marketing notes sanju

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Marketing Management DefinationThe application,tracking andreview of acompany'smarketingresources andactivities.Thescope of abusiness'marketing management depends on the size of the business and theindustry in which thebusinessoperates.Effective marketing management will use a company's resources to increase itscustomerbase,improvecustomeropinions of the company'sproducts andservices,and increase the company'sperceived value.American Marketing Association :-Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, serv

to create exchanges that satisfy individual and organizational goals

The Chartered Institute of Marketing :-Marketing is the management Marketing is the management process that identifies, anticipates and satisfies customer

requirements profitably profitably

Adcock et al :- The right product, in the right place, The right product, in the right place, at the right time, and at the right price at the right time, and at the rig

price

Kotler 1980 :- Marketing is the human activity Marketing is the human activity directed at satisfying human needs and wants through an exchange processprocess

Kotler 1991 :- Marketing is a social and managerial Marketing is a social and managerial process by which individuals and groups obtain wh at they want and nee

through creating, offering and exchanging products of value with others others

Definition of MarketingAccording to American Marketing Association, "Market ing is an organisational function and a set of processes for creating, communicating delivering value to customers and for managing customer relationships in ways that benefit the organisation and its stakeholders."Definition of ManagementAccording to Harold Koontz, "Managementis the art of getting things done through and with people in formally organised grouManagement consists of the interlocking functions of creating corporate policy and organising, planning, controlling, directing an organisatresources in order to achieve the objectives of the policy.Definition of Marketing ManagementAccording to Philip Kotler, "Market ing Management is the analysis, planning, implementation and control of programmes designed to bring adesired exchanges with target audiences for the purpose of personal and of mutual gain. It relies heavily on the adoption and coordination of pro

price, promotion and place for achieving responses.".Marketing management is a business process, to manage marketing activities in profit seeking and non profit organisations at different levemanagement. Marketing management decisions are based on strong knowledge of marketing functions and clear understanding and applicatio

supervisory and managerial techniques.Nature of Marketing ManagementIt Combines the Fields of Marketing and ManagementAs the name implies, marketing management combines the fields of marketing and management. Marketing consists of discovering consumer nand wants, creating the goods and services that meet those needs and wants; and pricing, promoting, and delivering those goods and services. Dso requires attention to six major areas - markets, products, prices, places, promotion, and people.Management is getting things done through other people. Managers engage in five key activities - planning, organising, staffing, directing, controlling. Marketing management implies the integration of these concepts.Marketing Management is a Business ProcessMarketing management is a business process, to manage marketing activities in profit seeking and non profit organisations at different levemanagement, i.e. supervisory, middle-management, and executive levels. Marketing management decisions are based on strong knowledgmarketing functions and clear understanding and application of supervisory and managerial techniques. Marketing managers and product managerthere to execute the processes of marketing management. We, as customers, see the results of such process in the form of products, priadvertisements, promotions, etc.Marketing Management is Both Science and ArtMarketing management is art and science of choosing target markets and getting, keeping and growing customers through creating, delivering

communicating superior customer value. (Kotler, 2006). Marketing management is a science because it follows general principl es that guidesmarketing managers in decision making. The Art of Marketing management consists in tackling every situation in an creative and effective manMarketing Management is thus a science as well as an art.

Nature of Marketing1. Marketing is an Economic FunctionMarketing embraces all the business activities involved in getting goods and services , from the hands of producers into the hands of final consumThe business steps through which goods progress on their way to final consumers is the concern of marketing.2. Marketing is a Legal Process by which Ownership TransfersIn the process of marketing the ownership of goods transfers from seller to the purchaser or from producer to the end u3. Marketing is a System of Interacting Business Activities

Marketing is that process through which a business enterprise, institution, or organisation interacts with the customers and stakeholders withobjective to earn profit, satisfy customers, and manage relationship. It is the performance of business activities that direct the flow of goods and servfrom producer to consumer or user.4. Marketing is a Managerial functionAccording to managerial or systems approach - "Marketing is the combination of activities designed to produce profit through ascertaining, creastimulating, and satisfying the needs and/or wants of a selected segment of the market."

According to this approach the emphasis is on how the individual organisation processes marketing and develops the strategic dimensions of markactivities.5. Marketing is a social processMarketing is the delivery of a standard of living to society. According to Cunningham and Cunningham (1981)societal marketing performs tessential functions:-

1. Knowing and understanding the consumer's changing needs and wants;2. Efficiently and effectively managing the supply and demand of products and services; and3. Efficient provision of distribution and payment processing systems.

6. Marketing is a philosophy based on consumer orientation and satisfaction7. Marketing had dual objectives - profit making and consumer satisfaction

Scope of Marketing1. Study of Consumer Wants and NeedsGoods are produced to satisfy consumer wants. Therefore study is done to identify consumer needs and wants. These needs and wants motivconsumer to purchase.
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2. Study of Consumer behaviourMarketers performs study of consumer behaviour. Analysis of buyer behaviour helps marketer in market segmentation and targeting.3. Production planning and developmentProduct planning and development starts with the generation of product idea and ends with the product development and commercialisation. Proplanning includes everything from branding and packaging to product line expansion and contraction.4. Pricing PoliciesMarketer has to determine pricing policies for their products. Pricing policies differs form product to product. It depends on the level of competiproduct life cycle, marketing goals and objectives, etc.5. DistributionStudy of distribution channel is important in marketing. For maximum sales and profit goods are required to be distributed to the maximum consumeminimum cost.6. Promotion

Promotion includes personal selling, sales promotion, and advertising. Right promotion mix is crucial in accomplishment of marketing goals.7. Consumer SatisfactionThe product or service offered must satisfy consumer. Consumer satisfaction is the major objective of marketing.8. Marketing ControlMarketing audit is done to control the marketing activities.

PROCESS

IntroductionThe activities of marketers both reflect and shape the world we live in. Every year new products and services are launched and some of them succeon an unprecedented scale. As in the case of Apple's iPod, iPhone, and also iPad. They all are great inventions and highly successful in market.According to marketing concept, the organisation must find ways to discover unfulfilled customer needs and wants and bring products that satisfy tneeds and wants. This can be done in a sequence of steps that is called marketing process.After reading this you will understand - what is marketing process, and the steps involved in marketing process.Meaning of Marketing ProcessThe Marketing Process of a company typically involves identifying the viable and potential marketing opportunities in the environment, develostrategies to effective utilise the opportunities, evolving suitable marketing strategies, and supervising the implementation of these marketing efforts.Marketing process involves ways that value can be created for the customers to satisfy their needs. Marketing process is a continual series of actand reactions between the customers and the organisations which are making attempt to create value for and satisfy needs of customers. In markprocess the situation is analysed to identify opportunities, the strategy is formulated for a value proposition, tactical decisions are taken, plaimplemented, and results are monitored.

Steps in Marketing ProcessFollowing are the steps involved in the Marketing Process :-

Situation Analysis Marketing Strategy Marketing Mix Decision Implementation and Control1. Situation AnalysisAnalysis of situation in which the organisation finds itself serves as the basis for identifying opportunities to satisfy unfulf illed customer needs. Situatand environmental analysis is done to identify the marketing opportunities, to understand firms own capabilities, and to understand the environmewhich the firm is operating.2. Marketing Strategy

After identifying the marketing opportunities a strategic plan is developed to pursue the identified opportunities.3. Marketing Mix DecisionsAt this step detailed tactical decisions are made for the controllable parameters of the marketing mix. It includes - product development decisproduct pricing decisions, product distribution decisions, and product promotional decisions.4. Implementation and ControlFinally, the marketing plan is implemented and the results of marketing efforts are monitored to adjust the marketing mix according to the machanges.

IntroductionIn today's world of marketing, everywhere you go you are being marketed to in one form or another. Marketing is with you each second of your wallife. From morning to night you are exposed to thousands of marketing messages everyday. Marketing is something that affects you even thoughmay not necessarily be conscious of it.

