Selling Marketing

1 Emphasis is on the product2 Company Manufactures the product first

3 Management is sales volume oriented4 Planning is short-run-oriented in terms of today’s products and markets

5 Stresses needs of seller6 Views business as a good producing process7 Emphasis on staying with existing technology and reducing costs

8 Different departments work as in a highly separate water tight compartments

9 Cost determines Price

10 Selling views customer as a last link in business

1 Emphasis on consumer needs wants2 Company first determines customers needs and wants and then decides out how to deliver a product to   satisfy these wants3 Management is profit oriented4 Planning is long-run-oriented in today’s products and terms of new products, tomorrow’s markets and   future growth5 Stresses needs and wants of buyers6 Views business as consumer producing process satisfying process7 Emphasis on innovation on every existing technology and reducing every sphere, on providing better   costs value to the customer by adopting a superior technology8 All departments of the business integrated manner, the sole purpose being generation of consumer    satisfaction9. Consumer determine price, price determines cost10. Marketing views the customer last link in business as the very purpose of the business

Marketing plan Marketing strategyA clear marketing plan is a blueprint that lays out the steps

a company must take in order to achieve its marketing goals.

A marketing plan details what you will do to make the strategy happen.

It usually goes further than the strategy, including detail such as budgets and a timetable for implementation.

Define your customer needs.

Define the services you offer .

Establish the size of your market.

Establish your position in the market in relation to your competitors.

Set objectives and realistic time scales.

Identify how these objectives will be achieved .

Niche market Mass marketWhere a business targets a smaller segment of a larger market, where customers have specific needs and wants

Targeting a product or service at a niche

Where a business sells into the largest part of the market, where there are many similar products on offer

The key features of a mass market are as

segment has several advantages for a business (particularly a small business):

• Less competition – the firm is a “big fish in a small pond”• Clear focus - target particular customers (often easier to find and reach too)• Builds up specialist skill and knowledge = market expertise• Can often charge a higher price – customers are prepared to pay for expertise• Profit margins often higher• Customers tend to be more loyal

The main disadvantages of marketing to a niche include:

• Lack of “economies of scale” (these are lower unit costs that arise from operating at high production volumes)• Risk of over dependence on a single product or market• Likely to attract competition if successful• Vulnerable to market changes – all “eggs in one basket”

follows:

• Customers form the majority in the market• Customer needs and wants are more “general” & less “specific”• Associated with higher production output and capacity (economies of scale)• Success usually associated with low-cost operation, heavy promotion, widespread distribution or market leading brands

Marketing product Marketing serviceProducts go to the customers through distribution channels.

Customers like their products to be standardized.

The quality that expect from a product is mostly embedded in the product itself at the time of its manufacture and depends in turn on the quality of the materials used and the setting of the machines. Both materials and machines, being inanimate, can be standardized.

The products are tangible and can be inspected / sampled before buying.

The product business is expanded by expanding the market reach and access to more customers.

Customers come to the service locations to avail them.

Customers like services to be customized to their needs.

On the other hand the quality that people expect from a service is quite different : customization and variation is appreciated in service and this depends a lot on the experience, skill and motivation of the service-giver on the spot

Service on the other hand is experiential and sometimes based on a belief. 

In services the constraint in increasing the business is also in creating good service providers through recruitment,

induction, training and motivation.

Urban marketing Rural marketing

Crate relationship by offering integrated

innovation in product or service.

Crate relationship by inclusive growth of

product or service.

Buyer looks for style, quality &novelty. Buyer looks for quality products that offer

value for money.

Internet, TV channels, mobile, are used

for research.

Interactive approaches, observation, rating

scale are used for research.

Psycho graphic, usage based

segmentation is the main base of divide

the market.

Demographic & geographic segmentation

can be the base of divide the market.

Marketing goal is capture market share,

image, and profitability.

Create a brand name then capture the

market with enough profitability.

Sophisticated technology can be used to

create product.

Primarily appropriate technologies can be

used for rural innovation.

Consumers take purchasing decision

emotionally &rationally

Consumers are too much emotional to take

purchasing decision.

