notes: marketing management mba 2008-09
DESCRIPTION
Marketing Management Notes for MBA studentsTRANSCRIPT
Dr AMIT RANGNEKAR
2008-09
MARKETING MANAGEMENT
SVKM’s
NMIMS UNIVERSITY
MUMBAI
MBA
NMIMS (Syllabus)
Marketing Management Dr Amit Rangnekar ([email protected])
Marketing Management
Objectives:
To equip the participants with marketing terminologies and concepts, to help them understand the various marketing tools, strategies and models through cases and class interaction. To provide insights into the fast-changing marketing environment, and the challenges of marketing in the new economy.
Ground Rules • Regular attendance, punctuality, mobiles switched off • Sessions (Sans break), Exercises / Cases in every session • Session notes will be emailed to the CR, a week prior to class/ a day after class (your call) • 100 Marks = Project & Presentation (40) + Class participation (10) + Written Examination (50)
Syllabus
SUBJECT TOPICS Induction Introduction, syllabus, ground rules, appraisal schedule
1 Marketing Concepts
Needs, wants, demands, product, service, brand, market, value, manager, leader, management, marketing, marketing management, organisational orientation Selling v Marketing, Industrial v consumer marketing
2 Marketing Environment Micro, Macro, External Environments, Analysis & Frameworks 3 Marketing Mix Promotion, Price, Place, Product & Branding 4 Marketing Strategy
Segmentation, Targeting, Positioning, Differentiation, Product Lifecycle, Leaders, challengers, followers, nichers
5 Consumer Behaviour Dynamics, The Indian consumer 6 Marketing Research Process, case analysis, tools 7 Marketing Dynamics Services Marketing
Rural, Social, Global marketing Interruption, Permission, Viral, Ambush, Guerilla Marketing Sales Management
8 Marketing in the 21st Century The retail and convergence revolution, Disruptive innovation, CRM, Indian E-Commerce, B2C, C2C, B2B, C2B
9 New Product Launch Full Syllabus revision/ Case study 10 Class Presentation Group presentations
Recommended Reading Books Mktg Mgt (Philip Kotler / Rajan Saxena / Ramaswamy & Namakumari); Marketing White
Book (Business World), Marketing as Strategy (Nirmalya Kumar), Marketing FAQs (Kotler) Authors Kevin Keller, Ries & Trout, Jagdish Seth, Seth Godin, Jagdeep Kapoor, Paco Underhill Case Studies
NMIMS Library, ICFAI, Mktg Mastermind, Praxis, Strategist, Business- Today / India / World, CIM
Daily/Weekly ET, Hindu-Business Line, Business Std, Strategic Mktg, Smart Manager, Brand Equity Websites Knowledge@Wharton, Insead, Brands Asia, Mckinsey Quarterly, Economist, Forbes,
Business Week, Harvard Business School / Review, Chartered Institute of Mktg www.cim.co.uk , Mktg glossary- www.knowthis.com , Value based management, American Marketing Association www.marketingpower.com, Strategic Mktg - www.etstrategicmarketing.com,.
NMIMS (Syllabus)
Marketing Management Dr Amit Rangnekar ([email protected])
Project & Presentation Submission Dates
• Topic / Subject with group names and roll number by Session 4 • Queries & clarifications by Session 7 • Hard copy of Project & Presentation Session 9 • Presentation - Session 10
Presentation Topics (You may please add to the ones below or modify) Successful CRM How Market Research helps Effective Brand Management Industry Analysis Sales Force management Celebrity endorsements Multi Level Marketing Virtual Marketing Ambush Marketing Marketing in the New Economy Women as Consumers Marketing to Kids Rural Marketing Social Marketing Services Marketing Marketing of Financial Services Integrated Marketing Communication Pricing Strategies Promotional strategies How Technology drives Marketing Branding Positioning Strategies The Retail Industry Social Marketing Internet Marketing Public Relations Advertising
Presentation (Team)
• Students to select from marketing topics above. • Presentation should contain cases & illustrations. • Only the 1st slide should be theory, the other slides should reflect your understanding of the theory
with real examples • Presentation time- 12-15 minutes per group, No topics to be repeated • Ideally 6 groups with all the members presenting, but to be completed within 120 minutes including
Q&A Presentation Arrangements
• CR to ensure LCD projector, laptops, PPT slides and other material are checked and ready before the presentation.
• Arrange presentations in a folder sequentially on the system itself to ensure no time wastage and to submit CD to me.
• Presentations start at the pre-fixed time with all present in class 5 minutes earlier
There would be no change in dates from my end and I have given clear 8 weeks preparation time. In case you have queries, please get them solved before or after class, or by prior appointment in the faculty room. Best wishes Amit Rangnekar [email protected]
NMIMS, 2007-08 (Concepts & Environment)
Marketing Management Dr Amit Rangnekar [email protected]
Marketing Concepts Needs, Wants, Demands Needs Wants Demands What Deprivation of
basic satisfaction Existing, few
Specific satisfiers of deeper needs Wants are many
Specific Wants for products Wants + purchasing power Ability & willingness to buy
Influencers Natural, not created
Shaped by Social- family, friends, Peers or Institutional- Promotion
Shaped by Status, Aspirations
Instances Food, clothing, belonging
Needs food- Wants Mcdonalds Needs clothes-Wants Allen Solly
Needs Car/TV, Wants Luxury Sedan/Flat TV, As willing+ able, Demands Benz/Plasma TV
Marketers Existing, Minimum influence,House
Influence wants, Affordable & available Bank loans, EMIs 3 Bed Room
Influence demand by making product attractive, aspirational, Status Duplex / Bungalow
Product-Offered to satisfy needs / wants
• Product-Tangible eg Books ; Services-Intangible eg Banking, Finance, Hospitality • Products also deliver services eg car-product & transportation-service, Mobile • Focus on products sans service risky eg TV, Fridge, AC without back-up Service Team -
Risky Brand- An identifying symbol/words/mark distinguishing a product/company from its competitors. Branding is an essential part of marketing. Brand = (Functional + Economic+ Emotional) Value Propositions. Nokia- Functional, Amul- Economic, Saffola- Emotional Value proposition- Bundle of benefits the product provides to fulfill customer needs and wants Market (mercor-to buy Latin)
• Potential + Existing customers sharing a common need/want, able & willing to engage / enter in exchange to satisfy their needs/wants Eg Pharma Market=Doctors + Hospitals + Trade
• Economics- Buyers+ Sellers= Market, Marketers- Sellers is Industry, Buyers is Market Value (valere-latin- worth)-
• Consumer’s estimate of the utility/capacity of a product/brand to satisfy their needs. Fair return.
• Price is what you pay, value is what you get- Warren Buffet Mobiles- convergence Customer- One who buys goods or services- Mother Consumer- One who consumes, but may or may not have purchased- Kid Client- A customer/ consumer/ party who pays for professional services- Lawyer, Hotel, Consultancy Prosumer: Producing consumers, active, regular and influencing consumers who also initiate feedback Customer satisfaction: Core- Quality, service, value; Desire (Within an arms length of desire- coke), customer delight (kingfisher airlines), delivery (blue dart), service (icici bank, taj) Marketing Marketer Mix+ Strategy Brand Value Customer
• Mission: Create a difference between company’s & competitors offering on a/an attribute/s important to customers, to provide value.Scope.
• Identifying, creating, managing demand to provide value to a customer for a profit -Kotler • Mgmt process that identifies, anticipates, satisfies customer requirements profitably-CIM • The right product, in the right place, at the right time, at the right price.-Adcock
NMIMS, 2007-08 (Concepts & Environment)
Marketing Management Dr Amit Rangnekar [email protected]
• Marshalling organisational resources to meet changing needs of the customer-Palmer • Marketing is far too important to leave to the marketing department”, David Packard (HP)
1950. • Concept- Satisfaction of the Customer & their needs, focus of business activities. IBM • Philosophy- Owned by everyone from within the organization • Marketing is not only much broader than selling, but not a specialized activity at all. Marketing
encompasses the entire business. The whole business seen from the point of view of the customer. Concern & responsibility for marketing must therefore permeate all areas of the enterprise. A business has only 2 basic functions that produce results, marketing and innovation, the rest are all costs- Peter Drucker
• "If marketing is seminally about anything, it is about .. differentiating what you do and how you operate. All else is derivative of that and only that." Theodore Levitt 1986
• Holistic marketing: From product to customer focus, from selling products to satisfying
customers, visualising broader ways to serve customers and assess how all departments affect customer satisfaction- delivery, service, performance
• Reverse marketing: Customer initiatives help design products marketing mix- PCs, Travel • Experential marketing: Customers experience/ simulate product before buying, Foods, CDs Planning Process of anticipating future events & conditions to determine the best way to achieve organizational objectives • Marketing planning- Implementing planning activities to achieve marketing objectives • Strategic planning- Adopting courses of action to achieve organizational objectives • Tactical planning- Planning that guides the implementation of activities in the strategic plan
Management (Manus –hand Latin)-Optimal utilization of resources to achieve objectives eg Electricity • Management is doing things right, leadership is doing right things-Peter Drucker • Manager- Responsible for application & performance of knowledge- Peter Drucker • Marketing Management- Demand management
Dimensional Differentiation of Selling v/s Marketing Dimension Selling Marketing 1 Concept Integral part of Marketing Broader concept, Includes Selling, Brand, MR,
Distribution, Promotion, Strategy, etc 2 Objective Transaction Exchange, Customer & Demand management 3 Target Buyer Needs /Wants of the Customer 4 Focus Product Brand / Service 5 USP Price Value 6 Strategy Sales force & Promotion Marketing Mix 7 Period Short term Long term 8 Controls Sales, Delivery, Collections Customer Satisfaction, Market Share 9 Skills Selling, Communication Analytical 10 Orientation People Team 11 Begins When you have a product Much before and long after a product Organisational Orientation Production-PSUs Product- Infosys Selling- Sansui, Marketing-Hutch, Finance- SBI, Service- ICICI
NMIMS, 2007-08 (Concepts & Environment)
Marketing Management Dr Amit Rangnekar [email protected]
Marketing Environment M8+ C5+ PESTND (Case –Mobile Industry) Surrounds & impacts the organization, 3 key perspectives- Macro, Micro and Internal environments.
• Internal Envt-M8-
Important for managing change
• Micro Envt-C5- Influences organization directly, Relationship between firms & driving forces
• Macro Envt-PESTND Influencing factors, but out of direct control, environmental change
PEST ND Political Factors
• Huge, influence policy & regulations and spending power of consumers • Government - VAT,WTO-GATT, Taxation, Reservations
Economic Factors • Economy –Sensex, Forex, Interest rates, Inflation, Employment level , Per Capita , GDP,
Sociocultural Factors • Ethnicity, local factors and issues, environmental issues- Bandra-Worli Sealink • Attitudes to foreign products and services- KFC Bangalore, Language impact • Cultural and religious factors –Mcdonalds French fries controversy, Nivea in Latin America
Technological Factors • Technology- New, accessible, better, cheaper, innovation, investment intensive- ATM, Net
Natural Factors • Raw material availability, Pollution, Environment, Monsoon- Pharmaceuticals
Demographics • Age profile, Geriatrics, Life expectancy, Mortality, Geography, Consumption, Psychographics
Analysing the Environment 5 Forces Analysis (Porter)
• Analyses forces driving industry competition, intensity of competition- Indian Hotels not Tatas
• Collective strength determines profit potential, identifies areas where company can defend
• 5 Key areas- threat of entry & substitutes, power of buyers & suppliers, competitive rivalry.
The threat of entry
• Economies of scale –Production, coverage, distribution- Reliance Polyester
• Entry / Exit Barriers- FDI, Retail • Access to distribution channels –Shelf space • Cost advantages- Bazee- Ebay • Product Differentiation- Baby products-J&J,
5 Forces Analysis
New Entrants
Substitutes
BuyersSuppliers
NMIMS, 2007-08 (Concepts & Environment)
Marketing Management Dr Amit Rangnekar [email protected]
• Government policy- Insurance Sector Will competitors retaliate? Price cuts, promotional onslaught, technology- Mobiles The power of buyers Monopoly, Oligopoly, Cartelling- Tyre, Vitamin manufacturers The power of suppliers
• Switching costs high –technology, distribution – Tata GSM • Power Brand- Amul, Integration- Tata Tea- Barista. • Fragmentation, consolidation, integration
The threat of substitutes
• Disruptive innovations- Mobiles- convergence affects 32 industries • Need substitution-Better toothpaste reduces need for dentists, Diagnostics can avoid
diseases • Generic substitution- Stop smoking cigarettes, Gutka ban • Technology- Blue tooth, Java
Competitive Rivalry
• High, where entry is likely / threat of substitute products/ suppliers / buyers control the market FMCG, Pharma, IT,
• Pre-emptive eg leader drops price/intensifies promotion to scuttle new competitor entry Effective 5-Forces Analysis
• Structural analysis and competitive strategy for defending / increasing market share • Strategic moves to influence balance of forces • Anticipating and exploiting change to emerge stronger
PEST Analysis (Porter) • Environmental analysis preceding the marketing process. • Should be continuous & feed all aspects of planning.