After reading this you'll understand - what exactly the marketing is, different definitions of marketing, and what are the different approaches of marke

Definition and Meaning of MarketingAccording to American Marketing Association (1948)- "Marketing is the performance of business activities directed toward, and incident to, the flogoods and services from producer to consumer or user."

AMA (1960)- "Marketing is the performance of business activities that direct the flow of goods and services from producer to consumer or us

The above definitions are based on the economic approachof marketing. Marketing embraces all the business activities involved in getting goodsservices , from the hands of producers into the hands of final consumers. The business steps through which goods progress on their way to consumers is the concern of marketing.

Consumer's Approach of MarketingAccording to Star et al. (1977)- "Marketing is that process through which a business enterprise, institution, or organisation 1. selects target customeconstituents, 2. assesses the needs or wants of such target customers, and 3. manages its resources to satisfy those customer needs or wants."

The above definition is based on the consumer's approach of marketing. According to this approach marketing consists of four general activities:-1. Identifying and selecting the type of customer, understanding their needs and desires;2. Designing product or services that suits the customers' desires;


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3. Persuading customers to buy at the firm's offerings; and4. Storing, moving, and displaying goods after they leave the production site.

Societal Approach of MarketingAccording to Mazur (1947)- "Marketing is the delivery of a standard of living to society."This definition is based on the societal approach of marketing. According to Cunningham and Cunningham (1981) societal marketing performs thessential functions:-

1. Knowing and understanding the consumer's changing needs and wants;2. Efficiently and effectively managing the supply and demand of products and services; and3. Efficient provision of distribution and payment processing systems.

Managerial or Systems ApproachAccording to Eldridge (1970)- "Marketing is the combination of activities designed to produce profit through ascertaining, creating, stimulating,satisfying the needs and/or wants of a selected segment of the market."

The above definition is based on the managerial or systems approach of marketing. According to this approach the emphasis is on how the indiviorganisation processes marketing and develops the strategic dimensions of marketing activities.

A Broader Approach of MarketingAccording to Kotler (2000)- "A societal process by which individuals and groups obtain what they need and want through creating, offering, and frexchanging products and services of value with others."

According to AMA (2004)- "Marketing is an organisational function and set of processes for creating, communicating and delivering value to customand for managing relationships in a way that benefits both the organisation and the stakeholder."

MARKETING MIX

The Marketing Mix

Summary (Click to go directly)

Introduction to Marketing Mix Definition of Marketing Mix Meaning of Marketing Mix 4P's - Producer-oriented Model 4C's - Consumer-oriented Model

Introduction to Marketing MixMarketingis the process of identifying, anticipating, and satisfying customers' requirements with the purpose to make profits. In this process markmanagers and marketing representatives have to take various marketing decisions to make the operations profitable. They have to decide combination of marketing policies and procedures be adopted to bring about desired behaviour of trade and consumers at minimum cost. They havdecide how can advertising, personal selling, pricing, packaging, channels, warehousing, and the other elements of marketing be manipulated mixed to make marketing operations profitable. More specifically, they have to decide a marketing mix - a decision making method in relation withproduct, price, promotion, and distribution.

The term Marketing Mix was introduced by Neil H. Bordenin his article - "The Concept of Marketing Mix". He learned about it in a research bullet

the management of marketing costs, written by his associate, Prof. James Culliton. in 1948. In this study of manufacturers' marketing costsdescribed the business executive as a "decider," an "artist" - a "mixer of ingredients," who sometimes follows a recipe prepared by others, sometprepares his own recipe as he goes along, sometimes adapts a recipe to the ingredients immediately available, and sometimes experiments wiinvents ingredients no one else has tried.

Definition of Marketing MixAccording toPhilip Kotler- "Market ing Mix is the combination of four elements, called the 4P's (product, Price, Promotion, and Place), that ecompany has the option of adding, subtracting, or modifying in order to create a desired marketing strategy"

According to Principles of Marketing, 14e, Kotler and Armstrong, 2012- "The Market ing Mixis the set of tactical marketing tools - Product, PPromotion, and Place - that the firm blends to produce the response it wants in the target market."

Meaning of Marketing MixThe Marketing Mix is a marketing tool used by marketing professionals. It is often crucial when determining product or brand's offering, and it is called as 4P's (Product, Price, Promotion, and Place) of marketing. However, in case of services of different nature the 4 P's have been expande7P's or 8

In recent times, giving more importance to customer a new concept have been introduced, i.e. Concept of 4C's. The Concept of 4C's is more custodriven replacement of 4P's. According to Lauterborn's the 4C's are - Consumer, Cost, Communication, and Convenience. According to Shimizu's4C's are -Commodity, Cost, Communication, and Channel.4P's - Producer-oriented Model of Marketing Mix

Product- Products are offerings that a marketer offers to the target audience to satisfy their needs and wants. Product can be tangible goor intangible service. Tangible products are goods like - cellphone, television, or motor car, whereas intangible products are services like - financialservice in a bank, health treatment by a doctor, legal advice of a lawyer.

Price- Price is the amount that is charged by marketer of his offerings or the amount that is paid by consumer for the use or consumption the product. Price is crucial in determining the organisation's profit and survival. Adjustments in price affects the demand and sales of the product.Marketers are required to be aware of the customer perceived value of the product to set the right price.

Promotion- Promotion represents the different methods of communication that are used by marketer to inform target audience about theproduct. promotion includes - advertising, personal selling, public relation, and sales promotion.

Place- Place or distribution refers to making the product available for customers at convenient and accessible places.In case of services, the producer-oriented model of marketing mix is consists of 7P's. Including the above 4P's there are additional 3P's - PhysEvidence,People, andProcess. Physical evidence refers to elements like uniform of employees, signboards, and etc. People refers to the employ
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of the organisation comes in contact with the customers in the process of marketing. Process refers to the systems and processes followed worganisation.4C's - Consumer-oriented model of marketing Mix

Consumer- In this model the Product is replaced by Consumer. Marketers focuses more on consumer satisfaction. The product is designand produced keeping in consideration the requirements of consumer.

Cost- Price is replaced by Cost. Here the cost refers to the total cost of owning a product. It includes cost to use the product, cost to chanthe product, and cost of not choosing the competitor's product.

Communication- Promotion is replaced by Communication. Communication includes advertising, public relation, personal selling, and anmethod that can be used for proper,timely, and accurate communication between marketer and consumer.

Convenience- Place is replaced by Convenience. it focuses on ease of buying, convenience in reaching to the store/product, andconvenience in getting product information.

Product Life Cycle ConceptWe have a life cycle, we are born, we grow, we mature, and finally we pass away. Similarly, products also have life cycle, from their introductiodecline they progresses through a sequence of stages. The major stages of the product life cycle are - introduction, growth, maturity, and decProduct life cycle describes transition of a product from its development to dec

The time period of product life cycle and the length of each stage varies from product to product. Life cycle of one product can be over in few moand of another product may last for many years. One product reach to maturity in years and another can reach it in few months. One product stay atmaturity for years and another just for few months. Hence, it is true to say that length of each stage varies from product to prod

Product life cycle is associated with variation in the marketing situation, level of competition, product demand, consumer understanding, etc., marketing managers have to change the marketing strategy and the marketing mix accordi

Product life cycle can be defined as "the change in sales volume of a specific product offered by an organisation, over the expected life of the produc

Stages of the Product Life CycleThe four major stages of the product life cycle are as follows :-

1. Introduction,2. Growth,3. Maturity, and4. Decline.

Introduction Stage

At this stage the product is new to the market and few potential customers are aware with the existence of product. The price is generally high.sales of the product is low or may be restricted to early adopters. Profits are often low or losses are being made, this is because of the high advertiscost and repayment of developmental cost. At the introductory stage :-

The product is unknown, The price is generally high, The placement is selective, and The promotion is informative and personalised.Growth Stage