 

Segmentation

According to Philip Kotler “Market Segmentation is the process of dividing a market into distinct sub groups of consumer with distinct needs, characteristics or behavior.”

TARGET MARKETING

Target markets are groups of individuals that are separated by distinguishable and noticeable aspects. Target markets can be separated by the following aspects:

• Geographic segmentations, addresses (their location climate region)• demographic/socioeconomic segmentation (gender, age, income, occupation, education, household size, and stage in the family life cycle)• psychographic segmentation (similar attitudes, values, and lifestyles)• behavioral segmentation (occasions, degree of loyalty)• product-related segmentation (relationship to a product)

market positioning  

Definition

An effort to influence consumer perception of a brand or product relative to the perception of competing brands or products. Its objective is to occupy a clear, unique, and advantageous position in the consumer's mind.

Marketing Definitions

Philip Kotler defines marketing as 'satisfying needs and wants through an exchange process'

Customers will only undertake the exchange, if they feel that their needs are being satisfied, clearly the transactional value can not be more than the amount customers are prepared to pay to satisfy their need.

P.Tailor of www.learnmarketing.net suggests that 'Marketing is not about providing products or services it is essentially about providing changing benefits to the changing needs and demands of the customer (P.Tailor 7/00)'

market strategy  

Marketing strategy is a process that can allow an organization to concentrate its resources on the optimal opportunities with the goals of increasing sales and achieving a sustainable competitive advantage.[1] Marketing strategy includes all basic and long-term activities in the field of marketing that deal with the analysis of the strategic initial situation of a company and the formulation, evaluation and selection of market-oriented strategies and therefore contribute to the goals of the company and its marketing objectives.[2]

NICHE MARKETING

A niche market[1] is the subset of the market on which a specific product is focusing. So the market niche defines the specific product features aimed at satisfying specific market needs, as well as the price range, production quality and the demographics that is intended to impact. It is also a small market segment. For example, sports channels like STAR Sports, ESPN, STAR Cricket, and Fox target a niche of sports lovers. Every product can be defined by its market niche.

Business-to-business (B2B) describes commerce transactions between businesses, such as between a manufacturer and a wholesaler, or between a wholesaler and a retailer. Contrasting

terms are business-to-consumer (B2C) and business-to-government (B2G). B2B (Business to Business) Branding is a term used in marketing.

The volume of B2B (Business-to-Business) transactions is much higher than the volume of B2C transactions.[1][2][3] The primary reason for this is that in a typical supply chain there will be many B2B transactions involving sub components or raw materials, and only one B2C transaction, specifically sale of the finished product to the end customer. For example, an automobile manufacturer makes several B2B transactions such as buying tires, glass for windscreens, and rubber hoses for its vehicles. The final transaction, a finished vehicle sold to the consumer, is a single (B2C) transaction.

RURAL MARKETING

Rural Marketing is defined as any marketing activity in which the one dominant participant is from a rural area. This implies that rural marketing consists of marketing of inputs (products or services) to the rural as well as marketing of outputs from the rural markets to other geographical areas.

Direct marketing is a channel-agnostic form of advertising that allows businesses and nonprofits organizations to communicate straight to the customer, with advertising techniques that can include Cell Phone Text messaging, email, interactive consumer websites, online display ads, fliers, catalog distribution, promotional letters, and outdoor advertising.

PRODUCT PORTFOLIO ANALYSIS

Product portfolio management, product lifestyle management, and product portfolio analysis all describe the process that allows the integration of strategic analysis in regards to market opportunities of new products.

MOUTH OF TRUTHIn customer service, instance of contact or interaction between a customer and a firm (through a product, sales force, or visit) that gives the customer an opportunity to form (or change) an impression about the firm

Definition and characteristics of ServicesThe American Marketing Association defines services as - “Activities, benefits and satisfactions which are offered for sale or are provided in connection with the sale of goods.”

The defining characteristics of a service are:

1. Intangibility: Services are intangible and do not have a physical existence. Hence services cannot be touched, held, tasted or smelt. This is most defining feature of a service and that which primarily differentiates it from a product. Also, it poses a unique challenge to those engaged in marketing a service as they need to attach tangible attributes to an otherwise intangible offering.

