Marketing Management

Module 1
Marketing management – market and marketing – Meaning – definition of marketing – Marketing concepts –
marketing environment – Functions of ,marketing – marketing management-marketing mix – 4 P’s and 4 C’s –
importance of marketing mix – factors affecting marketing mix – Market segmentation – concept – need – basis –
benefits – market targeting – market positioning – differentiated and undifferentiated marketing .

Marketing: Definition
According to the famous Marketing Guru Philip Kotler “Marketing is societal process by which individuals and
groups obtain what they want and need through creating and exchanging products and value with others”.
 Societal Process - Social Process
 Individuals and groups - Customers
 Wants and Needs
 Creation and Exchange
 Product
 Value - Price
Management : Definition
Mary Parker Folett defines management as “the art of getting things done through others”.
Manage - Men – Tactfully*
*Tact-Strategy
Functions of Managemant

Marketing is a combination of four elements:

1)Development of product –Product
2)Determination of price-Price
3)Distribution-Place
4)Advertisement Strategy-Promotion
Features of Marketing
 Organisational function
 Societal process
 Management process
 Commercial functions (Exchange)
 Manufacturing process (Right product, Right place, Right time, Right price).
 Process of utilising resources.
Objectives of Marketing
 Identify target market (customers)
 Identify needs and wants
 Develop product
 Determine price
 Distribute product
 Product promotion
 Satisfy changing needs
 Undertake research
 1) Barter Stage : People exchanged goods for goods without using medium of exchange such as money.
 2) Production Stage : The business enterprise is highly concerned with production issues.
 3) Sales Stage : Advertisements and other sales promotion techniques were used to increase sales
volume.
 4) Marketing stage : The needs and wants of consumers governed business decisions and customer
satisfaction is the prime motive.

Importance /Benefits of Marketing

1.Benefits to the Society
 Improves quality of life.
 Act as a connecting link( Producer &Consumer)
 Create Competitive market environment.
 Generate employment opportunities.
 Ensuring availability of product
 Provide education to consumers.
 Provide choice.
2.Benefits to the Firm
 Helps to identify customers .
 Helps to develop products.
 Determines demand .
 Provide market information.
 Deliver the product.
 Identify competitors.
 Identify new product according to changing needs
 Identify new customers(Target Market)

Role of Marketing in Economic Development

The following things helps in the economic development of nation:
 Increase the level of business activities & National income.
 Develop basic industries.
 Increase foreign exchange earnings.
 Create demand and increased consumption.
 Generate employment opportunities & Purchasing power.
Marketing Utilities
1. Form Utility-: (Usable form, include physical characteristics and shape)
2. Place Utility-: (Offer product at the place of customers to ensure easy availability)
3. Time Utility -: (Ensure availability of product on right time required by customers
4. Possession Utility-: (Ownership and possession is transferred from Seller to Buyer)

• Marketing Process
• Step 1- Market Analysis ( To identify problems &prospects in marketing)
• Step 2- Formulation of Marketing Strategy (Plan of action to achieving desired goal
• Step 3 -Decision regarding 4p’s ( Different decisions to satisfy customers)
• Step 4 -Implementation and Control (Launching of product, Monitoring movement, Identify Strength
&Weakness)

Market
The term market is derived from the Latin word ‘Mercatus’
Mercatus- Place of Trade
According to Philip Kotler “ market is an area or atmosphere for a potential exchange”
 Difference between market and marketing
Market Marketing
 Total demand of a product Organisational function
 Place of exchange All functions related to physical movement
 Objective-Physical flow Objective-Customer satisfaction
 Price , Demand, Supply & purchasing Planning , Designing , pricing ,
power are the major factors advertisement are the major factors
 System of existing &potential buyers Process of making the market

