MARKETING

COMPENDIUM
2020

“ Business has only two

functions- marketing and
innovation.
“
-Milan Kundera

Department of Management Studies

INDIAN INSTITUTE OF TECHNOLOGY DELHI
(Institute of Eminence, Govt. of India)
MARKETING
Marketing refers to activities undertaken by a company to
promote the buying or selling of a product or service.
Marketing includes advertising, selling, and delivering
products to consumers or other businesses.

As per the American Marketing Association: Marketing is an

art and science of choosing target markets and getting,
keeping and growing customers through creating, offering
and freely exchanging products and services of value with
others.
As per Philip Kotler: Marketing is the science of exploring,
creating and delivering value to satisfy the needs of a target
market at a profit. Marketing identifies unfulfilled needs and
desire. It defines, measures and quantifies the size of the
identified market and the profit potential. It pinpoints which
segments the company can serve best and it designs and
promotes the appropriate products and services.
SEGMENT
ATION

IDENTIFIC
ATION

TARGE
TING

CUSTOMER
PROFILING

POSITIO
NING

PROD
UCT

PLA
CE

PRI
CE

PROMO
TION
CUSTOMER FEEDBACK

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SALES vs MARKETING
Marketing and sales are both aimed at increasing revenue. They
are so closely intertwined that people often don’t realize the
difference between the two.

MARKETING SALES
DEFINITION Marketing is the systematic A sale a transaction between two
planning, implementation parties where the buyer receives
and control of business goods (tangible or intangible),
activities to bring together services and/or assets in exchange
buyers and sellers. for money.

APPROACH Broader range of activities to Make customer demand match

sell product/service, client the products the company
relationship etc.; determine currently offers.
future needs and has a
strategy in place to meet
those needs for the long-
term relationship.
HORIZON Long term Short term
STRATEGY Pull Push
IDENTITY Constructs brand Meeting needs in an opportunistic
identity to method driven by human
make it easier to associate interaction.
with.

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CONSUMER BEHAVIOUR
Consumer behavior is the study of an individual, group or
organization selects, buys, uses and disposes products (goods
and services) to satisfy their needs and wants.
Assumption: Consumers are actors in the marketplace. The
roles played by them are
Information provider, from the user to the payer and to the
disposer, consumers play these roles in the decision process.
Abraham Maslow proposed the hierarchy of needs theory
comprising a five-tiered model of human needs. The needs
lower down in the hierarchy and an individual must be satisfied
before they can graduate to the upper level.
Physiological needs: Biological requirements for human
survival, e.g. air, food, drink, shelter, clothing etc.
Safety needs: Protection from elements, security, order, law,
stability, freedom from fear.
Love and Belonging needs: The third level of human needs is
social and involves feelings of belongingness. The need for
interpersonal relationships motivates behavior. E.g. Friendship,
camaraderie, trust and acceptance.
Esteem needs: 1. Esteem for oneself: Dignity, Mastery,
Independence etc.
2. Respect from others: Status and Prestige
Self-Actualization needs: Realizing self-potential, self-
fulfillment, personal growth etc.

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MARKETING PLAN
Today, Segmentation, Targeting and Positioning (STP) is a
familiar strategic approach in Modern Marketing. This
popularity is relatively recent since previously, marketing
approaches were based more around products rather than
customers. So, what does happen in STP model?

This is an audience rather than product focused approach

to communications which helps deliver more relevant
messages to commercially appealing audiences.
Segmentation: Identifying customer needs and segregating
customers into different groups based on their needs.
Targeting: This is the evaluation stage. The groups are
evaluated on the basis of their potential and commercial
attractiveness. More than one group can be found to be
valuable and selected group/s can be taken as the target
segment.
Positioning: Positioning is the output function of the model.
In this step, the customer perception of the good/service is
taken into consideration. How a customer perceives a
product/brand decides whether they will be associated with
it or not.
The next step involves the formulation of the marketing mix.

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Perceptual Maps:
A perceptual map is of the visual technique designed to show
how the average target market consumer understands the
positioning of the competing products in the marketplace. In
other words, it is a tool that attempts to map the consumer’s
perceptions and understandings in a diagram.

MARKETING MIX
Marketing Mix refers to the 4 P’s of Marketing. Its origins can be
traced back to the late 1940’s. The 4 P’s of Marketing are the
combined variables for a marketer with which he/she can
change the entire nature of marketing pursuit.

Product: Product refers to a commodity or service that caters

to the needs of the customers. It has many other factors
attached to its success like design, technology, usefulness and
other accessories.

