Pre Joining Reading Material Edition 1

Basics of Marketing

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BASICS OF MARKETING
Marketing is.. not only much broader than selling, it is not a specialized activity at all. It encompasses the
entire business. It is the whole business seen from the point of view of the final result, that is, from the
customers point of view. Peter Drucker
.. the social process by which individuals and groups obtain what they need and want through creating,
offering and freely exchanging products and value with others. Philip Kotler
.. the management process that identifies, anticipates and satisfies customer requirements profitably.
The activity, set of institutions, and processes for creating, communicating, delivering and exchanging
offerings that have value for customers, clients, partners, and society at large American Marketing
Association
Simply put, Marketing is the identifying of human and social needs and providing for the same.
To understand it better, let us look at marketing from 2 perspectives: Tactical and Strategic. Now, both
these terms might sound similar but are quite different in business. Tactical is more instantaneous and to
change the status quo to achieve short-term objectives. Strategic is something more long-term and aimed
towards the final goal.
From the tactical perspective, marketing is ensuring that the right product/service, in the right place, at
the right time, at the right place reaches the right customer*.
From the strategic perspective, marketing is satisfying customer needs profitably and better than the
competition.
Difference between Sales and Marketing
Marketing is the complete process which includes finding a void in the market, realizing what the
consumers need, conceptualizing a product and then promoting it to the consumers. Sales is the tip of the
Marketing iceberg and refers to a generally one-to-one process of selling goods to the consumer in order
to meet the demand. The marketing department works to get the word out about the product or service,
and the sales department works to convince individual consumers to purchase a product or service.
Ideally, the aim of marketing therefore is to make selling superfluous. The aim of marketing is to know
and understand the customer so well, that the product produced to satisfy the customer, sells itself.
Marketing can be considered to be a wider term than sales. It includes identifying customers, producing
innovative products, branding, advertising, public relations, sales, etc. Thus, sales is a stage or an activity
of marketing.
*Difference between Customer and Consumer
Most of us think that customer and consumer are the same thing and use it interchangeably. But in some
cases they are poles apart. A customer is the target of the marketing team and some who is more likely to
buy the product while the consumer is someone who consumes the product. Simple, but must always be
remembered.
Can you think of an example where customers and consumers are different? Take Baby diapers as an

example, the customer in this case is the mother watching the adorable Johnson and Johnson
advertisements (who later buys the same from a chemist shop) but the consumer will always be the baby.
Another apt example is that of Yippee Noodles. In a market greatly dominated by Maggi, Yippee marketed
itself with two basic USPs, something which was different from what Maggi was and was appreciated by
the mothers whom they targeted. The first USP was that it was non sticky and hence, could be consumed
easily at a later point of time, something which was a common complaint against Maggi. Secondly, it had
a circular cake which fit easily inside the vessel and didnt need any additional effort. It lured the children
(the consumer) with the promise of exceptional taste, but these were the two primary USPs it sold while
targeting the mothers (the customer).
To
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WHAT ALL CAN BE MARKETED

1.

Goods: Physical goods manufactured by companies forms the bulk of the marketing efforts.
Examples of marketed goods are shampoos, cigarettes, automobiles, mobile phones etc. The
following two images show HUL advertising Magnum Ice Cream and one of Samsungs latest mid
range offering, Grand Neo.

2.

Services: Services form a very important part of growing economies. Airlines, hotels, banks,
maintenance and repair shops and restaurant chains offer services which are readily marketed.
The easy-on-the-pocket Tata Air Asia has been marketed well on its cost efficiency USP. Similarly,
the30 minutes or free service promise has been advertised Dominos since its inception in the
Indian market.

3.

Events: Time-based and routine yearly events are marketed heavily. Annual trade shows,
sporting events and corporate events are marketed heavily. The Kanna Keep Calm campaign
for IPL 2014 garnered a lot of attention, which obviously got eclipsed by the massive marketing
for the Greatest Show on the Earth, the FIFA World Cup 2014.

4.

