Marketing Process Model

Capturing Value
from the customer
Understanding
customer , Building
competitor and Customer
company Relationship

Marketing Process Model

Designing a
Designing customer
Marketing
driven Marketing
Plan
Strategy
Marketing Process Model

A five step model of Marketing

process consists of following :

1. Understanding 3 Cs of Marketing
. Marketing Research , Marketing
environment analysis
Marketing Process Model

2. Designing customer Driven

Marketing strategy.
. What customers will the company
serve
(Market segmentation and Target
market )
. How can the company serve the
customers best ( Market positioning
)
. What Marketing Philosophies should
guide the company
Marketing Process Model

3. Preparing a Marketing Plan

The Marketing plan includes
designing marketing mix strategy.
Marketing mix consists of 4 Ps of
Marketing
Product
Price
Place
Promotion
 Marketing Process Model

4. Building Customer Relationship

The process of building and maintaining
profitable customer relationship by
delivering superior customer values and
satisfaction is called customer relationship
management .It is about finding, retaining
and growing profitable customers.
5. Capturing Value from the customer
In terms of current and future sales,
market share and profits, brand loyalty,
market image, reputation and goodwill.
 Introduction
Market - Group of people with
sufficient purchasing power,
authority, and willingness to buy
Target market - Group of people a
firm believes is most likely to buy its
goods and services

6
 MARKETING SEGMENTATION,
TARGETING, AND POSITIONING

(STP)

7
The STP Process

SEGMENTATION is the process of classifying

customers into groups which share some
common characteristic
TARGETING involves the process of evaluating
each segments attractiveness and selecting one
or more segments to enter
POSITIONING is arranging for a product to occupy
a clear, distinctive and desirable place relative to
competing products in the mind of the consumer
 SEGMENTATION
A market segment is a subgroup of
people or organizations sharing one or
more characteristics that cause them to
have similar product needs.

According to Philip Kotler , Market

segmentation is sub-dividing a market
into distinct and homogeneous
subgroups of customers, where any
group can conceivably be selected as a
target market to be met with distinct
marketing mix.
Defining Marketing
Segmentation
No Market Segmentation
Segmented by Gender
Segmented by Age
 Criteria for Effective
Segmentation
Measurable
Measurable Size, purchasing power,
profiles of segments can
be measured.
Substantial
Segments must be large or
Substantial
profitable enough to serve.

Accessible
Accessible Segments can be
effectively reached and
served.

Differential
Differential Segments must respond
differently to
different marketing mix
elements & actions.
Actionable
Actionable Must be able to attract and
serve
the segments.
 Segmenting Consumer
Markets
1) Demographic 2) Geographic
Variables
for Segmenting
Consumer
Markets

3) Psychographic 4) Behaviorist

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Segmentation Criteria
Geographic
Nations, states,
regions or cities

Demographic
Age, gender,
family size and life
cycle, or income

Psychographi
cSocial class, lifestyle,
or personality

Behavioral
Occasions, benefits,
uses, or responses
SEGMENTATION DESCRIPTION OF EACH MAIN
BASE CONSUMER SEGMENTATION BASE

Geographic Segmenting by country, region, city or other

segmentation geographic basis.

Demographic Segmenting based on identifiable population

segmentation characteristics, such as age, occupation,
marital status and so on.

Psychographic This segmentation approach involves an

segmentation understanding of a consumers lifestyle,
interests, and opinions.

Behavioral Segmenting the market based on their

segmentation relationship with the product or the firm.
Examples include: heavy or light users, brand
loyal or brand switchers, and so on.
 1) GEOGRAPHIC
SEGMENTATION

Geographic
Nations, states,
regions or cities
 Segmentation Criteria
Geographic variables
REGION: East, West, South, North,
Central, coastal, hilly, etc.
SIZE: Metropolitan Cities, small cities,
towns.
DENSITY OF AREA Urban, Semi-urban,
Rural.
CLIMATE Hot, Cold, Humid, Rainy.
 Division of an overall market into
homogenous groups based on their
locations
Marketers look at:
Economic variables
Geographic indicators
Migration patterns
Pay close attention to fastest-growing
states
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 Using Geographic
Segmentation
Marketers focus on core regions,
those from which they draw 40 to 80
percent of sales
Residence location within a region is
an important variable

22
GEOGRAPHIC SEGMENTATION

Ex.- Mcdonalds globally, sell burgers aimed at local

markets, for example, burgers are made from
chicken in India rather then beef because of
religious issues. In Mexico more chilli sauce is
added and so on.
 Discussion Question

Geographical climate is
a legitimate means of
segmentation for many
products or services.
Name several examples of products
for which need (and demand) would
vary on a geographical basis.