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Price: The monetary value that a customer pays for the
product is the price. The price is determined by numerous
factors such as cost, brand, perceived value, competitor’s
pricing etc.
Place: Place is the channel where the product meets its target
audience. It includes the distribution channel.
Promotion: Promotion refers to the communication methods
used to inform, persuade and remind the target market of the
products or services.
7P’s OF MARKETING (Service Sector)
Apart from the 4 P’s the other P’s are:
People: Employees and stakeholders
Process: Delivery of the product to the customer until it
reaches the stage of customer satisfaction.
Physical Evidence: The ambience in which the service has
been produced or provided.

PUSH VS PULL MARKETING

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Push marketing is a promotional strategy firms used by firms
to drive or ‘push’ their products and services to the customer.
Often there is a third-party firm involved to gain exposure.
Some common examples of the tactics include email, social
media, direct mail, print and broadcast. Push Market is often
Sales oriented and therefore short term focused.
An example of push marketing can be seen in retail stores that
highlight a product. The product manufacturers offer sales
incentives or discounts to the retail stores for pushing its
products onto customers.
For a push marketing campaign to succeed, you need to push
your message often and to a big audience in order to draw in
your leads. The audience needs to be disturbed sufficiently in
order for you to get the needed response.

Pull marketing is a promotional strategy used to get

consumers to come to you. Demand is driven or ‘pulled’ by the
consumer rather than the vendor. Common sales tactics used
for pull marketing include; word-of-mouth, referrals, and
advertised sales promotions. Pull marketing is more long-term
focused. Firms look to create brand loyalty with the consumer.
An example of pull marketing is in cosmetics or beauty goods.
Initially, the manufacturer advertises the product through
various channels. As the advertisement gains traction, retailers
pick it up and people begin to purchase the product.

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PRODUCT MIX
Product mix, also known as product assortment, is the
total number of product lines that a company offers to its
customers. The product lines may range from one to
many and the company may have many products under
the same product line as well. All these product lines
when grouped together form the product mix of the
company.
Width: The width of the mix refers to the number of
product lines the company has to offer.
For e.g., If a company produce only soft drinks and juices,
this means its mix is two products wide. Coca-Cola deals
in juices, soft drinks, and mineral water and hence the
product mix of Coca-Cola is three products wide.

Length: Length of the product mix refers to the total

number of products in the mix. That is if a company has 5
product lines and 10 products each under those product
lines, the length of the mix will be 50 [5 x 10]

Depth: The depth of the product mix refers to the total

number of products within a product line. There can be
variations in the products of the same product line. For
example – Colgate has different variants under the same
product line as Colgate advanced, Colgate active salt, etc.

Consistency: Product mix consistency refers to how

closely products are linked to each other. Less the
variation among products more is the consistency.

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 For example, a company dealing in just dairy products has
more consistency than a company dealing in all types of
electronics.
The consistency of product mix is advantageous for firms
attempting to position themselves as a niche producer or
distributor. In addition, consistency aids with ensuring a
firm’s brand image is synonymous with the product or
service itself.

PRODUCT LIFECYCLE
Product life cycle is the set of stages a product goes through
during its lifetime. The journey starts from the day it is just an
idea to the day it is finally removed from the market. There are
4 different stages in the Product life cycle:

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Introduction Stage

This stage is where the idea becomes an actual product

for sale in the market. A product is introduced to the
market during the introduction stage. This stage involves
business capturing the market. Every customer is the new
customer. Sales are less. This stage involves creating a
buzz. A buzz about the new brand is created in the market
and the potential customers and competitors get to know
about the product.
There are no economies of scale in the introductory stage
as the demand is yet to be created. This high production
cost combined with distribution and marketing and
promotion costs are high for the start. Since the demand is
yet to be created, the business starts off with a loss.

Growth Stage

A product finds its place in the market at the growth stage.

This stage is characterized by increased sales and
revenue. Profits also improve as the company gets a
benefit of economies of scale with the rise in customer
demand. The Company has already worked on creating a
brand awareness in the introductory stage and the
customers are more aware of the brand. Growth stage
witness customers repeating the purchases. They
might have already set the product as a preference in this
growth stage. This increases the sales of the sales.
Increased sales results in more demand for the product.
More demand means more production, which results in
the company getting the benefit of economies of scale.

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The increased popularity of the brand results in an increase in
the competition in the market. Growth stage witnesses a
change in marketing focus of the companies. They now spend
more resources on increasing brand equity and brand
preference. More money is spent on advertising, digital content
and public relations so as to engage the customers for long.

Maturity Stage

Maturity stage is when sales are at their peak and grow at a

slower pace. Competitors’ product becomes more similar and
it becomes hard to retain the market share during the maturity
stage. Hence, the company starts more aggressive practices of
lowering the price, sales promotion, adding more product lines,
modifying existing product lines, opening new distribution
channels and rewarding the existing channels.
The demand for the product divides as product differentiation
decreases among the competitors’ products. The company
comes up with different ideas to differentiate its product from
the competition. This result in innovation as new ideas for
production, pricing, placing and promotion emerge. Marketing
focus shifts to more of sale promotion and direct selling.
Businesses focus more on capturing the competitors’ market
share by making customers more brand loyal. Incentives are
also provided to sellers to increase the shelf space of the
product.