Classification or Types of Market

• Place or Geographical Area
a) Local Market-(Market in a particular locality, Offer good and services to people in that area)
b) Regional-(Larger than local market-Covers particular area of the country)
c) National-(Covers whole nation)
d) International –(Cross the borders of the nation –Global market)
• On the basis of Time
a) Very Short Period-(Very short period-lasts for single day or few days - Example: market for perishable
goods)
b) Short Period-(Last for a weeks or few weeks.)
c) Long Period-(Last for long time )
• On the basis Sales
a) Wholesale-(Sold goods in bulk quantities to retailers as well as consumers)
b) Retail-(Sold goods in small quantities to consumer
• On the basis of type of goods
a) Product-(Delivers tangible goods-We can see and touch)
b) Service-(Delivers intangible goods-We can’t see and touch
• On the basis use of goods
a) Consumer-( Sells goods for personal consumption -B2C )
b) Industrial-(Sells goods for business purpose-B2B)
• On the basis nature of goods
a) Financial-( Financial instruments are bought and sold-Example: Share, Debenture…..)
b) Commodity-(Deals with hard & soft commodities)
• On the basis Competition
a) Perfect-(Large number of buyers and sellers-Similar or identical products-Free entry and exit-No
restrictions for starting and closing the business-Complete information)
b) Imperfect-(Large number of buyers and sellers – Deals with differentiated products .)
c) Monopoly-(Single seller and large number of buyers)
d) Monopolistic-(Many producers producing differentiated products)
e) Oligopoly-(Only small number of sellers and large no of buyers)
f) Duopoly-(Two sellers dominating the market)
• On the basis nature of transaction
a) Spot-(Immediate payment and receipt of cash)
b) Future-(Payment and receipt is made on a future date)
CONCEPTS / ORIENTATIONS OF MARKETING
All marketing decisions revolve around the customers. The major concepts of marketing in its different stages of
evolution are as follows;
• Production Concept-
This concept focuses on reducing production costs by way of mass production.
 • Product Concept –
A firm following this concept tries to introduce the best product, based on quality and features. The firm
utilizes its fullest energy and efforts in the continuous improvement of the product.

• Sales Concept-
The focus of this concept is to manufacture the product, and then take maximum efforts to sell it in the
target market.The concept holds the view that sales volume cannot be increased by introducing a superior product.
Firms which uphold this concept concentrate on intense sales promotion efforts
• Market Concept –
This concept views customer as the key element of the marketing process. Firms attempt to know the needs
and wants of the customers through market surveys and research. All marketing activities revolve around
customers and they are considered as the king of the business.
• Societal Concept –
The societal marketing concept holds that a firm should make good marketing decisions by
considering consumers' wants, firm's requirements, and the society's long - term interests. The concept emphasizes
that marketing activities should not harm the interests of society.
Marketing Environment
The marketing environment is a group of factors comprised of both controllable and uncontrollable forces
that affect the firm .Certain factors in the marketing environment are internal and specific to the firm whereas
certain factors are outside and general to the marketing enterprise. A deep understanding of these
environmental factors is highly essential for the success of the marketing activities of a firm. The marketing
manager has to formulate the marketing policies and programs of the company in accordance with the marketing
environment.
Micro Environment of Marketing
Micro environmental factors are specifically related to the marketing firm. They are close to the organization
and have a direct impact on the marketing operations. It includes
• The Company
• Suppliers
• Marketing Intermediaries
• Customers
• Competitors
• Public
• The Company
The type of organization, its objectives, structure, management, vision and mission are important
factors influencing the marketing policies and programs.
• Suppliers
Suppliers are parties who deliver the raw materials for the production of goods or services.The
quality, quantity, cost and availability of the raw materials depend on the type of suppliers. Therefore suppliers
critically influence the marketing activities of an organization.
• Marketing Intermediaries
Marketing intermediaries are parties assisting in the promotion and distribution of goods and
services of an organization to consumers. Wholesalers, retailers are some of the marketing intermediaries.