Experiences: Visit to places like amusement parks, theme parks and other such tourist
destinations promise a real life experience which is marketed. An evening at Hard Rock Caf,
complete with the musical ambience, promises a different experience from the bar at the corner

of the street. Jaipurs famed Chokhi Dhani is renowned for its replication of a Rajasthani village,
while Essel World has been marketed as an experience which you would never want to end.

5.

Persons: Celebrity marketing is a major business, and a country like India has multiple examples
of people being marketed to the extent of being made a brand in themselves, and beyond.
th
Sachin Tendulkar is an example, so much so, that his 200 Test Match was heavily marketed
culminating in the release of a special coin to his name. Narendra Modi, complete with his Modi
Kurta and Bvlgari rimless spectacles, is yet another extremely marketable personality.

6.

Places: The tourism industry runs on the ability to market places. Also called territorial marketing
or place branding, certain cities or regions can be marketed owing to their tourist attractions.
Portraying Madhya Pradesh as the Heart of Incredible India has been a way of marketing it.
Apart from it, the biggest cash cow of place marketing is Las Vegas.

7.

Properties: Marketing of properties can refer to either real property ( i.e real estate ) or financial
property ( stocks and bonds). While real estate owners work for property owners or sellers,
investment companies market securities.
Organizations: Organizations work to build a strong, favourable and unique image in the minds
of their target group. Whereas the Tata Groups Leadership with Trust tagline has always
conveyed to the people as to how they are a conglomerate with a difference, Philips Sense and
Simplicity tagline is inseparable from its existence.

8.

9.

Information: Information can be made readily available to people and marketed as a product by
charging a fee. Encyclopedias are an example. Euromonitor International is a business
intelligence company which publishes marketing research data for various sectors across the
world. Similarly, AutoCar and Overdrive are magazines which publish information related to the
automobile world.

10. Ideas: Every market offering has a basic idea. When Coke markets its product, it conveys to its
customers via its tagline, Open Happiness, that they arent just buying a bottle of bold drink,
but a bottle of Happiness. So, a subliminal idea gets sent that Coke means Happiness. Social
Marketers also use such platforms to market ideas of greater importance. The Earth Hour 2014
was celebrated by roping in Spider Man, just before the release of the Amazing Spiderman 2 of
course, and urged people to unleash the superhero in going off electricity for an hour.

NEEDS, WANTS AND DEMANDS

Needs Generic Human requirements such as food, air, water, clothing and shelter.
Wants A need becomes a want when they are directed to specific objects that might satisfy the need. So
basically, a person in India needs food but may want chapattis, rice, curries, etc. You NEED a shirt, buy you
WANT a white, formal shirt.
Demands Wants for specific products backed by an ability to pay. Demands are specific towards certain
brands and products. A specific focus is also there on the ability to pay. A lot of people want a Porsche
but only a few can afford. Your girlfriend may demand a Louis Vuitton Bag but you can only afford a Baggit
purse. Therefore its important for companies to measure not only on how many people want their
product, but also on how many are willing and able to buy it.

BRANDS
Brand is the "name, term, design, symbol, or any other feature that identifies one seller's product as well
as differentiates itself those of other sellers. These differences may be functional, rational or tangiblerelated to product performance. They may also be more symbolic, emotional or intangible- related to
what the brand stands for or represents.
Therefore it makes sense to understand that branding is not about getting your target market to choose
you over the competition, but it is about getting your prospects to see you as the only one that provides a
solution to their problem. The objectives that a good brand will achieve include:
Delivers the message clearly
Confirms your credibility
Connects your target prospects emotionally
Motivates the buyer
Concretes User Loyalty
Branding is endowing products and services with the power of a brand. Marketers can brand virtually
anything. It is possible to brand a physical good (Mercedes Car, Dove Soap), a service (Citibank banking
service, Fedex courier service), a person (MS Dhoni, Lionel Messi), a place (Kerala- Gods own Country), an
idea (Polio awareness campaign), etc

