Introduction to

Marketing:
Sessions 1-2
KNOW YOUR FACULTY
Prof. Freda J Swaminathan

Faculty at FORE since 3 years.

Graduated from the Indian Institute of
Management, Ahmedabad and
Illinois State University ( USA).

•Professional in Advertising,
Corporate Communications and Marketing.
Worked with leading organizations viz LINTAS ( 8 years),
JW Thompsons Associates ( 4 years ), Goodyear ( 3 years ),
Advertising & Sales Promotions – CK Birla group ( 6 years ) and the
Dalmias ( 3 years ).

•Worked on some of India’s leading FMCG brands and services.

•On the client side, handled major ad agencies including Leo Burnett,
McCann Erickson, Enterprise Nexus & Percept Advertising.
Core Courses – Marketing 1 & 11
Marketing 1
Decision areas in Marketing
• Assessing market opportunity
– Customer analysis
– Competition Analysis
– Assessing Marketing Environment
• Designing the Market Offering
– Product offering
– Promotions
Marketing 2
• Market Assessment and Forecasting
• Market Research and Information System
• Delivering the Offer
– Sales and Distribution Management
– Pricing
• Emerging Issues in Marketing
Assessment Methods and Marks Distribution
Method Weight

Class Participation & In class 15%

presentation
Written submissions 30%
Group Projects @ 5*3 =15
Cases @ 5 * 2 = 10
Quiz @ 2.5 * 2=5

Mid Term 15%

Final Exam 40%

Projects due in July, 2008
Group Projects – 3 nos.
Group to be of 3-5 members
Read the assignment given in the Reading
Material.
Report is due on the day of presentation.
First presentation on Session 5.
Second presentation on Sessions 12 & 13
Case analysis
Vora & Co – due on Session 9
Quiz on Session 7
 July
August

M T W TH F S Remarks

1 2 3 4 5
Session 1 Session 2

7 8 9 10 11 12
Session 3 Session 4 Session 5

14 15 16 17 18 19
Session 6 Session 7 Session 8

21 22 23 24 25 26
Session 9 Session 10 Session 11

28 29 30 31
Session 12 Session 13
 Role of Marketing in an Organization

“ In the factory we produce cosmetics.

In the drugstore we sell hope.”
Charles Revson

Work in Pairs:
Make a similar statement for another
Product.
Introduction to Marketing

Activity 1
Work in pairs
1.Name 3 Goods that are marketed in our country?
2 Specify 3 brands within the goods mentioned. Select one
brand that you will discuss.
3 Who would be the customer and consumer of the brand?
4 Describe a single judgement of the following for the brand
selected :
Product :
(Can be variety, quality, Quality, Design, Features, Brand
Name, Packaging, Sizes, Services, Warranties, Returns, etc)
Price :
(list price, discounted, credit, premium pricing, offers, etc)
Place :
(distributors, retailers, malls, kirana stores, dealers,
showrooms )
Promotion:
( advertising, sales promotion, public relations, direct
marketing, sales force)
5. What are the following influences:
Technology
Globalization
Customization
Competition
Consumer expectations
Retail changes
Internet
6. How does this brand affect the environment ?
Marketing Variables - Marketing Mix

• Product
• Price
• Promotion
• Place

Using the Marketing Mix to build long term relationships.

 What is Marketing?
Marketing is finding out what
the consumer wants and then
giving it to him / her, in a commercially
viable manner.

Marketing therefore becomes

an attitude, a state of mind and a philosophy
which guides the operations of a business.
.
What is Marketing?