SWOT Analysis (Case)
• Tool for auditing organization and environment. • 1st Stage of planning, helps marketers focus on key issues. • Identify key issues & objectives, use with other audit & analysis tools, like PEST / 5-Forces • Strengths & weaknesses -internal factors, Opportunities & threats-external. • Strengths- Speciality, economies, reputation, innovation, service, tech, location, quality • Weaknesses- Lack of strengths • Opportunities- Markets, geographies, M&A, strategic alliances, technology, channels • Threats- Competition, innovation, technology, regulatory
Successful SWOT analysis guidelines
• Short, simple and fair analyses especially about strengths & weaknesses of your organization • Anticipation of PEST factors in the industry, Avoid grey areas. • Competitive analysis through benchmarking, popular tool, quick & easy to learn.
Disadvantages
• Can be very subjective, Not very reliable, Bias steps in • Two people rarely come-up with the same final version of SWOT, • Use only as a guide
NMIMS-MBA (2007-08) (Marketing Mix)
(Concepts & Environment) Dr Amit Rangnekar- [email protected]
Marketing Mix (Neil H. Borden) • Marketing 'tactics' or tools or '4Ps' (McCarthy) • Other Ps- Pace, People, Policy, Process, Packaging etc • Car- Mix of Engine, Mileage, Looks, Price, Features, Quality, EMI options • Mix elements vary leading to different strategies, perceptions & value propositions
Product Brand, features, design, quality, range Warranty, AMC, service, size, packing, performance
Price Strategies,
Credit, Costs
Promotion Sales Promotion, Personal Selling, Advertising, Sponsorship, Multi-level Marketing, Direct Marketing, Trade fair & Expositions
Place Channels, location, coverage,
transportation, inventory, width, spread, reach, shippers
Promotion
• Marketing communication • Objectives- Sales, attract/retain/convert, trial, awareness, remind, reassure, • Retention Levels -Reading10%, Listening20%, Audio-Visual70%; Sight, Sound, Motion
effective. Integrate individual promotion mix components for effective communication
Promo Tools / Mix (SPPASM DT) Sales Promotion
Personal Selling
Public Relations
Advert ising
Sponsorship
MLM Direct Trade Fair Expo
Contests Coupons Low finance
Presentations Samples Demo
Inserts Press kit Seminars
Advts Hoardings Banners
Events Period Theme
Residual Income Network Commissions
Database Mailers CRM
Demos Brochures Tech-Info
Personal Selling- (Car, Insurance)
• Effective but expensive way to manage personal customer relationships (Medical Representative)
Sales Promotion –(Akai / Aiwa/ Sansui) • Incentive to buy, ensures trial, D2C through trade BOGOF, Coupons, Discounts, Contests,
Trial Public Relations (PR)- (Political parties / Top Companies/ IPO)
• Subtle inserts used in image building, firefighting - impact if managed well, economical, if long-term
Direct (Credit card / insurance company mailers) • Targeted communication- updated database, response monitoring, multiple use-2% response • Mailers of contests, EMI options, transfer of credit, mail order catalogues, CRM
Trade Fairs and Exhibitions (Print / Auto / Pharma / IT Expo) • Trade, product display / demonstration / awareness / trial, recent decline due to Internet
Advertising • ‘Paid for’ communication, Difficult to measure Ad impact (Amul bylines excellent, sales
impact?), Helps develop attitudes /create awareness/ communicate message, elicit response • Type of Ads- FRESHEN-Fear, Rational, Emotional, Social, Humour, Ethical, Negative • Media-Print- Newspapers/ magazines/ journals (local, national, trade, speciality) / pamplets
Electronic- TV/ radio Virtual- Internet, mobiles Outdoor–Hoardings/ Banners/ Kiosks/Transport (Bus, Train, Taxi, Vans) Captive – Theatres, Train compartments, Cable TV
Sponsorship (Femina-Miss India) • Organization pays to associate with an event/cause-Sahara- Indian Cricket /Hockey/ Olympics • Event attributes then associate with the sponsor-Pepsi –Youth, Sahara-Patriotism
NMIMS-MBA (2007-08) (Marketing Mix)
(Concepts & Environment) Dr Amit Rangnekar- [email protected]
Multi-Level Marketing (HerbalLife, Amway) • Networking, Residual Income, Flexi-timings, Initiators earn maximum, financial schemes -
suspect Promotional Spend Methods- (Half my Ad-spend is wasted, but which half? John Wanamaker)
• Affordable –Amount decided on supposed affordability, ignores promo needs • % of Sales- Anticipated sales, not guided by opportunities, promo-spend varies, % basis
arbitrary • Competitive parity- Share of voice, Assumes competitive spend-collective industry wisdom-
debatable, Own opportunities/strengths/reputation not considered- IIPM highest print spender • Objectives & Task Method- Define objectives/tasks, allocate promo-spend, difficult to
implement Pull v/s Push: Push- Sales force + Trade promotion, Pull- Advertising +Consumer promotion Strategies differ across industry players, traditionally HLL-Push and P&G-Pull strategy worldwide Promotion Mix Strategy- ICICI Place (Distribution/ channel/ intermediary)
• Set of institutions performing activities to move product from production to consumption-Bucklin
• Functions- Order Processing, Warehousing, Inventory, Transportation, Collections • Ensures- Availability, Visibility (Dikhta hai voh bikta hai), Movement, CRM, Feedback • Width- Trade coverage, Reach- Customer coverage, Depth- Brand coverage • Growing impact of convergence- internet, mobile, retail revolution 1-Level 2-Level 3-Level 4-Level 5-Level
Manufacturer Manufacturer Manufacturer Manufacturer Manufacturer C&F C&F Stockist Stockist Retailer Retailer Retailer
Consumer Consumer Consumer Consumer Consumer Industrial, IT IT Hardware Retail / Malls Garments Pharma / FMCG
Channel Intermediaries
• Distributors (C&F)- Bulk to smaller packs, handle major area, supply to stockists • Wholesalers (Stockists)- Resell to retailers, storage, coverage essential • Others- Commission agents, co-operatives (farmers), Indentors ( Imports), agents
(magazines) • Retailers- Strong customer influence, consumption / purchase pattern insights, service • Speciality (Sports), Supermarket (Big Bazaar) Convenience (Kirana), Factory Outlets,
Warehouses, Direct sellers (Encyclopaedia)- D2D, Vending Machine (Tea, Coffee), Co-operatives (Apna Bazar, Grahak Peths, Societies), Chain stores (Monginis)
• Internet (Services)- Channel margins and inventory costs major savings- can be passed, hence economical, death of distance, geographically disperse market , niche products reach wider audience, low entry barriers, display variety & functionality, interactive, Payments risky, gaining popularity, delivery costly- Books, CDs, medicines, travel, tourism
• 3rd Party Logistics ( AirFreight, GATI)- Tremendous scope Channel Decisions
• Direct or indirect channels / Single or multiple channels • Length of channel • Types of intermediaries / Number of intermediaries at each level • Which intermediaries? Avoid intrachannel conflict- Nike
The Retail Revolution (Case)
NMIMS-MBA (2007-08) (Marketing Mix)
(Concepts & Environment) Dr Amit Rangnekar- [email protected]
Price • Fit between crucial financial component- cost & marketing component -value • Center-stage in marketing wars, Inter-firm rivalry-Mobile Industry • Product differentiation blunted- Surf / Ariel, Mature products / Markets- TVs • Economic Value Proposition- Titan- High priced brands inspite of local & Grey market
competition • Objectives- Profits/ROI, competitive position, demand, costs, survival, product Portfolio, Entry
Pricing Methods
• By Cost - Cost Plus and Break Even • By Competition - Going Rate, competitive pricing, cartelling- Tyre industry, sealed bids
(tenders) • Customer Oriented- Perceived Value (Lifestyles), Auctions (bazee), Value-Buffett, McDonalds
Pricing Strategies
• Penetration- HQLP- NPL, Entry, Attract, Ensure trial- Amul • Premium- HQHP-Sustainable advantage- Bose Speakers, Benz • Economy- Functionality & Value-, Nirma, Supermarkets-own brand • Skimming- LQHP-Significant advantage, unsustainable-Reliance Mobile • Rip-Off- Medium quality, very high price - Pricey Hotels/ Restaurants • 1,5,9-coexist in same market till buyers insist on quality, price, value • 2,3,6- ways to attack 1,5,9 as 2 = HQMP, 3=HQLP,6=MQLP • 4,7,8 overpricing wrt quality-customers feel ‘taken’, bad oral publicity, avoid
Other Pricing Strategies • Psychological- Bata, Mobile Airtime Tariffs • Geographical- Medicines / Electronics across countries or Urban/Rural-Electronics • Promotional –Extensive usage, if successful-copied, if unsuccessful-financial drain • Loss Leader- Factory outlets • Special Discounts / Rebates - BOGOF, % Off, Sale • Financing- EMIs, Low interest rates • Warranties/ AMCs- Extended warranties, TVs-Onida 4 year warranty, Free AMC • Psychological Discounting- Prices slashed 399 to 199, Baazee • Old for New- New for Old at discounts- Exchange offers-Van Heusen, TVs • Price point-Cadburys-Re1-Eclair, Rs2-Chocky, Rs5-5Star,Rs50-Heroes,Rs100-(Heroes) • Value –Superstores-Big Bazaar
Discriminatory- Same brand/service, 2 prices
• Customer segment- Student discounts • Product form- Ketchup-100gm-20, 250gm-45, 500gm-75 • Image- Hotels-Taj Palaces (Premium), Resorts (Lifestyle), Hotels (Business), Indione (Budget) • Location-Theatres-Stall-50, Balcony-75, Dress Circle-100, Stadium-Pavilion, stands • Time- Seasonal-Cheaper / costlier during season, Happy Hours, Bakeries-25% off after 8pm
Product Mix-Profitable brands take care of others in the portfolio
• Product line-Full Range in all segments- Maruti Cars 2 Lacs to 8 Lacs at every 25000 intervals
Price Exercise- Gives examples of each pricing strategy High Medium Low
High 1-Premium 2-HighValue 3-Penetration Medium 4-Over-charging 5-Medium Value 6-Good Value
Quality (Quality is only indicative)
Low 7-RipOff / Skimming 8 False Economy 9-Economy
NMIMS-MBA (2007-08) (Marketing Mix)
(Concepts & Environment) Dr Amit Rangnekar- [email protected]
• Optional feature pricing-Ford Ikon-Insurance+ Deck+ Central Lock + Auto Cop free • Captive product- Cameras / Razors cheaper but consumables –Film / Blades costly • 2-Part- Esselworld- admission + rides, Airtime + SMS/VMS/STD • By-product- Lubricants with petrol • Product bundling- Season tickets, Time share
Internet- Cheapest-No layers, Transaction cost for buyer/seller minimum, auctions, bargains, visibility Other ways to ‘increase’ prices without increasing price
Revise discount structure Premium for urgent orders Change minimum order size or shipper Interest on overdue outstandings / penalty clause Charge for delivery/ services/ installation Produce less of low margin models
Product “Our plan is to lead the public with new products than ask them what products they want. The public does not know what is possible, but we do. So instead of doing a lot of market research, we try to create a market for a product by educating them” (Akio Morita, Sony)
Core Product- Core benefit offered A mobile phone buyer, purchases mobility, any time access & data and voice communication. Total Product As all mobiles offer core benefits Differentiate to entice potential customers Communicate branding, features and benefits Nokia conveys reliability and ruggedness. Augmented Product Additional non-tangible benefits, Competition focused on ASS, extended warranties, EMI, delivery and insurance. Convey security, payment options & peace of mind
How NPD
• Idea generation- Employees, Sales force, Trade, Competitors, Customers • Idea screening- Feasible, Workable, Practical • Concept development and testing- Feedback from target audience • Marketing strategy- Mix (4Ps), STPD, Targets, Projections, Geographies • Product development- Final touches & Mfrg • Test Marketing- Geography or Segment • Commercialisation- National / Global launch
Why new product development (NPD)
• Changing customer needs – Diet Coke, Saffola • New Segment Entry- Maruti SX4 • Changing market needs- Scooters to Bikes • Own successes- Brand / line extensions- Maggi • Competitive Successes- Krackjack- 50:50, Marie • New Capabilities- UB Group • New Concepts- Suzuki Swift, Tata Ace / 1L Car • New technology- I-Pod, I-Phone, TV • Product lifecycle- MS Office, Play Station 1,2,3 • Portfolio / Business realignment- Reliance Mobile • Environmental changes- Music downloads
Unexplored Opportunities
NMIMS-MBA (2007-08) (Marketing Mix)
(Concepts & Environment) Dr Amit Rangnekar- [email protected]
Product decisions Design: Can design be the selling point for the product /company- ipod, iphone, LG Chocolate. Quality: Quality has to consistent with other elements of the marketing mix. Bose speakers Pricing: A premium pricing strategy should reflect quality or value. Benz Features: Which additional features will enhance the benefit offered to your target market? Nokia Branding: Power of instant sales, trust, quality, reliability, loyalty base,differentiation Brand value of Microsoft > GDP of Pakistan. Would your perception change for a pair of Nike sneakers without the swoosh or nike logo? Brand - Strategic Asset- Accenture- Accent on the future, Viagra-Vitality of the Niagara
• Brand= Functional, Economic & Emotional Value Propositions -Volvo- Safety, Durability • Attributes- P(performance),Q(qly),R(rate),S(Service),T(Tech), U(uniqueness), V-(value) • Benefits- Titan- Functional (superior performance), Reliable (Perfect time, no other costs) • Value- Consumers perception of brand utility / performance (Titan-Rs2000, lifetime) • Culture- Tradition of high quality, high performance watches • Personality- India’s image abroad, finest quality • User- Working Executives across age groups • Branding -"Buildings age & become dilapidated. Machines wear out. People die. What live on
are brands." Aaker. Coke, Lux, Colgate, Kodak- Brand leaders for 75 years worldwide Brand Ladder
• Promise- Value proposition offered to customers, choice
• Affinity- Belief in the brand, brand differentials evident
• Brand Bonding- Perceived as delivering on promise
• Loyalty- Positive differential effect driving customer brand preference over identical competitive brands, willing to pay more /wait/go places if unavailable
• Brand Equity- Brand value as price premium, trade leverage, competitive advantage (Corporate)
• Promotional strategies revolve around brand purchase stages
Co-branding (Hutch-Britannia, Citibank-Club Mahindra, ICICI-HP, Coke-McDonalds)
• 2 brands of different companies together in the same campaign / communication • Advantages- partner customer base/sub segment, value-added package, promotional cost-
saving • Key - brand / customer fit, symbiosis, maintain brand personality/values, share of mind & voice • Avoid- brand devaluation, brand eclipse in promotion
Brand Extension To leverage the brand success, spread into other segments/businesses, harness profits, lifecycle manahgement. Extensions should not stray from central proposition of main product brand or cannibalise sales
• Line extension: Add new features to existing portfolio (flavours, packs)- Mirinda Lime, Amul Probiotic
NMIMS-MBA (2007-08) (Marketing Mix)
(Concepts & Environment) Dr Amit Rangnekar- [email protected]
• Promoted with one basic identity, promo economies • Brand extension: Extend successful brand names into new or existing areas. Virgin- Music-
Airlines-Hotels-Mobiles; Kingfisher- Beer to Air, Saffola- Leveraging the cardiac friendly theme • Multi Branding: Introduce more brands in same segment/category. Kellogg’s
Cereals/Frosties/ Crispies; Titan-Fastrack, Raga, Edge, Nebula, Regalia, Xylys • New Brands: A new brand launch to take on existing rivals- Britannia Tiger, 50-50
Branding Levels- No discrete method, continuous, dual message-leveraging corporate & brand value Product branding (P&G –Pioneers of product branding –concept of product management-Tide)
• Individual product- own brand name & resources, company name virtually absent, brand focus • Unique value, personality, identity, positioning, sustainable competitive advantage • Rationale- Unless product cannot stand on its own, it does not deserve to be launched • Brand performance evaluation, value, resource allocation possible • If brand flops, does not affect company name (Tanishq watches vis-à-vis Titan) • Expensive, as advertising & promotion costs cannot be shared-
Corporate branding (Umbrella or monolithic branding- Nokia, Sony) • Corporate name is the brand, products in alpha numeric / letter terms, no distinctive brand • Each product derives strength of corporate brand values & positioning, saves promo spend • Builds corporate brand strength & financial value -Service / Hi-Tech industries • Akio Morita, Sony "I have always believed that the company name is the life of an enterprise.