• Competitors
The competitors are rival firms marketing products and services similar to that of a firm. In a market
situation all firms have to set their marketing strategies in accordance with the nature and degree of competition
they face.
• Customers –
Firms have to examine the needs and interests of their target market. If the products and services
fail to address the needs of the customers in the target market, firms cannot survive in the market.
 • Publics-
Public in the micro environment of marketing means any party who maintains an interest in the marketing
activities of a firm.
The major types of publics are;
 Financial Publics: Individuals or institutions who grant financial assistance to an organization for its
marketing activities.
For example, banks and other financial institutions.
 Government Publics: Central and state governments introduce and implement rules and legislations which
monitor, regulate and control the marketing activities.
 Citizen Public: The marketing activities of organizations are influenced by the needs and interests of the
different citizen groups such as the consumer organizations and environment associations.
 Local Public- Peoples who are directly or indirectly exposed to the benefits and shortcomings of the
marketing activities of a firm are referred to as local publics.
 General Public: Public at large or the mass population comes under the purview of general public. The
perception and attitude of the public directly influence the consumers buying habits.
 Internal Public: People inside the organization come under internal public Internal publics include
employees, managers and board of directors.
 Media Public: Agencies that publish information, features and news about the products and services of a
firm. Media public includes newspapers, paper and online magazines blogs, social media, radio and
television.

 Citizen Public: The marketing activities of organizations are influenced by the needs and interests of the
different citizen groups such as the consumer organizations and environment associations.
 Local Public- Peoples who are directly or indirectly exposed to the benefits and shortcomings of the
marketing activities of a firm are referred to as local publics.
 General Public: Public at large or the mass population comes under the purview of general public. The
perception and attitude of the public directly influence the consumers buying habits.
 Internal Public: People inside the organization come under internal public Internal publics include
employees, managers and board of directors.
 Media Public: Agencies that publish information, features and news about the products and services of a
firm. Media public includes newspapers, paper and online magazines blogs, social media, radio and
television.
• Natural Factors-
Natural factors include the utilization of natural resources for the manufacturing of products.
Wastages of raw materials and finished goods can cause harm to the environment.

• Technological Factors-
Innovations and modifications in production and marketing are the outcomes of advancements in
technology. Marketing activities are subject to changes in technology
• Political Factors-
Political factors include government policies and various rules and legislations affecting the
marketing operations. Companies have to frame their marketing activities in accordance with the laws the country
FUNCTIONS OF MARKETING
1. Functions of Exchange
2. Functions of Physical Supply
3. Facilitating Functions.
4. Market Information
1. Functions of Exchange
a) Buying and Assembling -Buying is the first stage in the process of
marketing. A manufacturer has to purchase raw materials for producing goods. Similarly a wholesaler is
required to buy goods from the manufacturer to sell them to the retailer. A retailer has to buy goods from the
wholesaler to sell it to the consumers.
 Assembling is the process of bringing together similar goods purchased from different sources for
the purpose of selling. Assembling starts after the buying of goods.
b) Selling- It is the stage where ownership and possession of the goods and services are transferred from the seller
to the buyer. It is the act of offering products and services to the buyer in return for money.

2. Functions of Physical Supply

a) Transportation- In marketing, transportation means the movement of goods from the place of origin to the
place of customers. Road, water and air are the important modes of transportation used for transporting
goods from one place to another.

b) Storage and Warehousing -Storage and warehousing facilities

are used by the manufacturers, wholesalers and retailers for
preserving the raw materials and finished products to ensure
an uninterrupted and smooth supply of goods to consumers.
3. Facilitating Functions
Facilitating functions are subsidiary functions which are considered as the supporting functions of marketing.

