughout the process.
3. Installation: work done to make a product operational in its planned location.
Becomes a selling point when the target market is technologically novice.
4. Customer training: training customer’s employees to use vendor’s equipment
efficiently and properly.
5. Customer consulting: data, information and advice services that seller offers to
buyers.
 6. Maintenance and repairs: helps customers keep products in working
order.
7. Returns: they are of two types-
1. Controllable: result from problems, difficulties, or errors of
seller or customer and can be eliminated with proper
strategies.
2. Uncontrollable: can’t be eliminated by the company in the
short run.

1. Product Quality- Freedom from defects, delivering targeted level of performance

1 2. Features That can add value and differentiate your product

3. Style and Design Differentiating factor, adds usefulness

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isBranding-
not here to Buyers
be read. attach meanings and form relationships with brands. It assures

2
1
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quality, consistency,
is not here to be read.
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is not here to be read.
legal protection. Whole product story is built on a brand

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isPackaging- Attracts
not here to be read. buyers, communicates brand positioning, optimum and easy

3 packaging is preferred. Must be done to reduce adverse environmental impacts as

much as possible

Labeling and Logos Supports brand positioning and personality, digital friendly logos

4 preferred

5
Customer Support- Used to build lasting relationships, constant interaction through
online-offline medium, survey to improve products
Chapter 14
Designing And
Managing Services
 CHARACTERISTICS OF SERVICE
Intangibility
Services are intangible offerings. A
buyer cannot see, hear, feel or taste a
service unless it is bought. A person
who pays for a massage will not see
the effects of massage till the time the
massage is done on his/ her body
Perishability
A service cannot be stored, returned, or
resold like a tangible product. A buyer
cannot save the massage experience
bought from a service provider. To
experience it again, the service will have to
be bought again. Similarly, in case of a bad
experience, he/ she cannot return the
service if dissatisfied.
Inseparability
There is inseparability of the service
provided and the buyer. This doesn’t
holds true for products as they are
produced, stored at a different place, and
delivered when needed, service is
generated and consumed at the same
time. For example, a barber needs to be
present to provide his service of a
haircut.
Variability
The way a service is provided differs
depending on the service provider, it’s
time as well as location. For example,
an entertainment program by two
different performers will be
different.A barber may not provide a
consistent haircut to all individuals
depending on time constraints by the
clients

What is service quality?

An assessment of how well a delivered service conforms to the client's expectations. Service business operators
often assess the service quality provided to their customers in order to improve their service, to quickly identify
problems, and to better assess client satisfaction.

Service Quality Gap Model

The Gap Model of Service Quality is framework for analysing common customer satisfaction issues. It was
proposed by A Parasuraman, Valarie Zeithaml and LL Berry in 1985 in the Journal Of Marketing

GAP 1
The Listening Gap (Not knowing What Customers Expect)
• Inadequate marketing research orientation
• Lack of upward communication
• Insufficient relationship focus
• Inadequate service recovery

GAP 2
The Service Design and Standards Gap (Not having the Right
Service Quality Designs and Standards)
• Poor service design
• Absence of customer-driven standards
• Inappropriate physical evidence and services cape

GAP 3
The Service Performance Gap (Not Delivering to Service Designs and
Standards)
• Deficiencies in human resources policies
• Customers who do not fulfill roles GAP 5
• Problems with service intermediaries The Customer Gap
• Failure to match supply and demand The customer gap is the difference
between customer expectations and
GAP 4 customer perceptions. This gap occurs
The Communication Gap (Not matching Performance to Promises) because customers do not always
• Lack of integrated services understand what the service has done
• Ineffective management of customer expectations for them or they misinterpret the
Overpromising Inadequate horizontal communications service quality.
Chapter 15
INTODUCING
NEW MARKET OFFERINGS
 INTODUCING NEW MARKET OFFERINGS
New product development shapes the company’s future.
There are two ways to Introduce new product.

A) BUY (Acquisitions)
When aqcuiring, company can;
Buy a
Buy license or
Buy other patents franchise
companies from other from Nestle increased it’s presence in
North America by acquiring
companies another brands such as Carnation,
company Stouffer’s, Ralson Purina, Gerber,
PowerBar, Dreyer’s Ice Cream.

B) MAKE
Brand Extension New Product Development
 Angry bird has 63 levels when
it began, which grew to more
than 360. The brand (Rovio
Entertainment) has also
successfully extended within
and outside entertainment,
with toys, backpacs, TV show,
comic series. It is so popular
that there are Angry Bird
themed activity parks in some
countries.

Some drawbacks faced by new product launches:

*Fragmented Markets *Social, economic & governmental
constraints *Cost of Development *Capital Shortages *Poor
Launch timings *Shorter product life cycles *Lack of
organizational support.