It carries responsibility and guarantees the quality of the product..." House or endorsement branding
• Corporate name placed alongside product brand name- Cadbury’s Dairy Milk • Allows brand identity/positioning, strength from corporate brand values, economies in
advertising/ promotion, prominence to corporate brand can vary, product failure can damage parental brand
• Helps NPL, otherwise difficult in mature markets sans credible corporate endorsement Brand Personality
• Created by applying personality values & characteristics, appeals to a consumer's mind. Like
human relationships, as brands grow, emotional dimension dominates. Consumers attracted easily to likeable brand values like dependability (LIC), trust (Tata), honesty (Peter England), reliability (Titan), safety (Volvo)
• Define audience, needs /wants /likes, build consumer personality profile, create brand personality to match. Ensures greater willingness to buy / deeper brand loyalty – Levis
• Profiling approach reinforces self-concept of consumers & their aspirations. Niche brands • Brand identity- add personality, set of values, perceptions and brand aspirations… all the
pieces converging. The Swoosh replacing the brand name, Nike • Brand image- Sum total of consumer perceptions, firms fit perceptions to communication-
Swatch- Trendy, Nokia- Value • Corporate identity- Visual aspects / image of company's presence-eg logo, collaterals-Tata’s • Brand repositioning- Changing customer preferences – Petrol pumps- from typical to vibrant
NMIMS-MBA (2007-08) (Marketing Mix)
(Concepts & Environment) Dr Amit Rangnekar- [email protected]
Brand Positioning Brand Personality
What a consumer remembers the brand/service by- performance, good value, durability, price…
Humanistic traits of a brand- masculine, friendly feminine, youthful, , what kind of a person?
Rational side of brand identity Emotional side of brand identity Coke-Thanda, Saridon-Sardard, Amul-Economy Bullet-Macho, Woodlands- Rugged Brand Equity
• Worth or value a brand • Nurtured and built over years through sustained performance and promotion to a loyal
customer base by providing value- Parle-G, Mangola, Microsoft • High brand awareness and consumer loyalty • Difficult to put a value on, but how much is a pair of Levis Jeans worth without the logo on it?
Nintendo Brand Value is greater than Sony in Japan but Sony Value > Pakistan GDP Brand Salience
• Brand’s ability to be retrieved by customers in a purchase situation (Ehrenberg-Bass Institute) • Propensity of a brand to be thought of (come to mind) or noticed in buying situations (Coburn) • Print ads more effective than TV. If print ads added to TV, then increase in brand salience,
enhanced memorability of communication & strengthening of brand values. People multi task while watching TV but are not distracted while reading - INS 2004
• Advertising helps change consumer attitudes toward a brand and primarily influences market share by increasing brand salience, but has limited impact on brand image (Lisette 1998)
Branding of tech products/companies
• World of Parity- Differentiations blunted, few sustainable advantages, obsolescence, piracy • Product proliferation/Shorter PLC/Perpetual change-Tech: short PLC, Aurobindo NPL 3 weeks • Converging & New Technologies- Borderless world, obsolescence • Powerful brands connote stability, market dominance, command premium prices, enterprise
value Brand Manager- Insistent, Persistent, Consistent, Conversant, Observant
• Brand- Values, benefits, Extensions, Market Research • Customers- Identify, meet, convert, retain, regain, perceptions, suggestions, CRM • Packaging- Aesthetics, Layouts & Design • Strategy- Advertising, Trade/ Customer Promotion, Positioning, Segmentation, Market
Research • Sales-Sales Force & trade - Training, Incentives • Pricing- Components, Costs, Technology, Volume, Value • Distribution-Channels, Availability ( Dikhta hai woh bikta hai), width, depth, reach, trade, info • Issues- Focus on Packaging, Advtg, Promotion, Training; Ignore- Sales, field work, Customer
Consumer touch points magnify the impact From Product to Idea, to Product-Customer-Idea plus customer touch points not only brand touch points. Increasing relevance in a customer’s life- MS-Office suite designed by being with users than surveys IPod- Mix of how you interact with a PC, buy / store / retrieve music & weave your life around music Strategic Brand positioning Clear strategy cuts thro the clutter, enables brand building, five key ingredients
• Brand name- Clear, clean, digestible brand name. Else NIVEA in Latin America • Identify product /service to avoid confusion and clear positioning eg education • Focus on segment and define target audience well eg Kingfisher airlines • Highlight tangible / intangible benefits that the brand offers eg lock= security + peace of mind • Provide evidence for every benefit offered to establish credibility and trust eg xp, testimonials
NMIMS-MBA (2007-08) (Marketing Mix)
(Concepts & Environment) Dr Amit Rangnekar- [email protected]
Packaging • Colour, form, size, convenience become USPs and brand identities- Laalwala toothpaste • Right sizing is extremely important as it offers value and also caters to the single use customer -
Shampoo Sachet, Chota Coke, Bisleri, Liquor- quart, Pint, Nips, Half Nips • Innovations- Bubble / blister (razor, tablets), tetrapak (storage & perishability), hologram
(additional security)- Castrol Customer loyalty ladder Intent- Convert sale into long term customer relationship to mutual benefit Surveys- Retain customers, attracting new customers costs 6 times more
• Suspect- Potential customer, exposed to your communication • Prospect- Potential customer, interested in your promotion • Customers- Purchasers of your product / service • Clients- Those who return to re/purchase • Advocates- Convinced and happy about the product / service,
they now promote on your behalf to others Niche Marketing- the process of targeting a small market segment with a specific, specialized marketing mix Celebrity endorsements (Brands, Political Parties, Social Agencies)
• 2 ½ celebrities in a country of 1 billion people- Alyque Padamsee, eminent adman • Concept first, celebrity later, brand & celebrity values fit essential, force-fit risky but reality
Advantages • Establishes Credibility, trust, mass appeal, especially NPL- Santro-Sharukh • Attracts attention, breaks clutter, brand noticeable- Parker- Bachchan • Associative benefit- persuasive message – as celebrity benefits, consumer will- Sachin-Boost • Psychographic / Demographic connect- sways fans towards brand, star appeal cuts across
segments Problems & Risks
• Improper positioning- Maruti Versa, Bachchans- people expecting larger than life car • Brand-celebrity disconnect- Celebrity- brand value conflict - Amitabh- Pepsi / Navratna Tel • Over exposure –Tendulkar- Palio, Boost, Pepsi, Airtel, MRF, TVS & social messages • Product quality /performance- Fiat Palio, initial success, poor fuel efficiency, sales plummet • Brand Eclipse - Brand eclipsed by star presence- Home Trade –Sachin, Hrithik, Shahrukh • Scepticism- Audience sceptical about use of mass product by celebrities- Sachin-Motorcycles • Fickle Fame - Celebrity scandals/ controversies, popularity wanes -Azhar, Jadeja • Costs- Star Costs; Brand Rub-offs- Brand bust leads to negative image- Home Trade –Sachin
Branding Caselet (Nokia) Refer Nokia Presentation also
• Unknown, Finnish not Japanese, third handset, unwieldy models, high priced, corporate branding
• User friendly common software / charger, sturdy performer, long talk time, minimum charging • 5110 revolutionised market, Made for India campaign, Saare jahan se achaa, Navi keys, • Express on covers (Parents happy), Regional SMS, Parts availability and service coverage • Value proposition- Functional (Performance & Technology) + Economic (Value Pricing & high
resale value) + Emotional (Saare Jahaan se Achaa Ringtone)- Image/perception of value & quality
• Model numbers based on psychographics- 7 innovation, 6 Business, 1 lower end, 3 youth • Ubiquitous, Great price points- Rs 3000- 30000 at every 1000 levels- Value in Price sensitive
market • Flat antenna, MR driven customer focus, shift from ear to eye, to mobile enterprise data &
multimedia
NMIMS-MBA (2007-08) (Marketing Mix)
(Concepts & Environment) Dr Amit Rangnekar- [email protected]
• Slow in colour/cameras- Samsung/Sony earlier, lag in cdma but clear gsm leader, website 1stop shop
• No celebrity endorsements, models for India, 1100 largest selling but high end 6600 is number 3
• Biggest by value, 2nd in value to LG, $1Billion sales in 10 years (HLL-in 50 years), Brand equity
• Launched Vertu 3L-70 L, no advts, only oral publicity, diamonds, platinum, titanium and gold • Concierge Service
NMIMS- (2007-08) Segmentation, Targeting, Positioning, Differentiation
Marketing Management Dr Amit Rangnekar [email protected]
Segmentation- Where to compete
• Identify buyer subsets with similar needs demonstrating similar buyer behavior - segmentation
• Segment- viable, profitable, measurable, potential, competitive intensity, access, values fit- Entry?