8- 24
2) DEMOGRAPHIC
SEGMENTATION

Demographic
Age, gender,
family size and life
cycle, or income
 Division of an overall market into
homogenous groups based on:
Demographic
variables
Age
Gender
Sexual orientation
Family size
Family life cycle
Education
Income
Occupation
Education
Socioeconomic
status
Religion
Nationality/race
As peopleagetheir needs
and wants change, some
organizations develop
specific products aimed at
particular age groups for
example nappies for
babies, toys for children,
clothes for teenagers
and so on.

Gender segmentation is
commonly used within the
cosmetics, clothing and
magazine industry.

Holidays are developed for

families, the 18-30's
singles, and for those in
their 50's.
What type of demographic segmentation
is reflected by this ad?
3) PSYCHOGRAPHIC SEGMENTATION

Psychographi
cSocial class, lifestyle,
or personality
 What is Psychographic
Segmentation?
Psychographic Segmentation is used mainly to
target a certain group from within a population.
It uses peoples lifestyle, their activities,
interests as well as opinions to define a market
segment.
These psychological aspects may be
consumers lifestyle, their social standing as
well as their AIO.
AIO statements - Items on lifestyle surveys
that describe various activities, interests, and
respondents opinions
30
 Here are the factors which help
divide a population based on
psychographic segmentation.
1) Lifestyle
2) AIO activities, interests and
opinions
3) Vals Values attitude lifestyle
4) Social class
5) Personality
 1) LIFESTYLE
There are various segments which have
become popular in retail but one of the most
popular segments is the lifestyle segment.
Everyone has different clothing habits based on
their lifestyle.The customer might be school
going, college going, office going or other.
Thus by lifestyle we mean, where does the
customer stand in his life cycle.
Similarly, the lifestyle of a rural area customer
might be different from urban areas.
 2) ACTIVITIES INTERESTS AND
OPINIONS
A subset of lifestyle, activities interests
and opinions also affect consumer buying
behavior.
It tells a marketer of what a consumer
likes, what are his interests and how does
his thought process work. This is deduced
through a series of questions asked by a
market researcher which ultimately gives
the consumers psychographic profile.
 Activities The way a person carries out his work or the type of hobbies he
has tells a lot about a person. If he has a tough work and at the same time he is
also involved in numerous sports then we have a highly active person in hand.
Whereas if we have a computer operator who mainly likes indoor sports then we
have someone who is unlikely to head out of home on his weekends. Thus
depending on the activities of anindividual, we can determine what would be his
travelling habits, his working habits, so on and so forth.
Interests What is the consumer interested in? Is he interested in food,
technology products, fashion or recreation? A consumers interests also help
marketers as they help him to decide on the right marketing message which
needs to be communicated to the prospect consumer. If you have a consumer
who is interested in technology products, its useless to pitch recreation plans to
him (he might use it, but he is not your primary target).
Opinions Ask any political party or movie marketer and he will say that
audience opinion is one of the topmost factors affecting the rise or fall of a
political party or a movie.Opinions do matter. And especially in the age of
internet, opinions spread fast. Nowadays there are agencies taking care of
abrandonline such that they can immediately give a feedback of what the
public opinion about a brand /productis. The management can accordingly
make the changes.
Now, as a marketer, if you have these three variables in hand activities,
interests and opinions you can definitely make some decisions regarding your
promotional plans as well as advertising message. This is the exact role that AIO
activities, interests and opinion plays in market segmentation.
 3) VALUES ATTITUDES AND
LIFESTYLE.
Vals Values attitude lifestyle
Vals which is also known asvalues attitude and lifestyleis one of
the primary ways to perform psychographic segmentation. All three
terms are intangible in nature and therefore give an idea of the inert
nature of the consumer. If you know what your consumer is thinking,
you would know what kind of promotions or communications will
attract him most. And how do you know what the consumer is
thinking? By determining his vals Values, attitudes and lifestyle.