"Marketing is the activity, set of

institutions and processes, for creating,
communicating, delivering and
exchanging offerings that have value for
customers, clients, partners,
and society at large.“

AMA, 2008
Concepts of Sesson 1
• What is Mktg
• Marketing mix

Next session : Mark’s & Spencer’s. Read the case for a mini quiz.
Mark’s & Spencer’s

Session 2
Project 1
– What were the triggers of purchase.
– What were the stages in the purchase processes.
– What inputs were sought in each of these stages.
– Who played what kinds of roles in each stage and
– Approximately how much time was taken in each stage.
– Was there any post purchase dissonance?
Methodology
• Based on the learning’s and insight from the in-depth discussions with
THREE consumers, please draw implications for marketing decisions.
• Ask probing questions.
• Do not construct a structured questionnaire. Just carry with you a list of
questions to guide you discussions.
• The report should be limited to 3 pages ( one and a half space, 12pt Times
Roman / Arial ) including Appendix, if any.
• The report is due just before the presentation.
• Late submissions irrespective of reasons, however genuine, will have a 50%
reduction in marks if the report is submitted after the next 2 days and will not
be accepted beyond 2 days.
Four Eras of Marketing History
Era Production Sales Prior Marketing Relationship
Prior to 1920’s to 1950’s Since 1950’s Since 1990’s

In the United States and other highly industrialized economies

“A good product “Creative advertising and “The consumer rules! “Long term relationships
will sell itself.” selling will overcome Find a need and fill it.” with customers and other
consumers’ resistance and partners lead to success.”
convince them to buy.”
Relationship Marketing

The development, growth, and

Advocate
maintenance of long-term, cost-
effective exchange relationships
with individual customers,
Loyal
Supporter suppliers, employees, and other
partners for mutual benefit.
Regular
Purchaser

New
Customer
Customer Needs / Wants / Demands
Customer
Needs ( Basic )

Eg. Food
Air, shelter
Wants Demands

Directed at specific Wants for

Objects – shaped by specific products
backed by an
one’s society. Eg. ability to pay.
Rice, dals, fruits Eg : Pepsi, Benz,
etc.
l 16
I want it, I need it…..

5 Types of Needs

• Stated needs:
• Real needs:
• Unstated needs:
• Delight needs:
• Secret needs:
I want it, I need it…..

5 Types of Needs

• Stated needs: admission to a good institute.

• Real needs: must afford the fees.
• Unstated needs: good teaching from faculty
• Delight needs: good placement
• Secret needs: good brand to last a life time
 How do we identity needs, wants , desires and market to diverse
and large crowds :
Mktg
4 P’s Envn.
Societal
Forces
Customer

STP Satisfaction

Markets:
Brands & Channels
Benefits Supply Chain
Competition

Internal Marketing: Relationship Marketing;

Integrated Marketing
Consumer Company
Capabilities Capabilities
 Product Process

Make Product Sell Product

(Design, Procure, Make) (4 P’s / 4 C’s)

Value Creation & Delivery

Provide & Communicate

STP Value through
Segmentation, Targeting,
Positioning 4 P’s / 4 C’s

Strategic Marketing Tactical Marketing

Marks & Spencer

Decision Areas in Marketing

•Creating customer value
•Strategic planning
Characteristics of Company

• No senior mngt sign off – too much delegation

• Too much inventory
• High profile customers
• St Michael’s – a value for money brand
• 16 sub brands .
• Advertising not aspirational but functional
• Diverted from retail heartland – not customer focused.
• New competition like Next, Walmart ( ASDA)
• Led by consultants experimenting with projects
• De motivated staff
What Stuart Rose did
• Fighting off a hostile takeover
• Managing Press
• Support of 2 trusted execs – in IT and Marketing
• Streamlined 5 sourcing offices
• Made suppliers conscious of this being ‘our’ problem and reduced costs
• House cleaning – off many brands
• Retrenched 650 staff but retained home grown talent
• Motivated retained staff – making them customer focused
• HR measures
• Stock management – 2 crimes : overstocked and short of stock
• Daily reporting to ceo of stock position
• Problems are not allowed to fester
• Focus on the basics of the business – improve product / store / service
• Selling off their financial services to HSBC
• Buying Per Una womens wear brand
Marks & Spencer