At this stage the product is becoming more widely known and acceptable in the market. Marketing is done to strengthen brand and develop an imagthe product. Prices may start to fall as competitors enters the market. With the increase in sales, profit may start to be earned, but advertising remains high. At the growth stage :-

The product is more widely known and consumed, The sales volume increases, The price begin to decline with the entry of new players, The placement becomes more widely spread, and The promotion is focused on brand development and product image formation.Maturity StageAt this stage the product is competing with alternatives. Sales and profits are at their peak. Product range may be extended, by adboth withe and depth. With the increases in competition the price reaches to its lowest point. Advertising is done to reinforce the product image inconsumer's minds to increase repeat purchases. At maturity stage :-

The product is competing with alternatives, The sales are at their peak, The prices reaches to its lowest point,

The placement is intense, and The promotion is focused on repeat purchasing.Decline StageAt this stage sales start to fall fast as a result product range is reduced. The product faces reduced competition as many players have left the maand it is expected that no new competitor will enter the market. Advertising cost is also reduced. Concentration is on remaining market niches as sprice stability is expected there. Each product sold could be profitable as developmental costs have been paid at earlier stage. With the reductiosales volume overall profit will also reduce. At decline stage : -

The product faces reduced competition, The sales volume reduces, The price is likely to fall, The placement is selective, and The promotion is focused on reminding.


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MARKETING ENVIRONMENT

IntroductionIn today's world of marketing, everywhere you go you are being marketed to in one form or another. Marketing is with you each second of your wallife. From morning to night you are exposed to thousands of marketing messages everyday. Marketing is something that affects you even thoughmay not necessarily be conscious of it.

Definition of MarketingAccording to American Marketing Association (2004)- "Marketing is an organisational function and set of processes for creating, communicatingdelivering value to customers and for managing relationships in a way that benefits both the organisation and the stakeholder."

According to Kotler (2000)- "A societal process by which individuals and groups obtain what they need and want through creating, offering, and frexchanging products and services of value with others."

Marketing EnvironmentThe term Marketing Environment refers to the forces and factors that affects the organisation ability to built and maintain good relationship witcustomers. Marketing environment surrounds the organisation and it impacts upon the organisation. Marketers have to interact with internal and extpeople at micro and macro level and builds internal and external relationships. The key elements of marketing environment are as follows :-

1. Internal Environment,2. Micro Environment, and3. Macro Environment.

Internal EnvironmentInternal factors like men, machine, money, material, etc., on which marketing decision depends consists internal marketing environment. The intenvironment refers to the forces that are within the organisation and affects its ability to serve its customers. It includes marketing managers, srepresentatives, marketing budget, marketing plans, procedures, inventory, logistics, and anything within organisation which affects marketing decisand its relationship with its customers.

Micro EnvironmentIndividuals and organisations that are close to the marketing organisation and directly impacts its ability to serve its customers, makes Marketing MEnvironment. The micro environment refers to the forces that are close to the marketing organisation and directly impact the customer experiencincludes the organisation itself, its suppliers, marketing intermediaries, customers, markets or segments, competitors, and publics. Happenings in menvironment is relatively controllable for the marketing organisation.

Macro EnvironmentMacro environment refers to all forces that are part of the larger society and affects the micro environment. It includes demography, economy, poculture, technology, and natural forces. Macro environment is less controllable.

MARKETING RESEARCH

Marketing Research is used to identify and define marketing opportunities and problems: to generate, refine and evaluate marketing actions; to monitor

marketing performance and to improve understanding of the marketing process.

INFORMATION ANALYSIS

Information gathered by the companys marketing intelligence and marketing research systems require detailed analysis. This includ e use of advanced statistical

analysis. Information analysis might also involve a collection of mathematical models that will help marketers make better decisions. Each model represents some

real system, process, or outcome. These models can help answer the questions of what, if and which is best.

DISTRIBUTING INFORMATION

The information gathered through marketing intel igence and marketing research must be distributed to the marketing managers at the right time. Most compan

have centralized marketing information systems that provide managers with regular performance reports, intel igence updates, and reports of research studies.

Mangers need these routine reports for making regular planning, implementation, and control decisions.

Developments in information technology have caused a revolution in information distribution. With recent advances in computers, software and telecommunicat

most companies are decentralizing their marketing information systems. In many companies marketing managers have direct access to the information network

through personal computers and other means. From any location, they can obtain information from internal records or outside information services, analyze the

information using statistical packages and models, prepare reports on a work processor or desk-top publishing system, and communicate with orders in the netw

through electronic communications.

Such systems offers exciting prospects. They al ow the managers to get the information they needed directly and quickly and to tailor it to their own needs.

MARKETING RESEARCH

Marketing basically consists of identifying the consumers and satisfying them in the best possible way. Marketing research plays a key role in this process. Market

research helps the firm to acquire a better understanding of the consumer, the competition and the marketing environment. It also helps the formulation of right

marketing mix, which include decisions on product, price, place and promotion.

The conduct of marketing research has become so complex due to increasing complexity of marketing and hence requires specialized skil s and sophisticated

techniques.

Marketing research has been variously defined by marketing researches.

Richard Crisp defined marketing research as the systematic, objective and exhaustive search for and study of the facts relating to any problem in the field ofmarketing

According to Green and Tul , marketing research is the systematic and objective search for and analysis of information relevant to the identification and solution

any problem in the field of marketing.

America Marketing Association defined marketing research, as the systematic gathering, recording and analyzing of data about problems relating to the marketi

goods and services.

An analysis of above definitions clearly highlights the salient features of marketing research:

It is a search for data which are relevant to marketing problems; It is carried out in a systematic and objectives manner; It involves a process of gathering, recordin

and analysis of data.

None of the definitions is explicit about the managerial purposes of marketing research, except saying that data are required for solving marketing problem.

A better definition of marketing research is, that it is an objective, and systematic collections, recording and analysis of data, relevant to marketing problems of a

business in order to develop an appropriate information base for decision making in the marketing area.

MARKET RESEARCH


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Market research is different from marking research. Market research is a systematic study of facts about market only who, what, where, when, why, and how o

actual and potential buyers. On the other hand the scope of marketing research is to wide that it includes al functional areas of marketing including market.

IMPORTANCE OF MARKETING RESEARCH

The emergence of buyers market requires continuous need of marketing research to identify consumer need and ensure their satisfaction.

The ever expanding markets require large number of middlemen and intensive distribution. Marketing research should help identify and solve the problems of

middlemen and distribution.

There is always a change in the market conditions and the requirements of consumers. Marketing research enables to anticipate and meet any such changes.

Marketing research can help bring about prompt adjustments in product design and packaging. It can help find out effectiveness of pricing.

It can help find out the effectiveness of sales promotion and advertisement.

It can help identify the strength and weakness of sales force.

The impact of economic and taxation policies on marketing could also be known through marketing research. In short, marketing research enables the manageme

to identify and solve any problem in the area of marketing and help better marketing decisions.

SCOPE OF MARKETING RESEARCH

The scope of marketing research stretches from the identification of consumer wants and needs to the evaluation of consumer satisfaction. It comprises of resear

relating to consumer, products, sales, distribution, advertising, pricing and sales forecasting. A clear view of the scope of marketing research may be obtained by t

following classification of marketing research activity.

Market Research

The purpose of market research is to gather facts about markets and the forces operating therein. The areas of market research broadly include:

Study of the market size/ potential

Study of the market profile

Market share analysis

Study of market segments

Market trends Sales forecasting

Study of seasonal trends

Consumer Research

The aim of this research is to develop an understanding about present and potential consumers and the level of satisfaction expected and derived by them fromcompanys products. The broad areas of consumer research are:

Study of consumer profile

Study of consumer brand preferences, tastes and reactions

Study of consumer satisfaction/ dissatisfaction, reasons, etc.

Study of shifts in consumption patterns.

Product Research

Reviewing product line, product quality, product features, product design etc.

