UNIT 1

Contemporary Marketing Management

Level of Knowledge:  Basic, Practical and Conceptual

Marketing in 21st Century – Scope of Marketing – Core Marketing Concepts – New

Marketing Realities – Michael Porter‘s Value Chain – Marketing Plan (Theory & Activity)
– Segmentation (Geography, Demography, Psychographic and Behavior Based
Segmentation) – VALS Segmentation System - Targeting and Positioning – Positioning
Statements and Brand Positioning Statements – Modern Marketing Mix – Psychology of
Marketing – Branches of Marketing Management.

Marketing in 21st Century

Formally or informally, people and organizations engage in a vast number of activities we could
call marketing. Good marketing has become increasingly vital for success. But what constitutes
good marketing is constantly evolving and changing. Good marketing is no accident, but a result
of careful planning and execution using state-of-the-art tools and techniques. It becomes both an
art and a science as marketers strive to find creative new solutions to often-complex challenges
amid profound changes in the 21st century marketing environment. Today’s marketplace is
fundamentally different as a result of major societal forces that have resulted in many new
consumer and company capabilities. These forces have created new opportunities and challenges
and changed marketing management significantly as companies seek new ways to achieve
marketing excellence.
CEOs recognize the role of marketing in building strong brands and a loyal customer base,
intangible assets that contribute heavily to the value of a firm. Consumer goods makers, health
care insurers, nonprofit organizations, and industrial product manufacturers all trumpet their
latest marketing achievements. Many now have a chief marketing officer (CMO) to put
marketing on a more equal footing with other C-level executives such as the chief financial
officer (CFO) or chief information officer (CIO).

SCOPE OF MARKETING
It includes what marketing is, how it works, who does it, and what is marketed.

WHAT IS MARKETING?
Marketing is a process of identifying and meeting human and social needs. It means “meeting
needs profitably” which says that it is an exchange process where the want of one person become
profitable business opportunity for others. It may also be termed as changing private and social
needs into a profitable business.

Marketing is an organizational function and a set of processes for creating, communicating, and
delivering value to customers and for managing customer relationships in ways that benefit the
organization and its stakeholders.
It involves the following activity/process:

a. Creating a product or services

b. Communicating about it to the target customer/public at large

c. Delivering the goods and services to the customer

d. Exchanging offerings

Marketing can be of two types: first social marketing and second managerial marketing.

Under social marketing, Marketing is a societal process by which individuals and groups
obtain what they need and want through creating, offering, and freely exchanging
products and services of value with others.

Under managerial marketing, marketing is “the art of selling products,” but many people
are surprised when they hear that selling is not the most important part of marketing!
Selling is only the tip of the marketing iceberg. There will always, one can assume, be a
need for some selling. But marketing aims to make selling superfluous. The aim of
marketing is to know and understand the customer so well that the product or service fits
him and sells itself. Ideally, marketing should result in a customer who is ready to buy.
All that should be needed then is to make the product or service available. The aim of
marketing is to meet and satisfy target customers’ needs and wants better than
competitors. Marketers must have a thorough understanding of how consumers think,
feel, and act and offer clear value to each and every target consumer.
Marketing aimsTING MANAGEMENT?

Marketing management is an art and science of selecting target markets and getting, keeping, and
growing customers through creating, delivering, and communicating superior customer value.

IMPORTANCE OF MARKETING:

Good marketing leads to better economic condition: Marketing plays a key role in addressing
the problems/challenges faced by businesses in day to day business. Finance, operations,
accounting, and other business functions won’t really matter without sufficient demand for
products and services so the firm can make a profit. In other words, there must be a top line for
there to be a bottom line. Thus financial success often depends on marketing ability.

Helps in society development and enhancement: Marketing’s broader importance extends to

society as a whole. Marketing has helped introduce and gain acceptance of new products that
have eased or enriched people’s lives. It can inspire enhancements in existing products as
marketers innovate to improve their position in the market-place. Successful marketing builds
demand for products and services, which, in turn, creates jobs. By contributing to the bottom
line, successful marketing also allows firms to more fully engage in socially responsible
activities.

THINGS TO TAKE INTO CONSIDERATION WHILE MAKING ADVT:

1. Marketers must decide what features to design into a new product or service
2. What prices to set
3. Where to sell products or offer services, and how much to spend on advertising, sales,
the Internet, or mobile marketing.
4. They must make those decisions in an Internet-fueled environment where consumers,
competition, technology, and economic forces change rapidly, and the consequences of
the marketer’s words and actions can quickly multiply.
5. Carefully monitor their customers and competitors, continuously improve their value
offerings and marketing strategies, or satisfy their employees, stockholders, suppliers,
and channel partners in the process. Good marketers are always seeking new ways to
satisfy customers and beat competition.
6. The aim of marketing is to know and understand the customer so well that the product or
service fits him and sells itself. Ideally, marketing should result in a customer who is
ready to buy. All that should be needed then is to make the product or service available.
7. Companies must measure not only how many people want their product, but also how
many are willing and able to buy it.
8. Marketers can use the Internet as a powerful information and sales channel.
9. Marketers can collect fuller and richer information about markets, customers, prospects,
and competitors.
10. Marketers can tap into social media to amplify their brand message.
11. Marketers can facilitate and speed external communication among customers.
12. Marketers can send ads, coupons, samples, and information to customers who have
requested them or given the company permission to send them.
13. Marketers can reach consumers on the move with mobile marketing.
14. Companies can make and sell individually differentiated goods.
15. Companies can improve purchasing, recruiting, training, and internal and external
communications.
16. Companies can facilitate and speed up internal communication among their employees
by using the Internet as a private intranet.
17. Companies can improve their cost efficiency by skillful use of the Internet.
18. Research customers more now, because their needs and wants are in flux.
19. Minimally maintain, but seek to increase, your marketing budget.
20. Focus on all that’s safe and emphasize core values.
STEPS FOR MARKETING
1. Developing Marketing Strategies and Plans: Key ingredients of the marketing
management process are insightful, creative strategies and plans that can guide marketing
activities. Developing the right marketing strategy over time requires a blend of
discipline and flexibility. Firms must stick to a strategy but also constantly improve it.
They must also develop strategies for a range of products and services within the
organization.
2. Capturing Marketing Insights
3. Connecting with Customers
4. Building Strong Brands: spend a great deal of time establishing a strong brand image by
developing a superior product and packaging, ensuring its availability, and backing it
with engaging communications and reliable service.
5. Shaping the Market Offerings
6. Delivering Value
7. Communicating Value
8. Creating Successful Long-Term Growth
9. build a marketing organization capable of implementing the marketing plan

MARKET RESEARCH INCLUDES

Step 1: Define the Problem, the Decision Alternatives, and the Research Objectives
Step 2: Develop the Research Plan
Step 3: Collect the Information
Step 4: Analyze the Information
Step 5: Present the Findings
Step 6: Make the Decision

● Companies can conduct their own marketing research or hire other companies to do it for
them. Good marketing research is characterized by the scientific method, creativity,
multiple research methods, accurate model building, cost benefit analysis, healthy
skepticism, and an ethical focus.
● The marketing research process consists of defining the problem, decision alternatives;
and research objectives; developing the research plan; collecting the information;
analyzing the information; presenting the findings to management; and making the
decision.
● In conducting research, firms must decide whether to collect their own data or use data
that already exists. They must also choose a research approach (observational, focus
group, survey, behavioral data, or experimental) and research instruments (questionnaire,
qualitative measures, or technological devices). In addition, they must decide on a
sampling plan and contact methods (by mail, by phone, in person, or online).
● Two complementary approaches to measuring marketing productivity are: (1) marketing
metrics to assess marketing effects and (2) marketing-mix modeling to estimate causal
relationships and measure how marketing activity affects outcomes. Marketing
dashboards are a structured way to disseminate the insights gleaned from these two
approaches within the organization.
WHAT IS MARKETED?

10 types of entities that marketer markets are:

1. GOODS Physical goods constitute the bulk of most countries’ production and
marketing efforts. Like: toothpaste, clothing, footwear, etc.

2. SERVICES As economies advance, a growing proportion of their activities focus on

the production of services. Services include the work of airlines, hotels, car rental
firms, barbers and beauticians, maintenance and repair people, and accountants,
bankers, lawyers, engineers, doctors, software programmers, and management
consultants. Many market offerings mix goods and services, such as a fast-food meal.

3. EVENTS Marketers promote time-based events, such as major trade shows, artistic
performances, and company anniversaries. Global sporting events such as the
Olympics and the World Cup are promoted aggressively to both companies and fans.

4. EXPERIENCES By orchestrating several services and goods, a firm can create,

stage, and market experiences. There is also a market for customized experiences,
such as a week at a baseball camp with retired baseball greats, a four-day rock and
roll fantasy camp, or a climb up Mount Everest.

5. PERSONS Artists, musicians, CEOs, physicians, high-profile lawyers and financiers,

and other professionals all get help from celebrity marketers. Some people have done
a masterful job of marketing themselves—David Beckham, Oprah Winfrey, and the
Rolling Stones. Management consultant Tom Peters, a master at self-branding, has
advised each person to become a “brand.”

6. PLACES Cities, states, regions, and whole nations compete to attract tourists,
residents, factories, and company headquarters. Place marketers include economic
development specialists, real estate agents, commercial banks, local business
associations, and advertising and public relations agencies.

7. PROPERTIES: Properties are intangible rights of ownership to either real property

(real estate) or financial property (stocks and bonds). They are bought and sold, and
these exchanges require marketing. Real estate agents work for property owners or
sellers, or they buy and sell residential or commercial real estate. Investment
companies and banks market securities to both institutional and individual investors.

8. ORGANIZATIONS: Organizations work to build a strong, favorable, and unique

image in the minds of their target publics. In the United Kingdom, Tesco’s “Every
Little Helps” marketing program reflects the food marketer’s attention to detail in
everything it does, within the store and in the community and environment. The
campaign has vaulted Tesco to the top of the UK supermarket chain industry.
Universities, museums, performing arts organizations, corporations, and nonprofits all
use marketing to boost their public images and compete for audiences and funds.

9. INFORMATION The production, packaging, and distribution of information are

major industries. Information is essentially what books, schools, and universities
produce, market, and distribute at a price to parents, students, and communities.

10. IDEAS: Every market offering includes a basic idea. Charles Revson of Revlon once
observed: “In the factory we make cosmetics; in the drugstore we sell hope.” Products
and services are platforms for delivering some idea or benefit. Social marketers are
busy promoting such ideas as “Friends Don’t Let Friends Drive Drunk” and “A Mind
Is a Terrible Thing to Waste.”

WHY MARKETING FAILS FOR SOME COMPANIES:

1. Fail to cope up with dynamic environment
2. Fail to monitor the customer and competitors
3. Fail to improve the offerings and marketing strategies
4. Fail to satisfy employees, stakeholders, suppliers, and channel partners.

Who Markets?

MARKETERS AND PROSPECTS A marketer is someone who seeks a response—attention, a

purchase, a vote, a donation—from another party, called the prospect. If two parties are seeking
to sell something to each other, we call them both marketers. Marketers are skilled at managing
demand: they seek to influence its level, timing, and composition for goods, services, events,
experiences, persons, places, properties, organizations, information, and ideas. They also operate
in four different marketplaces: consumer, business, global, and nonprofit.
Marketing is not done only by the marketing department. It needs to affect every aspect of the
customer experience. To create a strong marketing organization, marketers must think like
executives in other departments, and executives in other departments must think more like
marketers.

