introduction to marketing session for scms []

8/2/2019 Introduction to Marketing Session for SCMS []

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Introduction to Marketing


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Why Study Marketing ?


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What really is a business?

Is it about money ?

[including investing & managing money] Is it Advertising & Marketing?

[including brand building & promotion )

Is it Production?

[including design / materials management / conversion / manufacturing]

Is it about people?[including training & development]

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Case

CASE STUDY OF ARS. 100 /- BOTTLE OF SHAMPOO

AV

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Selling and Marketing

Selling

Selling starts with seller & is

preoccupied all the time with the

needs of the seller

Emphasizes on saleable surplus

available with the company

Seeks to convert products in to

cash

Views business as goods

producing process

Selling views the customer as the

last link in the business

Marketing

Marketing starts with the buyer

and focuses constantly on the

needs of the buyer

Emphasizes on identification of

market opportunity

Seeks to convert customer needs

in to products

Views business as a customer

satisfying process

Marketing views the customer as

the very purpose of business.


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Evolution of Indian Retail

Importance ofPoint of Purchase

Exclusive Brand Outlets

Hyper / Super Markets Department Stores Super Malls

Khadi Stores Cooperatives Specific Stores

ConvenienceStores(Mom & Pop)

Kiranas

Weekly Markets Village Fairs Melas

1960s

2000s

1990s

1980s

AV1
http://d/HUL/HLL%20FC/DMS%20New/Movie%201.mpghttp://d/HUL/HLL%20FC/DMS%20New/Movie%201.mpg


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Winning at Point of Purchase
http://../HUL/HLL%20FC/DMS%20New/movie2.mpghttp://../HUL/HLL%20FC/DMS%20New/movie2.mpg


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Definitions ( contd ) :

Shopper :

Who influences the brand choice at the POP

Consumer :

The End User of the Product

Buyer :

Who finances the purchase of the Brand

Customer :

The level in the Trade Distribution Chain which is serviced directly by the Marketer

categorized into Primary, Secondary, & Tertiary

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ShopperConsumer

There is a need to recognize the Shopper and Consumer as different entities

Need to understand shopper behavior & category shopping insights

Understanding The Importance of POP Activation


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Consumer to Shopper

Facts

40 % of TV advertising goes WASTE

60 % of purchase decisions can be influenced at the POP

Hence what is important for a brand is

Interaction with Shopper

on the shelf

Interaction with Consumer

on usage&


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3/10/2012 Shrirang Altekar

Communication Shopping Usage

Building Brands Through Shoppers : The P & G FMOT & SMOT

One of the last marketing mediums that consumers are willing to be marketed from

An environment where they really want to touch, experience our brands, compare & contrast :

does this brand meet my need?

The moment of truth for consumers to exercise their belief in our brand messageif we are

relevant

Source: Marketing Contact Audit Meta-Analysis, Arc WW, 2005 12


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Distinguishing Shoppers and Consumers

Shopper Vs Consumer

The mindset of a shopper and a consumer are fundamentally different.

Shoppers are in-store;

They are on a mission, have a need or problem and are trying to navigatetheir way through a complex variety of different products to find a solution.

Consumers have already made their purchase decision and are using theproducts - they want it to work or they won't buy again.

Proctor & Gamble have described these states of mind as the first and second

moments of truth.

In Modern Trade, it has been stated that 70% of all purchase decisions are madeat the shelf the point of purchase

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How are Marketers seeking to achieve the FMOT ?

Till some years back, the battle at the marketplace was about

Availability and

Distribution

The battle has shifted from being merely about availability and distribution to

winning within the retail environment.

Being there is not enough being preferred by the shopper who will ultimately

purchase you is what matters

Winning at the point of purchase is equal to being preferred over a competitor

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How Shoppers Behave - The AIDA(S) model:

Awareness

Generated by availability, basic visibility and media on air and in print

Interest

Generated by superior eye catching visibility, presence on the shelf and

point of sale materials

Desire

Generated by promotions and experiencing the brand (touching with either or

all the five senses)

Action

When the shopper actually buys (prefers) the product / brand

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Marketers Strategy for the Customers

Customer as acommunication

channel

Shopping = brandexperience

LeveragingBrands for the

customer



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Wanted to find a wayto create news and

excitement in thelaundry category.

Wanted to reinforcefamily values.

Shopperinsights

Surf Excel stood formodern parenting -go ahead, get dirty.

Sf Xl is the categoryleader and needed to

drive excitement andnews.

Shoppingfor household staples like laundry detergent is just a part of daily life, not

something to get excited about. I might try something new if it really caught my eye,

but I tend to be focused on other things.