Study on the actual uses of a given product

Study on new uses of an existing product

Testing of new products

Study of related products

Study of packing, packaging design

Study of brand name/ brand mark/ its impact

Distribution Research

The purpose of this research is to identify the appropriate distribution channels for intermediaries, storage, transport problems etc. The board areas include:

Assessing the general pattern of pricing fol owed by the industry

Measuring price elasticity of demand

Evaluating the pricing strategy of the firm

Advertising and Promotion Research

The purpose of this research is to develop most appropriate advertising and promotion schemes and evaluate their effectiveness. The broad areas include:

Advertising copy research

Media research

Assessing the effectiveness of advertising

Assessing the efficacy of sales promotional measures.

Sales Research

The purpose is to find out the sales potential and appraise sales performance of companys products. The broad areas include:

Testing new sales techniques

Analyzing of salesmens training

Measuring salesmans effectiveness

Study of sales compensationAnalyzing methods of setting sales quota and sales territories.


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Research on Competition

The purpose of this research is to find out the intensity and effect of competition to the firm. The broad areas include:

Study of competitive structure of the industry and individual competitors.

Study of competitors marketing strategies.

The scope of marketing research described above is only indicative and not exhaustive. Further, the above research areas are not watertight compartments. They

closely interrelated. The actual scope depends on the needs of a company and the marketing situations.

BENEFITS OF MARKETING RESEARCH

It is apparent that the scope of marketing research activity is very wide. It covers almost all aspects of marketing. The major contribution of marketing research is

it augments the effectiveness of marketing decisions. Marketing research uncovers facts from both outside and within the company relevant to marketing decisio

and provides a sustainable and logical base for making decisions.

The specific contributions of marketing research to the effectiveness of the marketing programme of a firm are as follows:1. With the guidance of research, products should be better suited to the demand and prices reasonably. 2. Specific markets having the greatest sales potentialiti

could be identified. 3. Research can help to identify the best sales appeal of the products, the best way of reaching the potential buyers and the most suitable timi

of promotion etc. 4. Research can also help minimize marketing costs by making marketing efforts more efficient and effective. 5. Research can also find out the

effectiveness of sales force management such as right selection procedure, effective training programmes, scientific compensation schemes and effective control

mechanisms.

The contributions of marketing research are considerable. It facilitates both the decision-making and the operational tasks of marketing management effective an

efficient and thereby contributes to consumers satisfaction and organizations efficiency.

LIMITATIONS OF MARKETING RESEARCH

The marketing research is not without its share of limitations.1. Marketing Research cannot provide complete answer to the

problems because there are many intervening variables which are

difficult to be controlled.

2. Some marketing problems do not lend themselves to valid research conclusions due to limitations of tools and techniques involved. There are many intangible

variables operating which are difficult to be measured.

3. In a fast changing environment, the data collected become obsolete soon and the research findings based on them will become little use.

4. It only provides a base for predicting future events; it cannot guarantee with any certainty their happening.5. Marketing research involves more time, effort and high cost. But it is very often said that marketing research is cheaper than costly marketing mistakes.

PROCEDURE IN CONDUCTING MARKETING RESEARCH

In marketing research, the fol owing procedure is general y adopted.

1. Defining the problem and its objectives

2. Determine the information needed and the sources of information

3. Deciding on research methods

4. Analysis and Interpretation of data

5. Preparing research report

1. Determine the Problem

The first basic step is to define the marketing problem in specific terms. Only if the marketing researcher knows what problem management is trying to solve, he

cannot do an effective job in planning and designing a research project that wil provide the needed information. After the problem has been defined, the researc

task is to learn as much about it as the time permits. This involves getting acquainted with the company, its business, its products and market environment,

advertising by means of library consultation and extensive interviewing of companys officials. The researcher tries to get a feel of the situation surrounding the

problem. He analyses the company, its markets, its competitions and the industry in general. This phase of preliminary exploration is known as situation analysis.

analysis enables the researcher to arrive at a hypothesis or a tentative presumption on the basis of which further investigations may be done. When a problem ha

been identified, objectives of the research have to be determined. The objectives of the project may be to determine exactly what the problem is and how it can

solved.

2. Determine the Specific Information Needed and Sources of Information

The researcher should then determine the specific information needed to solve the research problems. For successful operations of production and sales

departments, what information is required depends to a large extent on the nature of goods and the method used for placing it in the hands of the consumers. Th

investigator must identify the sources from which the different items of information are obtainable and select those that he wil use. He may collect information

through primary data, secondary data or both. Primary data are those which are gathered specifical y for the project at hand, directly e.g. through questionnaires

interviews. Primary data sources include: Company salesmen, middlemen, consumers, buyers, trade associations executives, and other businessmen and even

competitors. Secondary data are generally published sources, which have been collected original y for some other purpose. They are not gathered specifical y to

achieve the objectives of the particular research project at hand, but are already assembled. Such sources are internal company records; government publiscation

reports and journals, trade, professional and business associations publications and reports, private business firms records, advertising media, University researc

organizations, and libraries.

3. Deciding on Research Method

If it is found that the secondary data cannot be of much use, collection of primary data become necessary. These widely used methods of gathering primary data

(i) Survey, (i ) Observation, and (ii )Experimentation. Which method is to be used wil depend upon the objectives, cost, time, personnel and facilities available.

(i) Survey Method: In this method, information is gathered directly from individual respondents, either through personal interviews or through mail, questionnairetelephone interviews. The questions are used either to obtain specific responses to direct questions or to secure more general response to open end questions.

(ii) Observational Method: The research data are not gathered through direct questioning of respondents but rather by observing and recording their actions in a

marketing situation. The customer is unaware that he/she is being observed, so presumably he/she acts in his/her usual fashion. Information may be gathered by

personal or mechanical observation. This technique is useful in getting information about the caliber of the salesman or in determining what brands he pushes. In

another situation, a customer may be watched at a distance and noticed, what motivates him to purchase

(ii ) Experimental Method: This method involves carrying out a smal -scale trial solution to a problem, while, at the same time, attempting to control all factors

relevant to the problems. The main assumption here is that the test conditions are essential y the same as those that wil be encountered later when conclusion

derived from the experiment are applied to a broader marketing area. The technique consist of establishing a control market in which al factors remain constant a

one or more test markets in which one factor is varied.

4. Analysis and Interpretation of DataAfter the necessary data have been col ected, they are tabulated and analyzed with appropriate statistical techniques to d

conclusions and findings. This stage is regarded as the end product.

5. Preparation of Report


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The conclusions and recommendations, supported by a detailed analysis of the findings should be submitted in a written report. The report should be written in c

language, properly paragraphed, and should present the facts and findings with necessary evidence. The choice of the words, adequate emphasis, correct statistic

presentation, avoidance of flowery language and ability to express ideas directly and simply in an organized framework are essential for a good report.

MACRO ENVIRONMENTMacro environment consists of six major forces viz, demographic,economic, physical, technological, political/ legal and socio-cultural. Thetrends in each macro environment components and their implications onmarketing are discussed below:DEMOGRAPHIC ENVIRONMENTDemography is the study of human population in terms of size,

density, location, age, gender, occupation etc. The demographicenvironment is of major interest to marketers because it involves peoplethe people make up markets.The world population and the Indian population in particular isgrowing at an explosive rate. This has major implications for business. Agrowing population means growing human needs. Depending onpurchasing powers, it may also mean growing market opportunities. Onthe other hand, decline in population is a threat so some industrial andthe boon to others. The marketing executives of toy-making industryspend a lot of energy and efforts and developed fashionable toys, andeven advertise Babies are our business-our only business, but quietlydropped this slogan when children population gone down due todeclining birth rate and later shifted their business to life insurance forold people and changed their advertisement slogan as the company hasnot babies the over 50s.The increased divorce rate shall also have the impact on marketing

decisions. The higher divorce rate results in additional housing units,furniture, appliances and other house-hold appliances. Similarly, whenspouses work at two different places, that also results in additionalrequirement for housing, furniture, better clothing, and so on.Thus, marketers keep close tract of demographic trendsdevelopments in their markets and accordingly evolve a suitablemarketing programme.ECONOMIC ENVIRONMENTMarkets require purchasing power as well as people. Totalpurchasing power is functions of current income, prices, savings andcredit availability. Marketers should be aware of four main trends in theeconomic environment.(i) Decrease in Real Income GrowthAlthough money incomer per capita keeps raising, real income percapita has decreased due to higher inflation rate exceeding themoney income growth rate, unemployment rate and increase in thetax burden.