a) Financing -Marketing is an economic process which requires money to perform all its functions. The
effectiveness of marketing functions depends on the availability of funds.
b) Risk Bearing -Risk is inherent in every business. It is not avoidable in marketing also. Risk starts from the first
stage of a marketing process. An efficient marketer can adopt certain measures to reduce or minimize the risk
factors but it is not possible to keep away from risk elements completely.
c) Standardisation and grading.
Standardisation means establishing standards for the products. Standards are generally determined on the
basis of colour , weight ,quality etc.
Grading is a part of standardization. It is a process of classifying the products on the basis of quality, size,
shape, color, weight etc. Grading helps to determine the value of the product as the best grade commands the
highest price.
4) Market Information
Collection of relevant market information is an important function of marketing. A marketer requires
information regarding the needs and wants of the customers, market condition, competitors' products etc. to
formulate ad equate marketing strategies for his products.
MARKETING MANAGEMENT
MEANING
 Management of marketing activities is called Marketing management.
 Marketing management is concerned with all the activities towards the attainment marketing goals
 Functions of marketing management are planning, organizing, staffing,directing,coordinating, budgeting ,
reporting and controlling of marketing activities.

DEFINITION

According to Philip Kotler “Marketing management is the process of planning and executing the conception
(marketing idea), pricing, promotion, and distribution of goods, services and ideas to create exchange with target
groups that satisfy customer and organizational objectives”.
FEATURES
 Functional branch of business management.
 Process of planning and executing marketing functions.
 Attempts to achieve the marketing goals of a firm.
 Focus on the optimum use of resources and efficiently attain the marketing goals of the firm
 Makes marketing concepts into practice.
 OBJECTIVES
1. To plan , organize, direct and control all the marketing. activities of the firm.
2. To give maximum satisfaction to customers.
3. To ensure optimum utilization of resources.
4. To expand the customer base of the firm.
5. To formulate an ideal marketing mix for the firm.
6. To create and maintain a good image for the firm and its product in the market.

FUNCTIONS
Functions of marketing aim at achieving the marketing goals of a firm. The important functions of
marketing management as follow;
1. Determining the Marketing Objectives
The functions of marketing management begin with identifying and defining the marketing
objectives of the firm. The marketing objectives may be short term or long term.
2. Planning
After clearly specifying the marketing Objectives, the important function of the marketing
management is to formulate plans to achieve those objectives. This includes formulation of marketing
programs, marketing strategies and sales forecasting.
3. Organizing
Organizing function of marketing management involves the coordination of adequate resources to
implement the marketing plan.
4. Coordinating
Coordination refers to integration of the various activities of marketing. It involves coordination
among various activities such as sales forecasting, product planning, product development, pricing,
distribution, promotion, transportation, warehousing etc.
5, Directing
Direction in marketing management refers to leading and motivating the people associated with the
marketing efforts in the desired path to attain the objectives.

6. Controlling
Control function aims at improving the effectiveness of the marketing activities. It involves
establishing standards for marketing activities and evaluation of actual performance to detect the variations
from the standards. Corrective measures are adopted when the actual results are less than the standards
fixed.
7. Staffing
Success in the marketing efforts depends on the efficiency of people employed in this process.
Staffing function of marketing management searches and selects competent people to perform the
marketing activities.
MARKETING MIX / 4 P'S
The basic components of marketing mix are product, price, place and
promotion. It is also known as 4 P's of marketing. The marketing strategies
of a firm revolve around these four elements. A firm has to prepare a mix of
right product, right price, right place and right promotion to attain success
in marketing and satisfy its customers.
DEFINITION
According to Philip Kotler , "Marketing mix is the set of marketing tools
that the firm uses to pursue( Accomplish) its marketing objectives in the
target market".
 FEATURES OF MARKETING MIX
It is a combination of four important marketing variables such as
product, price, place and promotion. These four variables depend on each
other.
 It is a tool adopted by the firm to achieve marketing targets.
 The mixture or composition of the four elements is not rigid. It can be
altered on the basis of the changes in the target market.
 Periodical adjustments and modifications in the marketing mix are
necessary to improve customer satisfaction.
 Marketing mix aims at giving maximum satisfaction to the customers.
The marketing mix is to give the customers the right product at the
right price, in the right place through right promotional measures.