CustomerObjective

Surf Excel

Marketers Strategy for the Consumer an example



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The Changing Indian Consumer

The Urban Consumer

Getting exposed to international lifestyles

Inclined to acquiring assets (Source: NCAER)

The Top of the pyramid is growing at a faster rate

6% of the Indian HH - MHI of >Rs.10,000 (CAGR 25% over 00)

56% of HH have - MHI less than Rs. 3000 (CAGR is -3%) (Source:NRS05)

Consumer of tomorrow

Youngest population profile

High and Middle income population growing at a pace of over 10%* per annum

over last decade (Source : NCAER)

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Income Per Capita Per Annum INR (2005- 06 Prices) Source : NCAER

> INR 200000 - 4% - Global India

> INR 40000 - 20% - Seeking and Striving India

> INR 18000 - 42% - Aspiring India

< INR 18000 - 34% - Deprived India

Four Distinct Consumer Worlds in India Learning from Nestle

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Most FMCG companies address - Global, Seeking & Aspiring India

Economic Progress Forecasts Middle - class (Part of Seeking & Striving) to

grow from less than 100 million to 250 -300 million by 2015

Inclusive Economic Growth should sharply reduce Deprived India from 65%

to approximately 34% in 2015

A Young, growing, large population 540 million people below 25 Years

(50% of India Population)

Four Distinct Consumer Worlds in India

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Segment Occupation Durablesowned

Food basket Target forCo.

Global India HNI, Corp. Execs,Owners of largebusinesses etc

100 % own acar

Very health conscious,High affordability

Packaged Foods,Snacks etc

Nescafe, MaggiNoodles

Seeking andStriving India

BPO Executive,Shop Owner,

Officer/Supervisor in

Organized

sector/MNC/ mid

level government

70% have aTwo-Wheeler

Health Conscious, CostCautious

Health Drink, Butter,Jam

Everyday,Nescafe Sunrise

Aspiring India Clerk, small shopkeepers/Shop floor

Supervisor in smallscale / unorganized

sector/semi skilled

47% have aTwo-wheeler

Health is a concern butcost prevails

Packaged tea, snacks,biscuits

Munch, HalfMaggi noodles

Deprived India Daily wage earners,agri labourers,construction workers

17 % own aB & W TV

Cost is the only concern

Unbranded products

Eclairs

Indian Consumer Segmentation Psychographic (Nestle)

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Winning at POP

Availability

Visibility

Attractive Display

Change with changing times


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Appreciation of the Shopper-POP Levels of Engagement

Buying Decision Process

1. At Home

2. Pre-store

3. In-store


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Consumer / Shopper Behavior & Buying Situations

Monthly House-hold Purchases

Impulsive Purchases

Trial and variety seeking behavior

Emergency Purchases

Service Seekers

Shopping as an experience


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Buying Occasions & Specific Channels

Type ofOutlet

Groceries GeneralStores

Paan / BidiShops

Chemists

Consumerbuying

situations(80 %situations)

Monthlyshopping by

residents ofthe middleincomegroupsupwards

Trial andvariety

seekingbehavior bymiddle -incomegroupsupwards is

predominant.Purchases offloatingpopulation

Impulse orvariety

seekingbehavior ispre-dominant

Emergencypurchases

of middleincomegroupresidentsand trialpurchases

by lowerincomegroups


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Marketing Overview


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The definition of Marketing used tobe:

human activities directed at the

satisfaction of needs and wants

through exchange processes

(Kotler, Northwestern University)or


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Performance of business activitiesthat

direct the flow of goods and services

from producer to consumer

(American Marketing Association)

or


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the process of identifying customer needs;

conceptualizing those needs in terms of an

organizations capacity to produce;communicating the conceptualization to the

appropriate laws of power in the

organization; conceptualizing theconsequent output in terms of the customer

needs earlier identified; and communicating

that conceptualization to the customer

(Howard, Columbia University)

why does it say customer and not consumer ?

or


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the process of creating, distributing,promoting, and pricing goods, services and

ideas to facilitate satisfying exchange

relationships with customers in a dynamicenvironment

(Pride [Texas A&M] - Ferrell, [Colorado State])

or


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Is this enough?Is knowing what the customer wants enough

when all of your competitors know it as well?

Or is success based primarily on strategies and tactics?


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A better definition of marketing:

Marketing is War!


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War belongs to the province of

business competition, which is also a

conflict of human interests and

activities.

(Karl von Clausewitz, On War)


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The true nature of marketing today involves the

conflict between corporations.Not the satisfying of human

needs and wants!