• Tourists- by state / country, by age groups, by interests- adventure, history, sports, nature, cuisine
Segmentation methods Demographic segmentation Customer Markets
• Geography-City, State, Zone (Coke-Chota-Rural, Bada –Urban) • Psychographics – lifestyle (outdoor/ travel/ clubs), personality (Woodlands-rugged/ extrovert) • Demographics- Income (Garments/Car), occupation, education, religion, age (Hospitals), sex
(insurance), social class (middle/lower/upper), marital status, Generation (Tech /Net savvy) • Behaviour- Occasions (Vacations-tour operators/Greeting cards/Wedding) Benefits (Quality-
Sony/Nokia, Service-Dominos), Usage (consumption, heavy, light), User (new, regular), Loyalty (loyal, split, shifters, switchers), Readiness (Informed, interested, unaware), Attitude (+ve/-ve, hostile), Convenience (EMI, Home Delivery), User (Brides, Pregnancy)
• Ideal- integrated segment mix Business Markets
• Demographic- Industry, Company size, Markets • Operational Variables- Technology, Business terms
Segmentation Matrix- Business Battlemap (Mobiles) Age (Kids, College, YUP, Execs, Housewives) v Features (PDA. Cam, GPRS, Games, Battery, Talk) Sports Shoes Market (Exercise) Which segments do Nike, Adidas & Reebok target Cricket Tennis Soccer Hockey TT Adventure Badminton Exercise Professional Amateur Casual Psychographic segmentation (Cultural, social, psychological and lifestyle)
• Cultural- Deepest / broadest influence • Social- Family/friends-most influential, religious, professional
Lifestyle- How u spend time & money eg Niche magazines- Grooming, fashion, car, outdoors Readers Digest lost 3 million customers only from 1997 to 1999 to niche magazines
VALS- Values, Attitudes, Lifestyle Segmentation Resources (demographics + psychographics) v Orientation (Principle, status, action)
Actualisers- successful, resourceful, open to change High Orientation Principle Status Action
Fulfilleds Satisfied, practical
Achievers Career oriented, low risk
Experiencers Impulsive, young
Believers Strong principles,
brands
Strivers Achievers, less
resourceful
Makers Action oriented, self
sufficiency
Res
ourc
es
Strugglers- Economically weak, focus on survival Low
NMIMS- (2007-08) Segmentation, Targeting, Positioning, Differentiation
Marketing Management Dr Amit Rangnekar [email protected]
AIO- How people spend time, what interests them, self view & world view AIO Activities Interests Opinions Example Work, Hobbies, Shopping Family, Community, Fashion,
Food Self, PEST
Marketer To identify which lifestyle segments, buying patterns, consumption, usage, attitude, target relevant segments eg Nike to Joggers, Adidas to serious sportsmen, Reebok to Tennis
Targeting- Which product, which market
• Post-segmentation, select segment/s to target, resource allocation targeted at the segment
Positioning -What Your Customer perceives
• Creating distinct and valued physical and perceptual differences between one’s product and its competitors, as perceived by the target customer
• The act of designing the firm’s market offering so that it occupies a distinct and valued place in the minds of its target customers
• Projects brand identity & personality, creates brand perception & image in consumer's minds • Brand perceptions differ intra segment from C2C eg Food stalls- VFM, variety, cheap,
unhygienic • Outward expression of brand, aimed at developing a strategic, sustainable competitive
advantage • Manages perceptions, results in brand image & reputation
Positioning types • Attribute-Longevity-Since 1904 • Benefit- Sea view, service speed • Use-ICICI- Fast A/c opening • User-Louis Philipe-Upper crust
• Category- Big small car-Indica • Quality-Benz-Future of the automobile • Value-Budget Hotels, Residential flats
Positioning anomalies • Under-Fridge-PUF • Over- Casio watches now start at Rs 500, perceived as expensive earlier • Confused- Top Ramen Noodles-‘Smooth’ • Doubtful- Tall promises-Teak plantations, Finance schemes
NMIMS- (2007-08) Segmentation, Targeting, Positioning, Differentiation
Marketing Management Dr Amit Rangnekar [email protected]
Positioning strategies • Single- Camry-Touch Perfection, Double-Tavera-Comfortable family car, Triple-Liquidity, safety,
returns-MFs • Multiple Positioning- Brand-positioning strategy presented differently to various target audiences,
success depends on accurate judgment of the market segments and their precise needs /wants • A chocolate-based health drink, Central positioning of nutrition, Energy- drink for active people,
Dietary food supplement for the elderly & pregnant ladies, Essential growth supplement for youngsters, Nutritional revitalizer for busy executives
• Appealing to various segments with intact central positioning Perceptual mapping
• Brands 'mapped' together on a 'positioning map', • Compared across parameters • Identify weak/strong/absent competitive positions • Price v range for super stores in Mumbai • Distinguish brands from competitive offerings • Gaps regarded as opportunities for
positioning/repositioning/launch Positioning statement- Target +Brand +Concept +Differential Positioning- Treacy & Wiersema
• Value disciplines- Either brand leader, operationally excellent, customer intimate • Become best at 1/3, Improve & sustain 1, Achieve adequate performance level & improve 2&3
Trout and Ries framework for successful positioning
• Position- owned/aspired, dislodge who/how, Resources, Patience, Strategy • To reach target customers in a crowded marketplace, begins with a product but is about perception
of the brand in the customer’s mind- Colour-J&N • Brand that seeks to be everything to everyone ends up being nothing to everyone
Getting Into the Mind of the Consumer • 1st mover advantage-Harvard, Sony-If not, claim unique position - Dominos-delivery, • If brand is not number 1, relate itself to the No.1-Comparative Nirma • Club player- Fortune 500, Top 3-Leader never says so, followers do
Positioning of a Leader • Rule of 3- ratio of 4:2:1, generally No1-first launched brand in the product category- Xerox • If a firm is first to introduce a product, advertising should reinforce it-Carrier ACs, Crabtree switch • No.1 may sustain leadership, but fail in categories in which it was not first- Sintex • To sustain leadership, follow multibranding or single-position strategy than change existing ones
holding leadership positions-Taj Hotels- Palaces, Indione Budget Hotels • Embrace change than resist- especially new technology, 1st-mover advantage helps-Bajaj in bikes • Sometimes necessary to adopt newer name to adapt to change-Balaji Telefilms to Balaji films, AFL
Positioning of a Follower • Be first, establish leadership-Harvard- If second, find unoccupied position to be first.LG-Care/Health
Repositioning the Competition • Where no unique positions exist, reposition the competition- Domino’s Pizza- Delivery 30minutes • Perception of brand origin- Scotch, Champagne, Basmati • Power of demonstration- Blind tasting of Colas • Comparative communication- Double edged- TOI–HT NRS in Delhi, Outlook/Week
Positions that firms successfully have claimed in India
• Beauty- Lux • Premium-Bose, Benz • Thanda- Coke • World scale- Reliance • Generic-Cadbury/ Xerox/ Amul Butter • Delivery-Domino’s/ Blue Dart • Service- Private Banks, Maruti
• Fast food- Udipi, VadaPav, Sandwich • Range- Vijay Sales, Alfa, Nokia • Youth- Pepsi, Swatch • Fever- Crocin • Innovation- Sony, Casio • Macho- Enfield Bullet • Performance- Nokia, Bata, Titan
Range
Price
Low
High
High Low
ShoppersStopLifeStyleRunwalCrossroad
Globus
Giants
Akbarallys
ApnaBazar
BigBazaar
NMIMS- (2007-08) Segmentation, Targeting, Positioning, Differentiation
Marketing Management Dr Amit Rangnekar [email protected]
• Friendly salesmen-Eureka Forbes • Reach-HLL, Glaxo,Colgate • Kids-McDonalds, Esselworld, J&J • Indian MNC-Ranbaxy, Infosys, Wipro • Economy- Big Bazaar
• Value-Dollar Shops, Factory outlets • Tourism-Goa, Kerala, Rajasthan • Headache-Saridon/Anacin
Differentiation: how to compete (STP undertaken to help differentiate)
• Add set of meaningful & valuable differences to distinguish company’s offering from competitor’s • By form / features- Coke bottle shape, Heinz thick ketchup, BMW auto park, Vertu-Concierge • Identify tangible differences between brand & competitors-conscious, rational benefits like
PQRSTUV-, Performance (Nokia), Quality (Sony), Rate (Big Bazaar), Range (Maruti, Vijay Sales), Service (ICICI Bank), Technology (HP), Utility (Bata), Value(Titan),Convenience (EMIs, Loan terms)
• Intangible Benefits - emotional, sub-conscious benefits the brand owns like Status (Benz, Bose Speakers) or House value (Armani, Rolex)- most important leverage for brand dominance
• For services, key differentiator is ease of ordering • Sustainable advantages- Brand perception as unique (Sony Trinitron), sustainable customer
benefit, difficult for competitors to substitute (Amul Price, Toyota low cost) Differential variables Brand Service People Channel Image Performance Delivery Response Coverage SymbolFeatures Convenience Competence Performance Trust Differentiation Criteria- Important, Distinctive, Superior, Preemptive, Affordable, Profitable Summary
Case- STPD for New Brand Launch- - Kingfisher Airlines Segmentation Status Conscious Air Traveller, SEC-Upper middle, HHI 25k+, Wired, Professional Targeting YUP, Executives, Family
Passengers not really economy conscious but seeking an airline commensurate with their standing / status, who love to be pampered, are price insensitive, seek a pleasurable in-flight ambience and experience. More reason for Kingfisher to increase prices later.
Positioning Kingfisher Class, A never before experience, Funliner Differentiation One Class, No male pursers, Brand New A320s, Personalised video screens with 5
Channels, 10 Kingfisher Radio channels Pricing Value Promotion Print, Outdoor, Electronic, Virtual Place On line, Home delivery in Mumbai / Delhi, Travel agents Branding Unallied Brand Extension, Kingfisher perceived as the king of good times- airline naturally
extends to ‘Fly the good times’ Advantages Great food, service, ambience, comfortable seats, gifts. Can revolutionise if consistent Weaknesses Cost intensive industry, high operational costs, strategy should be sustainable. History of
past failures of such airlines in India Future International foray, DeccanAir stake to cover lower end, push kingfisher to premium
NMIMS-2007-08 Marketing Strategy
Marketing Management Dr Amit Rangnekar ; [email protected]
Product Life Cycle Helps interpret brand/market dynamics, useful in planning, control
• Every product goes through a lifecycle but length, shape, duration, phases differ • Difficult to determine PLC stage, based on human life
PLC - Applications Introduction Growth Maturity Decline Characs Sales Low High Highest Ebb Costs Highest High High Low Profits Nil Start High Ebb Customers Innovators Adopters Majority Laggards Competitors Nil/existing Many Max/New tech Many Objectives Awareness, Trial MS, Usage Profits, Maintain MS Reduce costs Strategies Products Brand Build, extend, service Diversify, revive Sustain, Phase
out weak Price Cost + Penetrate, Skim Competitive Reduce,
Survival Distribution Selective, Availability Intensive Extensive, Visibility Watchful Advertising Awareness for
customers, trade Awareness & Interest In Trade/mass mkt
Differentiation Benefits
Reduce to retain loyals
Sales Promotion
Heavy to entice Trial/purchase
Cater to demand Encourage brand switch / substitution
Minimum
PR Max Selective Selective Nil Personal Selling
Target customers, Trade
Convince, convert Defend Minimum
Direct Mix New customers, review mix
Loyals Selective
Sponsorships Max Significant Specific Nil PLC Strategies Pioneer Advantage- Inventor, product pioneer, market pioneer Growth Stage- Add Products, quality, features, styles, models, segments, coverage, channels, Shift advertising from awareness to preference, reduce price to attract next segment of buyers Maturity Stage- By modifying- Markets- Expand brand users and brand usage Products- quality, features Mix- Price, channels, promotion, services Decline Stage- Review investments, selectively focus on key segments, markets and brands, divest
NMIMS-2007-08 Marketing Strategy
Marketing Management Dr Amit Rangnekar ; [email protected]
Marketing strategy- Integrates an organization's marketing goals and policies into a cohesive marketing plan to achieve marketing objectives. Dynamic and interactive. Eg economy pricing to attract consumers, establish relationship, move products up the value chain Common marketing strategies
• Based on market dominance – Leader, Challenger, Follower and Nicher • Innovation strategies – Based on new product development, cutting edge of technology and
business innovation. Three types: Pioneers, Close followers and Late followers • Growth strategies – Organic and Inorganic, Integration (Horizontal & vertical), Diversification or
conglomeration, M&A, Alliances, Strategic acquisitions. • Warfare based- Offensive, defensive, flanking, guerilla
Market dominance – Measure of the strength or control of a brand, service or firm relative to competitive offerings, generally expressed in terms of market share, geographical reach and number of players. Monopoly, duopoly, oligopoly, fragmentation, consolidation, concentration ratio. Market dominance strategies Market leader- dominant, substantial market share (MS) and reach.
• Expand the total market by new users, new uses, more usage • Protect MS by improved customer service & distribution effectiveness, reducing costs, NPD • Increase MS by targeting one or more major competitor(s)
Market challenger- strong, but not dominant position but following an aggressive strategy to gain MS
• Target industry leader and smaller, more vulnerable competitors. • Price discounts / reduction, line extensions, intensify promotions • NPL, reduce / upgrade product quality, • Improve service and distribution, cost reductions
Market follower- strong, but not dominant position, content to stay at that position. Safe, low risk player • Develop strategies parallel to market leader, hope to gain share from the leader • Plays on accepted norms in best practices, R&D, risks and costs- low failure rates • No head-on battle with the market leader
Market nicher- Focus / concentrate marketing mix on select few target markets / segments
• Specialise in a niche large enough to be profitable, but small enough to be ignored by the majors • Profit margins emphasized rather than revenue or market share. • Competitive advantage gained through effectiveness rather than efficiency • Successful nichers- High value added industries/ market high end products, obtain high margins.