KEY CUSTOMER MARKETS

Consider the following key customer markets: consumer, business, global, and nonprofit.
1. Consumer Markets Companies selling mass consumer goods and services such as
juices, cosmetics, athletic shoes, and air travel spend a great deal of time establishing a
strong brand image by developing a superior product and packaging, ensuring its
availability, and backing it with engaging communications and reliable service. Business
Markets Companies selling business goods and services often face well-informed
professional buyers skilled at evaluating competitive offerings. Business buyers buy
goods to make or resell a product to others at a profit.
2. Business marketers must demonstrate how their products will help achieve higher
revenue or lower costs. Advertising can play a role, but the sales force, the price, and the
company’s reputation may play a greater one.

3. Global Markets Companies in the global marketplace must decide which countries to
enter; how to enter each (as an exporter, licenser, joint venture partner, contract
manufacturer, or solo manufacturer); how to adapt product and service features to each
country; how to price products in different countries; and how to design communications
for different cultures. They face different requirements for buying and disposing of
property; cultural, language, legal and political differences; and currency fluctuations.
Yet, the payoff can be huge.
4. Nonprofit and Governmental Markets Companies selling to nonprofit organizations
with limited purchasing power such as churches, universities, charitable organizations,
and government agencies need to price carefully. Lower selling prices affect the features
and quality the seller can build into the offering. Much government purchasing calls for
bids, and buyers often focus on practical solutions and favor the lowest bid in the absence
of extenuating factors.

CORE MARKETING CONCEPTS

Needs: Needs are the basic human requirements such as for air, food, water, clothing, and
shelter. Humans also have strong needs for recreation, education, and entertainment. These
are basic necessities to survive.

Wants: These needs become wants when they are directed to specific objects that might
satisfy the need. A person in Afghanistan needs food but may want rice, lamb, and carrots.
Wants are shaped by our society.

Demands: Demands are wants for specific products backed by an ability to pay. Many
people want a Mercedes; only a few are able to buy one.

Target Markets, Positioning, and Segmentation: Not everyone likes the same cereal,
restaurant, college, or movie. Therefore, marketers start by dividing the market into
segments. They identify and profile distinct groups of buyers who might prefer or require
varying product and service mixes by examining demographic, psychographic, and
behavioral differences among buyers. After identifying market segments, the marketer
decides which present the greatest opportunities which are its target markets. For each, the
firm develops a market offering that it positions in the minds of the target buyers as
delivering some central benefit(s). Volvo develops its cars for buyers to whom safety is a
major concern positioning its vehicles as the safest a customer can buy.

Offerings and Brands: Companies address customer needs by putting forth a value
proposition, a set of benefits that satisfy those needs. The intangible value proposition is
made physical by an offering, which can be a combination of products, services, information,
and experiences.
A brand is an offering from a known source. A brand name such as McDonald’s carries
many associations in people’s minds that make up its image: hamburgers, cleanliness,
convenience, courteous service, and golden arches. All companies strive to build a brand
image with as many strong, favorable, and unique brand associations as possible.

Value and Satisfaction: The buyer chooses the offerings he or she perceives to deliver the
most value, the sum of the tangible and intangible benefits and costs to her. Value, a central
marketing concept, is primarily a combination of quality, service, and price (qsp), called the
customer value triad.

Value perceptions: It increases with quality and service but decreases with price. We can
think of marketing as the identification, creation, communication, delivery, and monitoring of
customer value. Satisfaction reflects a person’s judgment of a product’s perceived
performance in relationship to expectations. If the performance falls short of expectations,
the customer is disappointed. If it matches expectations, the customer is satisfied. If it
exceeds them, the customer is delighted.
Marketing Channels: To reach a target market, the marketer uses three kinds of marketing
channels.
1. Communication channels deliver and receive messages from target buyers and include
newspapers, magazines, radio, television, mail, telephone, billboards, posters, fliers, CDs,
audiotapes, and the Internet. Beyond these, firms communicate through the look of their
retail stores and Web sites and other media. Marketers are increasingly adding dialogue
channels such as e-mail, blogs, and toll-free numbers to familiar monologue channels
such as ads.
2. Distribution channels to display, sell, or deliver the physical product or service(s) to the
buyer or user. These channels may be direct via the Internet, mail, or mobile phone or
telephone, or indirect with distributors, wholesalers, retailers, and agents as
intermediaries.
3. Service channels include warehouses, transportation companies, banks, and insurance
companies. Marketers clearly face a design challenge in choosing the best mix of
communication, distribution, and service channels for their offerings.
Supply Chain: The supply chain is a longer channel stretching from raw materials to
components to finished products carried to final buyers. Its aim is to capture a higher
percentage of supply chain value.
Competition: Competition includes all the actual and potential rival offerings and substitutes
a buyer might consider.
Marketing Environment: The marketing environment consists of the task environment and
the broad environment. The task environment includes the actors engaged in producing,
distributing, and promoting the offering. These are the company, suppliers, distributors,
dealers, and target customers. In the supplier group are material suppliers and service
suppliers, such as marketing research agencies, advertising agencies, banking and insurance
companies, transportation companies, and telecommunications companies. Distributors and
dealers include agents, brokers, manufacturer representatives, and others who facilitate
finding and selling to customers. The broad environment consists of six components:
demographic environment, economic environment, social-cultural environment, natural
environment, technological environment, and political-legal environment. Marketers must
pay close attention to the trends and developments in these and adjust their marketing
strategies as needed. New opportunities are constantly emerging that await the right
marketing savvy and ingenuity.

NEW MARKETING REALITIES:

1. Network information technology.
2. Globalization.
3. Deregulation
4. Privatization.
5. Heightened competition.
6. Industry convergence.
7. Retail transformation.
8. Disintermediation.
9. Consumer information.
10. Consumer participation.
11. Consumer resistance.

MODERN MARKETING MIX

1. Product
Product variety, Quality, Design, Features, Brand name, Packaging, Sizes, Services,
Warranties, Returns
The product can have both tangible and intangible aspects, and is something that is
offered to satisfy customers’ wants and needs. Now it becomes easy to consider aspects
such as the product range, its quality and design, features and the benefits, size, and
packaging and any add-on guarantees and customer service offerings.

2. Price
List price, Discounts, Allowances, Payment period, Credit terms
Sound pricing decisions are crucial to a successful business and should be considered at
both long-term strategic and short-term tactical levels. Within this element of the mix the
company should consider list price and discount price, terms and conditions of payment
and the price sensitivity of the market. It is important to keep in mind the fact that the
cheaper the price, the lower income group market can be tapped.

3. Promotion
Sales promotion, Advertising, Sales force, Public relations, direct marketing
If appropriate methods of promotion are not used then it will certainly result in wastage
of money. There are many different promotional techniques such as Advertising, Public
Relations, Sales Promotions, and Direct Selling. These techniques are used to
communicate the specific benefits of the product to the customers. Targeting can be done
through this technique very effectively.

4. Place
Channels, Coverage, Assortments, Locations, Inventory, Transport
The word ‘Place’ is used to describe distribution channels. The company’s choice of such
channels is important. For example, a common issue for businesses which is starting to
trade online is, how that will affect their offline business, for example selling directly
through the web could alienate retail outlets that have been the mainstay of the business
in the past. Targeting the customer of a large group of customers depends a great deal on
the place.

5. People: People reflect internal marketing and the fact that employees are critical to
marketing success. Marketing will only be as good as the people inside the organization.
It also reflects the fact that marketers must view consumers as people to understand their
lives more broadly and not just as they shop for and consumes products and services. The
impact that people can have on marketing cannot be underestimated. It is obvious that
this covers the front line sales and customer service staff who will have a direct impact on
how product is perceived. Knowledge and skills of the staff, their motivation and morale
must be considered by the company. The people element is very important as it has a
direct bearing on the quantum of the target market.

6. Processes: Processes reflects all the creativity, discipline, and structure brought to
marketing management. Marketers must avoid ad hoc planning and decision making and
ensure that state-of-the-art marketing ideas and concepts play an appropriate role in all
they do. Only by instituting the right set of processes to guide activities and programs can
a firm engage in mutually beneficial long-term relationships. Another important set of
processes guides the firm in imaginatively generating insights and breakthrough products,
services, and marketing activities. The process part of the mix is about ease in doing
business in relation to the process. The company must look at it from customers’ point of
view. The process problems that are most annoying to a customer are those which are
designed for the company’s convenience and not the convenience of the customer.

7. Physical Evidence:
When a company sells tangible goods, it can offer the customer a chance to ‘try before
they buy’, or at least see, touch or smell. With services, unless a free trial is offered, the
customer will often be buying on trust. And to help them do so you need to provide as
much evidence of the quality you will be providing as possible. Therefore, physical
evidence refers to all the tangible, visible touch points which the customer will encounter
before he/she buys. The better the physical evidence, the bigger will be the target market
8. Program: Programs reflects all the firm’s consumer-directed activities. It encompasses
the old four Ps as well as a range of other marketing activities that might not fit as neatly
into the old view of marketing. Regardless of whether they are online or offline,
traditional or nontraditional, these activities must be integrated such that their whole is
greater than the sum of their parts and they accomplish multiple objectives for the firm.

9. Performance: Performance as in holistic marketing, to capture the range of possible

outcome measures that have financial and nonfinancial implications (profitability as well
as brand and customer equity), and implications beyond the company itself (social
responsibility, legal, ethical, and community related). Finally, these new four Ps actually
apply to all disciplines within the company, and by thinking this way, managers grow
more closely aligned with the rest of the company.

SUMMARY
1. Customers are value maximizes. They form an expectation of value and act on it.
Buyers will buy from the firm that they perceive to offer the highest customer
delivered value, defined as the difference between total customer benefits and total
customer cost.

2. A buyer’s satisfaction is a function of the product’s perceived performance and the

buyer’s expectations. Recognizing that high satisfaction leads to high customer loyalty,
companies must ensure that they meet and exceed customer expectations.
3. Losing profitable customers can dramatically affect a firm’s profits. The cost of
attracting a new customer is estimated to be five times the cost of keeping a current
customer happy. The key to retaining customers is relationship marketing.

4. Quality is the totality of features and characteristics of a product or service that bear on
its ability to satisfy stated or implied needs. Marketers play a key role in achieving high
levels of total quality so that firms remain solvent and profitable.
5. Marketing managers must calculate customer lifetime values of their customer base to
understand their profit implications. They must also determine ways to increase the value
of the customer base.

5. Companies are also becoming skilled in customer relationship management (CRM),

which focuses on developing programs to attract and retain the right customers and
meeting the individual needs of those valued customers.

6. Customer relationship management often requires building a customer database and data
mining to detect trends, segments, and individual needs. A number of significant risks
also exist, so marketers must proceed thoughtfully.

8. Consumer behavior is influenced by three factors: cultural (culture, subculture, and

social class), social (reference groups, family, and social roles and statuses), and personal
(age, stage in the life cycle, occupation, economic circumstances, lifestyle, personality,
and self-concept). Research into these factors can provide clues to reach and serve
consumers more effectively.