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What is the role of Marketing in a company?

Understand the customer and the target market

Understand the competition

Support the sales function

Create shareholder / stakeholder value

Determine what products a company can sell

Providing customer value

What else?


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Concepts

Production Concept

Product Concept

Selling Concept

Marketing Concept

Societal Marketing Concept


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What do we mean when we use the term

Marketing Concept?

A view from the perspective - that we will offer to agiven target audience, what we can profitably sell,

using a clearly defined set of actions!


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Define Providing valueto customers

In terms of the Price/Value ratio

In terms of product features

In terms of product benefits

V=f( c,v,t ) where v =( q,s )


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What is the Marketing Mix?

Marketing deals withProducts, Place,

Pricing, and Promotion directed at a

particular target audience. Together these

elements form the Marketing Mix.


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Decisions Within the Four Elements of the Marketing Mix

Product

Quality

Style

Options Packaging

Features Brand name

Guarantees/warranties Services/spare parts

Place

Numbers and types of middlemen

Locations/availability

Inventory levels

Transportation

Promotion Advertising

Personal selling

Sales promotion

Point-of-purchase materials

Publicity

Price Discounts

Allowances

Credit terms

Payment period

Rental/lease

List price

The target market


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What is relationship marketing?

Establishing a long-term relationship with abuyer that is mutually beneficial. Often the

term CRM is used to describe this

marketing process


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What leads to defeat in both War and Marketing?

Over-pessimism (Fear of Failure) Over-optimism (Failure to Fear Failure)


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We learn more from failures than success.

Good Marketing professionals need

to understand the nature, causes,

and cures of marketing failures


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Marketing Failures are never Single Point

Most Common Marketing Errors

Failure to keep products/services up-to-date

Failure to estimate market potential accurately Failure to gauge the trend of the market

Failure to appreciate regional differences in

market potential and in trend of market

Failure to appreciate seasonal differences inyour customers demand


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Failure to establish the advertising budget

based on the job to be done

Failure to adhere to policies established in

connection with long-range goals Failure to test-market new ideas ( Innovation ! )

Failure to differentiate between long-term

strategies and short-term tactics

Failure to admit defeat


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Failure to try new ideas while a brand is climbing

Failure to integrate all phases of the marketing

operation into the over-all program

Failure to appraise objectively your competitors

brands

Failure to get the facts and interpret them

correctly


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Differences Between Production-Oriented and Market-

Oriented

Business activity orfunction

Product offering

Product line

Pricing

Research

Production orientation

Company sells what it can

make; primary focus on

functional performance

and cost.

Narrow.

Based on production and

distribution costs.

Technical research; focus

on

product improvement and

cost cutting in the

production process.

Marketing orientation

Company makes what it can

sell; primary focus on

customers needs and

market opportunities.

Broad.

Based on perceived benefits

provided.

Market research; focus on

identifying new

opportunities and applying

new technology to satisfy

customer needs.


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Differences Between Production-Oriented and Market-

Oriented

Business activity or

Function

Packaging

Credit

Promotion

Marketing orientation

Designed for customer

convenience; a

promotionaltool.

A customer service; a tool

to attract customers.

Emphasis on productbenefits and ability to

satisfy customers needs or

solve problems.

Production orientation

Protection for the product;

minimize costs.

A necessary evil; minimize

bad debt losses.

Emphasis on productfeatures, quality, and price.


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Non Sequitur by Wiley Miller


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Goals and Objectives

Whats the difference between a Goal and a

Strategy?

Goals are commitments. Inflexible, rigid, unwavering,focused.

Strategies can be changed, modified or eliminated

based on market conditions


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Strategy

Companies often talk about their strategies.

What does strategy mean?

A fundamental pattern of present and planned objectives,resource deployments, and interactions of an organization with

markets, competitors, and other environmental factors.


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Components of Strategy

Scope

Goals and objectives

Resource deployments

Identification of sustainable competitive advantage

Synergy


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Corporate Growth Strategies

Market penetration Product development

Market development Diversification

Current products New products

Current

markets

New

markets

h


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Corporate Growth Strategies

Market penetration strategies

Increase market share

Increase product usage

Increase frequency of use

Increase quantity used

New applications

Product development

strategies Product improvements

Product-line extensions

New products for same

market

Market development

strategies

Expand markets for existing

products

Geographic expansion

Target new segments

Diversification strategies

Vertical integration

Forward/backward integration

Diversification into related

businesses

(concentric diversification)

Diversification into unrelated

businesses (conglomerate

diversification)

Current products New products

Current

markets

New

markets

f k i l


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Contents of a Marketing Plan

Executive summary

Current situation (SWOT) and trends

Performance review (for an existing good or service only)

Key issues Objectives

Marketing strategy

Action plans

Projected profit-and-loss statement

Controls

Contingency plans


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Strategic Planning

What is a SWOT Analysis?