VALSis different for different people. Lets take income as an

example. If you are a person with high income your lifestyle would
probably include habits of the SEC A class such as dining out of home
frequently and that too in top class restaurants, wearing only
branded clothes and buying the best cars out there. Whereas if you
are a middle class income group consumer, you would be more wary
of spending money and would rather concentrate on savings.
 So now how does VALS affect a marketer?
Lets say you were a banker. What would you
sell someone who had a high income
lifestyle? You would sell them investment
options and would also dedicate a
relationship manager to take care of their
needs.
In fact, the bankers also have a term for
high income individuals known as HNI
high networth individuals. But, if your
lifestyle was that of a low income customer,
you are more likely to be targeted for
savings
 4) SOCIAL CLASS
Different consumers fall in different social
classes. This depends mainly on their buying
power. The buying power is affected by the
background of the customer, his income as
well as his spending habits.
The customer will always buy to maintain his
social class. Thus premium brands like Gucci,
Longines or others always target the Sec A
segments because they know that these
would be the classes capable of buying their
products. These brands have to keep in mind
both Lifestyle as well as social class.
 5) PERSONALITY
Personality in psychographic segmentation is dependent on
both lifestyle as well as social class. A person will have a
rich personality only if he has high buying power as well as
the taste in clothes to maintain such a lifestyle.
Thus the term Brandpersonality came into effect. The
reason for that is that different brands target different
personalities. A simple example would be if i ask you what
comes in mind if i talk about a Harley Davidson biker more
commonly known as Hogs. They would be people unshaven,
tall, manly who like to live a rough lifestyle. Thats the
personality built for Harley over time. Thus brands target
their customers even based on their personality.
Overall, these factors are intangible in nature and need in
depth market research to determine which lifestyle or social
class to target. There are companies which are dedicated to
the art of psychographic segmentation.
Swatch targets
those with an
active lifestyle
 4) BEHAVIORAL
SEGMENTATION
Behavioral
variables
Benefit sought
Usage rate
Occasion
Loyalty status

Behavioral segmentation refers

to why people purchase a
product or service
 OCCASIONS - Archies and Hallmark
cards, Monaco at tea time.
BENEFITS Shampoo for hair
conditioning, cleaning , hair fall defense
dandruff control
USER STATUS- light medium heavy
user
LOYALTY STATUS- hardcore loyal , split
loyal- loyal to 2-3 brand ,shifting loyal,
switcher
 A) BY BENEFITS SOUGHT
The process of grouping customers
into market segments according to the
benefits they seek from the product.

Segmenting by benefits sought

Focuses on the benefits people expect
from using the product
Example: Women who work out at Curves
want to look their best and feel healthy

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 B) BY USAGE RATES
Dividing a market by the amount
of product bought or consumed.

Segmenting by usage rates

80/20 principle (Praedos law) - 80
percent of a products revenues come
from 20 percent of its customers
Marketers may target heavy, moderate,
light users or nonusers
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 Product-Related
Segmentation
Segmenting by brand loyalty
Example: Frequent purchaser programs

44
 Product-Related
Segmentation
Using multiple segmentation bases
Segmentation helps marketers increase
their accuracy in reaching the right
markets
Segmentation helps marketers to know
their potential customers better