These developments had reduced disposable personal income;which is the amount people have left after taxes. Further, manypeople have found their discretionary income reduced aftermeeting the expenditure for necessaries. Availability ofdiscretionary income shall have the impact on purchasingbehaviour of the people.(ii)Continued Inflationary PressureThe continued inflationary pressure brought about a substantialincrease in the prices of several commodities. Inflation leadsconsumers to research for opportunities to save money, includingbuying cheaper brands, economy sizes, etc.(iii) Low Savings and High DebtConsumer expenditures are also affected by consumers savingsand debt patterns. The level of savings and borrowings amongconsumers affect the marketing. When marketers make availablehigh consumer credit, it increases market opportunities.(iv) Changing Consumer Expenditure PatternsConsumption expenditure patters in major goods and servicescategories have been changing over the years. For instance, whenfamily income rises, the percentage spent on food declines, thepercentage spent on housing and house hold operations remainconstant, and the percentage spent on other categories such astransportation and education increase.These changing consumer expenditure patterns has an impact onmarketing and the marketing executives need to know suchchanges in economic environment for their marketing decisions.PHYSICAL ENVIRONMENTThere are certain finite renewable resources such as wood andother forest materials which are now dearth in certain parts of world.Similarly there are finite non-renewable resources like oil coal andvarious minerals, which are also not short in supply. In such cases, themarketers have to find out some alternative resources. For instance, the


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marketers of wooden chairs, due to shortage and high cost of woodshifted to steel and later on fiber chairs. Similarly scientists all over theworld are constantly trying to find out alternative sources of energy foroil due to dearth in supply.There has been increase in the pollution levels in the country dueto certain chemicals. In Mumbai-Surat-Ahemedabed area, are facingincreased pollution due to the presence of different industries.Marketers should be aware of the threats and opportunitiesassociated with the physical environment and have to find our alternativesources of physical resources.SOCIO CULTURAL ENVIRONMENTThe socio-cultural environment comprises of the basic beliefs,

values and norms which shapes the people. Some of the main culturalcharacteristics and trends which are of interest to the marketers are:(i) Core Cultural ValuesPeople in a given society hold many core beliefs and values, thatwill tend to persist. Peoples secondary beliefs and values are moreopen to change. Marketers have more chances of changingsecondary values but little chance of changing core values.(ii)Each Culture Consists of Sub-CulturesEach society contains sub-cultures, i.e. groups of people withshared value systems emerging out of their common lifeexperiences, beliefs, preferences and behaviors. To the extent thatsub-cultural groups exhibit different wants and consumptionbehaviour, marketers can choose sub-cultures as their targetmarkets.Secondary cultural values undergo changes over time. For examplevideo-games, playboy magazines and other cultural phenomenahave a major impact on children hobbies, clothing and l ife goals.Marketers have a keen interest in anticipating cultural shifts inorder to identify new marketing opportunities and threats.TECHNOLOGICAL ENVIRONMENTTechnology advancement has benefited the society and also causeddamages. Open heart surgery, satellites all were marvels of technology,but hydrogen bomb was on the bitter side of technology. Technology isaccelerating at a pace the many products seen yester-years have becomeobsolete now.Alvin Toffler in his book The Future Shock has made aremark on the accelerative thrust in the invention, exploitation anddiffusion of new technologies. There could be a new range of productsand systems due to the innovations in technology.This technology developments has tremendous impact onmarketing and unless the marketing manager cope up with thisdevelopment be cannot survive in the competitive market.POLITICAL AND LEGAL ENVIRONMENTMarketing decisions are highly affected by changes in the political/

legal environment. The environment is made up of laws and governmentagencies that influence and constraint various organizations andindividuals in society.Legislations affecting business has steadily increased over theyears. The product the consumes and the society against unethicalbusiness behaviour and regulates the functioning of the businessorganizations. Removal of restrictions to the existing capabilities,enlargement of the spheres open to MRTP and FEMA companies andbroad banding of industrial licenses were some of the schemes evolvedby the government. The legal enactments and rules and regulationsexercise a specific impact on the marketing practices, systems andinstitutions in the country. Some of the acts which have direct bearing onthe marketing of the company include, the Prevention of FoodAdulteration Act (1954), The Drugs and Cosmetics Act (1940), TheStandard Weights and Measures Act (1956) etc. The PackagedCommodities (Regulative) Order (1975) provides for clearly making theprices on all packaged goods sold in retail excluding certain items.

Similarly, when the government changes, the policy relating tocommerce, trade, economy and finance also changes resulting in changesin business. Very often it becomes a political decisions. For instance, oneGovernment introduce prohibition, and another government lifts theprohibition. Also, one Government adopts restrictive policy and anotherGovernment adopts liberal economic policies. All these will have impacton business.Hence, the marketing executives needs a good working knowledgeof the major laws affecting business and have to adapt themselves tochanging legal and political decisions.All the above micro environmental actors and macro environmentalforces affect the marketing systems individually and collectively. Themarketing executives need to understand the opportunities and threatscaused by these forces and accordingly they must be able to evolveappropriate marketing strategies.


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Scanning the major macro environment

Environmental scanning is a process of gathering, analyzing, and dispensing information for tactical or strategic purposes. The environmental scanning process ent

obtaining both factual and subjective information on the business environments in which a company is operating or considering entering

Kinds of environmental scanning

Ad-hoc scanning - Short term, infrequent examinations usually initiated by a crisis

Regular scanning - Studies done on a regular schedule (e.g. once a year)

Continuous scanning (also called continuous learning) - continuous structured data collection and processing on a broad range of environmental factors

Environmental scanning usually refers just to the macro environment, but it can also include industry, competitor analysis, marketing research (consumer analysis

new product development (product innovations) or the company's internal environment.

A scan of the external macro-environment in which the firm operates can be expressed in terms of the following factors:

Political

Economic

Social

Technological

The acronym PEST(or sometimes rearranged as "STEP") is used to describe a framework for the analysis of these macro environmental factors.

Political Factors:-Political factors include government regulations and legal issues and define both formal and informal rules under which the firm must operate.

Some examples include:

tax policy employment laws environmental regulations trade restrictions and tariffs political stability

Economic Factors :-Economic factors affect the purchasing power of potential customers and the firm's cost of capital. The following are examples of factors in th

macro economy:

economic growth interest rates exchange rates inflation rate


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Social Factors

Social factors include the demographic and cultural aspects of the external macroenvironment. These factors affect customer needs and the size of potential mark

Some social factors include:

health consciousness population growth rate age distribution emphasis on safety

Technological Factors:-Technological factors can lower barriers to entry, reduce minimum efficient production levels, and influence outsourcing decisions. Some

technological factors include:

R&D activity

Automation technology incentives rate of technological change


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PRODUCT-MARKET INTEGRATION STRATEGIES