An assessment of the companys Strengths,

Weaknesses, Opportunities, and Threats.

SIBM SWOT - 2007


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strengths

Strong visiting faculty base

Physical location ( Pune )

Alumni base, corporate tie ups

Moving to world class infrastructure

Rich Library resources, e data, databases

Strong Revenue generation through corporate training programs

Strong brand equity, especially in North & West India

Strong innovation in teaching methodologies, involvement of

corporates in education

Reasonable fee structure, high return to student stakeholders

through excellent placements

Overseas collaborations and tie- ups.

Strong IT base, computer labs, wi-fi campus

Multicultural student base, strong student loyalty to SIBM

Strong support from Symbiosis Management, Society.

Extending campuses in Bangalore and Hyderabad

Weaknesses

Low permanent faculty base, being rectified now.

Lower reach in East and comparatively as compared to North

and West.

Faculty attrition, inability to attract top faculty on permanent

basis.

Pressure of 2 additional new campuses on brand equity

Current infrastructure inadequate, leading to loss in teaching

time. ( being remedied now )

Long term planning especially in HR and HR practices required.

Morale low due to compensation packages by other B- schools

Low top international collaborations ( being worked on )

Inadequate faculty training programs

opportunities

Huge Market for corporate training

Inability of competing B- schools to retain corporate clients

Industry growth affecting B- schools positively

State of the art technology in new campus will enable new

teaching methodologies

Strong Indian brand, now can be projected internationally

Can target quality student input and corporate clients.

Quality experience in FMCG sector training can be leveraged for

corporate clients New campuses will enable reaching out and accommodating new

quality students

Customized training programs for corporates

Major opportunities available with existing clients : HUL, ITC, L

& T, MNYL etc

Setting up research cell for creation of knowledge, not just

dissemination will improve quality of teaching as well as

corporate education and training

Enhanced brand equity for international tie -ups

Threats

Competition from other B-schools likely to increase for students,

academics, and corporate training programs

Government interference in admissions process

Rapid changes in IT may make current systems obsolete

In case new campuses do not perform, may affect brand value of

SIBM Pune New technologies, services, ideas being utilized by other B schools

Other B- school collaborations with international partners or

setting up of international campuses

Sustaining internal capabilities, retention of existing faculty

members, Loss of key staff may happen due to shift to Lavale

SIBM SWOT 2007


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Marketing Jeopardy

What are Stars, Cash Cows, Question

Marks, and Dogs?

The four cells in the

Boston Consulting Group

growth share matrix


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Strategic Planning

Product Portfolio Matrix

Stars Question Marks

Cash Cows Dogs

High Low

Relative Market Share

High

Market

growth rate

Low


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Environmental Analysis


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Key Macro Trends To Evaluate

Demographic environment

Socio - cultural environment

Economic environment

Political/legal environment Technological environment

Legal Environment

Physical environment


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Shifts Occurring in Demographics

Family Structure:Traditional is becoming less typical

Aging:

Baby boomers dominate growth

Geographic Distribution:Increase in immigrants and migration of jobs

and people to suburbs

Ethnic Composition:

PoP strata becoming more diverse What else?


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Shifting Values in Our Society

Traditional values

Self-denial ethic

Higher standard of living

Traditional sex roles

Accepted definition of success

Traditional family lifeFaith in industry, institutions

Live to work

Hero worship

Expansionism

Patriotism

Unparalleled growthIndustrial growth

Receptivity to technology

New values

Self-fulfillment ethic

Better quality of life

Blurring of sex roles

Individualized definition of success

Alternative familiesSelf-reliance

Work to live

Love of ideas

Pluralism

Less nationalistic

Growing sense of limitsInformation/service growth

Technology orientation


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Economic Environment

GDP gap has increased between rich and poor

countries

Worlds economic growth continues to

increase ( though rate may vary )

Developing countries are expected to have

higher growth rates than developed countries


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Potential Technological Problems

Development of Fiber-optic Cables

Storage devices developed to handle the increasing volume

of data

Use of flexible low-cost wireless transmission

Development of low-cost multimedia chip Advances in biology

Progress in agriculture


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Physical Environment

Depletion of valuable resources

Deserts growing

Forests shrinking Lakes dying

Quality and quantity of groundwater declining

Rise in temperature

introduction to marketing session for scms []

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