9. Four main psychological processes that affect consumer behavior are motivation,
perception, learning, and memory.
10. To understand how consumers actually make buying decisions, marketers must
identify who makes and has input into the buying decision; people can be initiators,
influencers, deciders, buyers, or users. Different marketing campaigns might be targeted
to each type of person.
10. The typical buying process consists of the following sequence of events: problem
recognition, information search, evaluation of alternatives, purchase decision, and post
purchase behavior. The marketers’ job is to understand the behavior at each stage. The
attitudes of others, unanticipated situational factors, and perceived risk may all affect the
decision to buy, as will consumers’ levels of post purchase product satisfaction, use and
disposal, and the company’s actions.

12. Consumers are constructive decision makers and subject to many contextual influences.
They often exhibit low involvement in their decisions, using many heuristics as a result.

MARKET TARGET AND SEGMENTATION

Companies cannot connect with all customers in large, broad, or diverse markets. But they can
divide such markets into groups of consumers or segments with distinct needs and wants. A
company then needs to identify which market segments it can serve effectively. This decision
requires a keen understanding of consumer behavior and careful strategic thinking. To develop
the best marketing plans, managers need to understand what makes each segment unique and
different. Identifying and satisfying the right market segments is often the key to marketing
success.
To compete more effectively, many companies are now embracing target marketing. Instead of
scattering their marketing efforts, they’re focusing on those consumers they have the greatest
chance of satisfying. Effective target marketing requires that marketers:
1. Identify and profile distinct groups of buyers who differ in their needs and wants (market
segmentation).
2. Select one or more market segments to enter (market targeting).
3. For each target segment, establish and communicate the distinctive benefit(s) of the company’s
market offering (market positioning).
BASES FOR SEGMENTATION
Market segmentation divides a market into well-defined slices. A market segment consists of a
group of customers who share a similar set of needs and wants. The marketer’s task is to identify
the appropriate number and nature of market segments and decide which one(s) to target.
The major segmentation variables—geographic, demographic, psychographic, and behavioral
segmentation—are
1. Geographic Segmentation: Geographic segmentation divides the market into
geographical units such as nations, states, regions, counties, cities, or neighborhoods.
The company can operate in one or a few areas, or it can operate in all but pay attention
to local variations. In that way it can tailor marketing programs to the needs and wants
of local customer groups in trading areas, neighborhoods, even individual stores. In a
growing trend called grassroots marketing, such activities concentrate on getting as close
and personally relevant to individual customers as possible.

2. Demographic Segmentation: In demographic segmentation, we divide the market on

variables such as age, family size, family life cycle, gender, income, occupation,
education, religion, race, generation, nationality, and social class. One reason
demographic variables are so popular with marketers is that they’re often associated with
consumer needs and wants. Another is that they’re easy to measure. Even when we
describe the target market in non-demographic terms (say, by personality type), we may
need the link back to demographic characteristics in order to estimate the size of the
market and the media we should use to reach it efficiently.

3. Psychographic Segmentation: Psychographics is the science of using psychology and

demographics to better understand consumers. In psychographic segmentation, buyers are
divided into different groups on the basis of psychological/personality traits, lifestyle, or
values. People within the same demographic group can exhibit very different
psychographic profiles.

4. Behavioral Segmentation: In behavioral segmentation, marketers divide buyers into

groups on the basis of their knowledge of, attitude toward, use of, or response to a
product.

VALS SEGMENTATION SYSTEM

One of the most popular commercially available classification systems based on psychographic
measurements is Strategic Business Insight’s (SBI) VALSTM framework. VALS, signifying
values and lifestyles, classifies U.S. adults into eight primary groups based on responses to a
questionnaire featuring 4 demographic and 35 attitudinal questions. The VALS system is
continually updated with new data from more than 80,000 surveys per year (see Figure 8.1). You
can find out which VALS type you are by going to the SBI Web site.49 The main dimensions of
the VALS segmentation framework are consumer motivation (the horizontal dimension) and
consumer resources (the vertical dimension). Consumers are inspired by one of three primary
motivations: ideals, achievement, and self-expression. Those primarily motivated by ideals are
guided by knowledge and principles. Those motivated by achievement look for products and
services that demonstrate success to their peers. Consumers whose motivation is self-expression
desire social or physical activity, variety, and risk. Personality traits such as energy,
self-confidence, intellectualism, novelty seeking, innovativeness, impulsiveness, leadership, and
vanity—in conjunction with key demographics—determine an individual’s resources. Different
levels of resources enhance or constrain a person’s expression of his or her primary motivation.
The four groups with higher resources are:
1. Innovators—Successful, sophisticated, active, “take-charge” people with high self-esteem.
Purchases often reflect cultivated tastes for relatively upscale, niche-oriented products and
services.
2. Thinkers—Mature, satisfied, and reflective people motivated by ideals and who value order,
knowledge, and responsibility. They seek durability, functionality, and value in products.
3. Achievers—Successful, goal-oriented people who focus on career and family. They favor
premium products that demonstrate success to their peers.
4. Experiences—Young, enthusiastic, impulsive people who seek variety and excitement. They
spend a comparatively high proportion of income on fashion, entertainment, and socializing. The
four groups with lower resources are:
1. Believers—Conservative, conventional, and traditional people with concrete beliefs. They
prefer familiar, U.S.-made products and are loyal to established brands.
2. Strivers—Trendy and fun-loving people who are resource-constrained. They favor stylish
products that emulate the purchases of those with greater material wealth.
3. Makers—Practical, down-to-earth, self-sufficient people who like to work with their hands.
They seek U.S.-made products with a practical or functional purpose.
4. Survivors—Elderly, passive people concerned about change and loyal to their favorite brands.
Marketers can apply their understanding of VALS segments to marketing planning. For example,
Transport Canada, the agency that operates major Canadian airports, found that Actualizers, who
desire to express independence and taste, made up a disproportionate percentage of air travelers.
Given that segment’s profile, stores such as Sharper Image and Nature Company were expected
to do well in the firm’s airports.
Psychographic segmentation schemes are often customized by culture. The Japanese version of
VALS, Japan VALSTM, and divide society into 10 consumer segments on the basis of two key
concepts: life orientation (traditional ways, occupations, innovation, and self-expression) and
attitudes to social change (sustaining, pragmatic, adapting, and innovating).
SUMMARY
1. Target marketing includes three activities: market segmentation, market targeting, and market
positioning. Market segments are large, identifiable groups within a market.
2. Two bases for segmenting consumer markets are consumer characteristics and consumer
responses. The major segmentation variables for consumer markets are geographic,
demographic, psychographic, and behavioral. Marketers use them singly or in combination.
3. Business marketers use all these variables along with operating variables, purchasing
approaches, and situational factors.
4. To be useful, market segments must be measurable, substantial, accessible, differentiable, and
actionable.
5. We can target markets at four main levels: mass, multiple segments single (or niche) segment,
and individuals.
6. A mass market targeting approach is adopted only by the biggest companies. Many companies
target multiple segments defined in various ways such as various demographic groups who seek
the same product benefit.
7. A niche is a more narrowly defined group. Globalization and the Internet have made niche
marketing more feasible to many.
8. More companies now practice individual and mass customization. The future is likely to see
more individual consumers take the initiative in designing products and brands.
9. Marketers must choose target markets in a socially responsible manner at all times.

MARKET POSITIONING

What is Market Positioning?

Market Positioning refers to the ability to influence consumer perception regarding a brand or
product relative to competitors. The objective of market positioning is to establish the image or
identity of a brand or product so that consumers perceive it in a certain way.
For example:
• A handbag maker may position itself as a luxury status symbol
• A TV maker may position its TV as the most innovative and cutting-edge
• A fast-food restaurant chain may position itself as the provider of cheap meals

Types of Positioning Strategies

There are several types of positioning strategies. A few examples are positioning by:

• Product attributes and benefits: Associating your brand/product with certain characteristics
or with certain beneficial value
• Product price: Associating your brand/product with competitive pricing
• Product quality: Associating your brand/product with high quality
• Product use and application: Associating your brand/product with a specific use
• Competitors: Making consumers think that your brand/product is better than that of your
competitors

A Perceptual Map in Market Positioning

A perceptual map is used to show consumer perception of certain brands. The map allows you to
identify how competitors are positioned relative to you and to identify opportunities in the
marketplace.

How to Create an Effective Market Positioning Strategy?

Create a positioning statement that will serve to identify your business and how you want the
brand to be perceived by consumers. For example, the positioning statement of Volvo: “For
upscale American families, Volvo is the family automobile that offers maximum safety.”
1. Determine company uniqueness by comparing to competitors
Compare and contrast differences between your company and competitors to identify
opportunities. Focus on your strengths and how they can exploit these opportunities.
2. Identify current market position
Identify your existing market position and how the new positioning will be beneficial in setting
you apart from competitors.
3. Competitor positioning analysis
Identify the conditions of the marketplace and the amount of influence each competitor can have
on each other.
4. Develop a positioning strategy
Through the preceding steps, you should achieve an understanding of what your company is,
how your company is different from competitors, the conditions of the marketplace,
opportunities in the marketplace, and how your company can position itself.
Alternative Positioning Strategies Available to a Firm
A perceptual map can help a company identify different positioning strategies available and
select the appropriate one. A company can pursue one of the following positioning strategies:
• Attribute Positioning: If a company positions itself in terms of a certain attribute such as years
of experience it has, its size, or so on, it is called attribute positioning.
• Benefit Positioning: In the benefit positioning, the company tries to establish its brand as
offering the best benefit in one or more areas.
• Use/Application Positioning: If the product is positioned as best in certain use or application,
it is called use/application positioning.
• User Positioning: User positioning is when the product is positioned as best for certain user
groups/segments.
• Competitor Positioning: In competitor positioning, a producer tries to establish his product as
superior to his competitor/s.
• Product Category Positioning: In the product category positioning, a product is positioned as
the best/leader in a particular product category.
• Quality/Price Positioning: In quality positioning, the seller tries to give the market the idea
that his product offers the best value to consumers’ money.

Why do Companies adopt a Positioning Strategy?

You have seen that a company can try to differentiate its product in many different ways. No
matter how a company tries to differentiate its product, it will not be considered different if
customers do not perceive it differently. Adopting a policy of differentiating products involves a
cost to the company, and it expects to realize such costs by increased sales. But, there is no
guarantee that sales will go up unless customers act positively. To act positively, customers look
for something in a product claimed by its seller as different.
A company should, therefore, be careful in selecting ways of differentiation and provide for the
following criteria in its offer:
• Importance: If a product can deliver highly valued benefits to most customers, it will be
considered important by them.
• Distinctive: A product will be considered distinctive by the buyers if it offers something not
offered by the competing brands.
• Superior: If the difference seems to be better by the customers than other ways obtaining the
same benefit, they consider it superior.
• Communicable: Marketer should develop such a difference which can easily be intimidated to
market, and the market should be able to visualize that easily.
• Preemptive: If the competing firms cannot easily copy the difference, they possess the
preemptive feature.
• Affordable: Differentiation, you know, costs to the company, and the company realizes that
from customers. It should, therefore, consider whether customers are in a position to bear the
same. If they can, such differentiation is called affordable.
• Profitable: To work out a differentiation company needs to incur a lot of costs. A company does
so with the hope of making a sizable profit through increased sales. If sales do not increase
proportionately to warrant company profit, such differentiation cannot be called profitable.