Product differentiation and Product positioning

Introduction of ProductProduct, a component of the marketing-mix, can help achieve themarketing objectives only when there is integration between theproduct and market. Product-market integration may be defined asa state wherein both product image and consumer self-image arein focus; there is a match between product attributes and consumerexpectationsboth economic and non-economic. Such matching iscrux of the modern marketing concept, because it is essential forevery marketer to develop such a product image which iscompatible with the self-image of his consumers. This should bethe essence and objective of all product management exercises.INTEGRATION PROBLEMSNevertheless, there are always problems associated with suchexercises. The problems steam from the fact that while product is one orlimited in number, consumers are numerous and their self-images manyand varied. Under this situation, if a company attempts to meetconsumer individual self-images then it would have to introduce asmany products as there are wrinkles on an old mans face possibly evenmore. Such an attempt would be highly uneconomical from thestandpoint of cost of production.As such, a marketer is faced with dilemma whether to meetconsumer self-images or to avoid penalties of product economics. If theformer is to be opted, then product-time proliferation and cost escalationare inevitable; in the latter case, the product line will be narrow and thecost structure balanced. However, both options are not inescapable andwithout problems. It is, therefore, always advisable to develop in

Optimum Matching Strategy (OMS) between the companys products andmarkets.Optimum Matching Strategy (OMS)Optimum matching strategy may be defined as the method ofmatching product and consumer self-images in such a way that in somemarket segments there is full matching whereas in others not so, so thatthe cost-revenue equilibrium is maintained. The strategy comprisesmarket segmentation, product offering and product differentiation.The whole market is divided into three segments, viz. core, fringeand zone of indifference. In the core market , the company attempts toattain a full match between the product and the self-image of the groupsof consumers. In the fringe market , the match between the productimage and the self-image of consumers may be only partial. This partialmatch may be in terms of less than full ocmpatibality in respect of theproduct image and all the variables of consumer self-image, namely,economic and non-economicpsychological, sociological and culturalor alternatively, full matching in respect of others. In the zone ofindifference, there is absolutely no attempted matching between productimage and consumer self-image. Whatever matching that may emerge isonly random.Where the strategy of full matching is employed, a higher make-upmay be attempted relative to partial and no matching strategies in orderto earn larger profits from the core market and to compensate for theloss of consumer satisfaction in the fringe market and zone ofindifference arising out of the non-0fulfilment of the non-economicexpectations.In the fringe market and the zone of indifference, since there isonly partial and random matching respectively, the company may attemptproduct differentiation so as to convey an impression of matching. Thismay be attained with the effective use of advertisement and salespromotion. Through this strategy, consumer may be made to perceiveproducts in such a way that semblance of matching is attained andproducts are bought. In reality, in this way, a company attempts to

reshape consumer self-images so as to fit with the product image.The other strategies through which product-market integrationmay be attained include product positioning, diversification,simplification, planned obsolescence and branding and packaging.PRODUCT POSITIONINGPositioning is the set of activities which help create a perceptibledifference between a brand and its competitors in the mind of theconsumer. Positioning goes beyond the physical or functionalcharacteristics of a brand. It includes also the non-functional orpsychological characteristics of a brand. In the consumers mind-space, abrand occupies a position in relation to competitive brands. Surf andAriel are perceived to be closer to each other while Wheel and Nirma arePositioned in quite another space. The perceived image of a brand is theproperty of the consumers mind. Two brands of a product may beidentical in terms of physical attributes but could be perceived differentlyby the consumer. Positioning involves placing a brand in certain distinct


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and preferably unique way in the consumers mind. Basically, one maytake either the information route or the imaginary route to build aposition. In the 100cc motorbikes category, T.V.S. Suzuki took theinformation route, Kawasaki Bajaj took the imagery route and Hero Hondaused a skilful combination of bothand it is easy to recognize that thesebrands are perceived differently by the consumer although they may notbe generically very different.If one consider a consumers mind space as allotting specificpositions for various brand of a product, the extent of competitions abrand faces can be studied depending upon the distance between thebrand and other brands in the space. Such a graphical representation iscalled a perceptual map. CORE, the marketing research division of Clarion

Advertising conducted a positioning study of some toilet soap brand andfound the results to be as depicted in this figure:Here the Y axis represents the cosmetic benefit or feels goodfactors and the Health related benefits or the does good factors. The Xaxis represents popular pricing versus high or premium pricing. As thefigure shows, there are hardly any brands in the luxurycosmeticsegment, while the utilitycosmetic segment is crowded. Margo is thesole purveyor of the Health relatedutility segment. This study wasconducted in 1989, among women in West Bengal. It would be interestingto include Camay, Medimix, Lesancy, Pears, Rexona, Evita, Palmolive,Lifebuoy, Nirma Bath, Moti, Santoor, Dove, Ganga, Dettolthe list isexhausting! Further, the mens toilet soap category has also opened up, the baby soaps category boasts of a few brands and the liquid soapscategory presents its international appeal. Positioning alone candetermine the brands that will keep going and the goners!TYPES OF POSITIONING

A products image is created among the consumers based on thefollowing aspects:1. Product Attribute ImagesSince some of the brands have excellent product features theydirectly appeal to consumers. Exide is considered to be the batterwhich has no troubles at all. Promotion message, each time,concentrates on the consumer gains resulting from productperformance. Philip emphasizes the quality plank and BPL audiosemphasis on the fidelity platform.2. Symbolic ProjectionsIn those products with not much differentiation with othercompetitors, position arises from broad symbolizations rather thanthe product performance. Beer advertising is one such. Since theproduct does not differ in many brands, the emotional moods areused as product attributes. ONIDA has used the devil to sell itsproducts as depicted in their advertisements, on seeing a devil oneimmediately recognize ONIDA television.

3. Direct Competitive PositioningIn this approach, a products position use the competitorsposition as a reference point. Classic example is that of pepsi andcoke. 7-up position itself as an uncola. Videocon uses the salesfigures of competitors as selling point. Indian Airlines have alsostarted advertising with response to the private airlinesadvertisement.REPOSITIONINGA brand does not have to be stuck with the image it has o0nccreated. Since the competitive environment and nature of the productchanges it is imperative to reposition the product among the consumers.Repositioning will sometime give new life to the sales of the brand. Thisis done also in the cases of declining market share. Any change in marketshare provide a direct indication of competitive standing market potentialdata may reflect on the expansion, contraction or stability of industryvolume. In the case of declining market share it is advisable to repositionthe product into new market. An expanding or growing market

represents additional opportunities in the long term. Repositioning maybe necessary when share in a growing market declines. Such a declinesuggests that the brand in not getting additional sales in proportion towhat it had in the past. In the case of increasing share is an expandingmarket, repositioning is not required.

PRODUCT DIVERSIFICATIONIn the pursuit of product-market integration, a number of policyand strategy option are available to a company. One among them isproduct diversification. Diversification is a policy or managementphilosophy of operating a company so that its business and profits comefrom a number of sources, usually from diverse products that differ inmarket or production characteristics.Unlike other product policies and strategies, the distinguishingfeature of the policy of diversification is to increase the number ofproducts in the product portfolio of the company. It involvesfundamental change in the old product, say, in its modular construction,


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but not merely a tactical adjustment in the design, style, colour of size ofthe product to gain temporary market advantage.Reasons for DiversificationA study of the business literature and analysis of the companyhistories reveal that the questions of corporate survival, stability andgrowth are the prime movers of diversification.The following are the specific reasons for diversification:SurvivalTo offset declining or vanishing markets.To compensate for technological obsolescence.To offset obsolete facilities.To arrest declining profit margins.