• What is M&S strategy

• What value is being created
• What should S Rose do and why
Concepts of Sesson 2
• Strategic and Tactical Marketing
• History of marketing
• Relationship marketing
• Consumer orientation in marketing
• Needs wants demands
(basic) ( aimed at object) desire for brand
Marketing Mix and the Customer

Four Ps Four Cs
• Product • Customer solution
• Price • Customer cost
• Place • Convenience
• Promotion • Communication
Marks & Spencer
• What is the problem that Stuart Rose was
facing when he took charge of M&S?
Stuart Rose’s concerns

Stakeholders

Processes

Resources

Organization
 Defining the corporate mission for M&S

• Mission
– What business is M&S in? What businesses should
we be in? What do we do best? What are the
values/ethics of the firm?
– Define business by need rather than product
features.
- Lodging vs hotel
- Quick service restaurants vs fast food hamburgers
Marketing Myopia

Management’s failure to recognize the

scope of its business.
Avoiding Marketing Myopia by Focusing on
Benefits
Company Myopic Description Marketing-Oriented
Description
MCI Worldcom “We are a telephone “We are a communications
company.” company.”
Northwest Airlines “We are in the airline “We are in the
business.” transportation business.”
Prudential Securities “We are in the stock “We are in the financial
brokerage business.” services business.”
Sony “We are in the video “We are in the
game business.” entertainment business.”
Stuart Rose had multi portfolios
• Food
• Textiles
• Others

What strategy for each ?

Characteristics of SBUs
• It is a single business or collection of
related businesses
• It has its own set of competitors
• It has a leader responsible for:
– Strategic planning
– Profitability
– Efficiency
Assigning resources to each SBU.

• Analytical tools such as the Boston

Consulting Group growth-share matrix are
used to guide.

• Anticipate changes

37
 Analyzing Current SBU’s:
Boston Consulting Group Approach
Relative Market Share
High Low
Market Growth Rate

Stars Question
Question Marks ?
High

Marks
• High growth & share ••High
Highgrowth,
growth,low
lowshare
share
• Profit potential ••Build
Build into Stars orphase
into Stars or phaseout
out
• May need heavy ••Require
Requirecash
cashto
tohold
hold
investment to grow market
marketshare
share
Cash
Cash Cows
Cows Dogs
Dogs
••Low • Low
Lowgrowth
growth&&share
Lowgrowth,
growth,high share ••Low
highshare share
Low

••Established, profit potential

successful • Low profit potential
Established,successful
SBU’s
SBU’s
••Produce
Producecash
cash
Porter’s Generic Strategies
• Overall cost leadership
• Differentiation
• Focus
Current Market

New Markets
 Alternative Strategies

New Business
Diversification growth

Backward / forward
Integrative growth Integration in same
business
Sales Intensive growth Through
(Value ) Current products

Current
Portfolio

1 2 3 4 5 6
Time ( years )
 HOLISTIC RELATIONSHIP MARKETING FRAMEWORK
1) Who is involved?

CUSTOMERS CORPORATION COLLABORATORS

MARKET
SPACE 2) How can we define relevant market space?

3) What are the potential opportunities emerging from

POTENTIAL the market space?
OPPORTUNITIES

4) What business capabilities and infrastructure

BUSINESS required?
INVESTMENT
 HOLISTIC RELATIONSHIP MARKETING FRAMEWORK
1) Who is involved?