ELEMENTS OF MARKETING MIX

PRODUCT
A product is something a firm offers to give satisfaction to consumers. It is the final output of a
production process. Product is the most powerful weapon in marketing. It is considered as the soul of the
marketing mix.
The major decisions based on product in marketing include:
Product development, Branding, Packaging, Labeling and other features of the product. The product
manufactured for market should be in accordance with the needs and expectations of the target market.
DEFINITIONS
According to Philip Kotler, "a product is anything that can be offered to a market for attention,
acquisition, use or consumption that might satisfy a want or need".
PRICE
Price is defined as the value that is required to purchase a specific quantity of a good or service: It is
the consideration given in exchange for the transfer of ownership and possession of goods and services.
Pricing is also used as a strong weapon for
beating competition in the market. Pricing decisions and strategies directly influence
the sales volume and profits of the firm.

OBJECTIVES OF PRICING
1. Maximize profit
2. Increase sales volume
3. Increase market share
4. Growth of the firm
5. Discourage new entrants into the industry
6. Enhance the image of the firm and the product
7. Encourage customers to buy the product
8. Discourage competitors from cutting prices
9. Get competitive edge.
PLACE
Place is defined as the location where a firm expects to find its customers and consequently, where
the sale is carried out. Place refers to the actual
physical position of the customer in a geographic area.
Place in marketing means the area or location of the consumers and not the place of the business. A
firm has to understand the place of the consumers and choose adequate distribution network or channel to
reach that place.
 The major areas covered in place decision making are;
1 Distribution channel
2. Transportation
3. Warehousing
4. Inventory management
5. Order processing
6. Logistics management.
PROMOTION
Promotion is the communication link between the firm and the
consumer. Promotional measures are necessary to inform the consumers
about a product and its features. It helps to persuade customers to buy a
product there by increase sales volume.

OBJECTIVES OF PROMOTION
1. To inform the consumers about the product (product awareness).
2. To encourage the consumers to purchase the product (creation of interest).
3. To increase demand (building demand).
4. To differentiate a product from other similar products in the market
(product differentiation).
5. Strengthening the image of the brand in the market (Create brand image).
PROMOTION MIX
The overall marketing communication programs of a firm are known as promotion mix. The major
elements of a promotion mix are as follows;
1. Advertising -It is defined as any paid form of non - personal communication of products through electronic
or print media in order to inform and influence the customers.
2. Personal Selling -It is a process of helping and stimulating the consumers to purchase a product or service
through oral presentation. For example, canvassing customers personally or through telephone and other
electronic means, sales presentations etc.
3. Sales Promotion -It is providing incentives to the customers for encouraging them to purchase the
product. For example, gifts, scratch cards, discount offers etc.
4. Publicity -It is giving favorable presentations and news about the product and its features in the media.
For example, articles and reports in newspapers and magazines, radio and TV presentations, charitable
contributions, seminars etc.
IMPORTANCE OF MARKETING MIX
• Development of effective marketing strategies.
• Effective communication.
• Value creation and modification.
• Customer satisfaction.
• Gain competitive advantage.
1. Development of effective marketing strategies.
Marketing mix provides a clear direction to the marketing functions. It helps to analyses the role of
product , price ,place and promotion in different market situations.
2) Effective communication.
An ideal mix of marketing components helps the organization to effectively communicate the
relevant information to the target market.
3) Customer satisfaction.
An ideal mix of marketing components helps to attract and retain customers . Customer satisfaction
can easily attained through suitable marketing mix.
4) Value creation and modification.
Marketing mix helps the companies to study the merit and demerits of the product, price ,place and
promotion strategies. Adequate changes and modification can be made on the basis of this study.
5) Competitive advantages.
Right product, price ,place and promotion helps a firm to attain success in the market.
 FACTORS AFFECTING MARKETING MIX
 Availability of funds: Financial resources govern the marketing mix.
 Requirement of target market: The needs of the customers influence the proportion of marketing mix.
 Size of the market: Proportion of marketing mix varies on the basis of market size.
 Competition: Firms use marketing mix as a response to actions of competitors.
 Technology: Development of science and technology is the major reason behind the revolutionary changes
in modern marketing.
4 C’S OF MARKETING
1. Consumer / customer: Consumer or customer enjoy the prime position in modern marketing.. So
identification & satisfaction of the customer needs and wants is the ultimate aim of marketing. Instead of
focusing the product aspect in 4 P’s of marketing, the firm need to emphasis on the taste and preference of
the consumers.
2. Cost: The cost concept replaces the price concept by offering products to consumers at a fair cost. Price is
constituted by the element of profit and aims at maximization of profit but cost aim at giving more value to
customers at same cost.
3. Convenience: This concept reminds the company to search and find the convenience of the consumer to
purchase product or services with respect to the time and place of their purchase.
4. Communication: Communication refers to the two way exchange of information between the customer
and the marketing firm instead of mass promotion. It aims at more meaningful relation with customer.