To offset an unfavourable geographic location brought about bychanging economic factors.StabilityTo eliminate of offset slumps.To offset cyclical fluctuations.To maintain employment of labour force.To provide a balance between high and low margin products.To provide a balance between old and new products.To maintain market share.To meet new products of competitors.To maintain an assumed source of supply.To reduce dependence on existing products.Kinds of Diversification:Horizontal diversification may be described as introduction to newproducts which are akin to the industrys product-line. They newproducts so introduced may not contribute anything to the presentproducts in any way but may cater to the mission which lie within therealm of the industry of which the company is a member.Vertical diversification may be described as inclusion of newproducts such as components, parts, and materials in the current productportfolio of the company. These new products perform distinct anddifferent missions from that of the original products.Lateral diversification may be described as a move to expandproduct line beyond the confines of the industry. I t may include may kindof product which may be totally different. For instande, the Bata whichare primarily in footwear business have diversified their business intoreadymade garments. Similarly, the Raymonds who are basically in textilebusiness have diversified their business into footwear.PRODUCT-LINE SIMPLIFICATIONSimplification may be defined as, deleting or eliminating from theproduct-line those product items which no more satisfy the criteria laiddown by a company for retaining products in the line. It is the opposite ofproduct diversification and involves all those managerial exercises which

aim at product-line rationalization.Need for Product SimplificationDeclining absolute sales volume.Sales volume decreasing as a percentage of the firms total sales.Decreasing market share.Past sales volume not up to projected amounts.Expected future sales disappointing.Future market potential not favourable.Return on investment below minimally acceptable level.Variable cost exceeds revenues.Various costs as percentage of sales consistently increasing.Increasingly greater percentage of executive time required.Price must be consistently lowered to maintain sales.Promotional budgeted must be consistently increased to maintainsales.Once a decision to abandon a product is taken, company mustformulate a programme for its smooth deletion so that it is

implemented with minimum of problems.PLANNED OBSOLESCENCEThe word obsolescence means to wear out or fall into disuse.When applied to products, obsolescence means wearing our or fallinginto disuse of products in terms of consumer acceptance.When it is known that every product is liable to get out of use,there are two options available to a marketer. The first option is toallow the product to die out in a natural way. In this, marketers, acceptproduct death as fait accompli after having suffered sufficient costpressures and lost profit opportunities.The second option is to plan its death in advance so that it quits ata time desired by the management. I t wears out and fall into disse onthe expiry of a fixed time period. This is called the strategy of PlannedObsolescence and has been defined as, a purposeful programme ofvendors to shorten the time span or number of performance overwhich a product continues to satisfy customersthus presumabley


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encouraging an early purchase for replacement.The obsolescence of a product may be due to following factors.:Physical incapacity of the product to continue performance of heintended service or function due to breakage, wear or corrosion.Availability of close and better substitutes of current liabilities.Changes in consumer perception about products acceptableusefulness.


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MARKET SEGMENTATIONLearning ObjectivesAfter reading this lesson, you should to able to understand-The meaning, bases and benefits of the concept of marketsegmentation;The concept of target market;Meaning and types of positioning and its implicationsAll firms must formulate a strategy for approaching their markets. On theone hand, the firm may choose to provide one product to all of itscustomer; on the other hand, it may determine that the market is soheterogeneous that it has no choice but to divide or segment potentialusers into submarkets.

Segmentation is the key to the marketing strategy of many companies.Segmentation is a demand-oriented approach that involves modifying thefirms product and/or marketing strategies to fit the needs of individualmarket segments rather than those of the aggregate market.

According to William Stanton, Market segmentation is the process ofdividing the total heterogeneous market for a product into severalsub-markets or segments each of which tend to be homogeneous in allsignificant aspects.Market segmentation is basically a strategy of divide and rule. Thestrategy involves the development of two or more different marketingprogrammes for a given product or service, with each marketingprogramme aiming at each segment. A strategy of market segmentationrequires that the marketer first clearly define the number and nature ofthe customer groupings to which he intends to offer his product orservice. This is a necessary condition for optimizing efficiency ofmarketing effort.RATIONALE FOR MARKET SEGMENTATION

There are three reasons why firms use market segmentations:Because some markets are heterogeneousBecause market segments respond differently to differentpromotional appeals; andBecause market segmentation consider with the marketing concept.Heterogeneous Markets:Market is heterogeneous both in the supply and demand side. Onsupply side, many factors like differences in production equipments,processing techniques, nature of resources or inputs available to differentmanufactures, unequal capacity among the competitors in terms ofdesign and improvement and deliberate efforts to remain different fromother account for the heterogeneity. Similarly, the demand side, whichconstitute consumersis also different due to differences in physical andpsychological traits of consumer. Modern business managers realize thatunder normal circumstances they cannot attract all of the firms potentialcustomers to one product, because different buyers simply have different

needs and wants. To accommodate this heterogeneity, the seller mustprovide different products. For example, in two wheelers, the TVSCompany first introduced TVS50 Moped, but later on introduced a varietyof two wheelers, such as TVS XL, TVS Powerport, TVS Champ, TVS Sport,TVS Scooty, TVS Suzuki, TVS Victor, to suit the requirements of differentclasses of customers.2. Varied Promotional Appeals:A strategy of market segmentation does not necessarily mean thatthe firm must produce different products for each market segment. Ifcertain promotional appeals are likely to affect each market segmentdifferently, the firm may decide to build flexibility into its promotionalstrategy rather than to expand its product line. For example, manypolitical candidates have tried to sell themselves to the electorate byemphasizing one message to labour, another to business, and a third tofarmers.As another example, the Sheraton Hotel serves different districtmarket segments, such as conventioneers, business people and tourists.

Each segments has different reasons for using the hotel. Consequently,Sheraton uses different media and different messages to communicatewith the various segments.3. Consistency with the Marketing ConceptA third reason for using market segmentation is that it isconsistent with the marketing concept. Market segmentation recognizesthe existence of distinct market groups, each with a distinct set of needs.Through segmentation, the firm directs its product and promotionalefforts at those markets that will benefit most from or that will get thegreatest enjoyment from its merchandise. This is the heart of themarketing concept.Over the years, market segmentation has become an increasinglypopular strategic technique as more and more firms have adopted themarketing concept. Other historical forces being the rise of marketsegmentation include new economies of scale, increased education andaffluence, greater competition, and the advent of new segmentation


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technology.Bases of Market SegmentationThere are a number of bases on which a f irm may segment its market1. Geographic basisa. Nationsb. Statesc. Regions2. Demographic basisa. Ageb. Sexc. Incomed. Social Class

e. Material Statusf. Family Sizeg. Educationh. Occupation3. Psychographic basisa. Life styleb. Personalitiesc. Loyalty statusd. Benefits soughte. Usage rate (volume segmentation)f. Buyer readiness stages (unaware, aware, informed, interested,desired, intend to buy)g. Attitude stage (Enthusiastic, positive, indifferent, negative,hostile)METHODS OF SEGMENTATIONOn the basis of the bases used for the market segmentation,various characteristics of the customers and geographical characteristicsetc., common methods of market segmentations could be done. Commonmethods used are:Geographical SegmentationWhen the market is divided into different geographical unit asregion, continent, country, state, district, cities, urban and rural areas, itis called as geographical segmentation. Even on the geographic needsand preference products could be made. Even through Tata Tea is sold ona national level, it is flavoured accordingly in different regions. Thestrength of the tea differs in each regions of the country. Bajaj hassub-divided the entire country into two distinct markets. Owing to thebetter road conditions in the north, the super FE Sector is promotedbetter with small wheels; whereas in the case of south, Bajaj promotesChetak FE with large wheels because of the bad road condit ions.Demographic SegmentationDemographics is the most commonly used basis for marketsegmentation. Demographic variables are relatively easy to understand

and measure, and they have proven to be excellent segmentation criteriafor many markets. Information in several demographic categories isparticularly useful to marketers.Demographic segmentation refers to dividing the market intogroups on the basis of age, sex, family size cycle, income, education,occupation, religion, race, cast and nationality. In better distinctionsamong the customer groups this segmentation helps. The abovedemographic variables are directly related with the consumer needs,wants and preferences.Age: Market segments based on age are also important to manyorganizations. Some aspects of age as a segmentation variable are quiteobvious. For example, children constitute the primary market for toys andpeople 65 years and older are major users of medical services. Age andlife cycle are important factors. For instance in two wheeler market, asBajaj has Sunny for the college girls; Bajaj Chetak for youngsters;Bajaj Chetak for the office going people and Bajaj M80 for rural people.In appealing to teenagers, for example, the marketing executive

must continually monitor their ever-changing beliefs, political and socialattitudes, as wells as the entertainers and clothing that are most popularwith young people at a particular time. Such factors are important indeveloping effective advertising copy and illustrations for a productdirected to the youth market.Sex segmentation is applied to clothing, cosmetics, magazines andhair dressing. The magazines like Womens Era, Femina, (in Malayalam),Mangaiyar Malar (in Tamil) are mainly segmented for women. Recentlyeven a cigarette exclusively for women was brought out. Beauty Parloursare not synonyms for the ladies.Income segmentation: It has long been considered a good variablefor segmenting markets. Wealthy people, for example, are more likely tobuy expensive clothes, jewelleries, cars, and to live in large houses. Inaddition, income has been shown to be an excellent segmentationcorrelate for an even wider range of commodity purchased products,including household toiletries, paper and plastic items, furniture, etc.