Ansoff's Product/Market Matrix - Offers strategic choices to achieve growth objectives-Indian Hotels
• XPXM- Market Penetration • XPNM- New audience, new region, exports • NPXM- existing customers, develop,
innovate, new- Automobiles • NPNM-Diversify into
related - familiar –Amul- milk to foods Unrelated- unfamiliar based on potential
and management competence- Say Amul into Garments
Product(P) Existing(X) New(N) Existing(X) Market
Penetration Product Development
Mar
ket (
M)
New(N) Market Development
Diversification
NMIMS-2007-08 Marketing Strategy
Marketing Management Dr Amit Rangnekar ; [email protected]
BCG Matrix- Product Portfolio Matrix (Parle Biscuits) • For SBUs/brands, aids portfolio planning than decision making-Relative Mkt Share v Mkt Growth • General order- Question Mark, Star, Cash Cow & Dog • Dogs-Low share of a low growth market, no cash
generation, consume cash, rid, hive • Cash cows- High share of low growth market, cash
generators, low investment, ex-stars, economies, profits, fund other brands
• Question Mark -Low share of a high growth market, consume resources, generate little, decision to retain/grow/hive
• Stars-High share of high growth markets, generate high income, high costs low profits, build
• Portfolio balance critical, reduce dogs, milk cash cows and build stars
• Use funds generated by cash cows to turn ? into Stars, may eventually become cash cows. Some ? may become dogs, larger contribution from successful products to compensate for failures.
• Limitations- Profitability, trends, environment not considered, SBU sensitivities not considered GE matrix or "GE Business Screen"- Growth Share Matrix
• Market Attractiveness v Business strengths • Suggests optimal business portfolio to fit company's
strengths, exploit attractive industries/markets • Analyzes, SBU's which should receive +/- investment,
+/- new products / biz • SBU is circle in the Matrix, Circle size = Market
Size, Pie size = SBU Market Share • Arrows= future direction & movement of SBU's • Forecast for N3-5Y, including strategy, PLC,
competition, technology, policy, incorporate in length & direction of arrows
Factor Ratings
• Market attractiveness-attractive4 to unattractive1, Business strength-4strong to 1 weak • Top 3 corner- strong in attractiveness, invest/grow; Diagonal 3- medium in attractiveness,
selectivity, manage earnings; Bottom 3 corner- low in attractiveness, harvest / divest Implementation of portfolio analysis
• Identify drivers important to overall strategy, assign relative importance weights to the drivers • Score SBU's each driver, Multiply weights times scores for each SBU, Interpret results
Review factors affecting Market Attractiveness: • Size, growth, profits, demand, pricing, risks, competitive intensity / rivalry, segment, differentiation
Factors affecting SBU Competitive Strength • Assets, competence, relative brand strength, market share, growth, customer loyalty, relative
profit margin, technology / innovation, distribution, production capacity, financial resources, cost structure
GE Matrix- later and more advanced version of the BCG Matrix in three aspects: • Broader- Market /Industry attractiveness replaces market growth as dimension of attractiveness. • Competitive strength replaces relative market share to assess competitive position of each SBU. • GE Matrix with a 3*3 grid, allows for more sophistication while the BCG Matrix has only 2*2
Limitations- Core competencies not represented, SBU Interactions not considered
?
0%1x10x 0.1x
10%
25%Star Question mark
Cash Cow Dog
Mar
ket G
row
th
Relative Market Share
1
2
34
5
6
78
Strong Medium Weak
High
Medium
Low
1
2
3
4
1234Business Strength
Ma
rket Attrac
tiveness
Invest/Grow Selectivity/Earnings Harvest/Divest
NMIMS-2007-08 Marketing Strategy
Marketing Management Dr Amit Rangnekar ; [email protected]
Generic Strategies – Porter -Sources of competitive advantage-Cost leadership, Differentiation, Focus Competitive Advantage- A sustainable advantage over the competition gained by offering consumers / customers greater value and benefits through better PQRSTUV & people Perceptible Changes • Quality to World Class-Titan • Creativity to Innovation- Technology • Durability to Obsolescence- IT • Price to EMI- Housing, Insurance • Range to Features- All in one mobiles
Cost Leadership • Low cost leader-competitive advantage able to
produce at lowest cost, ‘no frill products’- Amul • Low cost not always low price, can enjoy bigger
margins Toyota- high quality, lower costs, better margins
The need to Differentiate • Over Communication (urban Indian adult 681 messages daily), Information overflow • Intense Local, Regional, National, International Competition- 25000+ pharma companies • Spoilt for choice- 4 car models 1983 to 14 in 1993 to 83 in 2003, Brand clutter
Differentiation • Select 1/more vacant differentiated needs, position business to meet those criteria- Domino’s. • Premium pricing- Reflect superior product quality, features and service, Reasons to prefer the
product over other, less differentiated products- Plasma TV, Benz • Competitive advantage in a broad range of market / industry segments • Differentiated goods/services satisfy customers needs through sustainable competitive advantage • Specific targeting, Price desensitization, value focus- higher prices, better margins- Sony, Nokia • Innovation and improvement are important. • Competitive advantage with additional costs, but increased revenue will offset
Differentiation Focus or Niche strategy • Specialise within just 1/ more small market segments with different customer needs. • Competitors targeting broader group of customers, existing brands not meeting the demand. • Tour Operators- Nepal or HP or South only, Glaxo- Pharmaceuticals • Niche- Specialization by narrow segment / market / industry, but small, specialist niches could
disappear in the long term- often used by smaller firms- Florist, Sports shop • Cost focus – Difficult, unachievable if industry depending on economies of scale e.g. telecom
Eg Country Level -Strategic Differentiation China India Hard Infrastructure- Ports,Roads,Power, Manufacturing Soft Infrastructure- Software, ITES, Auto, Biotech Factory of the World Back End Government support Entrepreneurship
McKinsey 7-S framework – Successful strategy implementing by companies, if all 7 elements present
• Strategy, Structure, Systems-hardware, balance software • Shared values- What organization stands for, shared
beliefs and attitudes • Strategy- Operational Plans to reach identified goals.
Environment, competition, customers • Structure-How the SBUs relate to each other • System-Procedures, processes-financial/hr/mktg/mis • Staff- Able people, well trained • Style- Common way of thinking & behaving eg smiles • Skill- Capabilities, competence to implement strategy
Nar
row
Broa
d
Low Cost High Cost
Com
petit
ive
scop
e
Competitive advantage
Overall cost leadership
Cost focus
Differentiation
Differentiation focus
NMIMS MBA 2007-08 Consumer Behaviour
Marketing Management Dr Amit Rangnekar [email protected]
Consumer Behaviour Effective marketing plans – Sound understanding of consumer markets & buying behavior
• Consumer market - goods for personal consumption, ultimate market in the economic chain
• Buyer behaviour through understanding the consumer psychology, response to marketing, research on influences and analysis of buying patterns
• 7’O’s framework- Occupants, objects, objectives, organization, operations, occasions & outlets Adoption-Diffusion Model (Eg Films)
• Innovators- Well informed risk takers, willing to change- 2.5% (1st day 1st show)
• Early Adopters- Educated opinion leaders, purchase if +ve response(Sunday film goers) from innovator- 13.5 %
• Early Majority- Averse to risk without reference/recommendation –34 % (Review)
• Late Majority- Sceptical, purchase only after wide acceptance-34% (review + opinions)
• Laggards- Avoid change, do not adopt till traditional alternatives exist- 16% (Tax free) Influences on Buying Behaviour (Cultural, social, personal, psychological)
• Cultural- Deepest/broadest influence culture (values, perceptions, preferences), subculture (nationalities, religions, racial groups, geographical regions) & social class (sharing similar values, interests & behavior)
• Social-reference groups (primary-family/friends-most influential, secondary-religious, professional) , roles & statuses (role performed & associated status)
• Personal- age, occupation, economic circumstances (Blue collar v white collar, income, savings and assets), Personality and self-concept, lifestyle (activities, interests, opinions)
Lifestyle- How one spends time & money eg Niche magazines-Grooming, fashion, cars, outdoors- Readers Digest lost 3 million customers only from 1997 to 1999 to niche magazines
Type Approach-Approach Approach-Avoidance Avoidance-Avoidance What happens Torn between 2
desirable alternatives Desire a goal, but wish to avoid
Choice between 2 undesirable alternatives
Example Home for vacations / trip with friends
Good food but Calories Renovate/Buy new House
Marketers Role Bundle several benefits
Because you deserve the best Stress unforeseen benefits
Desirability BPL EMI Maslow’s hierarchy of needs • Implies, order of development is fixed, satisfy basic needs before progressing upwards • Specifies certain types of benefits, people in a certain level look for
Self-fulfillment, enriching xp Self-actualisation Hobbies, Travel, Education Prestige, status, accomplishment Esteem (Status, recognition) Cars, Appliances Love, friendship, acceptance Social (Belonging) Clothes, grooming products, clubs Security, social protection Safety (Security) Insurance, Investments Basic needs Basic ( Physiological) Medicines, food
Buyer Behaviour ModelStimuli
4Ps PEST
Buyer Characteristics
PersonalSocial PsychologicalCultural
Buyer Decision ProcessRecognitionInformation
AlternativesDecisionPost-Purchase
Buyer Decisions
Purchase timingPurchase Amount
2.5% 13.5% 34% 34% 16%
Inno
vato
rs
Early
A
dopt
ers
Early
M
ajor
ity
Late
M
ajor
ity
Lagg
ards
NMIMS MBA 2007-08 Consumer Behaviour
Marketing Management Dr Amit Rangnekar [email protected]
Freud- Conflict between desire to gratify needs & necessity to function responsibly • Id- maximize pleasure, avoid pain, disregard for consequences • Ego- Balance & mediate between id & super ego • Super ego- conscience, controls id from selfish gratification
Herzberg- Absence of dissatisfiers not enough, actively present satisfiers to motivate purchase • Dissatisfiers- Factors that can cause dissatisfaction, but not influence sale- Warranty • Satisfiers- Factors causing satisfaction, but influence sale- Features, benefits
Perception—varies for same product Learning—changes in behavior arising from experience Beliefs and attitudes—belief-descriptive thought about something; attitude- enduring favorable/ unfavorable evaluations, emotional feelings, action tendencies toward some object/idea Country of Origin- Japan (Best in electronics, auto), India ( Best in Gems, IT, Bulk drugs, Handicrafts) Personality and self-concept—personality characteristics that influence buying behavior (self-confidence, socialibility, etc., and ties to brand personality
Buying process Buying roles- TV
• Initiator (Peer)- Influencer (Friend)- Decider (Mother)- Buyer (Father)- User (Kids) Consumer Buying behavior- based on intensity of consumer involvement & significant brand differences Hi Involvement Low Involvement Significant brand differences
Complex Beliefs, attitudes, thoughtful choice Highly involved, aware-significant differences Expensive, infrequent purchase- PC, Car Brand benefits
Variety Seeking Low involvement, significant differences High brand switch, variety, boredom relief Pens Available, Visible, promotion
Few brand differences
Dissonance Reducing Highly involved, few differences, quick Expensive, infrequent, informed choice Post purchase dissonance- Watches,Clothes Build beliefs, feel good
Habitual Low involvement, insignificant differences Lesser brand switch Toothpaste, tea Link to issues/effects/emotions - cavities
Stages in the buying decision process
• Need recognition (New lap top) • Intention 15 days (time and effort justified) • Alternatives (Dell, Acer, Lenovo, HP) & Evaluation (Price, customer service, software support,
printer/scanner package, deals) • Decision (HP) & Action (Buy from Croma) • Post-purchase behaviour (ASS, Response)
Metamarket- Mobiles-Handset, Features, Accessories, Insurance, Warranty- E-BuyGuru Metamediary- Neutral, compares/recommends based on desired features across various brands. Carwale Post-purchase behaviour
• Post purchase satisfaction-fit between expectations & performance • Post purchase actions- if Satisfied- repurchase, viral ; if Dissatisfied- Sue, stop, negative publicity • Use & disposal- Buy back /exchange / loyalty
Rural Consumer Marketing - Volume –driven growth
• 70% population in 640000 villages, 90% rural population in villages of < 2000 people • NCAER- More 'middle income+ ' households in rural than urban areas, twice 'lower middle
income' households in rural areas than urban areas, middle & high-income households in rural
NMIMS MBA 2007-08 Consumer Behaviour
Marketing Management Dr Amit Rangnekar [email protected]
India, expected to grow from 80 million to 111 million by 2007 while in urban India, expected to grow from 46 million to 59 million. By 2007 (Absolute size of rural India)=2(urban India)
Income Distribution among Indian Households (NCAER) Class Rural % Urban % Profile Product 1999 2007 1999 2007 High 3 6 13 25 Inherited /come up/ exceptional
ability/ professionals/ business Designer,
Jewellery, Art Upper Middle
4 6 12 22 Professionals / Business/ Career oriented/ Executives