Overall Probability Probability of Probability of

Probability = Of Technical X commercialization X economic success
Of success Completion given technical given
completion commerciaization
Chapter 16
Developing Pricing
Strategies and Programs
 How to set prices?
Understanding consumer pricing psychology
• Reference Prices – Comparing product
price with what they remember or
external reference price like
• Anchor prices
• Price options
• Posted price-benchmark
• Minimal bidding price
• Price quality inferences, Image pricing –
exclusivity & high price is perceived as an
indicator of quality
• Price Endings – end with an odd digit or 9
unless a high-price image product

PRICING METHODS
Markup price = unit cost / (1-desired return on sales)
Target-return price = unit cost + (desired return x invested capital)/unit
sales
Break-even volume = fixed cost / (price – variable cost)
 A company may sometimes find it desirable
to initiate either a price change or a price
increase. In both cases it must anticipate
buyer and customer reactions

Responding to
Price Changes
 Participative pricing

1) Auction
2) Reverse Auction
3) Exchange
4) Negotiation
5) PWYW – Customer has total
control over the price
6) NYOP model – Seller can
refuse the price that a buyer
is prepared to pay eg
priceline
Chapter 17
Designing and Managing
Integrated Marketing
Communication
 Marketing communications mix

Advertising Paid form of non personal communication of ideas

Sales promotion Short term incentives to encourage trial or purchase

Events &
Special brand related interaction with consumers
experiences
Internal or external(consumers) programs to protect or promote
PR & publicity the image of the co.
Online & media Activities to raise awareness, improve image
social marketing
Direct & database marketing Through calls, fax, mails, etc

Mobile marketing Targeted towards smart-device users

Personal selling Face-to-face interaction with prospective customer

All these modes above together form IMC*

Macro model of communications process

 Micro model of consumer responses

Developing effective communications

Identify target Determine Design
audience objectives communications

Decide on media
Select channels Establish budget
mix

Measure results Manage IMC*

 SET THE COMMUNICATION SELECT
INTENT- COMMUNICATION
a. Establish need for category CHANNELS-
b. Build brand awareness a. Personal
c. Build brand attitude b. Non-personal(Mass)
d. Influence brand purchase c. Integration of
intention communication
channels
ESTABLISHING THE BUDGET FOR IT
a. AFFRODABLE METHOD- setting it to what
they think they can afford FACTORS
b. % OF SALES METHOD- Set by availability of
funds, not market opportunities
AFFECTING
c. COMPETITIVE PARITY- Enough to stay on COMMUNICA
par with competitors
d. OBJECTIVE & TASK METHOD- Determine -TIONS MIX
what needs to be done first and allocate
accordingly
Type of product market
Buyer readiness stage
Product life cycle stage

*IMC – Integrated Marketing Communications

Chapter 18
Managing Mass
Communications:
Advertising, Sales &
Promotion
Mission: What are our advertising objectives?
Money: How much can we spend & how do we allocate our spending across media
types?
Message: What should the ad campaign say?
Media: What media should we use?
Measurement: How should we evaluate the results?

Television Ads Print Ads Radio Ads

Advantage High reach & Timely & Flexibility &

low cost pervasive quick reaction
generation

Disadvantage Brand Poor Lack of visual

neglection reproduction images &
owing to the quality & short resulting
fleeting nature shelf life passivity
Sales Promotion consists of a collection of incentive tools, mostly short-term, designed
to stimulate quicker or greater purchase of particular products or services by
consumers or the trade.

Advertising vs. Sales Promotion

Sales Promotion tools

Premium refers to A coupon is a
certificate that
goods offered
either free or at low fetches buyers a
saving when they
cost as an incentive
to buy a product. purchase a specified
product.
Samples are defined
as offers to
consumers of a
small amount of a
product for trial.
 Engagement marketing, sometimes called "experiential marketing", "event
marketing", "on-ground marketing", "live marketing", "participation marketing",
"Loyalty Marketing", or "special events" is a marketing strategy that directly
engages consumers and invites and encourages them to participate in the
evolution of a brand or a brand experience. It involves choosing events,
designing sponsorship programs and measuring sponsorship activities while
creating experiences.

Public relations (PR) is the practice of deliberately managing the spread of

information between an organization and the public. Public relations may include an
organization or individual gaining exposure to their audiences using topics of public
interest and news items that do not require direct payment. This differentiates it from
advertising as a form of marketing communications. Public relations is the idea of
creating coverage for clients for free, rather than marketing or advertising.
Chapter 19
Managing Digital
Communication: Online,
Social, Media & Mobile
 Digital Communication
Digital marketing encompasses all marketing efforts that use an electronic device
or the internet. Businesses leverage digital channels such as search engines, social
media, email, and other websites to connect with current and prospective
customers.

Advantages of Online Communication Disadvantages of Online Communication

•Marketers can easily the effects by noting how many •Bogus clicks are generated by software-powered Websites
unique visitors, UV clicks on a page, time spent, etc. making marketers think the ads are effective.

Contextual placement which means marketers can buy ads Advertisers lose some control over their online messages,
on sites related to their own offerings. which can be hacked or vandalized.

Pace advertising to reach people based on keywords

customers type into search engines. Customers can easily screen out most messages.

Online Marketing Communication Channels

1. Web sites- Express the company’s purpose,
history, products, and vision. To encourage repeat
visits, effective sites feature seven design elements
called the 7Cs: 2. Search Ads- Paid search or pay-per-click ads.
Context, Content, Community, Customization,
Communication, Connection, Commerce.