2. Heterogeneity/Variability: Given the very nature of services, each service offering is unique and cannot be exactly repeated even by the same service provider. While products can be mass produced and be homogenous the same is not true of services. eg: All burgers of a

particular flavor at McDonalds are almost identical. However, the same is not true of the service rendered by the same counter staff consecutively to two customers

3. Perishability: Services cannot be stored, saved, returned or resold once they have been used. Once rendered to a customer the service is completely consumed and cannot be delivered to another customer. eg: A customer dissatisfied with the services of a barber cannot return the service of the haircut that was rendered to him. At the most he may decide not to visit that particular barber in the future.

4. Inseparability/Simultaneity of production and consumption: This refers to the fact that services are generated and consumed within the same time frame. Eg: a haircut is delivered to and consumed by a customer simultaneously unlike, say, a takeaway burger which the customer may consume even after a few hours of purchase. Moreover, it is very difficult to separate a service from the service provider. Eg: the barber is necessarily a part of the service of a haircut that he is delivering to his customer.

BCG MATRIX

Boston Consulting Group (BCG) Matrix is a four celled matrix (a 2 * 2 matrix) developed by BCG, USA. It is the most renowned corporate portfolio analysis tool. It provides a graphic representation for an organization to examine different businesses in it’s portfolio on the basis of their related market share and industry growth rates. It is a two dimensional analysis on management of SBU’s (Strategic Business Units). In other words, it is a comparative analysis of business potential and the evaluation of environment.

According to this matrix, business could be classified as high or low according to their industry growth rate and relative market share.

Relative Market Share = SBU Sales this year leading competitors sales this year.

Market Growth Rate = Industry sales this year - Industry Sales last year.

The analysis requires that both measures be calculated for each SBU. The dimension of business strength, relative market share, will measure comparative advantage indicated by market dominance. The key theory underlying this is existence of an experience curve and that market share is achieved due to overall cost leadership.

BCG matrix has four cells, with the horizontal axis representing relative market share and the vertical axis denoting market growth rate. The mid-point of relative market share is set at 1.0. if all the SBU’s are in same industry, the average growth rate of the industry is used. While, if all the SBU’s are located in different industries, then the mid-point is set at the growth rate for the economy.

Resources are allocated to the business units according to their situation on the grid. The four cells of this matrix have been called as stars, cash cows, question marks and dogs. Each of these cells represents a particular type of business.

                10 x                                  1 x                                  0.1 x

Figure: BCG Matrix

1. Stars- Stars represent business units having large market share in a fast growing industry. They may generate cash but because of fast growing market, stars require huge investments to maintain their lead. Net cash flow is usually modest. SBU’s located in this cell are attractive as they are located in a robust industry and these business units are highly competitive in the industry. If successful, a star will become a cash cow when the industry matures.

2. Cash Cows- Cash Cows represents business units having a large market share in a mature, slow growing industry. Cash cows require little investment and generate cash that can be utilized for investment in other business units. These SBU’s are the corporation’s key source of cash, and are specifically the core business. They are the base of an organization. These businesses usually follow stability strategies. When cash cows loose their appeal and move towards deterioration, then a retrenchment policy may be pursued.

3. Question Marks- Question marks represent business units having low relative market share and located in a high growth industry. They require huge amount of cash to maintain or gain market share. They require attention to determine if the venture can be viable. Question marks are generally new goods and services which have a good commercial prospective. There is no specific strategy which can be adopted. If the firm thinks it has dominant market share, then it can adopt expansion strategy, else retrenchment strategy can be adopted. Most businesses start as question marks as the company tries to enter a high growth market in which there is already a market-share. If ignored, then question marks may become dogs, while if huge investment is made, then they have potential of becoming stars.