Appliances, Plush Homes/ Cars
Middle 10 18 23 26 White Collar, Educated Popular brands, Value, EMI
Lower Middle
35 46 34 24 Blue Collar, Skilled Economy, Tight budgets
Lower 48 24 19 3 Educationally deficient, Semi-skilled Hand to mouth
• Strategy- In-depth knowledge of village psyche, strong distribution channels & awareness • Psyche- low priced, small packs, affordable, colour- as high price sensitivity, daily wages eg
Colgate sachet caps, Britannia Tiger • Distribution channel- rural retailers influence 35% purchases, availability affects brand choice,
volumes, market share. Village based rural sub-stockist crucial for reach & depth • Awareness- Mass media only to 57% of the rural population, Medicines 40%-Generate by-Fairs,
festivals for brand communication, Shop-fronts, walls to increase brand visibility • Pricing and Sizing- Effective to penetrate • Consumers-realistic expectations, cost sensitive, tight budgets, look for better value • Edible oils- prefer buying smaller quantities than 15 kg tin though lower in cost/ kg, 70% loose • Sachet shampoo-Velvette, Chota Colgate, Commodities-water, atta, salt - evolution in pricing &
sizing - increased penetration • Regional communication- understood by large sections of population, affinity-Regional TV
channels-Alpha, ETV, ESPN/Cartoon Network, Magazines Major demand, evolving rural market, companies with deeper pockets, unwavering rural commitment & staying power will last
Case- CB in Urban buyers- 10000 U&M class HH across 20 Indian cities- (KSA Survey Apr’04)
• Downageing-People of all ages getting younger in consumption pattern • 53% population < 25 years of age, India getting younger, children getting older • Fall in age when people buy certain products / services eg House @ 30s than 40s • Triggers-More money, convenience, choice, Information • Attitude to indulge, plunge, splurge ; ;hange in how much / what / way one spends
NMIMS MBA 2007-08 Consumer Behaviour
Marketing Management Dr Amit Rangnekar [email protected]
Wired Generation Impatient Aspirers Balance Seekers Arrived Veterans Age 8-19 20-25 26-50 51-65 Size 32 Million 16 Million 40 Million 10 Million Status Tweens, Teens In / Out of college Married,children Settled / Retired Income Nil, but important in
high value appliance purchases
10k-25k pm, salary with no supervised spending limits, loathe to savings
25K+, double income, planned life, enjoy life on EMIs, liabilities
Interest, Sponsored, Retirement benefits
Influence on purchases
14000 Crores Dictate spending pattern of elders, involved in hi-tech purchase decisions
2500 Crores 30000 Crores Household help, nursery, savings for children, Bring down age of purchases
6000 Crores Willing to spend on themselves again, techno-phobia, brand loyal
Traits Difficult to track down
Active & visible Huge desires, but marriage responsibilities
Not truly evolved
Profile Born post-lib, Raised around modern tech
Reaping rewards of job boom in retail, food, services sectors
Earn well, but expenses surge ahead of incomes, stretched for time
Peri-retirement, fulfilled major obligations, investments
Charac-teristics
Tech savvy, gadget crazy, net friendly
Individualistic, adventurous, informed, impulsive
Stretched finances, responsibilities, time crunch
Long term perspective, strong social-family ties,
Shopping urge
Latest, price no concern
EMI not MRP, peer opinion matters
Seek value, keen to upgrade appliances / gadgets
Averse to credit, planned & utilitarian approach
Credo I decide, parents buy Salary is pocket money
Earn big, buy bigger
Family, friends, fun & health
Priority Books, Music, Apparel, Eating out, Movies , Mobiles
Eating out, Books, Consumer durables, Apparel, Movies
Apparel, Consumer durables, Jewellery, Music
Health, parental obligations, vacation
Effects Funky, trendy, bright appliances/ places Look/ performance important
Happening places Vacations- religious, foreign, health
Examples Changeable mobile covers, CDs, PCs
Phone & Net Banking, Cars, Credit cards
Loans, Insurance, Health, Cars
Tour operators, VRS/ deposit financial schemes
Indian Youth, Indian Kids, Indian Women
NMIMS- MBA2007-08 MIS, Marketing Research, Industrial Mktg, Services, Sales
Marketing Management Dr Amit Rangnekar [email protected]
MIS (Marketing Information Systems) • ‘A set of procedures and methods for the regular, planned collection, analysis and
presentation of information for use in marketing decisions’- AMA • Changing marketing environment, understand customer consumption/ behaviour • People, equipment, procedures • Internal records-Sales, costs, stocks, reports • Marketing Intelligence system- Information sources- reports, feedback from sales force,
trade, customers, competitive information / products / net Marketing Research – Syndicated (ORG), custom, specific, helps understand the marketing problem better, larger concept than Market Research
• Market Research: Involves researching specific industries or markets. • Marketing Research: Analyses & researches a given marketing problem, generally within an
organisation and recommends solutions • ‘Systematic collection, recording & analysis of data about ‘problems’ relating to the marketing
of goods and services’- AMA • Understanding changing customer needs, proact, react, brand decisions- Marks &Spencers
started accepting credit cards only in 2002 • Impact of advertising/ training on sales, new product / extension decisions • Quantitative research - statistical basis • Qualitative research - Opinions and attitudes towards a product or service • Sampling - studying part of a ‘population’ to learn about the whole • Hypothesis- I believe, A hunch, an intelligent and informed guess
Steps
• Problem Definition- Define the Marketing problem & Research objectives, correct identification & definition important; exploratory, descriptive or causal
• Developing Research plan-Most efficient & cost-effective method for data/info collection Secondary data-Existing data, low cost, starting point-Sources-Corporate, Trade Associations, Regulatory bodies, Syndicates, net Primary data- Data collected for a specific purpose for the first time or generated firsthand Authentic but costlier and time consuming. Questionnaire, survey, interview, focus groups Secondary data - Already exists (desk research). Cheap & fast but problems of plenty, accuracy, authenticity, applicability, date External- Annual reports, Net, journals, trade, Govt, Internal- Organisational data Questionnaire Design -Questionnaire types- (Flexible, commonly used) Open end-I prefer brand ‘x’ as ………… Word Association-Tata….., Unstructured- What is?… Closed- Dichotomous-Y/N, Multiple choice->3 answers, Likert scale-1-5 (Agree to Disagree Strongly), Ratings 1-5 (Excellent to Poor), Importance (Extremely to least important)
• Double Barreled : Combines 2 issues ““Do you think professors should have more contact with university staff & university administrators?” Y?N
• Leading Questions: Biases respondent with loaded / leading word- Don’t U agree/Do U believe. “Don’t you agree that social workers should earn more money than they currently earn? Sample design, plan, target, size; contact- Mail, net, phone, questionnaire/ interview
• Participant Observation, Mystery shoppers • Data Collection- Expensive, chances of error • Analysis, Strategic Recommendations, Implementation
Research Process
• Set objectives • Define research problem • Assess value of the research • Construct research proposal • Specify data collection method
• Specify measurement techniques • Select sample • Data collection • Analysis of results • Present final report
NMIMS- MBA I 2007-08 Session 8- Industrial marketing, MIS, Marketing research
Marketing I (Concepts & Environment) Amit Rangnekar [email protected]
Measurement- Assigning numbers to measure data into an absolute amount (Operationalising) Scales
• Categorical: Where do you live? a, b, c, d • Ordinal: Rank or order Colas best to worst: (Coke, Pepsi, RC, Campa)-1st, 2nd, 3rd, 4th • Interval: Rate the 4 cola brands on a 10 point scale:
C/P/R/C- 0/1/2/3/4/5/6/7/8/9/10 Very bad to fantastic • Ratio: Cans of Coke you drank last year? ____
Research success stories- Nokia India, Velvette Shampoo Sachet, Levis, Nike Dependent Variable (Y Axis)- Sales, Performance, Pass / Fail Independent Variable (X Axis)- Advertising, Training, Promotion, Income, Qualification Y= a+bx Case-Indian 2-wheeler industry Objective- To determine Consumer behaviour & influencing factors in purchase of 2 wheelers Research methodology & design-
• Universe-consumer • Sampling unit-Pune • Sample size-100 • Type-simple random sampling • Questionnaire- closed, Questionnaire type- Structured
Data Source- Primary- Main Source, Secondary-industry trends, current player status Questionnaire (Design a questionnaire based on the following factors) Name, age, occupation, income, current 2wheeler staus-if owned, which, if not, intend to buy which, why, what use, influencing factors, technical factors, performance factors, service factors, brands, features, satisfiers, finance, media,perceptions Findings Table1 Table2 Table3 Table4 Table5 Table6 Age % Occupation % Income % 2wheeler % 82% 18% 18-25 49 Business 36 < 10 k 12 Owned 82 Scooter 55 Scooter 58 26-32 30 Private 26 10-15k 26 Not owned 18 Bike 39 Bike 42 33+ 21 Govt 16 15-20k 50 Scooty 4 Scooty Student 16 20k+ 12 Moped 2 Moped Other 6
NMIMS- MBA I 2007-08 Session 8- Industrial marketing, MIS, Marketing research
Marketing I (Concepts & Environment) Amit Rangnekar [email protected]
Table7 Table8 Table9 Table10 Table11 Purpose % Influence % Features % Tech % Service % Office 40 Friends 42 Average 23 Acceleration 20 ASS 50 Business 35 Ads 22 Brand 17 Engine 18 Spares 26 College 14 Family 18 Price 15 Maintenance 17 Service 24 Local 11 Offer 8 Engine 12 Pollution 12 Dealer 6 Looks 10 Handling 11 Mechanic 4 Pickup 9 Safety 10 Resale 8 Smoothness 9 Service 6 Tank 3 Table12 Table13 Table14 Table15 ToM Recall % Media % Rank Price Maint’e Service Brand Payment % Bajaj 42 TV 54 1(Lo) 11 38 0 2 Cash 58 HeroHonda 38 N’papers 20 2 21 27 2 8 EMI 31 TVS 10 Magazines 10 3 28 17 12 14 Bank 7 Kinetic 9 Outdoor 10 4 22 10 24 18 Private 3 LML 1 Net 5 5(Hi) 18 8 62 58 Other 1 Radio 1
Perceptions -Advantages sustained/built on & lacunae improved, overcome by all 2 wheelers
• Bajaj tops overall as it ranks number 1 in Engine, value, dealers, service,economy & a close 2nd in Resale, safety, styling
• Hero Honda overall second. Ranked 1 in resale, styling, maintenance but 2 in engine,value. It has to improve it’s service, safety & economy
• Kinetic ranked 4 overall but 1 in ease of drive • TVS ranked 3 overall but 1 in safety
Perceptions 1 2 3 4 Engine Baj HH TVS Kin Resale HH Baj Kin TVS Value Baj HH TVS Kin Dealers Baj Kin HH TVS Service Baj Kin TVS HH Safety TVS Baj Kin HH Styling HH Baj Kin TVS Ease of drive Kin TVS HH Baj Maintenance HH TVS Baj Kin Economy Baj TVS Kin HH
Table Analysis 1 79% respondents below 32 years of age 3 76% respondents between 10k-20k income levels 4 82% surveyed owned 2 wheelers, 18% did not 5 Out of 82% 2wheeler owners, 55% owned scooters 6 Out of 18% non-2wheeler owners, 58% aspired to own scooters & 42% aspired to own bikes 7 75% of 2 wheeler owners, current & potential, will /purchase it for work ( office+ business) 8 Friends-42%, Ads-22%, Family-18% most significant influencers- Ads should contain family,
friends & features 9 Average most important, followed by brand & price in terms of features
10 Acceleration, engine & maintenance most important tech factor 11 After sales service-50% most important service factor-conveys existing is deficient 12 Top of Mind recall brand – Bajaj (58%) & Hero Honda (38%) 13 TV – 54% most effective media as sight, sound & motion 14 Competitive price, low maintenance cost, prompt service from a reputed manufacturer most
crucial to purchase 15 Cash 58% most preferred mode of payment
NMIMS- MBA I 2007-08 Session 8- Industrial marketing, MIS, Marketing research
Marketing I (Concepts & Environment) Amit Rangnekar [email protected]
Services Marketing Service Characteristics- Many products also have service element- Mobile (Handset+Communication)
• Lack of ownership- Not owned / stored like a product, but hired, leased, used for a period of time. Live concert can be enjoyed but its DVD becomes a product
• Intangibility- Cannot hold / touch a service but perceptions formed from a service may become convictions & impact. Restaurant ambience, service.
• Inseparability- Inseparable from service provider. Provided at / near point of purchase. Ambience, quality & taste- Part of the service process, hence inseparable
• Perishability- Services are perishable, cannot be stored like a product for later use. The service is developed and used almost simultaneously. Restaurant experience starts and ends with a visit, wonderful experiences bring customers back
• Heterogeneity / Variability- Difficult to make each service experience identical. In-flight experiences can’t be identical every time
Service Industries- HHEFTTTII- Healthcare, Hospitality, Entertainment, Finance, Transportation, Telecommunication, Travel, Information, Insurance Managing services are more complicated than managing products, due to lack of standardisation, difficulty in measurement and higher mix factors. Time plays a key role in the pricing of services. Services Mix Besides the 4Ps, People, Process & Physical evidence are important in services
• People- Services are people intensive and quality of staff can influence customer perceptions either way- critical. Eureka Forbes
• Process- Effective systems to deliver a service can foster high degree of customer loyalty. Instant food delivery, Automatic renewal of credit cards.