45
 TARGETING
Target marketing, is the art of marketing
only to a desired target market. Thus target
marketing mainly involves two steps such
as
1) Deciding your market segment as well
as deciding on who your target customer is
going to be.
2) Designing your marketing mix with the
proper product, price, promotions and
place such that your target market adopts
itquickly.
 Micromarketing
Micromarketing
Products
Products to
to suit
suit the
the tastes
tastes of
of individuals
individuals or
or locations
locations
(complete
(complete segmentation)
segmentation)
Niche
Niche Marketing
Marketing
Diferent
Diferent products
products toto subgroups
subgroups within
within segments
segments
(( more
more segmentation)
segmentation)
Segment
Segment Marketing
Marketing
Diferent
Diferent products
products to
to one
one or
or more
more segments
segments
(some
(some segmentation)
segmentation)
Mass
Mass Marketing
Marketing
Same
Same product
product to
to all
all consumers
consumers
(no
(no segmentation)
segmentation)
Levels of Targeting
 Figure 8-2:
Target Marketing
Strategies
 1. MASS/UNDIFFERENTIATED
MARKETING
Marketing programs tailored to the needs
& wants of every customer groups.
Definition of mass market A mass market
can be defined as a term used for the
largest group of consumers for a specified
products. A mass market is broad in nature
and is not categorized by demographics.
Examples of Products which target a
Mass Market Coke, Pepsi
 2. SEGMENTED/DIFFERENTIATED
MARKETING
A sales growth strategy in which several market niches
or population segments are targeted with different
products for each niche or segment.
Also called as multi-segment marketing is wherein a
company attempts to appeal to two or more clearly
defined market segments with a specific product and
unique marketing strategy tailored to each separate
segment.
Firms such as Maruti-Suzuki, Hyundai etc use
differentiated marketing to attract two or more
segments.
 3. NICHE/CONCENTRATED
MARKETING
Concentrated Marketing is a strategy
whereby a product is developed and
marketed for a very well defined and specific
segment of the consumer population.
Focusing marketing efforts on satisfying a
single market segment.
An example of concentrated marketing is the
marketing of Rolls Royce cars, which targets
the luxury car market segment.
Sugarfree
ROLLS ROYCE
4. INDIVIDUAL/MICRO MARKETING

Ultimate segmentation Individual

marketing is defined as tailoring products
and marketing programs to the needs and
preferences of individual customers. In this
marketing strategy, products are
customized to suit each person.
Customization empower the consumers
to design the product or service offering of
their choice.
Birkins for Hermes
 POSITIONING
Onceacompanyhasdecidedwhichsegments
ofthemarket
itwillenter,itmustdecidewhat positions it
wants tooccupyin thosesegments.
Aproduct'spositionisthewaytheproductis
definedby
consumersonimportantattributes--
theplacetheproductoccupiesin
consumers'minds relative
tocompetingproducts.
Positioninginvolvesimplantingthebrand'su
niquebenefitsand differentiationin
customers'minds.
 Intheautomobilemarket,Toyotaand
Hyundaiarepositioned
oneconomy,Mercedes
andCadillaconPremiumwhile
Ferrari and Rolls Royce are positioned
as Luxury
 A simple example of positioning would be If I
say An expensive TV, what comes first to
your mind probably will be A Sony or A
Samsung TV whereas if say a cheaper or
VFM TV (value for money TV) you might
think of an Onida or a Micromax.
Thats positioning. Why is it that you have
called out these respective names only? That
is because how the brands are positioned in
your mind in terms of awareness.
 Positioning In marketing, creating an image of the
companys brand in the eyes of the consumer is
positioning. Now, this image has to be such that the
consumer connects with the product immediately.
A product can be positioned on two platforms, the
CONSUMER and the COMPETITOR.
When positioning is on the customer oriented, the
advertising campaigns and messages are targeted
at the consumers.
These advertisements propound the benefits that a
consumer will get on using the product. On the
other hand, when positioning is done on the basis of
competitors, the advertisement campaigns try to
say that their product is better than that of the
competitors.
 POSITIONING
Positioning involves designing an
offering so that the target segment
members perceive it in a distinct and
valued way relative to competitors.