MARKET SEGMENTATION
MEANING : Market segmentation is a process of identifying the areas of market that are different from one
others. It is the process of dividing the market on the basis of different needs and characteristics. Market can
be segmented on basis of age, sex, income, education, occupation etc.
DEFINITION : According to Cundiff and Still , “market segments are grouping of consumers according to such
characteristics as income, age, degree of urbanization, race or either classification, geographic location or
education”
FEATURES OF MARKET SEGMENTION
• It is the process of dividing a market into different sections or groups on the basis of consumer needs and
behaviors.
• The aim of market segmentation is to identify and select the best suitable target market.
• It is a process which narrows down a large market into small segments.
• It is the process of dividing a heterogeneous market into different homogeneous segments.
• It leads to market targeting and product positioning. It popularly known as STP(Segmenting, Targeting and
Positioning).
• Segmentation is usually adopted by the firms when it is difficult to carry out mass marketing.
NEED & IMPORTANCE OF SEGMENTATION
i. It is essential to learn and understand the behavioural pattern of consumers.
ii. It identifies a market segment which a firm can effectively manage.
iii. It gives information about 4P’s
iv. Segmentation is necessary to locate homogeneous segments.
v. It helps to study the nature and degree of competition in a particular market.
vi. It helps to identify and concentrate on the special needs of a particular segment of a market.
NEED & IMPORTANCE OF SEGMENTATION
i. It is essential to learn and understand the behavioural pattern of consumers.
ii. It identifies a market segment which a firm can effectively manage.
iii. It gives information about 4P’s
iv. Segmentation is necessary to locate homogeneous segments.
v. It helps to study the nature and degree of competition in a particular market.
vi. It helps to identify and concentrate on the special needs of a particular segment of a market.
 ADVANTAGES OR BENEFITS OF MARKET SEGMENTATION.
The underlying principle of market segmentation is divide and conquer
• Helps in better understanding of customer needs and wants.
• It helps the firm to differentiate their products and services.
• Firms can design and redesign product and services to meet the market needs.
• It give firms new market opportunities by identifying the unexplored segments of a market.
• Helps the firm to select most approachable market segments.
 Helps firms to study the behavior and buying motives of consumers in the market.
 Helps firms to classify the most profitable and least profitable market segments.
 Helps firm to avoid unprofitable markets.
 Enables a better positioning of the products.
 Helps firms to make proper allocation of marketing resources.
 Helps the firm to become market leader.
DISADVANTAGES / LIMITATIONS OF MARKET SEGMENTATION
• Increase in marketing expenses.
• It is difficult to carry segmentation when there are great difference in consumer behavior.
• Firm has to bear additional cost and expenses to formulate different marketing mix for different market
segments.
• Segmentation is not beneficial or practical in the case of market where the buyer are small in number.
• Products get a limited coverage.
MARKET SEGMENTATION PROCESS/STEPS
Segmentation is the process of dividing a heterogeneous market into different
homogeneous segments that facilitate the easy marketing of products in the target market. The following
are the major steps in segmentation process:
1. Identification of the market
2. Identification of the market needs
3. Division/segmentation of the market(Segmenting stage)
4. Study of the different segments(Segmenting stage)
5. Selection of a particular market.(Targeting stage)
6. Formulation and implementation of marketing strategies.(Positioning stage)