Brand Equity
Brand Equity is the added value endowed on products and services. It may be reflected in the way
consumers think, feel and act with respect to the brands, as well as in the prices, market share, and
profitability the brand commands.
In layman terms, it is the extra price you pay for the name of the brand. A very simple example will be an
iPhone. A phone whose functional worth is say, Rs. 25,000 can fetch double the amount because of its
association with the brand name Apple which has tremendous brand equity in the market.
Building Brand Equity
Marketers build brand Equity by creating the right brand knowledge structures with the right consumers.
Notice the word right consumers here. The marketer managing Harley Davidson brand doesnt want to
attract every average Joe riding a motorcycle to his brand. He wants to build his brand amongst the
adventure loving bike enthusiasts. Selecting the target audience forms one of the biggest challenges in
building a brand
Some ways of building brand equity are:
Initial choices of brand elements or identities making up a brand (brand names, URLs, logos,
symbols, rituals, slogans, jingles, packages).
o For ex:- Coca-Colas open happiness campaigns trying to display positivity in all their
communication across platforms
The product and Service and all accompanying marketing activities and other associations
indirectly transferred to the brand by linking it to an external entity.
o After the Coca-Cola pesticide scandal, Coke associated itself with celebrities which
inspired trust like Aamir Khan and Amitabh Bachchan, hence leveraging the association
transferred by an external entity
How to brand?
You only have one value proposition and you want it to stick it in your customers' minds. BMW is the
"ultimate driving machine." Apple customers "think different." Nike's message -- "Just do it" -- is
ubiquitous with the brand. But how do you determine what that one clear message should be?
Lets take an example of the re-packaging Airtel did of itself.

Here are three essentials it looked at to create its brand message:

The customer perspective: The primary target was to understand what the customers actually wanted. A
thorough market research must be carried out for this, including having personal interviews and surveys.
It was imperative to understand what the customers valued the most by hearing their voice intently.
With the advent of 3G and Mobile Data, Airtel desired to be the next hip thing in the market and wanted
to usher in a new identity, one which was more global, younger, had more humility and was more
aspiring.
The internal perspective: For a brand promise to be effective it must be true. What is it about your
product or service that makes it unique? Where do you create value? What is your vision? What is your
top sales person doing to close sales? What's unique about your manufacturing process?

Airtel is very proud of its customer service, network as well as a trendsetter in terms of new plans and
packs. Thus, their new logo wanted to communicate the message of their dynamic work ethic and bring
their innovative quality to the fore.
The marketplace perspective: Only one brand can own a position. How do your competitors position
themselves? It is important to study your competitors and look for the void in the market. Palmolive
positions itself as the only dish soap that softens hands while you do dishes. You want to make sure that
your value proposition is distinct.
And this brought the popular Har Friend Zaroori Hota Hai Yaar campaign, tapping into the marketplaces
essential tendency to talk, connect and make friends and present Airtel as the fresh face that showcases
friends and the value of friendships, differentiating itself from other players in the market.

MARKETING PHILOSOPHIES

1. Product Concept
a. The product concept proposes that consumers will prefer products that have
better quality, performance and features as opposed to a normal product.
b. High focus on innovation while not paying much attention to customer
needs, external factors and competition
c. Apple can be cited as an example of a company that cultivates this
philosophy. Year after year the company has bred innovation and come up
with revolutionary products. You can characterize Apple with the single
obsessive aim of creating premium, high quality products keeping factors like
pricing, market scenarios & competitor standings secondary.
The belief is that a premium product would itself attract buyers and the key to long-term success is in the
Product attributes. As stated earlier, usually this philosophy doesnt have a very high regard for customer
research. This quote from the former Apple CEO further explains the point:
People don't know what they want until you show it to them.- Steve Jobs.
d. May lead to failure- e.g. New coke. Due to some serious market share loss to Pepsi in recent years Coke
decided to improve its cola form ula and brought out the new coke into market without knowing the
customer needs. The customers loyal to the brand refused to buy the product and there was witnessed
one of the biggest brand failures of all time.

2.