Importance of Market Positioning

1. Creating greater customer perception: Positioning is the interface between brand identity and
brand image. Brand identity in the marketplace depends on positioning. Customer’s perception
of the brand develops only when the Market Positioning is proper.
2. Positioning as a source of competitive advantage: Better marketing positioning will give the
company a competitive advantage over other firms on the market.
3. Edge over competitor: Market Differentiation with Positioning – Positioning breaks the clutter
of noise. There are plenty of products and the number of firms delivering them is several.
Positioning will help a firm to stand out in the crowd of sellers.
4. Effective and efficient communication: A clear Brand Position enables you to efficiently and
effectively communicate and reach your target audience. Clear market positioning makes the
brand and its product visible and attractive to the customers.
4. Positioning Makes Buy easy for Customers: Consumers want easy solutions and options to
make purchase decisions. And positioning triggers an emotional response from your target
audiences, giving them a quick way to trust you and increase the interest level of customers and
increase sales numbers.

MARKET REPOSITIONING

What is Market Repositioning?

Market repositioning is when a company changes its existing brand or product status in the
marketplace. Repositioning is usually done due to declining performance or major shifts in the
environment. Many companies, instead of repositioning, choose to launch a new product or
brand because of the high cost and effort required to successfully reposition a brand or product.
Repositioning refers to the major change in positioning for the brand/product. To successfully
reposition a product, the firm has to change the target market’s understanding of the product.
This is sometimes a challenge, particularly for well-established or strongly branded products.
Firms may consider repositioning a product due to declining performance or due to major shifts
in the environment. Many firms choose to launch a new product (or brand) instead of
repositioning because of the effort and cost required to successfully implement the change.
Definition of repositioning
• Positioning is the target market’s perception of the product’s key benefits and features, relative
to the offerings of competitive products.

Therefore, in definition terms, repositioning is “implementing a major change” in the perception

of the product, resulting is the relatively similar definition of:
• Repositioning is the task of implementing a major change the target market’s perception of the
product’s key benefits and features, relative to the offerings of competitive products.
This view of repositioning as being a change of the established product positioning is reinforced
by the following two quotes:

• “Sometimes, marketers feel the need to change the present position of the brand to make it
more meaningful to the target segment. This change in position, and finding a new position for
the brand, is called brand repositioning.” (Vashisht,2005).
• “Repositioning is changing consumers’ perceptions of a brand in relation to competing brands.”
(Lamb, Hair,& McDaniel, 2009).
Both definitions carry the word ‘change’ as the key issue. The first definition, however, suggests
that repositioning is focused upon the same target market.
But, as will be discussed, a product can be repositioned in order to appeal to a wider or different
target market
Example of Market Repositioning
The example below describes Coca-Cola’s repositioning of Mother Energy Drinks:
The Coca-Cola Company launched Mother Energy Drinks in 2006 into the Australian market.
The launch campaign was professionally executed, and Coca-Cola was able to leverage its
distribution channels to get the product into major retailers. However, the taste of Mother Energy
Drink was subpar and repeat purchases were very low. Coca-Cola was faced with a decision: to
improve and reposition the product or withdraw it and introduce a new brand and product. The
company ultimately decided to reposition the product due to already high brand awareness. The
biggest challenge faced by Coca-Cola was to persuade consumers to try the product again. The
company changed the packaging, increased the size of the can, and improved the taste of the
product. The re-launch of the product featured a new phrase – “New Mother, tastes nothing like
the old one.” Ultimately, Coca-Cola was able to successfully reposition Mother Energy Drinks
and the brand today competes with the two leading energy drinks in the market – V and Red
Bull.
Why reposition a brand?
Generally brand/products are repositioned due to a concerning market situation, such as:
• Decline stage of the product life-cycle (PLC)
• Declining sales or profit margin due to being positioned to close to a major competitor
• The introduction of a superior product by the company itself
• To support an overall strategic change by the firm
• To assist in entering new marketplaces or pursue new segments
• The brand/product has been classified as a dog in the BCG matrix

How will repositioning a brand be helpful?

As identified in the reasons to reposition a brand listed above, repositioning is even designed to
improve sales and profitability, or allow for improved strategic execution. Working through the
above list of reasons:

• Introduction of new usage of the same product: In the decline stage of the product life-cycle, it
may be possible to effectively reposition the brand or products for a new use. An example here
would be vinegar (a food product) also being used as an effective and safe cleaner for household
mold
• reduce direct influence of close competitor: Being positioned too close to a major competitor
means that the brand is constantly “sharing” sales from consumers who are seeking that set of
product benefits – and this often leads to increased sales promotions are discounting. A new
position will hopefully reduce direct competition and lead to more sales and profit stability.
• Introducing improved version which might result in increase sales and profitability: Introducing
a superior product will tend to happen in technology-driven markets, where a company is
bringing out improved products consistently. Therefore, repositioning the older product will
assist in reducing product cannibalization with the goal of generating higher overall sales and
profits.
• Implementing improved strategic planning: Taking the brand in a new strategic direction is a
major decision by a company. They may wish for the brand to be seen as more modern,
innovative, convenient, helpful, and so on. In example here might be a traditional bank
repositioning to be seen as a modern online bank.
• Improve market position/Induce growth: Growth is often achieved by market development and
a firm may find that their traditional positioning limits their growth in new markets where that
original positioning may not resonate as well.
• Creating growth opportunities: A brand/SBU that has been classified as a dog in the BCG
matrix is typically considered to have limited prospects – having a relatively weak market share
in a stable low growth market. Therefore, possibly repositioning will create opportunities for
growth.

UNIT 2
Service Marketing-Concepts, contribution and reasons for the growth of services sector,
difference in goods and service in marketing, characteristics of services, service marketing
mix, GAP models of service quality, service encounter. Customer Behavior in Service
Encounters: Customer decision making: The 3-stage model of service consumption,
understanding service encounters, defining moments of truth, Customer expectation and
perception of services.

Important Questions 

Section A 

a) What is Services? 
b) Define Services. 
c) What is Services Management? 
d) What is Intangibility? 
e) What is Inseparability? 
f) What is Heterogeneity or Variability? 
g) What is Professional Services? 
h) Mention the four examples for the Professional Services. 
i) Mention the Marketing Mix of Services. 
j) Mention the Extended marketing mix P‟s of Services. 
k) What is Service Encounter? 
l) What do mean by Word-of-Communication? 

Section B 
a) Explain the Characteristics of Services? 
b) What is Services? Differentiate between the Good and Services. 
c) Briefly explain the Classification of Services. 
d) Briefly explain the Marketing Mix components of Services. 
e) What is Service Process? Explain various types of Service Processes. 

Section C 

a) What is Services? Explain the Characteristics of Services and also differentiate

between  the Goods and Services. 
b) What is Marketing Mix? Explain the Marketing Mix components. 
c) Bring out the Importance and Reasons for the Growth of Service in the Indian Economy.

What is Service Marketing

Ans. A service is an act or performance offered by one party to another. They are economic
activities that create value and provide benefits for customers at specific times and places as a
result of bringing desired change.
According to American Marketing Association, “Services are the activities, benefits or
satisfactions which are offered for sale or are provided in connection with the sale of goods.” A
service is an act or a performance offered by one party to another whose production may or may
not be attached to the physical product. Services, which are economic activities, are solutions to
customer problems or needs. They are typically aimed at improving, upholding or sustaining the
lifestyle of the customer. Also includes social efforts by the government to fight the evils present
in the society. For e.g. : services offered by banks, insurance companies etc.
contribution and reasons for the growth of services sector
Introduction
The services sector is not only the dominant sector in India’s GDP, but has also attracted
significant foreign investment, has contributed significantly to export and has provided
large-scale employment. India’s services sector covers a wide variety of activities such as trade,
hotel and restaurants, transport, storage and communication, financing, insurance, real estate,
business services, community, social and personal services, and services associated with
construction.

Contribution
Share of the services sector accounted for 54% of the total GVA in FY21. India’s services sector
GVA increased at a CAGR of 11.43% to Rs. 101.47 trillion (US$ 1,439.48 billion) in FY20, from
Rs. 68.81 trillion (US$ 1,005.30 billion) in FY16. Between FY16 and FY20, financial, real estate
and professional services augmented at a CAGR of 11.68% (in Rs. terms), while trade, hotels,
transport, communication and services related to broadcasting rose at a CAGR of 10.98% (in Rs.
terms).
Services exports comprise a major part of the total export from India. According to RBI, between
April 2021 and September 2021, India’s service exports stood at US$ 114.58 billion, whereas
imports stood at US$ 65.08 billion.
The India Services Business Activity Index/ Nikkei/IHS Markit Services Purchasing Managers'
Index stood at 55.2 in September 2021, compared with 56.7 in August 2021.

Contribution of service sector in India

1. it has been observed that the contribution of services sector into GDP of India has been
increasing at considerable proportion and thereby it has proved to be a major sector
among all the three sectors of the economy. The service sector has been contributing
towards the gross state domestic product (GSDP) of different states and union territories
(UTs) satisfactorily in recent years
2. The importance of services sector to Indian economy can also be traced from its
attainment of higher compound annual growth rate (CAGR). 
3. the growth in services sector will definitely support growth process in agriculture and
industrial sector in reasonable proportion and thereby assist the economy in generating
employment and raising overall productivity.
4. Employment Generation of Services Sector: The important of services sector can also
be realised from its contribution towards generation of employment in India. Although
the primary sector (mainly agriculture) is the dominant employer followed by the services
sector, the share of services sector has been increasing over the years and that of the
primary sector has been decreasing.
5. Contribution to India’s Services Trade: The services sector is also playing an
important role sector in raising the volume of exports in the country. Thus India is
moving towards a services-led export growth in recent years. 
6. Contribution towards Human Development: Services sector has a lot of contribution
towards human development in our country. Accordingly, services sector has been
rendering some valuable services, viz., health services, educational facilities, IT and IT
enabled services (ITes), skill development, health tourism, sports, cultural services etc.
which are largely responsible for human empowerment and improvement of quality of
life of the people in general.
7. Services Sector Growth and FDI Inflows: Modest growth of services sector has made
ample scope for the smooth inflow of FDI into the country. FDI also plays a major role in
the dynamic growth of the services sector. On the positive side, at global level, medium
term prospects for services are generally better than those manufacturing sector with
international investment in the services sector expected to grow relatively faster.
8. Contribution towards Development of Infrastructure and Communication Services:
Services sector has also been playing an important role in developing expanding and
management of infrastructure with a special emphasis on development of transportation
and communication services. In a developing country like India the importance of
development of infrastructural facilities is quite high.
9. Contribution towards Growth of IT and ITeS: The services sector has also paved the
way for a continuous growth of its IT and IT enabled services (ITeS) sector and thereby
helping the economy of the country to attain higher growth both in terms of GDP share,
employment, exports etc. which has put India on the global map. The IT and ITeS sector
of the country has developed an image of a young and resilient global knowledge power
and has earned a brand identity in this sector. The IT and ITeS industry has four major
sub-components : IT services, business process outsourcing (BPO), engineering services
and research and development (R&D), and software products. This IT and ITeS sector
has been generating considerable amount of revenues and employment in the economy.
10. Contribution towards Development of Some Social Services: Services sector is also
playing an important role in the development and expansion of some social services like
sports, cultural services etc. Sports promotes physical fitness and develops human
personality which also played an important role in national identity, community bonding
and international bonding.