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Social Class segmentation: This is a significant market segment.For example, members of different social classes vary dramatically intheir use of bank credit cards. People in lowe4r social classes tend to usebank credit cards as installment loans, while those in higher socialclasses use them for convenience purposes. These differences inbehaviour can be significant when segmenting a market and developing amarketing program to serve each segment.Psychographic SegmentationOn the basis of the life style, personality characteristics, buyers aredivided and this segmentation is known as psychographics segmentation.Certain group of people reacts in a particular manner for an appealprojected in the advertisements and exhibit common behavioural

patterns. Marketers have also used the personality variables asindependent, impulsive, masculine, aggressive, confident, nave, shy etc.for marketing their products. Old spice promotes their after shave lotionfor the people who are self confident and are very conscious of theirdress code. These advertisements focus mainly on the personalityvariables associated with the product.Behavioural SegmentationBuyer behavioural segmentation is slightly different frompsychographic segmentation. Here buyers are divided into groups on thebasis of their knowledge, attitude, use or response to a product.Benefit segmentation: The assumption underlying the benefitsegmentation is that markets can be defined on the basis of the benefitsthat people seek from the product. Although research indicates that mostpeople would like to receive as many benefits as possible from a product,it has also been shown that the relative importance that people attach toparticular benefits varies substantially. These differences can then besued to segment markets.Once the key benefits for a particular product/ market situationare determined, the analyst must compare each benefit segment with therest of the market to determine whether that segment has unique andidentifiable demographic characteristics, consumption patterns, or mediahabits. For example, the market for toothpaste can be segmented interms of four distinct product benefits; f lavour and product appearance,brightness of teeth, decay prevention and price.The major advantage of benefit segmentation is that it is designedto fit the precise needs of the market. Rather than trying to createmarkets, the firm indentifies the benefit or set of benefits thatprospective customers want from their purchases and then designsproducts and promotional strategies to meet those needs. A second andrelated advantage is that benefit segmentation helps the firm avoidcannibalizing its existing products when it introduces new ones.Buyers can be divided based on their needs, to purchase productfor an occasion. The number of times a product is used could be also

considered as a segmentation possibility. A tooth paste manufacturerurges the people to brush the teeth twice a day for avoiding tooth decayand freshness. Either a company can position in single benefit or doublebenefit which the product offers. The status of the buyers using theproduct and the number of times they use the product can also revealthat behavioural patterns of consumers vary on a large scale.Life-Style SegmentationLife-style segmentation is a relatively new technique that involveslooking at the customer as a whole person rather than as a set ofisolated parts. It attempts to classify people into segments on the basisof a broad set of criteria.The most widely used life-style dimensions in market segmentationare an individuals activities, interests, opinions, and demographiccharacteristics. Individuals are analyzed in terms of (i) how they spendtheir time, (ii) what areas of interest they see as most important, (iii) theiropinions on themselves and of the environment around them, and (iv)basic demographics such as income, social class and education.

Unfortunately, there is no one best way to segment markets. Thisfacts has caused a great deal of frustration for some marketingexecutives who insist that a segmentation variable that has proveneffective in one market/product context should be equally effective inother situations. The truth is that a variable such as social class maydescribe the types of people who shop in particular stores, but proveuseless in defining the market for a particular product. Therefore, inusing a segmentation criteria in order to identify those that will be mosteffective in defining their markets.UNDERSTANDING MARKETINGHere the company operates in most of the segments of the marketby designing separate programmes for each different segment. Bajaj,TVS-Suzuki, Hero Cycle are those companies following this strategy.Usually differentialted marketing creaters mreo sales thanundifferentiated marketing, but the production costs, productmodification and administrative costs, inventory costs, and product


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promotional budgets and costs would be very high. The main aim of thistype of marketing is the large volume turnover for a particular brand.Requirements for effective segmentations1. Measurabilitythe degree to which the size and purchasing powerof the segments can be measured.2. Accessibilitythe degree to which the segments can be effectivelyreached and served.3. Substantialitythe degree to which the segments are large and/orprofitable enough.4. Actionabilitythe degree to which effective programmes can beformulated for attracting and serving the segments.BENEFITS OF MARKET SEGMENTATION

Market segmentation gives a better understanding of consumer needs,behaviour and expectations to the marketers. The information gatheredwill be precise and definite. It helps for formulating effective marketingmix capable of attaining objectives. The marketer need not waste hismarketing effort over the entire area. The product development iscompatible with consumer needs, pricing matches consumerexpectations and promotional programmes are in tune with consumerwillingness to receive, assimilate and positively react to communications.Specifically, segmentation analysis helps the marketing manager.To design product lines that are consistent with the demands of themarket and that do not ignore important segments.To spot the first signs of major trends in rapidly changing markets.To direct the appropriate promotional attention and funds to themost profitable market segments.To determine the appeals that will be most effective with eachmarket segments.To select the advertising media that best matches thecommunication patterns of each market segment.To modify the timing of advertising and other promotional effortsso that they coincide with the periods of greatest market response.In short, the strength of market segmentation lies in matching productsto consumer needs that augment consumer satisfaction and firms profitposition. However, the major limitation of market segmentation is theinability of a firm to take care of all segmentation bases and theirinnumerous variables. Still, the strengths of market segmentationoutweigh its limits and offers considerable opportunities for marketexploitation.FEATURES OF CONSUMER MARKETINGConsumer goods are destined for use by ultimate consumers orhouse-holds and in such form that they can be used without commercialprocessing.Consumer goods and services are purchased for personalconsumption.

Demand for consumer goods and services are direct demand.Consumer buyers are individuals and households.Impulse buying is common in consumer market.Many consumer purchases are influenced by emotional factors.The number of consumer buyers is relatively very large.The number of factors influencing buying decision-making isrelatively small.Decision-making process is informal and often simple.Relationship marketing is less significant.Technical specifications are less important.Order size is very small.Service aspects are generally less important.Direct marketing and personal selling are less important.Consumer marketing depends heavily on mass media advertising.Sales promotion is very common.Supply efficiency, is not as critical as in industrial marketing.Distribution channels are generally lengthy and the numbers of

resellers are very large.Systems selling is not important.The scope for reciprocity is very limited.Vendor loyalty is relatively less important.Line extensions are very common.Branding plays a great role.Packaging also plays a promotional role.Consumers are dispersed geographically.Demand for consumer goods is price elastic.FEATURES OF INDUSTRIAL MARKETINGIn industrial marketing, the markets is concerned with themarketing of industrial goods to industrial users. The industrial goodsare those intended for use in producing of other goods roe rendering ofsome service in business. The industrial users are those individuals andorganizations who buy the industrial goods for use in their own business.The segments for industrial goods include manufacturing, mining and


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quarrying, transportation, communication, agriculture, forestry, finance,insurance, real estate etc.Industrial goods are services are bought for production of othergoods and services.Demand for industrial goods and services is derived demandIndustrial buyers are mostly firms and other organizations.Impulse buying is almost absent in industrial market.Industrial buying decisions are based on rational, economic factors.The number of business buyers is relatively small.The number of factors influencing buying decision-making isrelatively large.Decision-making process tends to be complex and formal.

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