4. Dogs- Dogs represent businesses having weak market shares in low-growth markets. They neither generate cash nor require huge amount of cash. Due to low market share, these business units face cost disadvantages. Generally retrenchment strategies are adopted because these firms can gain market share only at the expense of competitor’s/rival firms. These business firms have weak market share because of high costs, poor quality, ineffective marketing, etc. Unless a dog has some other strategic aim, it should be liquidated if there is

fewer prospects for it to gain market share. Number of dogs should be avoided and minimized in an organization.

Limitations of BCG Matrix

The BCG Matrix produces a framework for allocating resources among different business units and makes it possible to compare many business units at a glance. But BCG Matrix is not free from limitations, such as-

1. BCG matrix classifies businesses as low and high, but generally businesses can be medium also. Thus, the true nature of business may not be reflected.

2. Market is not clearly defined in this model.3. High market share does not always leads to high profits. There are high costs also involved

with high market share.4. Growth rate and relative market share are not the only indicators of profitability. This model

ignores and overlooks other indicators of profitability.5. At times, dogs may help other businesses in gaining competitive advantage. They can earn

even more than cash cows sometimes.6. This four-celled approach is considered as to be too simplistic

Flanking strategy

For most marketing managers, offensive and defensive are natural strategies. The leader

defends, everyone else attacks. So what else is new?

Flanking. For most managers, flanking strategy may seem like a military concept with no

marketing applications. Not so. Flanking is the most innovative way to fight a marketing

war.

In both marketing and a military sense, a flanking operation is a bold move. A big gamble

with big stakes. One that requires detailed planning on an hour-by-hour, day-to-day basis.

You might say a general accepts offensive and defensive assignments as a normal part of

the job, but lives for the day he is chosen to lead a flanking attack. It’s the best hope for

achieving a big, spectacular victory.

More than any other form of warfare, flanking requires knowledge of the principles

involved and an ability to visualize how the battle will unfold after the attack is launched.

These are much the same skills a good chess player develops.

Flanking Principle #.1

“A good flanking move must be made into an uncontested area.†� You don’t drop

your paratroops on top of the enemy’s machine-gun positions, and you don’t launch a

flanking product into the teeth of an established product.

A flanking move does not necessarily require a new product unlike anything now on the

market. But there must be some element of newness or exclusivity. The prospect must put

you into a new category.

Digital Equipment flanked IBM with a small computer, which customers put into a new

category called “mini- computers”-as opposed to IBM’s mainframe computers.

It might not be obvious, but the success of a flanking attack often hinges on your ability to

create and maintain a separate category. This is not always easy, especially since the

defender can be expected to try to blunt the attack by denying the existence of the new

category.

Traditional marketing theory might call this approach segmentation, the search for

segments or niches. This is an important qualification. To launch a true flanking attack, you

must be the first one to occupy the segment. Otherwise, it’s just an offensive attack

against a defended position.

The flanking strategy needs a exceptional foresight. The reason is the in goods flanking

attack, there is no established market for the new product or service.

Flanking Principle #.2

“Tactical surprise ought to be an important element of the plan.†�By its nature, a flanking attack is a surprise attack. In this respect, it’s different from

offensive or defensive attack where the nature and direction of attacks are pretty much

expected. (If Ford is going to attack General Motors, they have to attack somewhere

between Chevrolet and Cadillac.)

But flanking is different. The most successful flanking moves are the ones that are totally

unexpected. The greater the surprise, the longer it will take the leader to react and try to

cover.

Surprise also tends to demoralize the competition. Their sales force is temporarily tongue-

tied. They often don’t know what to say until they get directions from headquarters.

Unfortunately, test marketing or too much research, which exposes the strategy to the

competition, often undermines great flanking moves.

The classic example is Datril, which never had a chance because their test-marketing

alerted the folks at Johnson & Johnson to the potential danger.

Test-marketing a proposed flanking attack is a catch- 22 proposition. If it fails, it fails. If it

succeeds, it alerts the leader to take the steps necessary to ensure failure when the test-

marketing is expanded to a regional or national basis.

What if the leader is foolish enough to ignore your successful market test? Then, of course,

you might be able to launch the product or service on a national basis and have a bigger

winner. In other words, you keep your fingers crossed and hope the competition won’t

notice what you’re doing.