Reasons for growth in service sector:

Main reasons behind the growth of services include rapid urbanization, the expansion of the
public sector and increased demand for intermediate and final consumer services. Access to
efficient services has become crucial for the productivity and competitiveness of the entire
economy.

Tertiary/service sector in India has been growing rapidly for a number of reasons :-

(i) In a developing country, the government has to take the responsibility for the provision of
basic services for example, hospitals, educational institutions, post and telegraph services, police
stations, courts, village administrative offices, municipal corporations, defense, transport, banks,
insurance companies etc.

(ii) The development of agriculture and industry leads to the development of services such as
trade, transport, storage etc. Greater the development of the primary and secondary sectors, more
would be the demand for such services.

(iii) As income levels rise, certain sections of people start demanding many more services, such
as eating out, tourism, shopping, private hospitals; private schools, professional training etc. This
change was quite sharp in cities, especially in big cities.

(iv) Over the past decade or so, certain new services, such as those based on information and
communication technology have become important and essential.

(v) Government policy of privatization has also led to growth of this sector.

(vi) A large number of workers are engaged in services, such as small shopkeepers, repair
persons, transport persons etc.

(vii) However, the entire sector has not grown. Large numbers of people engaged as construction
workers, maid, peons, small shopkeepers etc. do not find any change in their life.
viii. Rapid urbanization
ix.
x. expansion of the public sector 
xi. Increased demand for intermediate and final consumer services
xii. Access to efficient services has become crucial for the productivity and competitiveness of
the entire economy.
Difference between GOODS AND SERVICES
Goods and services are an essential part of an economy, and these two terms are used in most of
the important economic discussions.
There are many products that a consumer purchases in order to fulfill their certain requirements.
These products can be either in the form of goods or services.
Goods are tangible, as in these have a physical presence and they can be touched, while services
are intangible in nature.
The purpose of both goods and services is to provide utility and satisfaction to the consumer.

Goods Meaning
The meaning of goods can be expressed in terms of economics, as any item that provides utility
and fulfills the needs of the consumer.
Goods can be classified as durable and non-durable based on their durability. Durable goods last
for a long time while non-durable goods perish sooner than durable goods.
Goods involve transfer of ownership from the seller once it is purchased by the consumer
(buyer). There is a certain time period that is required for the production of goods.
Goods due to their tangible nature have a proper structure, size and shape. They can be produced
as per the market demand.

Services Meaning
Services are the intangible and non physical part of the economy that cannot be touched. They
are perishable in nature as they need to be provided at a moment when requested by the
consumer.
Service lacks a physical identity and cannot be owned, it can only be utilised. For e.g, when
having dinner at a restaurant you can avail the concierge services but you do not own the
restaurant.
In other words, there is no transfer of ownership in services and unlike goods, services cannot be
stored and utilised later. Also, services cannot be distinguished from the service provider.
The following points of difference between services and goods can be discussed.

Basis of Comparison Goods Services

Nature Tangible Intangible

Transfer of Possible Not Possible

Ownership
Separable Goods can be separated from the seller Services cannot be separated
from the service provider

Storage Goods can be stored Services cannot be stored

Perishable Not all goods are perishable Services are perishable

Production and Goods have a significant time gap between Services are produced and
Consumption production and consumption consumed together

Characteristics of services
Service is an act or performance offered by one party to another. They are economic activities
that create value and provide benefits for customers at specific times and places as a result of
bringing about a desired change in or on behalf of the recipient of the service. The term service is
not limited to personal services like medical services, beauty parlors, legal services, etc.
According to the marketing experts and management thinkers the concept of services is a wider
one. The term services are defined in a number of ways but not a single one is universally
accepted.
The distinct characteristics of services are mentioned below.
Intangibility: Services are intangible we cannot touch them are not physical objects. According
to Carman and Uhl, a consumer feels that he has the right and opportunity to see, touch, hear,
smell or taste the goods before they buy them. This is not applicable to services. The buyer does
not have any opportunity to touch smell, and taste the services. While selling or promoting a
service one has to concentrate on the satisfaction and benefit a consumer can derive having spent
on these services. For e.g. An airline sells a flight ticket from A destination to B destination.
Here it is the matter‟ of consumer’s perception of services than smelling it or tasting it.
Perishability : Services too, are perishable like labor, Service has a high degree of perish ability.
Here the element of time assumes a significant position. If we do not use it today, it labor if ever.
If labor stops working, it is a complete waste. It cannot be stored. Utilized or unutilized services
are an economic waste. An unoccupied building, an unemployed person, credit unutilized, etc.
are economic waste. Services have a high level of perish ability.
Inseparability: Services are generally created or supplied simultaneously. They are inseparable.
For an e.g., the entertainment industry, health experts and other professionals create and offer
their service at the same given time. Services and their providers are associated closely and thus,
not separable. Donald Cowell states „Goods are produced, sold and then consumed whereas the
services are sold and then produced and consumed‟. Therefore inseparability is an important
characteristic of services which proves challenging to service management industry.
Heterogeneity: This character of services makes it difficult to set a standard for any service. The
quality of services cannot be standardized. The price paid for a service may either be too high or
too low as is seen in the case of the entertainment industry and sports. The same type of services
cannot be sold to all the consumers even if they pay the same price. Consumers rate these
services in different ways. This is due to the difference in perception of individuals at the level of
providers and users. Heterogeneity makes it difficult to establish standards for the output of
service firm.
Ownership: In the sale of goods, after the completion of process, the goods are transferred in the
name of the buyer and he becomes the owner of the goods. But in the case of services, we do not
find this. The users have only an access to services. They cannot own the service. For e.g. a
consumer can use personal care services or medical services or can use a hotel room or
swimming pool, however the ownership remains with the providers. According to Philip Kotler,
“A service is an activity or benefit that one party can offer to another that is essentially intangible
and does not result in the ownership of anything. “From this it is clear that the ownership is not
affected in the process of selling the services.
Simultaneity: Services cannot move through channels of distribution and cannot be delivered to
the potential customers and user. Thus, either users are brought to the services or providers go to
the user. It is right to say that services have limited geographical area. According to Carman,
“Producers of services generally have a small size area of operations than do the producers of
items largely because the producer must to get the services or vice- versa.” When the producers
approach the buyer time is taken away from the production of services and the cost of those
services is increased. On the other hand it cost time and money for the buyers to come to
producers directly. Here the economics of time and travel provide incentives to locate more
service centers closer, to prospective customer, resulting in emergence of smaller service centers
for e.g. aero plane cannot be brought to customer, etc.
Quality Measurement: A service sector requires another tool for measurement. We can measure
it in terms of service level. It is very difficult to rate or quantify total purchase. E.g. we can
quantify the food served in a hotel but the way waiter serves the customer or the behavior of the
staff cannot be ignored while rating the total process. Hence we can determine the level of
satisfaction at which users are satisfied. Thus the firm sells good atmosphere convenience of
customers, consistent quality of services, etc.
Inconsistency : It refers to the variation in performance of services. People perform most
services and people are not always consistent in their performance. Performance may vary from
one individual or service to another within the same organization or in the service one individual
provides from day to day and from customer to customer. Thus services are much more difficult
to standardize than tangible goods. For example, an airline may not give the same quality of
service on each trip; All repair jobs which a mechanic does may be consistent.
Cannot be Produced in Anticipation of Demand : Goods can be produced in anticipation of
demand. For instance, cars, computers, CDs, etc., can be produced in advance and stored till they
are demanded in the market. However, services cannot be produced in anticipation of demand.
For instance, one cannot produce and stock hairstyles, airline travelling, etc.
Cannot be Returned to Seller Once Used:
A defective computer can be returned back to the seller, but a defective hairstyle or poor quality
of teaching/ counseling cannot be returned back to the service provider. Because of this reason,
consumer of services do prefer to take services of highly skilled specialists, may be even quite a
distance away.
Time Utility is Crucial :
In services, time factor is crucial. A tangible item such as car can be stocked for several days or
even months before it is sold to the buyer. However, in the case of services, a service provider
who sits idle waiting for customers to turn loses that time forever. This is why some service
providers like doctors insist on prior appointments by their clients.
Need for Personal Interaction : In services marketing there is a need for personal interaction
between the service provider and the customer. Therefore, service providers can customize the
services as per the needs of individual customers. For instance, there is a need for personal
interaction between a doctor and a patient and therefore the doctor will treat individual patients
differently.
Direct Channel : Generally, services are provided directly to the customers. Rarely middlemen
may be present in case of services marketing. For instance, if a client needs bank services or
hotel services he may directly go to the service provider. Even where indirect channels are used,
such as in the case of insurance services, travel and tours. the channel of distribution will be
restricted to one or two intermediaries. A common approach for distribution of some services to
a broad market is through franchising like McDonalds Fast Food Chain. The franchiser provides
to the franchisee the rights of operating the business under the franchiser‟s trade name for a
consideration of royalty or franchising fees.
marketing mix of services
The service marketing mix is also known as an extended marketing mix and is an integral part of
a service blueprint design. The service marketing mix consists of 7 P‟s as compared to the 4 P‟s
of a product marketing mix(now product marketing mix is also 7ps) . Simply said, the service
marketing mix assumes the service as a product itself. However it adds 3 more P‟s which are
required for optimum service delivery.
The product marketing mix consists of the 4 P‟s which are Product, Pricing, Promotions and
Placement. The extended service marketing mix places 3 further P‟s which include People,
Process and Physical evidence. All of these factors are necessary for optimum service delivery.
Product –
The product in service marketing mix is intangible in nature. Like physical products such as a
soap or a detergent, service products cannot be measured. Tourism industry or the education
industry can be an excellent example. At the same time service products are heterogenous,
perishable and cannot be owned. The service product thus has to be designed with care.
Generally service blue printing is done to define the service product. For example – a restaurant
blue print will be prepared before establishing a restaurant business. This service blue print
defines exactly how the product (in this case the restaurant) is going to be.
Place-
Place in case of services determine where is the service product going to be located. The best
place to open up a petrol pump is on the highway or in the city. A place where there is minimum
traffic is a wrong location to start a petrol pump. Similarly a software company will be better
placed in a business hub with a lot of companies nearby rather than being placed in a town or
rural area.
Promotion –
Promotions have become a critical factor in the service marketing mix. Services are easy to be
duplicated and hence it is generally the brand which sets a service apart from its counterpart. You
will find a lot of banks and telecom companies promoting themselves rigorously. Why is that? It
is because competition in this service sector is generally high and promotions is necessary to
survive. Thus banks, IT companies, and dotcoms place themselves above the rest by advertising
or promotions.
Pricing –
Pricing in case of services is rather more difficult than in case of products. If you were a
restaurant owner, you can price people only for the food you are serving. But then who will pay
for the nice ambience you have built up for your customers? Who will pay for the band you have
for music? Thus these elements have to be taken into consideration while costing. Generally
service pricing involves taking into consideration labor, material cost and overhead costs. By
adding a profit mark up you get your final service pricing.
People –
People is one of the elements of service marketing mix. People define a service. If you have an
IT company, your software engineers define you. If you have a restaurant, your chef and service
staff defines you. If you are into banking, employees in your branch and their behavior towards
customers defines you. In case of service marketing, people can make or break an organization.
Thus many companies nowadays are involved into specially getting their staff trained in
interpersonal skills and customer service with a focus towards customer satisfaction. In fact
many companies have to undergo accreditation to show that their staff is better than the rest.
Definitely a USP in case of services.
Process –
Service process is the way in which a service is delivered to the end customer. Lets take the
example of two very good companies – Mcdonalds and Fedex. Both the companies thrive on
their quick service and the reason they can do that is their confidence on their processes. On top
of it, the demand of these services is such that they have to deliver optimally without a loss in
quality. Thus the process of a service company in delivering its product is of utmost importance.
It is also a critical component in the service blueprint, wherein before establishing the service,
the company defines exactly what should be the process of the service product reaching the end
customer.
Physical Evidence –
The last element in the service marketing mix is a very important element. As said before,
services are intangible in nature. However, to create a better customer experience tangible
elements are also delivered with the service. Take an example of a restaurant which has only
chairs and tables and good food, or a restaurant which has ambient lighting, nice music along
with good seating arrangement and this also serves good food. Which one will you prefer? The
one with the nice ambience. That’s physical evidence. Several times, physical evidence is used as
a differentiator in service marketing. Imagine a private hospital and a government hospital. A
private hospital will have plush offices and well dressed staff. Same cannot be said for a
government hospital. Thus physical evidence acts as a differentiator.
This is the service marketing mix (7p) which is also known as the extended marketing mix. Of
course the marketing mix for services still needs to address the remaining 4Ps of pricing,
product, place and promotion.
Pricing for services
Pricing needs to take into account two factors in relation to services.
The first issue is what is the unit which we are pricing? Do we sell a hotel room based on its area
or upon how long you use it for? Would you cost dental surgery by the amount of time you sat in
the dentist‟s chair or by the actual procedure that was undertaken?
Secondly if a price is based upon a bundle of sub services then how do you price it as a whole?
An example of this would be an all-you-can-eat menu priced at a single point e.g. €20, or would
you charge for each item on the menu individually and add-on a service charge?
Product for services
In this instance our product and service are pretty much the same. However as we have discussed
our service is intangible etc. One-way dealing with this is to consider that: service = product +
process. So, we need to focus upon the process. For example, when you arrive at a hotel people
process you to ensure that you are registered and your baggage is taken to a room. This is an
example of people processing. Another type of processing is possession processing, and an
example would be where you take your dog to be groomed, or you organize a service for your
car i.e., your possessions are processed. Both of these are examples of product in relation to
service.
Place for services
Where you consume the service is a central part of the services marketing mix. With the place
element the marketer considers convenience, location, footfall, number of outlets, and timing.
Consider an event which takes place over a weekend. If you have a food trailer which sells
organic salads to the public you need to make sure that you are actually booked at the event, that
people will walk past your trailer and be able to stop and queue, and that you are able to sell to
the people when they want to eat. Simply scale this up for businesses like Pizza Express.
Promotion for services
Obviously, services are more difficult to assess in terms of attributes in comparison to tangible
products. The marketer needs to be more innovative and clearer when it comes to the benefits to
the target market of his or her service. The marketer can try a number of techniques which
include: Emphasizing any tangible cues e.g., telecommunications companies will use symbols
such as Mercury to emphasize speed. Burger King will use boxes and packaging which
emphasize its marketing communications. Exploiting celebrity to provide information about the
service. There are many examples of well-known public faces telling us on TV how they
purchase life assurance or organize their final will. Branding is everything to service. Starbucks
does sell coffee and cake but much of its offering is its service. Starbucks‟ logo, its location, the
ambience of their stores and the whole service experience is all part of the brand Starbucks.
There are many other examples of this including KFC and McDonalds. Can you think of
anymore?
Physical Evidence
Physical evidence is the environment in which the service is delivered, and where the firm and
customer interact, and any tangible components that facilitate performance or communication of
the service. Physical Evidence is the material part of a service. Strictly speaking there are no
physical attributes to a service, so a consumer tends to rely on material cues. There are many
examples of physical evidence, including some of the following buildings, equipment, signs and
logos, annual accounts and business reports, brochures, your website, and even your business
cards. Physical evidence lesson
Process
Process is the actual procedures, mechanisms, and flow of activities by which the service is
delivered – this service delivery and operating systems. There are a number of perceptions of the
concept of process within the business and marketing literature. Some see processes as a means
to achieve an outcome, for example – to achieve a 30% market share, a company implements a
marketing planning process. However in reality it is more about the customer interface between
the business and consumer and how they deal with each other in a series of steps in stages, i.e.
throughout the process.
People
People are all human actors who play a part in service delivery and thus influence the buyers‟
perceptions; namely, the firm‟s personnel, the customer, and other customers in the service
environment. People are the most important element of any service or experience. Services tend
to be produced and consumed at the same moment, and aspects of the customer experience are
altered to meet the individual needs of the person consuming it.