• Physical Evidence- Physical evidence allows a consumer to make judgements and perceptions on the service offered, directly or indirectly. Restaurant ambience, air hostess courtesy, clean toilets in a hotel room, all can influence decisions
How customers assess service quality Tangibility, Reliability, Responsiveness, Assurance, Empathy Caselet – Services Marketing- Kerala Tourism
• 6 Million tourists, 16% growth, Average Intl tourist 14 days, Indian 6 days in 2003-04 Flashback
• Mid 80s, Kerala brand non existent • Highest literacy and social development levels • Inviting green destination, vibrant cosmopolitan, multi religious cultural heritage • India image- Exotic, snake charmers, rope trick, narrow roads, poverty.
Drivers • Kerala’s rise coincided with Kashmir decline in tourism • House boat emerged as the mascot for backwater tourism in Kerala • Started with Bangaram Island, Lakshadweep- ‘Less for more’ concept and lack of choice was
USP, austerity, languid, lagoons, nature in pristine glory and harmony. $ 180/ Day • Role Model- Bali- Different tourism identity from Indonesia • Unique power of public private partnership- Initial investments by state • Taj, Kovalam – Kerala tourism’s corporate face- brought in international tourists • Key tour operators selling southeast asian destinations also promoted kerala • 1990’s New breed of fearless, alert, independent travelers, not only on the look out for
luxuries, but for history, vibrant culture, peace of mind and nature, in large doses. • Ist resort Spice Village in Thekkady- translated concept of local content, harmony with the
environment and coexistence with the local community to the coconut lagoon.
NMIMS- MBA I 2007-08 Session 8- Industrial marketing, MIS, Marketing research
Marketing I (Concepts & Environment) Amit Rangnekar [email protected]
Positioning • Early 1990s- Gods own country • 1994- Green gateway • 1995- Gods own country
Brand makeover • Mid 1990s- Focus from generic to specific products- ‘Watercolours by God’ campaign • Nature, ayurveda, backwaters, culture, cuisine, kathakali, elephant festival, boat races • Emergence as a class than mass destination, from the beginning • Competing today with South east asian destinations- booked 6 months in advance • Collective effort by different stakeholders, individual promos after initial state promos • MICE destination- Meetings, Incentives, Conventions & Exhibitions center- Biz + pleasure
Marketing mix • Ads depicting tranquil backwaters, ayurvedic massage, foreigners, cuisine- effective. • Market, time & media specific, High decibel visibility • Participation in major tourism fairs, media events, PR, extensive internet promo • MF Hussains book on paintings on Kerala
Intrinsic strategy • Transforming everyday things of life in the state into a bouquet of experiences that enchanted
the world. Less is more concept. • Conscious efforts to ensure tourist not harassed or fleeced • As culture & society grow wired and wireless, desire to return to nature intensifies.
New Identity- Ecotourism, new watch words- health and preservation of cultural heritage- Industrial Marketing v Consumer Marketing Industrial Consumer Buyer Industry Individual / Family Quantity Bulk Piece Value Very high Lower Buyers Fewer Many Relationship With customer With retailer Customisation Common Rare Concentration Geographical, market based Spread out Demand Derived, Seasonal, Cyclical Seasonal, occasion based Technology Intensive Lesser extent Purchasing Process based, slower Impulse/need/want based,
faster Price Negotiation on price, terms, mode Bargaining, Add-ons,
freebies Web impact B2B –$ 2.5 Trillion C2C, B2C less in value Buying influences Corporation, Customer, Competition,
Environment Family, friends, peers, communication
Brand switch Lesser Common Channel/vendors Direct manufacturer/dealer Retailer/ Mall / Superstore Payment Thro bank/ Cheques Cash/ Cards Terms Lease, Credit EMIs, Cash Invoicing Invoice/ Bill Bill / Cash Post purchase Service/Warranty essential Not for every product Promotion Mix Personal Selling, Trade, Expo, Direct,
Catalogue Advertising, Sales Promotion, Direct
Pricing Volume/Frequency/ Terms MRP, Promotional, Psychological, competitive
Purchase Order Essential Oral request Support Components, Spares, Ancillaries Peripherals, consumables
NMIMS- MBA I 2007-08 Session 8- Industrial marketing, MIS, Marketing research
Marketing I (Concepts & Environment) Amit Rangnekar [email protected]
SSaalleess MMaannaaggeemmeenntt • Selling involves the salesperson’s unique style (art) of applying a systematic process
(science) to understanding customers’ needs and wants and matching the benefits of the salesperson’s product or service to those desires.
• Professional selling is the interpersonal communication process in which a seller uncovers and satisfies the needs and wants of a prospect to the mutual, long-term benefit of both parties
• “The successful salesperson cares first for the customer, their satisfaction, and then for products.”
•• SSaalleess PPrroocceessss-- Preparation--Attention--Examination--Prescription--Conviction & Motivation--Completion and Partnering
•• CCllaassssiiffiiccaattiioonn-- Retail selling,, Trade selling,, Missionary selling,, Technical selling •• TTyyppeess-- Responsive selling,, Creative selling,, Needs-based selling,, Consultative-partner
selling,, Problem-solution selling,, Customer-centered selling,, Value-based selling • CChhaannggee ffaaccttoorrss-- Globalization,, iintensified competition,, Inflated customer expectations
ttechnological innovation,, ccoommpplleexx sseeggmmeennttss Designing the Sales Force
• Planning-strategy- structure-size-compensation-coverage • Direct, Leveraged, Contractual -sales force • Territory Structure, Shape, Size- •• EExxcclluussiivvee tteerrrriittoorryy ffooccuuss,, cclleeaarr rreessppoonnssiibbiilliittyy ddeeffiinneedd,, lloowweerr ttrraavveell eexxppeennsseess •• DDeessiiggnneedd bbyy ppootteennttiiaall,, rreeaacchh,, wwoorrkkllooaadd,, ttrraavveell ttiimmee,, ccaallll ffrreeqquueennccyy,, ccaallllss ppeerr ddaayy,, ttaarrggeettss,,
eevvaalluuaattiioonn • Compensation- Fixed, Travel Expenses, Allowances, Incentives / commission
Managing the Sales Force • Recruitment- The entire procedure from manpower planning to final selection • Training- Corporation, Culture, job profile, products, communication, targets, field and
administrative norms, negotiation, customer, competition, trade, reporting system, time management
• Supervision, Motivation, Evaluation • Sales Representative- Prospect, Target, Communicate, Sell, Info, CRM-Convert, retain,
regain Improving Effectiveness
• Proper target identification, perseverance, effective communication, negotiation skills, objection handling, follow up, knowledge & information of customer, market, competition
Sales force - Pharma, FMCG, Insurance, Credit cards, Mobile service
NMIMS- MBA I 2007-08 Session 8- Industrial marketing, MIS, Marketing research
Marketing I (Concepts & Environment) Amit Rangnekar [email protected]
The Marketing Plan • Marketing part of an organisational plan, helps organise marketing strategy and planning • Guideline to anticipate future events, chalk out strategies, co-ordinate, achieve objectives • Benchmark performance standards, evaluate execution gap and take appropriate action • Events difficult to predict, hence past trends are no future indicator • Objectives – Where do we want to be? • Situational Analysis – Where are we? 3Cs- Corporation, Customer, Competition • Audit- Internal- Analysis, Decisions, Plans / External - PEST, Trends, SWOT • Strategy- How do we get there? STPD, Mktg Mix • Control- Are we there? Strategy Evaluation, Benchmark, Action • Competencies become rigidities
•Leadership•Rank•Geographic•Share•Profits•Growth
Marketing Objective
•Corporation•Customer•Competition•SWOT•Industry
Situation Analysis
•Mix- 4Ps•Segmentation•Targeting•Positioning•Differentiation•Prod Life Cycle
Marketing Strategy
Mktg ResearchBuyer BehaviourOrgl StructurePlanMonitoring
ExecutionControl
•Leadership•Rank•Geographic•Share•Profits•Growth
Marketing Objective
•Corporation•Customer•Competition•SWOT•Industry
Situation Analysis
•Mix- 4Ps•Segmentation•Targeting•Positioning•Differentiation•Prod Life Cycle
Marketing Strategy
Mktg ResearchBuyer BehaviourOrgl StructurePlanMonitoring
ExecutionControl
MPE-T1-NMIMS- 2007-08 Marketing in the New Economy
Marketing Management Amit Rangnekar [email protected]
Marketing in the New Economy Two men meet a big bear in the forest. One of them sits down to put on his running shoes. The other looks at him and says, It s no use, You can t outrun a bear anyway. The first one answers, “I don t have to outrun the bear. I just have to outrun you" Speed against competitors counts
Customer Relationship Management (CRM) 1 to 1 • “Methods & tactics to convert, retain, regain customers & to develop long term relationships” • “Initiation, enhancement, & maintenance of mutually beneficial long-term customer relationships
through business intelligence-generated strategies based on the capture, storing, and analysis of information gathered from all customer and partner touch points and transaction processing systems” Barak
• “A set of business practices designed to put an enterprise into closer and closer touch with its customers, in order to learn more about each one and to deliver greater and greater value to each one with the overall goal of making each one more valuable to the firm” Peppers and Rogers
• Customised database ( Not mass), Individual information-Potential & existing customers • The consistent application of up-to-date knowledge of individual customers to product and service
design, in order to develop a continuous and long-term relationship’ Cram • Not mass marketing. Aimed at individual, Customer retention not attraction, Long term, ongoing
relationships, Regular customer contact, Spirit of trust • Interaction ( Mail, Post, Phone), Relationship- understanding needs & getting closer • Customised offer ( Pinpoint communication), Customer clusters( Most valuable, valuable ,
potential), Increase customer base, conversions, retain & regain customers • Companies focus on attracting new customers, but loyal customers spend much more in the long-
term, so retention is better than conversion • Customer relationship hierarchy: Strangers- Acquaintances- Friends- Partners • Loyalty cards, Multi channel communication/ Promotion, updated databases, pin point targeting • Banks, Insurance, Hotels, Airlines, Retailers, Credit Cards Database (ICICI-15 Mn customers) • Build, customize, maintain, upgrade • Demographics, Psychographics (VALS,AIO), Mediagraphics (suitable media)
Types of Customers
• Loyalists: The most satisfied become apostles for your company. • Mercenaries: Loyal only to low prices & transaction specific, with no intentions of ever
establishing a relationship. • Hostages: “Stuck” with you for a variety of reasons. Complainers and prima donnas. • Defectors: Various types of dissatisfied former customers.
Customer Lifetime Value= (Total Customer Revenue)X(No. of Loyal Years)X(Company Profit Margin) Companies have “loyal” customers” but do customers always have loyal companies?
Old Marketing New Marketing • Short term focus (Transaction) • Marketing mix • Price & quality sensitive customers • Market share • All customers are equal • Mass marketing • Sell to the customer • Focus on new customers • Aggressive Marketing • Broadcast oriented • Transaction profit
• Long-term focus (Relationship) • Interactive & 360 degree marketing • Value conscious customers • Share of wallet focus • All customers not equal • Individual marketing • Manage customer experience • Focus on existing customers • Service focus • Dialogue oriented • Customer lifetime value
MPE-T1-NMIMS- 2007-08 Marketing in the New Economy
Marketing Management Amit Rangnekar [email protected]
Disadvantages • Huge investment in people, systems, cost of data collection, updation • Intrusion resented (phone calls, mails), Poor design ( Mckinsey survey)
E-marketing Mix
• Online marketing mix and strategies • E-product- Wide variety, convenience, full information, but intangibility, lack of service / interaction • E-price- Competitive as costs of inventory, staff and distribution margins are negligible.