CUSTOMERS CORPORATION COLLABORATORS

MARKET
SPACE
2) How can we define relevant market space? Explore
Value

3) What are the potential opportunities emerging from Create

POTENTIAL the market space? value
OPPORTUNITIES

Deliver
4) What business capabilities and infrastructure
BUSINESS Value
required?
INVESTMENT

CUSTOMER CORE COLLABORATIVE

FOCUS COMPETENCIES NETWORK
 Characteristics of Core Competencies

• A source of competitive advantage

• Applications in a wide variety of markets
• Difficult to imitate
 COMPETITIVE PLATFORMS
Customer Core Collaborative
Focus Competencies Network

COGNITIVE COMPETENCY RESOURCE

SPACE SPACE SPACE

Market Business

Offerings Architecture

Creating
CUSTOMER BUSINESS BUSINESS
Value VALUE DOMAIN PARTNERS

Marketing Operational
Activities
System
Delivering
Value
CRM ERP SCM

Printed on CANON
Categories of Marketing Alliances

• Product or Service Alliances

• Promotional Alliances
• Logistics Alliances
• Pricing collaborations
Marketing….

When you create a

concept, you
create a future…
Concepts of Sesson 3
• A holistic marketing framework
• Marketing myopia
• Core competency
• SBU
• BCG Matrix
Consumer Decision Making
Process
What Influences Consumer Behavior?
• Cultural factors – related to values/social
class / religion/community
• Social factors – related to reference
groups, family, roles & status.
• Personal factors – related to family life
cycle / occupation / personality / self-
concept / life style

6-50
Social Factors

Reference
Family
groups

Social
Statuses
roles

6-51
Reference Groups
• Membership
• Primary
• Secondary
• Aspirational
• Dissociative

6-52
Family
• Family of orientation
– Religion
– Politics
– Economics
• Family of procreation
– Everyday buying behavior

6-53
Personal Factors
• Age • Personality
• Life cycle stage • Values
• Occupation • Lifestyle
• Wealth • Self-concept

6-54
Socio economic Classification
• Urban : Occupation & Education ( SEC A,
B,C & D )
• Rural : Type of House ( pucca, semi-
pucca and kucha ) and education ( R 1,
R2 etc )
Socioeconomic Classification (SEC) Matrix—India (Urban)
Key Psychological Processes

• Motivation
• Perception
• Learning
• Memory
Motivation

• Maslow’s hierarchy of needs

• Freud’s theory
• Herzberg’s two-factor theory
Maslow’s Hierarchy of Needs

Self-Actualization
(Self-fulfillment)
Ego Needs
(Prestige, status, self esteem)

Social Needs
(affection, friendship, belonging)

Safety and Security Needs

(Protection, order, stability)

Physiological Needs
(Food, water, air, shelter, sex)
Besides ‘Needs’ behavior is due to :
• Unconscious psychological process
( Freud )
• Motivations that cause satisfaction or
dissatisfaction ( Herzberg )
• High involvement or low involvement
product
Perception

• Selective attention
• Selective retention
• Selective distortion
• Subliminal perception
How do consumers make buying decision?
• Initiators
• Influencers
• Deciders
• Buyers
• Users
Consumer Buying Process
• Problem recognition
• Information search
• Evaluation
• Purchase decision
• Postpurchase behavior

6-63
Other Theories of
Consumer Decision Making

Involvement Decision Heuristics

• Elaboration likelihood
model
• Low-involvement marketing
strategies
• Variety-seeking buying
behavior
( non rational)
• Availability – quickness & ease
• Representativeness ie how
similar is the outcome
• Anchoring and adjustment .
First impressions are lasting
impressions.

6-64
 Consumer’s Purchase Decision
External Factors Buyer’s Black Box Outcomes

Characteristics resulting
from:
-social /reference groups
Economic Conditions -family values Product form
-role & status
New Technology Brand
Personal circumstances
Media -socio-economic Retail outlet
-life style
Law & Politics -personality Value

Social Culture Decision process Form of payment

-need recognition
Marketing mix -information search Timing of
(competitor & own) -evaluation purchase
-purchase intention
-purchase
-post purchase
perceptions
 Session 3
• Reference group
• Aspirations
• Maslow
• Freud
• Herzberg
• Selective Attention
• Decision making process
• High & Low involvement
Pages 163 – 171 are optional readings.