What are you telling your targeted

segments?
Positioning in the market place

Examples

59
Sensodyne toothpaste
Promotes its anti-sensitivity protection
Mercedes
Promotes its great engineering
BMW
Ultimate driving machine
Attribute can be single or even multiples Posi
tioni
ng
Positioning and Differentiation
Positioning statements:
To (target group and need) our
(brand) is (concept) that (point-of-
difference)
Example: To young, active soft-
drink consumers who have little
time for sleep, Mountain Dew is
the soft drink that gives you more
energy than any other brand.
 POSITIONING TAG LINES
FEDEX - Fast, reliable on-time delivery
SOUTHWEST AIRLINES - Affordable, no-
frills air travel
ROLEX - Status-symbol fashion accessory
Ebay - The virtual marketplace to buy or
sell anything
 Case study of Target marketing Titan watches

Segment selection Titan mainly targets multiple segments based on

their income, social standing as well as behavioral attributes. Thus it
targets customers who have low incomes along with customers with high
income.
Marketing mix Titan does not offer the same product to different
customers. In fact it has a new product for each segment thereby micro
managing its target marketing efforts. Thus a Sonata will be offered to
the low income group whereas a Tommy Hilfiger will be offered to the
high purchasing powerindividual
Positioning Each product of Titan is positioned separately.
Furthermore when you walk into the retail store of Titan (World of titan)
you will find that there are separate sections for each class of customers
depending on their income groups.
Customer lifecycle marketing Another example of target
marketing ishaving every product in the kitty for each level ofa
customers life cycle. Thus by having brands like Fast track, ragaand
others, Titan ensures that it has a product whether its customer is a
college going individual, a working women or a high income professional.
 Brand
Repositioning Positioning
An Art of Creating a
Distinct Image for A
Product in The Minds
Of The Customers

Repositioning

Is Changing The
Position Of Brand
 Repositioning is changing the positioning of the
brand

A particular positioning statement may not work

with a brand.

For e.g Dettol toilet soap was positioned as a

beauty soap initially.
It did not work .
Dettol , the parent brand (antiseptic liquid) was
known for its ability to heal cuts.
The extensions beautypositioning was not in
tune with the parents germ-kill positioning.

The soap therefore had to be repositioned as a

germ-kill soap and it faired extremely well after
repositioning.. Here the soap had to be
repositioned for image mismatch.
 CADBURYS BOURNVITA

Bournvita is a case of how a brand changes its

positioning in keeping with the changing
needs of the customers.
Initially the emphasis was on it good taste
(taste additive to milk).
Then as the customers became more
demanding , the pitch was modified to include
the nutritive aspect as well ( extra nutrition,
extra taste).
Later to make itself more attractive it claimed
to give sharpness of mind (nutrition, mental
stimulation)
 Burnol : initially positioned for curing burns. With
increasing competition in the segment , it wanted
to enlarge the franchise. Thus it called itself a 3-
in-1 ointment. Aimed at curing burns, cuts and
gashes.
 Dettol liquid: Antiseptic liquid is basically
used to prevent cuts and gashes from
developing sepsis.
To increase the occasions for its use, it
shows several other avenues.
These are 1) for washing babies clothes
2) for the shaving mug 3) for washing
and swabbing 4) to clean floors
 D) Odomos : was one of the first
mosquito repellants in the market.
It was essentially pitched as an indoor
mosquito remedy.
Later as mosquito mats became popular,
creams became less popular as they
were seen as sticky.
One way of combating the mats was to
fight them outdoors.
So now odomos is for both indoor as well
as outdoors.
Making the brand serious

Saffola: was
positioned as the edible oil good for
heart.
To make the positioning more serious,
the pitchheart is not safe without
Saffolawas adopted.
This put saffola in a different league as
compared to the other oils making it the
most health conscious brand in the
market.
 Ambassador : was positioned as the rugged
roadmaster.
This positioning was in line with the product
perception because Ambassador is seen as a
tougher vehicle than Maruti.
However Maruti proved to be a sleek, more fuel
efficient and even cheaper as compared to
Ambassador.
Then the positioning was changed to a member
of the family .
In other words falling sales forced Ambassador
to move from rational pitch to emotional pitch.
But none of the positioning changes helped it
because the product itself was outdated.
Cadburys dairy milk : It was
found that most adults wanted to eat Dairy
Milk but restrained themselves because it was
supposed to be consumed by children.
Thus a repositioning campaign was launched
which showed adults doing unconventional
things (like a lady breaking into a jig in the
middle of an overflowing cricket stadium )
driving home the message that chocolates
could be enjoyed by adults as well.