Production Concept
a. The basic premise (philosophy) of the production concept is that if
we can build quality products at affordable prices, they will eventually
sell themselves. As a result, the major objective of firms adhering to the
production concept is to minimize costs, yet still maintain product
quality.
b. Focus on production efficiencies, low costs and mass distribution.
c. Basic assumption is all output can be sold as demand for a product is
greater than supply
d. Beneficial when increasing production raises economies of scale and helps reduce price

e. One of the best examples of the production concept is Henry Fords Model T. Henry Ford is the father
of the production line. By developing an efficient assembly line, Ford was
able to bring the cost of the Model T down from around $800 to just
under $300, putting affordable transportation into the hands of average
consumers in the United States. The biggest secret to Fords assembly
line is that he built one car --the Model T. There were very few variations
on the basic structure and functionality of this automobile. One of the
best known slogans of the time, which Ford himself coined, was "You
can have any color you want as long as it is black." Clearly, this slogan
embodied the fundamental business philosophy -- the production
concept -- practiced by Ford at the time.

3. Selling Concept
a. Products, even good ones, don't necessarily sell themselves. Customers must be
convinced to buy products
Focus on selling the product with the objective of profit maximization
b. Basic assumption is any product can be sold if sales people can convince the
customers
c. Practitioners of this philosophy pursue the objective of maximizing sales revenue via very aggressive
promotion in order to stimulate demand. In other words, 'hard sell' becomes the basic philosophy of
doing business.
d. Cust omer's wants and needs are secondary, if thought of at
all. The only thing of concern is to 'make that sale.'
e. Widely criticized yet widely used across industries! It can be
counter-productive in the long run.

4. Marketing Concept
a. The most central premise of the marketing concept states that we
should first find out what the customer wants and needs and provide the
desired satisfactions more effectively than competitors do.
b. Basic assumption is supply for a product is greater than demand (high
competitive intensity)
c. Success can be achieved only through customer satisfaction: they do
not sell what they can make but they make what they can sell.
d. Probably the first firm to formerly espouse the 'marketing concept' was
General Electric. John McKitterick, then CEO at GE, announced that
henceforth, GE's philosophy of conducting business would be one of filling the identified needs of its
customers, rather than bending the will of the customer to fit the needs of the company.

5. Societal Marketing Concept

a. Focus on all the stakeholders (Short term consumer wants -> Long term
consumer welfare)
b. Balancing all the 3 aspects: Consumer needs + business profit +
Societys interest
c. Each element of the marketing mix is closely analyzed and checked if it
is consistent with the objective of protecting society's interests.

d. A good example of Societal Marketing Concept is Coca Cola. In 2013, trying to

turn around soda's fat image, Coca-Cola used its 127th anniversary to promise
to fight obesity by not advertising to children under 12 anywhere in the world
and offering low or no calorie beverage options in every market where it does
business. The company also vowed to provide transparent nutrition information
with calorie counts on all packages and support physical activity programs in all
200 countries where Coca-Cola is sold.

CONSUMER BUYING BEHAVIOUR

Consumer behavior is the study of how individuals, groups and organizations buy, use and dispose of
goods, services and experiences to satisfy their needs and wants. Consumer behavior is influenced by
three primary factors:
1. Social Factors
2. Personal Factors
3. Cultural Factors

FIVE STAGE BUYING DECISION PROCESS

Problem
Recognition

1.

2.
3.
4.
5.

Information
Search

Evaluation
of
Alternatives

Purchase
Decision

Post
Purchase
Behaviour

Problem Recognition: At this stage, some internal or external stimuli trigger the need for a
particular product in the minds of the consumer. The exact circumstances need to be studied
to design better marketing strategies.
Information Search: The consumer considers different sources to gather more information
be it personal, commercial or public.
Evaluation of alternatives: The consumer decides the parameters necessary for his needs
and evaluates the options accordingly.
Purchase Decision: After a thorough evaluation and considering all the perceived risks, the
consumer makes a decision on the object of his purchase.
Post Purchase Behavior: Based on the performance of the product, the consumer decides his
level of satisfaction and future course of action while making a re-purchase.