You might get lucky. On the other hand, taking a chance like this violates a cardinal

principle of military planning: Base your strategy on what your enemy is able to do, not just

on what he is likely to do.

Flanking Principle #.3

“The pursuit is just as critical as the attack itself†�This is the pour-it-on principle. “Without pursuit, no victory can have a great effect.”

Too many companies, however, quit after they’re ahead. They achieve their initial

marketing targets and then they move resources on to other endeavors.

That’s a mistake, especially in a flanking move. Ancient military maxim: Reinforce

success, abandon failure.

Let’s say a company has five products, three winners and two losers. Who do you think gets

the time and attention of top management? That’s right, the losers.

It should be just the opposite. Shoot the losers and send their petrol rations to the tank

commanders who are making the most progress.

Marketing Strategy Vs. Marketing Plan

A marketing strategy is an overall approach to designing products to meet customer needs, letting customers know that these offerings are available, and giving them reason to purchase them. A marketing plan provides concrete details for implementing a marketing strategy, with specifics about budgeting and time frame, as well as indicators for gauging the success of different marketing efforts.

1. Role of a Marketing Strategyo A marketing strategy provides vision, tying a company's product development and

marketing activities to its larger vision. For example, a company whose marketing strategy is to build relationships with loyal customers over time will likely have a long term business strategy of functioning with integrity. This marketing strategy can act as a bridge linking the company's overall mission with the specifics of its marketing plan, making sure that its details also perpetuate broader company ideals.

Role of a Marketing Plan

o A marketing plan explains in text and numbers how a company will achieve a specific marketing objective, such as increasing sales or introducing a new product. A marketing plan should include a general introduction clarifying its scope. It should also

provide a marketing budget, detailing how much money the company will spend to achieve this objective as well as how it will use these funds. In addition, a marketing plan should specify which data the company will use to assess how well these investments are work

Relationship

o A marketing strategy is generally not tied to a particular time frame but rather informs company decisions and company plans. A marketing plan is the manifestation of the marketing strategy with reference to a particular innovation or time frame. For example, a company's marketing strategy might be to build a customer base over time by providing quality products and excellent service. Its marketing department might prepare a marketing plan for the process of introducing a new product, applying the general principle of maintaining quality to the specifics of building and servicing this particular product in the most effective possible way.

Differences

o A marketing strategy can provide direction and vision, but it is not sufficient in itself to direct a marketing department's actions. Too much specificity in a company's marketing strategy has the potential to limit possibilities, while too much generality in a company's marketing plan has the potential to provide an insufficient framework for attracting and keeping customers. A marketing plan should be revised over time as a company tinkers with its details and cuts out elements that do not work. A marketing strategy can remain static, providing consistency as the marketing plan evolves.

Niche marketing and mass marketing have many differences.These are:

1. Mass marketing has to do with selling ordinary things to very large numbers of people at quite cheap prices. Businesses can get high volume sales but at a fairly low profit margin meaning that there is little difference between what it costs to make the product and what the business can sell for it. But in Niche marketing the marketers serve specialist consumers and this can give high profit margins. Small businesses are especially suited to niche marketing.

2. Niche marketing targets a smaller market in which there is a particular focus on which group the firm wishes to concentrate on. In most cases, niche marketing focuses on markets that are not reached by mainstream providers. On the other hand, mass marketing deals with big numbers and an even bigger community. If a mass marketer targets parents, a niche marketer will go smaller, targeting the more specific group of single parents. 

3. In mass marketing, the focus is normally on attracting as many customers as possible. While in niche marketing it is all about getting that particular group of society to like your product.

4. Mass marketing uses expensive forms of media to reach out to the people. Mass marketing firms spend a lot of money on advertising on radio and television. As for niche marketing their budget is not wide enough to support mainstream media advertising. The most common way of advertising for them is through the internet. Examples would be through e-mails. They could also use magazine advertising but this would be on a very small

scale such as trade journals.

5. Mass marketers focus on high sales at low prices while niche marketers focus on high sales at high prices. But most times the result is low sales at very high prices. In Niche marketing the product is tailor-made for customers while in Mass marketing the product is for the general public.