Decline stage

A peak is always followed by a fall. Technological

obsolescence, change in customer tastes, market demand
saturation, or introduction of a new better substitute etc. can
lead to the decline of the existing product

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. This stage is the beginning of the end of the product.
This stage sees a fall in market demand of the product which
results in a decrease in sales and decrease in profits,
eventually. In hope of maintaining intact the demand for the
product, the company decides to decrease its price. Very few
options are left with the company during the decline stage. It
either:

• Withdraws the product from the market.

• Tries to incorporate innovation, or
• Waits for competitors to exit.

BRAND

Do you know what is the most recognizable word on Earth? It’s

‘OK’
What about the second most recognizable word? It is Coca-
Cola. That is the power of a Brand. Let us first try to
Understand what Brand is. We live in a brand conscious world,
in fact, according to some studies India is one of the most
brand-conscious countries in the world. But a brand is more
than just a logo or a name. A brand is a feature that
distinguishes an organization or product from its rivals in the
eyes of the customer.
Brands are used in business, marketing, and advertising.

Branding is a process which involves creating a specific name,

logo, and an image of a product, service or company. This is
done to attract customers. It is usually done through
advertising with a consistent theme. Branding aims to establish
a significant and differentiated presence in the market that
attracts and retains loyal customers.

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Branding should be planned according to the targeted
audience. No business firm can target the entire population.
Brand loyalty is the highest achievement or apex of any
company. A customer who buys the product of a company
extensively is known as a brand loyalist. Many consumers
prefer using certain brands of clothing, deodorants or tubes of
toothpaste, for example. They like how these brands benefit
them. Brand loyalty can be built by staying in touch with the
customers, asking them for their reviews.

Lovemarks: Modern marketing is about creating ‘lovemark’

brands that engage
emotionally with consumers and create loyalty beyond
reason, one of the world’s
leading brand strategist claims. According to Saatchi & Saatchi
executive chairman,
Kevin Roberts, today’s successful brands tune into a
customer’s emotional needs and wants, and strive to create
“movements of people”. To get there, CMOs must not only
harness data and digital, they also require an IQ in creative
leadership.

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Lovemarks thinking is the unique way we look at the
relationships people have with products, services and entities.
Lovemarks are the future beyond brands because they inspire
Loyalty Beyond Reason. Lovemarks transcend brands. They
deliver beyond your expectations of great performance. They
reach your heart as well as your mind, creating an intimate,
emotional connection that you just can’t live without. Take a
brand away and people will find a replacement. Take a
Lovemark away and people will protest its absence.
Lovemarks are a relationship, not a mere transaction. You don’t
just buy Lovemarks, you embrace them passionately. They are
about Mystery, Sensuality and Intimacy.

ABELL’S FRAMEWORK
The model is used to analyze the scope of the operation for a
business.
•Customer Groups (served by business)
•Customer Needs (what needs are met?)
•Technology (how needs would be met?)

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•Customer Needs: Identifies and lists down all the customer
needs that are relevant to the company in question. Customer
needs are identified based upon the product offering and a link
is established to the customer benefits.

•Customer Groups: It is vital for every organization to

understand how to segment the market and which segments to
target in order to successfully sell a product to them. Once the
market has been segmented, the company needs to work
toward acquiring as much knowledge as possible about the
different target groups and offer specific products or
campaigns to these segments.

•Technologies: This covers the ambit of alternate uses of an

existing product to cater to the needs of the customer groups
and maximizing the use of the pre-existing product. Usual
means used to convey this are marketing campaigns to
educate the customer of the same.

LIMITATIONS:
•Strict marketing emphasis limits the framework from being
widely used to define competitive strategies for a business.
•There is no room to accommodate external factors such as
governments and regulatory bodies.
There is only a provision for abstract growth directions and the
model does not provide support to determine the appropriate
size and scale of the business.

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BCG MATRIX
The Boston Consulting Group’s product portfolio matrix is
designed to help with long term strategic planning, to help a
business consider growth opportunities by reviewing its
portfolio of products to decide where to invest, to discontinue
or develop products. It’s also known as the Growth Share Matrix.
The matrix is divided into 4 quadrants based on analysis of
market growth and relative market share.

1. DOG Products: Low growth or market share and should

be eliminated from the company’s portfolio.
2. Question Mark Products: High growth market share with
low market share. Often require significant investments to
push them into star quadrant.
3. Star Products: High growth market share with high
market share. Can be the market leader though require
ongoing investment to sustain.
4. Cash Cow Products: Low Growth Market share but High
Market Share. This is the product that the company uses
to reap the profits. These are generally well-established
products.

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PRICING STRATEGY

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