1)Identification of market.
The first step in segmentation is to identify a market so as to select the most appropriate
target market and develop a marketing mix accordingly.
Eg: Travel market service.
2) Identification of the market needs.
In this stage, a firm is required to interact with the potential consumers to know more about
their interest and demands.
Eg: After selecting the travel service market , a firm is required to conduct a detailed study of
the needs and wants of consumers of this market.
3) Division or segmentation of the market.
On the basis of identified needs of the market, the firm has to divide the selected market
into different sub markets or segments.
Eg: The travel service market can be divided into different sub market such as Air, Bus, taxi,
ship etc.
4) Study the different market segments.
In this stage , the firm has to closely examine and study the needs , preference , buying
behavior and the size of identified segments. This helps the firm to sub divide the segments into further sub
markets.
Eg: In airline travel market- sub divided into first class, business class, economy class etc.
 5) Selection of a particular market segments.
After studying the needs of different market segments , the firm has to select an appropriate
market segments. The selection is depends on marketing resources possessed by the firm and its ability to
address the needs of the segments.
Eg: Economy class travel service.
6)Formulation and implementation of marketing strategies.
During this stage a firm formulates and implements adequate strategies to market its
products in the selected market segments . Here the firm is trying to create a place in the mind of target
consumers.
MARKET SEGMENTATION PROCESS
• IDENTIFICATION
• SEGMENTATION
• TARGETING
• POSITIONING
• EVALUATION
• CORRECTION

PREREQUISITES/ REQUIREMENTS FOR EFFECTIVE SEGMENTATION

i. Measurable: Segmentation is carried out on the basis of certain variables. These variables must be clear
and measurable.
ii. Accessible: Firm should make sure that the segmented market is conveniently reachable for consumers.
iii. Substantial: It evaluates the degree of profitability of a segment. The company should ensure that the
segment is economically feasible.
iv. Differential: A marketing firm should ensure that the segments identified are distinguished and they
respond differently to different marketing mix strategies.
v. Actionable: It is the ability of a firm to formulate and implement adequate programmes.
BASE FOR SEGMENTATION/ SEGMENTATION VARIABLES
 A. DEMOGRAPHIC SEGMENTATION
Segmentation based on demographic characteristics such as age, sex, income, occupation,
education, family lifecycle etc.
 B. GEOGRAPHIC SEGMENTATION
Segmentation based on physical location or region, size of metropolitan area, population density
and climate etc.
 C. PSYCHOLOGICAL SEGMENTATION
Separation based on the psychological characteristics or inner intrinsic qualities like personal
traits, interest life style etc.
 D. SOCIO-CULTURAL SEGMENTATION
Segmentation based on social values , culture, religion, race and nationality etc.
 E. BEHAVIOURAL SEGMENTATION
Based on consumer knowledge , usage and attitude towards product. It includes:
 Purchase occasion
 Benefit sought
 User status
 Usage rate
 Loyalty status
 Buyer readiness stage.
 Attitude
 MARKET TARGETING
Market targeting is the process of identifying groups of consumers who are most likely to
purchase a specific goods or service. After the segmentation a marketing firm has to formulate adequate
strategies for the particular segments.
DEFINITION
Marketing targeting is defined as ”the process of evaluating each market segment’s
attractiveness and selecting one or more segments to enter”.
TERMS USED IN MARKET TARGETING
 TARGET MARKET
Target market refers to the specific market focused by a firm to carry out its marketing activities
 TARGET MARKETING
It means the overall marketing efforts taken by a company to meet the requirements of the target market.
 MARKET TARGETING
It is the process whereby one or more of the market segments previously identified are evaluated and
selected.
TYPES \APPROCHES MARKET TARGETING .
UNDIFFERENTIATED MARKETING
This is also called Mass marketing or Zero segmentation. The major objective of
undifferentiated market is to cover large number of buyers with the same product.
ONE PRODUCT ENTIRE MARKET