GAP MODEL OF SERVICE QUALITY

The Gap Model of Service Quality (aka the Customer Service Gap Model or the 5 Gap Model) is
a framework which can help us to understand customer satisfaction.
The model shows the five major satisfaction gaps that organizations must address when seeking
to meet customer expectations. The model was first proposed by A. Parasuraman, Valarie
Zeithaml, and Leonard L. Berry in 1985.
In the Gap Model of Service Quality, customer satisfaction is largely a function of perception. If
the customer perceives that the service meets their expectations then they will be satisfied. If not,
they’ll be dissatisfied. If they are dissatisfied then it will be because of one of the five customer
service “gaps” shown below

To use the model, an organization should measure each of these gaps and then take steps to
manage and minimize each gap. Let’s examine each of the five gaps in turn.
Gap 1: Knowledge Gap
The knowledge gap is the difference between the customer’s expectations of the service and the
company’s provision of that service.
Essentially, this gap arises because management doesn’t know exactly what customers expect.
There are a number of reasons this could happen, including:
● Lack of management and customer interaction.
● Lack of communication between service employees and management.
● Insufficient market research.
● Insufficient relationship focus.
● Failure to listen to customer complaints.
Example:
If Netflix were to suffer from this gap then it could be because they don’t offer the right amount
of newer titles to their customer. If Pizzahut were to suffer from this gap then it could be because
they don’t offer pecan pie. In both cases, customers expect these things but they simply aren’t
offered.
Gap 2: The Policy Gap
The policy gap is the difference between management’s understanding of the customer needs and
the translation of that understanding into service delivery policies and standards.
There are a number of reasons why this gap can occur:
● Lack of customer service standards.
● Poorly defined service levels.
● Failure to regularly update service level standards.
Example:
If Netflix were to suffer from this gap then it could be that they offer all the right shows but the
streaming quality level isn’t high enough. If Pizzahut where to suffer from this gap then it could
be they offer pecan pie but the quality isn’t as good as people expect.
This gap causes customers to seek a similar service elsewhere but with better service.
Gap 3: The Delivery Gap
The delivery gap is the difference between service delivery policies and standards and the actual
delivery of the service.
This gap can occur for a number of reasons:
● Deficiencies in human resources policies.
● Failure to match supply to demand.
● Employee lack of knowledge of the product.
● Lack of cohesive teamwork to deliver the product or service.
Example:
If Netflix were to suffer from this gap then it could be because when the customer selects the
show they want to watch it takes five minutes before it starts to play. In this case, the product
isn’t performing as it should.
If Pizzahut were to suffer from this gap then it could be that when the customer orders the pecan
pie they are informed that the kitchen has run out. In this case, supply hasn’t been adequately
matched to demand.
Gap 4: The Communication Gap
The communication gap is the gap between what gets promised to customers through advertising
and what gets delivered.
Again. there are a number of reasons why this can happen:
● Overpromising.
● Viewing external communications as separate to what’s going on internally.
● Insufficient communications between the operations and advertising teams.
Communication gaps lead to customer dissatisfaction. This happens because what they receive
isn’t what they were promised. In the worst case, it may cause them to turn to an alternative
supplier.
Example:
If Netflix were to experience this gap then it could be because that although the service is good it
isn’t as good or as easy to use as depicted in the advert. If Pizzahut were to suffer from this gap
then it could be because the pecan pie was good but it wasn’t as large or delicious as it looked in
the advert.
Gap 5: The Customer Gap
The customer gap is the difference between customer expectations and customer
perceptions. This gap occurs because customers do not always understand what the service has
done for them or they misinterpret the service quality.
Many organizations can be completely blind to this gap. This gap can happen because of one of
the other four gaps, or simply because the customer perceives the quality of the
service incorrectly. In a worst-case scenario, it could lead to a business losing a large proportion
of their customers overnight. Although the company thought there was no gap, the reality was
that their customers were just waiting for someone to fill their perceived gap.
Important

According to the Gap Model of Service Quality, the only way to close the customer gap is to
close the other 4 gaps in the model. The extent to which one or more of these four gaps exist will
determine the extent to which customer perceived quality falls short of their expectation.
There is no way for the company to directly close this gap.

SERVICE ENCOUNTER
Service encounter is generally defined as a consumer's direct contact with a service provider,
including both face-to-face interaction and experience.
service encounter means “any discrete interaction between the customer and the service
provider relevant to a core service offering”.
SERVICE MARKETING AND CONSUMER BEHAVIOR
Marketing and consumer behavior are intrinsically connected. Without grasping a level of
understanding of what drives consumers, marketers would have a pretty difficult time identifying
the right market segments and putting together a marketing campaign that will attract attention.
Studying consumers helps marketers improve their strategies because it gives them stronger
insight into understanding buyer behavior. By obtaining a view into how consumers think, feel,
reason and choose, marketers can use this information to not only design products and services
that will be in demand, but also how to present these options to the consumer base in an
attractive fashion. An "official" definition of consumer behavior is "The study of individuals,
groups, or organizations and the processes they use to select, secure, use, and dispose of
products, services, experiences, or ideas to satisfy needs and the impacts that these processes
have on the consumer and society."
Here are some of the other factors that influence consumer behavior and the attributes
marketers should consider valuable:
Decision making
The thought processes consumers use in their decision making is an important behavior to try
and understand. Marketers want to try and tap into what makes consumers tick as they ponder
their choices and learn just what the types of things lead to a final decision. This way they can
align their products to remain in the running and be hopefully chosen.
Product use/complements
Understanding how consumers use products and what complement items are used is of value.
Marketers who gain insight to how products are used and what accompanying products are
purchased can then use this information to design products and develop complement products
that are enticing and attractive to consumers.
Environmental influences
Environmental influences also play an important role in consumer behavior. Culture, family,
types of advertising and the media can all influence the ways consumers make choices. This is
one of the reasons why advertisements are designed to be attractive and consumers identify with
the content.
Consumer knowledge
Social awareness is also a factor. Dr. Perner brings up the example, "aggressive marketing of
high fat foods, or aggressive marketing of easy credit, may have serious repercussions for
national health and economy". With any information on the Web readily available, there is a
much higher level of consumer awareness and knowledge. People aren't going to fall for flaky
advertisements or poorly designed marketing campaigns because it is easy to look things up.
Marketers should understand there are always cause and effects. Consumers today are pretty
savvy, and much of their behavior is focused around social awareness.
Motivation
What motivates consumers is also an important concept for marketers to understand. This is
another valuable area to tap into because products, services and marketing campaigns can be
designed to flow along the same path as consumer motivating factors.
Social media marketing
Friends influencing friends is also an important behavior today's marketers need to understand.
Some statistics, as e Marketer points out, suggest about 7 out of 10 millennial social users are
"somewhat" influenced by the recommendations provided by friends on social networks. It is
unwise for marketers to ignore this very popular and valuable channel of advertising. Social
media has become an important channel, and will likely continue to maintain a strong presence
in the lives of consumers; however, how it is leveraged will depend on how social networks are
perceived and utilized. Understanding consumer behavior is a vital component of marketing.
Businesses that don't understand the how, why and where of consumers, and gain insight to why
they make the choices they do, are going to have a much harder time making a connection and
reaching those coveted sales.