3. Search engine optimisation (SEO)- Used to

increase the web site’s visibility across the search
engines. It is designed to improve the likelihood
that a link for a brand is as high as possible in the
rank order of all non paid links when consumers
search for relevant terms.
4. Display ads- Also known as banner ads, display
ads are small, rectangular boxes containing text and
perhaps a picture that companies pay to place on
relevant Web sites.

5. Interstitials- A form of interruption marketing. 6. E-mail- Allows marketers to inform and

Interstitials interrupt sequential content, forcing
exposure to the advertisement before visitors can
continue on their content path. Since pop-up ads
are intrusive, many people use software to block
them.
communicate with customers. It includes delivering
personalized or targeted messages at the correct
time. For example, brands like Amazon, Flipkart,
etc. deliver emails that are tailored to meet the
user’s requirement.
 Social Media Marketing and Platforms
Social media marketing is a form of Internet marketing that utilizes social networking websites as
a marketing tool. The goal of SMM is to produce content that users will share with their social
network to help a company increase brand exposure and broaden customer reaches. This form of
marketing is driven by word- of-mouth, meaning it results in earned media rather than paid
media. For example: Volvo Super Bowl Contest #VolvoContest
Volvo let the word out that you could win a brand new Volvo for someone you love by simply
tweeting the name of the person you would like to give the car to and hash tag #VolvoContest
during any car commercial. The idea was to shift the viewer’s focus from the car commercial on
the TV to tweeting about Volvo instead.
The three main platforms are:

1. Online Communities and 3. Social networks- Have

Forums: Either created by
consumers with no commercial
interests or company affiliations
or are sponsored by companies
whose members communicate
with the company and with
each other through postings,
text messaging, and chat
discussions. They fill multiple
functions by both collecting and
conveying key information.
2. Blogs- Regularly updated
online journals or diaries are
an important outlet for word
of mouth. They bring together
people with common
interests.
become an important force in
both business-to-consumer
and business-to-business
marketing. Facebook,
LinkedIn, Tweeters are the
major ones. But given that
users generate their own
content, ads may find
themselves appearing beside
inappropriate or even
offensive material.

Mobile Marketing
Mobile Marketing is an increasingly important form of interactive marketing by
which marketers can use text messages, software apps, and ads to connect with
consumers via their smart phones and tablets.
Chapter 20
Managing Personal
Communication: Direct &
Database Marketing
 DIRECT MARKETING
Consists of direct one-to-one connections with carefully targeted individual
consumers to both obtain an immediate response and cultivate lasting customer
relationships. - Kotler

World renowned vehicle manufacturers, Land Rover, used a novel way

to invite customers to the opening of their new Liverpool showroom.
Balloons were put inside boxes and sent to 100 customers. Tags were
attached to the balloon strings, which delivered the company’s
marketing message together with an invite to the event.

Direct marketing is often used as a tool to promote food products, with

chocolate manufacturers Nestle also getting in on the act. They sent out a
mailer that was made to look like the card left by postmen when they’re
unable to deliver a parcel. Instead of saying that a package couldn’t be
delivered, however, the mailer claimed that the package (KitKat chunky) was
unable to be posted as it was ‘too chunky for your letterbox’. The lucky
recipients were able to exchange their card at their local newsagency for a
free KitKat Chunky chocolate bar.

Ways of Direct
Marketing

Database marketing
Database marketing involves the collection of consumer data in order to understand their needs
and provide solutions through personalized communication.

Facebook Messenger Freemium Models/Free Trials

Marketing
Messenger subscribers are
attained whenever a person
sends a message to a
Facebook fan page. This
makes growing a marketing
database easy since the
individual doesn’t need to
enter their email address on
a form. Their accurate email
address already exists on
Facebook and by interacting
with a brand, they give their
permission to be marketed to
by the brand.
Freemium models and free trial offers also
have been a proven way to grow a database
of potential customers and market to them.
Good examples include free messaging apps,
social media networks, free marketing tools
and free gaming apps with in-app purchases
or ads. SaaS companies offer seven, 14, 30
free trials to access powerful business tools
without asking users to enter a credit card
 Sales Force Design and Management
Sales force is linking between companies and customer. Therefore, companies have
to be careful in designing and structuring sales force

Steps involved in designing sales force Management of sales force

Two critical decisions determine the design of sales force: sales force size and
sales force organization.

Sales Force Size

Sales force size is decided by workload approach. Workload approach is based on
calculation of total annual calls required per year divided by the average calls per year
that can be expected from one salesperson.

Sales Force Organization

The following forms of sales force organizations are employed by companies:
• Geographic
The sales area is broke down into territories based on workload, i.e. number of calls that
a salesman would be required to make, and sales potential of the territory. A salesperson
is assigned to each territory to sell all products of the company.
• Product
A salesperson is responsible for selling one or only a few of the products that the
company sells

PERSONAL SELLING
Personal selling is where businesses use
people (the "sales force") to sell the product
after meeting face-to-face with the
customer. The sellers promote the product
through their attitude, appearance and
specialist product knowledge