Metamediaries, Online auction and payments. Customer loyalty, tracking. Internet fraud • E-place- Direct online purchase from manufacturer, cutting out retailers. Delivery time & cost • E-promotion- Website, promotion, advertising Banner ads, interstitials, Web PR inserts / reviews,
Direct emails cost effective, popular but intrusive SPAMMarketing in the New Economy New Economy Marketing
• New economy- ICE ( Information, Communication, Entertainment- BPO, IT, Telecom) • Outsourcing- 3 L in India, outsource what others can do better & cheaper, retain core activities • Benchmarking v best in class/world, Partnerships- Strategic/Financial/ Synergistic • Build- New advantages, intangible assets,IT & knowledge systems, CRM • M-Commerce- PDA, Mobiles • 3Cs- Connectivity, Content, Commerce, Dotcom revolution, bust, M&A- Ebay, Google, C2Win • Established players who went online succeeded, traditional players suffered – book/ music
stores, retailers, brokers • Metamediaries- Amazon, EbuyGuru, Steve’s Digicam-Neutral reviews, price comparison • Customisation- J&N shade cards, • Customerisation- SMS, baby books- operational + Mktg customization • Knowledge, Change, Good product / service • Technology /Systems, Speed, Seamless, Borderless, Death of Distance • People with expression & communication- High entry level opportunities • SOHO, Open Collars, DELL-Fully online, configure your own
Business types
• Brick only- Traditional- Akbarallys- no web focus • Click only- Direct online, no existing presence in same category-Rediff, Baazee • Brick & Click- Strand Book stall, LG ezbuy • Click & Brick- Asian Sky Shop • B2C- Books, stocks, Music, CDs-convenience, cheaper • B2B= $ 3 trillion ( 6 times India’s GDP)- M&M vendor online, Broking sites • C2C- Mail, Chatrooms, messengers- Health, Food, care- Ebay • C2B-Feedback, experience, reviews- Response time crucial • Convergence-Mobiles- Pda- PC thro java, Bluetooth, GPRS • Companies- Photocopy, Scan, Print, Fax, Photoprint- BENq
Customer
• Cheaper entry, retention, repurchase, • Customer benefits- focus, satisfaction, measure, xp, less transaction time, • Features, compare, finance, full range, discounts, no channels, 24*7, virtual- but no trial • Customers-traditional (not online), cyber (online), hybrid (both-majority), Brick & click important • Ecommerce - corporate + business + mail
Websites- Attractive, encourage repeat visits, content, communication, commerce • Internet Advertising- Specific, not mass, intrusive • Banners- Amazon, Indiatimes- Car, Mobiles • Microsites- Insurance • Sponsorships- Health info, Parenting-Pharma companies
MPE-T1-NMIMS- 2007-08 Marketing in the New Economy
Marketing Management Amit Rangnekar [email protected]
• Interstitials-Changeover ads-Corporate websites • Content push- IQ, vocabulary • Alliances/affiliates- Times of India group
Revenue sources
• Ads, sponsors, alliances, referrals • Subscription, memberships, Database profile selling, Product/service selling • Commissions, transaction fees, Information search, Archives
Web branding Issues
• Web- mass communication medium but interactive hence causes problems as companies perceive it as another advertising medium
• The user of the message is in charge, not the sender • Netizens do not relish advertising on the web, have a choice, do not pay attention, turn off ads • Customer profiling and targeting is difficult, brand building on the web- very difficult • Great spawning ground for new brands created specifically for the web, if brand is interactive • Amazon- interactive, unlike a bookstore where you walk up and down the aisles and look at all
the books, which are arrayed in whatever way the bookstore wants to arrange them. • Web distribution is a reality- Cisco 90% business on the Web; Dell 60 %. Cisco, both moving
towards becoming web brands like Amazon, Google, Monster. • Company should have a website to convey info about company, products, dealers, service, but a
concurrent web and real-world business may conflict and be incompatible. • Eg Nike- Sneakers on the Web, difficult as people want to try them on before they buy them.
Also, Nike would compete with own retailers and dealers who may lose interest. Similarly for Fashion products which may need a trial.
• But in computers and peripherals, books, music, travel, tourism, ticketing (sports, movies) where you can see what it looks like but don't have to try it on, would emerge as good web businesses.
• Web branding does away with channels and inventory and ensures huge savings and profits but shipping and delivery costs are another big factor. Inexpensive books become expensive post delivery.
New trends
• Smart cards- takes care of schedule, work, finances, health, diet, purchases, appliances • Geo-specific- The moment you enter the area of shoppers stop, they mail you latest sale items • Radio Frequency tag- Embedded in the FMCG, gives insights from production to final purchase
India joins the E-revolution
• Education- Professors at Career Launchers have an e-class across few cities in India where teaching & student interaction is live to cater to the huge demand for competitive exams
• Healthcare- Apollo Hospitals have tied up across 60 villages in AP where operations are beamed live to Hyderabad & consultation sought live
• Agriculture- E-chaupal initiative of ITC helps the farmer to store, sell online and get a better yield Marketing Trends Viral Marketing Facilitates & encourages people to pass along a marketing message or Information. VM depends on a high pass-along rate from person to person. If a large % of recipients forward something to a large number of friends, overall growth snowballs very quickly. If the pass-along numbers get too low, the overall growth quickly fizzles Eg Pass on this prayer to 9 friends, good luck will bless you, Hotmail.com
MPE-T1-NMIMS- 2007-08 Marketing in the New Economy
Marketing Management Amit Rangnekar [email protected]
Guerrilla Marketing GM aims to attract customers that will refer your business to others such as friends, family and work associates. It is all about getting the maximum attention of the public by using minimal resources. GM means being original, breaking the rules, and looking for alternatives. Taco Bell stationed a floating rubber target off the coast of Australia which, if any pieces of the decommissioned Mir Space Station were to hit, it would entitle everyone in the US to a free Taco. (Taco Bell took out insurance on this) A photo of the floating target was carried by major news agencies across the planet. Also, Taco Bell's NYSE symbol is 'YUM' much better than say TBC. Whenever the Dow Jones Index plunges, Tylenol ads appear to relieve headaches. ‘Bean bags’ ads on under-construction sites Ambush marketing Occurs when one brand pays to become an official sponsor of an event (most often sports) and another competing brand attempts to cleverly connect itself with the event, without paying the sponsorship fee and, more frustratingly, without breaking any laws. Effective but damaging, can endanger sports sponsorship of big events. Ambush marketing techniques omnipresent where stakes are highest eg Olympics, world cups 1996 Cricket World Cup, Coke are official sponsors, but Pepsi advertise as unofficial sponsors using cricket stars participating in the cup. Spectators given free caps, T-shirts with Pepsi logo inside the stadium. Maximum publicity at a fraction of the cost of official sponsorship Permission Marketing (Email marketing)- When your customers give you permission to market to them, opposite from traditional marketing. Communication sent with prior approval / permission, customers look forward to hearing from you. Most effective weapon with a small business owner. Allows to market to large number of potential customers for a fraction of the cost of traditional direct mail Interruption marketing (Traditional communication) Interruption marketing works by interrupting you. Nobody watches television for the commercials. Nobody flips through a magazine for the ads. But that's how interruption marketing gets you to buy something. The important thing is to start thinking about how marketing is changing and what you can do about it.
Caselet - eCommerce in India - Internet user's proclivity for shopping online Source – IOAI Internet & Online Association of India, http://in.rediff.com/money/2005/jun/28ecom.htm • To understand profile, internet usage, products purchased, propensity, nuances, affinity and aversion
to online shopping and reflect the changing face of business trends in India • 3,099 respondents- 55% (1,716) shopped online once, 87% (1,493) more than once (regular) • Total e-commerce activities in India 570 cr in 2005. • Changing lifestyles / shopping habits will propel e-commerce @ 300% to touch 2,300 cr by 2007. • Changing lifestyles and shopping habits make this shopping medium impossible to ignore. • How online retailers can fill gaps in the online environment and utilize unique elements of the online
shopping experience to create a competitive advantage over the physical retailing world. • The rapid development of e-commerce is forcing companies to adopt Internet business strategies • Internet population is 25+ million, expected to grow to 100 million by 2007 • Internet business module is cost effective, accessible and profitable • Consumers & retailers desire safe, simple and comprehensive online shopping experience • Regular shoppers- 25% in 18-25 age group, 46% in 26-35 and 18% in the 36-45 age group • 85% online shoppers male but even 15% female audience represents a 15 million market by 2007 • Education and profession: 83% Grad / PG- educated audience, 54% executives 24% of online
shoppers are professionals or self-employed- assured spending power. • Access: Multiple access points 76% access Internet from office, 63% home & 24% cyber cafes. • Purchase history: 62%, shoppers for more than a year, 37% started in last 12 months, 67% in last 3
months- growing acceptance of e-commerce.
MPE-T1-NMIMS- 2007-08 Marketing in the New Economy
Marketing Management Amit Rangnekar [email protected]
• Geography: Maharashtra: 29%, (Mumbai 24%); Delhi NCR: 19%; Tamil Nadu: 11%, (Chennai 7%); Karnataka: 10% (Bangalore 6%); Uttar Pradesh 7%, (Lucknow:2%); West Bengal: 6%, (Kolkata 5%); Andhra Pradesh: 5%, (Hyderabad 4%); Rajasthan: 5%; Gujarat 4% (Ahmedabad 2%); Kerala: 3%.Top city/product preference: Mumbai holds top slot in every category, except jewellery. Delhi fast competing with Mumbai in accessories, apparel, gifts, home appliances categories pipped Mumbai in jewellery. Chennai rank 3 for railway tickets, airline tickets, magazines, home tools, toys, jewelry, beauty products & sporting goods. Bangalore rank 3 for books, electronic gadgets, apparel, movies, accessories, gifts, computer peripherals, hotel booking, home appliances, movie tickets, health & fitness products and apparel gift certificates. Kolkata rank 3 in online music sales and Rank 4 for the movies & the music categories. • Top 20 products bought online: Books (41%), electronic gadgets (40%), railway tickets (39%),
accessories apparel (36%), apparel (36%), gifts (35%), computer and peripherals (33%), airline tickets (29%), music (24%), movies (21%), hotel rooms (20%), magazine (19%), home tools and products (16%), home appliances (16%), toys (16%), jewellery (15%), movie tickets (15%), beauty products (12%), health and fitness products (12%), apparel gift certificates( 10%) and sporting goods (7%).
• Top 5 reasons to shop online: 70% online shoppers like 'home delivery', 62% like 'time saving', 60% like the '24x7', 45% like 'ease of use', and 39% like product comparisons.
• Purchase frequency: In last 3 months, 67% shopped online once, 53% > 5 times, 27% >10 International Marketing
• Internet, telecommunication, social mobility, emerging nations driving major changes • Declining growth in major / home markets • Lifecycle management issues • ‘Geography is history’ • ‘Death of Distance’
International Marketing Environment
• Political – Stability, Regulations, Collections; democracy, communist, or dictatorship, • Economic- PCI, consumption/spending patterns, interest rates, duties & tariff • Social Factors- Communication, customs, hostility, values and attitudes, labour • Technological- infrastructure, energy, integration, scientific pool • Market entry factors- Speed, Costs, Entry, Exit, Risks & returns, Payback period, Long- term
objectives- International Marketing Entry
• Direct & Third Party Exports- • Licensing • Franchising- McDonalds • Contracting • Manufacturing abroad • Joint Venture • M&A
International Marketing Strategy
• Product- Standardise or adapt your product to the new market? • Different needs of the target market, so tailor make- McDonalds • Standardise, as brands are becoming global in nature- Coke, Nike, Levis • Promotion- Adapt Advertising messages and brand names in countries- Nivea, Tide or
standardize- Mastercard, HSBC, Absolut Vodka • Colour & Symbols- India red-bride, Japan- White mourning, UK- Black-Mourning • Level of media development, TV / net penetration , Censorship • Pricing- Getting pricing right is critical, currency, target group and willingness to pay
MPE-T1-NMIMS- 2007-08 Marketing in the New Economy
Marketing Management Amit Rangnekar [email protected]
• Place- Internet, outsourcing and Big retail are redefining distribution channels, generally more intermediaries involved, Malls and major retailers dominant
Global Marketing Case- Moser Baer
• 1983-Set up as a JV to manufacture time keeping devices with a Swiss company, bought out the Swiss stake, diversified but the name stuck.
• 1985- 2 crore investment in capacity of 600,000 floppy disks of 8.0"/5.25" disks commences • 1987- Production of 3.5" disks commences, First Public Issue • Liberalisation drove the need for globalization, focus on optical and magnetic data storage media • As opportunities increased, scale was necessary to go global- 0.5 mn in 1987 to 140 mn in 1995 • 1999- entered optical media business with CD-R’s, 2000- CD-RW’s • Scale, access and R&D capability to drive global foray • 2003- entered DVD-Rs, launched in India, world's single-largest optical media production facility
in Noida, Largest-ever Indian manufacturing deal with Imation Corp, USA Introduction of the 'moserbaer' brand in the Indian market
• Europe-initial exports but 25-30% MS and antidumping investigations forced MB to diversify revenue streams from a growth & risk perspective- 2005- Europe- 35%, Americas-30%, Asia-35%
• $ 10 mn manufacturing facility in Germany to cater to niche products for European markets- 5% by volume, 20% by value ($ 500 mn globally). Hi-value added , hi-margin products tough to service from offshore locations- current Japanese stronghold
• 2005- 85% exports, worlds 3rd largest CD maker (15-20% MS), capacity 2.4 bn units, focus on DVD
• Top2 Taiwanese firms- Ritek & CMC (70% MS) • R&D with JV and outsourcing tieup worth $ 100 mn with Imation (US) • Indian market- 25 cr in 99 to 600 cr in 2005 to 3000 cr by 2010 • Growth drivers- improved penetration, low CD price points and DVD players following similar
trend • 2004- Technology license agreement with HP to manufacture optical media using 'Lightscribe'
technology, and to manage the manufacturing, marketing and distribution of HP-branded DVD+Rs, DVD+RWs, CD-Rs and CD-RWs, storage media in India and the SAARC region
• Moserbaer is a Contributing Member of the Blu-ray Disc, the basic specifications for a next generation large capacity optical disc video recording format called “Blu-ray Disc”, that enables the recording, rewriting and play back of up to 27 GB of data on a single sided single layer 12cm CD/DVD size disc using a 405nm blue-violet laser.
• The 3rd largest player in the optical storage media segment globally, #1 in India , lowest-cost optical media manufacturer in the world, presence in 82 countries, 1/6 CDs in the world sold by MB
• OEM supplier to 11/12 major global brands • Revenue growing at 5-year CAGR of 42% • Pioneer among globalizing Indian firms, presence 6 marketing offices in India, US and Europe • Strong tie-ups with all major global technology brands • Tie up with HP to manufacture optical storage media using its 'Lightscribe' technology. World cost
leadership, 15-20% cost advantage over competitors, 30% lower investment for similar scale capacities