3 STAGE MODEL
Pre stage
Service encounter
Post stage
A moment of truth is simply any interaction during which a customer may form an impression of
your brand or product. This impression may be either positive or negative. The aim for the user
experience designer is to try and ensure that moments of truth have a positive impact on the
customer/user impression of the brand or product.

It is moments of truth that allow Herbert Simon’s famous quote; “Everyone designs who devises
courses of action aimed at changing existing situations into preferred ones.” to be widely true in
business.

Design moments of truth are rather different from psychological moments of truth. So you won’t
need to ask awkward questions like this one when designing your services.

Why Does the Moment of Truth Matter?

The moment of truth matters because in an increasingly crowded market place, brands and
products can only differentiate themselves on service. Wherever a gap in the market exists there
will be many competitors (in most non-monopoly circumstances) that rush to fill that gap. While,
initially, there may be the ability to differentiate on the capability to meet a need – over time, that
differential will eventually wane and the majority of providers in a market space will operate in
similar (if not identical) manners. Thus this leaves service as the only means of tangible
differentiation.

If a customer is delighted at every interaction with a brand or product they are unlikely to churn
(quit the brand or product) in favor of a competitor. There is also more chance that the customer
will go on to become engaged with the brand and even become a “brand ambassador” or “brand
fanatic”.

There are two real potential outcomes at a moment of truth – a magical moment or a miserable
moment. While neutral outcomes are possible, they are in reality unlikely; you will either
impress or fail to impress a customer during most interactions. These moments were first
conceptualized by Shep Hyken a Customer Experience designer.

Moments of truth can lay anywhere within the customer lifecycle. It’s important to examine the
lifecycle from end-to-end to determine where they actually are.

Magical Moments

A magical moment is one where the customer’s expectations are not just met but are exceeded.
Many designers will think big picture on this (for example; a guest in a hotel checks in on their
birthday and is rewarded with an upgrade to a suite) but in truth magical moments can be
delivered by just handling an interaction well (for example; a fast food restaurant rapidly
delivering a warm and tasty burger when the customer is in a rush).

Miserable Moments

Miserable moments not only suck but increase the likelihood of customer churn and the customer
telling others about poor service. They are the moments where a shop assistant ignores a client
looking for help or where a call center operative speaks rudely to the client.

It is worth noting that miserable moments can be created into magical moments if the customer is
concerned enough to complain to the service provider about the issue. How issues are resolved
can often help create lasting positive impressions on the customer; which is good because it is
unlikely (if not impossible) to prevent all possible lapses in service before they occur.

Four Discrete Moments of Truth

There are four moments of truth in service and customer experiences that have been recently
conceptualized and defined in service design. The first was developed by Google, the next two
by Proctor and Gamble and the final one by Brian Solis, the author of “What’s the Future of
Business: Changing the Way Businesses Create Experiences.”

● Zero Moment of Truth – this is the first possible moment of contact between a brand or
product and the customer. It’s when a problem arises in the customer’s mind and they get
online and go hunting for the perfect solution or to learn about possible solutions.
● First Moment of Truth – this occurs the first time a potential client comes into contact
with your products. It’s the impression that they form when they see the product for the
first time and begin learning about it. Proctor and Gamble say that this is the moment that
marketers should concentrate their efforts on to turn potential customers into actual
customers.
● Second Moment of Truth – this is the ongoing relationship with a product. The things
your customers think, see, here, touch, smell, etc. about the product and the brand over
the lifetime of the relationship.
● Ultimate Moment of Truth – the stage when the user or customer begins to share their
experiences with others and thus creates many more zero moments of truth.

How Can You Create Magical Moments of Truth?

There are no real surprises here. As with all areas of design – talking to customers and users will
enable you to create magical moments that matter to those customers and users. Everyone’s
customers and users are different – there’s no single formula to aid in creating the right
experiences at the moments of truth.

The Take Away

Moments of truth are based on interactions with your product or brand that either make or break
the user or customer experience. These moments of truth can be designed by UX or CX or
Service Design professionals as long as they are aware of them and are able to talk to their users
and customers to find out what will work for them.

Moments of truth contribute a lot to superior service delivery and customer satisfaction – which
in turn drive the cycle of profitable business evolution.

Unit 3
Brand Management
Brand – Branding Challenges and Opportunities – Lapferer‘s Brand Identity Prism-
Strategic Brand Management Process; Brand Equity – Types of Brand Equity (Price
Based, Cost Based And Customer Based Brand Equity) - Methods of Calculating Brand
Equity – Basic Problems – Sources of Brand Equity – Benetton‘s Brand Equity
Management; Brand Elements – Criteria for Choosing Brand Elements – Options and
Tactics for Brand Elements; Ansoff‘s Growth Share Matrix – Brand Extension – Brands
Across Geographic Boundaries and Brands Over Time.

Brand Management –
Meaning and Important Concepts BRAND:
A brand is the set of product or service attributes imbibed in the consumer’s mind in the form of
a name, symbol, logo, design and trademark.
The importance of brand management is: - Product differentiation from competitors - Building
corporate image - Creating bundle of benefits for different product categories - Attract and retain
the most loyal customers Brand management begins with having a thorough knowledge of the
term “brand”. It includes developing a promise, making that promise and maintaining it. It means
defining the brand, positioning the brand, and delivering the brand. Brand management is
nothing but an art of creating and sustaining the brand. Branding makes customers committed to
your business. A strong brand differentiates your products from the competitors. It gives a
quality image to your business.
IMPORTANCE OF BRAND MANAGEMENT
A brand represents who your company is and what it stands for. This includes your name, logo,
messaging, merchandise, design, and any other feature that identifies your company and its
products and service and makes it distinct from others. With your brand you are developing a
promise, conveying the message of this promise and then maintaining it.
Brand management is the science of crafting and sustaining a brand. This means defining the
brand, positioning the brand, and delivering the brand value constantly. Branding creates
customer commitment to your business. A robust brand differentiates its products from the
competitors and gives your business a leg up on the others, allowing you to increase sales and
grow your business.
Brand management includes handling both the noticeable and intangible characteristics of a
brand. When it comes to product brands, this includes the product itself, packaging, pricing,
availability, etc. With service brands, tangibles include customers’ experience. The intangibles
include emotional connections and expectations with products and services. Branding also
involves assembling a blend of the right marketing campaigns to create and reinforce your
identity. If done right, you can even create a brand that is able to break through the noise and
create brand loyalty.
Your brand should:
• Make your product or service distinctive from the competition • Identify what customers can
only get from your brand (Don’t camouflage your strengths!) • Trigger instant recognition with
customers and prospects • Position yourself as an expert • Be present when and where it matters
(Queue your integrated marketing campaigns) • Remind people of the reputation for which you
are known. Show up locally to reinforce this • Place your company top-of-mind with your
audience • See better return on investment, more brand awareness • Capitalize on mind share to
help drive sales.
BRANDING
The branding process means sending a message to the world about who you are and what you
stand for.  The idea behind this is to make people understand what your name, product, or service
is, and to present it in such a way so that they want it or aspire for it.

In other words, branding is an exercise that creates a lasting impression on the market. It helps
customers organize their knowledge and feelings about their brand in such a way so that they
recall your brand in a positive way.

In simple terms, Branding is all about adding Value to Your Product without Changing It.

Branding is all about helping people to know, understand, and want your offering (product,
service, idea).

Branding is the process of making your products, services, and your company (startup) known,
preferred, and wanted for decided features in your decided target audiences.
Benefits of Branding
Your business needs to create a positive image in the minds of consumers. Contrary to what
most people believe, branding isn’t just a logo. Your business’s purpose, focus, and image all
combine to create your brand. Why should you make this effort?
Below are a few benefits:
• You are remembered: It’s hard to remember a company with a generic name. You may not be
able to distinguish their purpose and business focus. And why would you call a company if you
couldn’t tell what they did? Branding your business ensures that consumers will know what
you’re about.
• You gain customer loyalty: The fact is, people build close bonds with brand identities.
Consumers want quality products that they can trust. So, your business should have an identity
that your customers can cling to. If your company delivers great products and services and has a
great brand identity, people will remember you. Additionally, they will often refer you to friends
and family.
• You become well-known: You want the people who have not done business with you to still
know who you are and what you do. If they see your ads on billboards, hear them on the radio,
see them on television, or any other media, they will know your brand identity. And when the
time comes that they need your product or service, your company will be the first to come to
mind.
• Consumers pay for image: We are a very brand-aware society. People commonly associate
brand names with quality and may only buy certain brands for that reason. If people only want
one brand of a particular product, they are willing to pay a higher price. Having a great brand
will make your company have a superior image and cause consumers to forget about the
competition. When you have distinguished your business through branding, the marketing has
the capability of becoming so profound that little else is necessary. Developing your brand takes
time and effort, but after it has been solidified, and after customers have had the chance to
identify with it, your sales can increase naturally. You won’t have to spend as much time
planning marketing strategies to attract the public.
BRAND-CHALLENGES
1. Treating brands as assets
The ongoing pressure to deliver short-term financial results coupled with the fragmentation of
media will tempt organizations to focus on tactics and measurables and neglect the objective of
building assets.

2. Possessing a compelling vision

A brand vision needs to differentiate itself, resonate with customers and inspire employees. It
needs to be feasible to implement, work over time in a dynamic marketplace and
drive brand-building programs. Visions that work are usually multidimensional and adaptable to
different contexts. They employ concepts such as brand personality, organizational values, a
higher purpose and in general they simply move beyond functional benefits.
3. Creating new subcategories
The only way to grow, with rare exceptions, is to develop “must have” innovations that define
new subcategories and build barriers to inhibit competitors from gaining relevance. That requires
substantial or transformational innovation and a new ability to manage the perceptions of a
subcategory so that it wins.

4. Generating breakthrough brand building

Exceptional ideas and executions that break out of the clutter are necessary in order to bring the
brand vision to life. These ideas and the execution of them are more critical than the size of your
budget. “Good” is just not good enough. That means making sure you get more ideas from more
sources, and that you make sure you have the mechanisms in place to recognize brilliance and
bring those ideas to market – quickly.