2. DIFFERENTIATED MARKETING
If the firm decides to target several segments and develops distinct
products with separate marketing mix strategies for different segments.
Segment 1
COMPANY Segment 2
Segment 3
3.CONCENTRATED MARKETING
This type of marketing targeting concentrates on one particular segment. It is also known as Niche
marketing.

BENEFITS OF MARKET TARGETING

• It helps the firm to conduct a detailed analysis of the different segments identified and select the best
market segments.
• Enables a firm to make a comparative study of different market segments.
• Helps a firm to determine where and how to market its products and services.
• A firm can decide the nature and course of its marketing strategies.
• It helps the firm to properly allocate and utilize the marketing resources (Men, Money, Material,
Machinery)
MARKET TARGETING PROCESS /STEPS
Evaluation of the segments
 The process of market targeting begins after the completion of the market segmentation process.
 Factors to be considered during the evolution stage are profitability, size and structure of the segment
 Ideal segment gives maximum financial return, sales volume and minimum competition.
. Selection of the segments
 In selection stage the firm select one or more ideal segments from identified market segments.
 After the detailed evaluation of risk and return factors of different segment and choose the best segment
or segments.
 Selecting the suitable market segment a firm formulates the appropriate target marketing strategies.
 MARKET POSITIONING
 Positioning is the last phase in the Segmentation , targeting and positioning process. It is the process by
which firm create impression in customer mind.
 A firm create its unique image for its product through a process of positioning.
 According to Philip Kotler “ positioning is the act of designing the company’s offering and image so that
they occupy a meaningful and distinct competitive position in the target customers mind”.

ELEMENTS OF MARKET POSITIONING

I. Attributes
These are the characteristics of a product sold and marketed by the company in the target market.
It includes variables like shape , size , price, color, weight, speed, durability and maintainability.
II. Product communication
It deals with the way in which a product is communicated in the target market through various
advertisement and promotion measures.
III. Perception
It deals with how consumers perceive a product compared to other competing brands in the target
market. Consumers may maintain a positive or negative attitude towards a product.

MARKET POSITIONING STRATEGIES

1. Positioning by product attributes and benefit.
2. Positioning by price.
3. Positioning by use or application.
4. Positioning by product user.
5. Positioning by product class.
6. Positioning by competitor.
7. Positioning by cultural symbols.

1) Positioning by product attributes and benefits.

In this case the marketer tries to position the product based on two or more attributes of
the product (characteristics )
Eg: Colgate offers the benefits of preventing cavity and fresh breath.
2) Positioning by price.
Here the marketer is using price of their products to position their products .
Eg: Branded shirts are charged high price.
3) Positioning by use or application.
Here the use or application of the products are used to position .
Eg: surf excel – stain remover.
4) Positioning by product class.
When close substitutes exist , the firm may focus on the benefits of the product with the
other product class to position its products.
Eg: Coffee and tea.
5) Positioning by competitor.
Certain firms compare their brand with the competitors brands as a means of gaining the
desired positions for their brands in the mind of the consumers.
Eg: FMCG products.
6) Positioning by product user.
This strategy is based on certain products being suited for certain users.
Eg: Insurance products for senior citizens , kids etc.
7) Positioning by cultural symbols.
Some companies uses cultural symbols to differentiate their brands .
Eg: Air India – image of a Magaraja ( Indian King)