5. Achieving integrated marketing communication (IMC)

IMC is more elusive and difficult than ever in light of the various methods you have to choose
from such as advertising, sponsorships, digital, mobile, social media and more. These methods
tend to compete with each other rather than reinforce because the media scene and options have
become so complex, so dynamic, and because product and country silos reflect competition and
isolation rather than cooperation and communication.

6. Building a digital strategy

This arena is complex, dynamic and in need of a different mindset. The reality is, the audience is
in control here. New capabilities, creative initiatives and new ways to work with other marketing
modalities are required. Adjust the digital marketing focus from the offering and the brand to the
customer’s sweet spot, which is to say the activities and opinions in which they are interested or
even passionate about. Develop programs around that sweet spot in which the brand is an active
partner, such as Pampers did with Pampers Village or what Avon did with their Walk for Breast
Cancer.

7. Building your brand internally

It is hard to achieve successful integrated marketing communications or breakthrough marketing
without employees both knowing the vision and caring about it. The brand vision that lacks a
higher purpose will find the inspiration challenge almost impossible.
8. Maintaining brand relevance
Brands face three relevance threats: Fewer customers buying what the brand is offering,
emerging reasons not-to-buy, and loss of energy. Detecting and responding to each requires an
in-depth knowledge of the market, plus a willingness to invest and change.

9. Creating a brand-portfolio strategy that yields synergy and clarity

Brands need well-defined roles and visions that support those roles. Strategic brands should be
identified and resourced, and branded differentiators and energizers should be created and
managed.

10. Leveraging brand assets to enable growth

A brand portfolio should foster growth by enabling new offerings, extending the brand vertically
or extending the brand into another product class. The goal is to apply the brand to new contexts
where the brand both adds value and enhances itself.

kapferer‘s Brand Identity Prism

The Brand Identity Prism model was created by J. Kapferer in 1986. According to Kapferer,
there are mainly six elements of a brand that helps in forming the brand’s identity in the mind of
consumers.

Thus, he coined the concept of brand identity prism and built a model that focused on these six
elements that interact and from an identity as a whole.

Definition – Brand Identity Prism is a six-element model that represent the identity of a brand as
a whole. Following are the elements of the brand identity prism:
● Physique

● Personality
● Culture
● Self-Image
● Reflection
● Relationship
The prism will allow you to represent all the above characteristics in the form of a prism and thus
better map it to one another.

It also helps in differentiating brand from one another which are generally quite similar. For
example, Coca Cola and Pepsi. If you ask an average person, they might use Coke and Pepsi
synonymously. But as a marketer you should know how both the brands have successfully
created a unique brand identity to differ from one another.
What are The Six Elements of Brand Identity Prism?

The six elements are divided into two broad categories i.e., externalization and internalization.
Physique, Relationship and Reflection are externalized elements of the brand identity prism
which depend upon how the brand appears to the consumer.

Whereas, Personality, Culture and Self-Image are internalized elements that depend upon how
the brand wants to appear to the consumer.

PHYSIQUE

 the physical characteristics of a brand that are visible i.e., the logo, colours of the brand,
packaging etc.

Personality

Personality doesn’t mean choosing the right brand ambassador for the brand. as a marketer you
need to ensure that the personality of your brand is being perceived by the consumers in the way
you want to.

Culture

Culture describes the values, ideals, morals, style of working, relationship between staff
members etc. of a brand. For examples, culture for Apple would be US based culture of working,
democratic, consumer-centric etc.  

Self-image

Ask this question to yourself when describing self-image in the brand identity prism- “what do I
feel when I use the brand” i.e., you as a consumer, what is the feeling that you get when you use
a particular brand.

For example, if I use Lakme products, I feel sexy, I feel beautiful. When I use Levi’s, I feel cool,
trendy etc.

Brands generally help in achieving certain aspirations that consumer have and self-image
describes just that.
Reflection

Reflection helps in answering this question – “How do consumers perceive the brand”. Do not
get confused between reflection and self-image. Self-image is more internal to the brand and
reflection is external i.e., it majorly depends upon how consumers recognize the brand as.

For example, reflection of a brand like Zara would be very stylish, individualistic (in the image
below) and for a brand like Corona would be young, cool, open-minded etc.

Relationship

Relationship describes the engagement between the consumers and the brand. Consumers tend to
form a strong relationship with certain brands that always meet their expectations.

You are surrounded by brand all the time. Currently I myself am surrounded by thousands of
brands such as Classmate, Pringles, Mc Graw Hill, Nykaa etc. It is hard to count all of them on
my fingers.

However, I have a relationship will all those brands. I use Nykaa when I want to look beautiful
and stylish and Nykaa helps me with that. That is the relationship I have with Nykaa, it is like
my beauty partner, my style advisor. 

BRAND EQUITY

Brand equity refers to a value premium that a company generates from a product with a
recognizable name when compared to a generic equivalent. Companies can create brand equity
for their products by making them memorable, easily recognizable, and superior in quality and
reliability. Mass marketing campaigns also help to create brand equity.

Brand equity is a set of brand assets and liabilities linked to a brand name and symbol, which add
to or subtract from the value provided by a product or service. In 1991 I published a book,
Managing Brand Equity, that defines brand equity and describes how it generates value.

● Brand equity refers to the value a company gains from its name recognition when
compared to a generic equivalent.
● Brand equity has three basic components: consumer perception, negative or positive
effects, and the resulting value.
● Brand equity has a direct impact on sales volume and a company's profitability because
consumers gravitate toward products and services with great reputations.
● Often, companies in the same industry or sector compete on brand equity.
The Brand Equity Outline

• Brand Loyalty

Reduced marketing costs, Trade leverage • Attracting new customers via awareness and
reassurance • Time to respond to competitive threats

• Brand Awareness • Anchor to which other associations can be attached • Familiarity which
leads to liking • Visibility that helps gain consideration • Signal of substance/commitment

• Brand Associations, including Perceived Quality • Help communicate information •

Differentiate/Position • Reason-to-buy • Create positive attitude/feelings • Basis for extensions

BENETTON BRAND’S EQUITY MODEL

One of the world’s top clothing manufacturers (with global sales of $2.4 billion), Benetton has
experienced some ups and downs in managing its brand equity. Benetton built a powerful brand
by creating a broad range of basic and colorful clothes that appealed to a wide range of
consumers. Their corporate slogan, “United Colors of Benetton,” would seem to almost perfectly
capture their desired image and positioning. It embraces both product considerations (the
colorful character of the clothes) and user considerations (the diversity of the people who wore
the clothes), providing a strong platform for the brand. Benetton’s ad campaigns reinforced this
positioning by showing people from a variety of different racial backgrounds wearing a range of
different-colored clothes and products.

Benetton’s ad campaigns switched directions, however, in the 1980s by addressing controversial

social issues. Created in-house by famed designer Oliviero Toscani, Benetton print ads and
posters featured such unusual and sometimes disturbing images as a white child wearing angel’s
wings along- side a black child sporting devil’s horns; a priest kissing a nun; an AIDS patient
and his family in the hospital moments before his death; and, in an ad run only once, 56 close-up
photos of male and female genitalia.

Critics labeled these various campaigns gimmicky “shock” advertising and accused Benetton of
exploiting sensitive social issues to sell sweaters. One fact is evident. Although the campaigns
may have succeeded with a certain market segment, they were certainly more “exclusive” in
nature—distancing the brand from many other consumers—than the early Benetton ad
campaigns, which were strikingly inviting to consumers and “inclusive” in nature. Not
surprisingly, the new ads were no always well received by its retailers and franchise owners.

Since 2001, Benetton’s advertisements have featured more conventional images—teenagers in

colorful Benetton clothing. Benetton maintained that the company would maintain its “socially
responsible” status by focusing on noncontroversial themes like racial discrimination, poverty,
child labor, AIDS awareness, and so forth. Accordingly, a variety of campaigns were introduced
in the ensuing decade, such as “Food for Life” and “Microcredit Africa Works.” The first decade
in the new millennium, however, saw the emergence of fierce competition from Zara, H&M, and
others. Lacking the same vertical integration and “fast fashion” business practices and having
lost brand momentum, Benetton found itself surpassed by its more nimbler, popular rivals.

CRITERIA FOR CHOOSING BRAND ELEMENTS

Brand elements, sometimes called brand identities, are those trademarkable devices that serve to
identify and differentiate the brand. • The main ones are brand names, URLs, logos, symbols,
characters, spokespeople, slogans, jingles and packages. • The customer-based brand equity
model suggests that marketers should choose brand elements to enhance brand awareness;
facilitate the formation of strong, favorable, and unique brand associations; or elicit positive
brand judgments and feelings. • The test of the brand-building ability of a brand element is what
consumers would think or feel about the product if they knew only that particular brand element
and not anything else about the product and how else it would be branded or marketed.

In general, there are six criteria for brand elements

1. Memorable: A necessary condition for building brand equity is achieving a high level of brand
awareness. Brand elements that promote that goal are inherently memorable and attention-getting
and therefore facilitate recall or recognition in purchase or consumption settings

2. Meaningful:

Brand elements may take on all kinds of meaning, with either descriptive or persuasive content.
• General information about the function of the product or service: Does the brand element have
descriptive meaning and suggest something about the product category, the needs satisfied or
benefits supplied?

• Specific information about particular attributes and benefits of the brand: Does the brand
element have persuasive meaning and suggest something about the particular kind of product, or
its key points-of-difference attributes or benefits?

3. Likable: Independent of its memorability and meaningfulness, do customers and the brand
element aesthetically appealing? Is it likable visually, verbally, and in other ways? Brand
elements can be rich in imagery and inherently fun and interesting, even if not always directly
related to the product.

4. Transferable

Transferability measures the extent to which the brand element adds to the brand equity for new
products or in new markets for the brand.

• How useful is the brand element for line or category extensions? In general, the less specific
the name, the more easily it can be transferred connotes a massive South American river and
therefore as a brand across categories. For example, Amazon can be appropriate for a variety of
different types of products

• To what extent does the brand element add to brand equity across geographic boundaries and
market segments? To a large extent this depends on the cultural content and linguistic qualities of
the brand element. One of the main advantages of nonmeaningful, synthetic names like Exxon is
that they transfer well into other languages.

5. Adaptable :

The other consideration for brand elements is their adaptability over time. Because of
changes in consumer values and opinions, or simply because of a need to remain
contemporary, most brand elements must be updated. The more adaptable and flexible the
brand element, the easier it is to update it. For example, logos and characters can be given a
new look or a new design to make them appear more modern and relevant.

6. Protectable
Another consideration is the extent to which the brand element is protectable— both in a
legal and a competitive sense. Marketers should (1) choose brand elements that can be
legally protected internationally, (2) formally register them with the appropriate legal
bodies, and (3) vigorously defend trademarks from unauthorized competitive
infringement.

The first three criteria—memorability, meaningfulness, and likability—are the marketer’s

offensive strategy and build brand equity. The latter three, however, play a defensive role for
leveraging and maintaining brand equity in the face of different opportunities and constraints.

Ansoff‘s Growth Share Matrix – Brand Extension – Brands Across Geographic Boundaries and
Brands Over Time.

The Ansoff Matrix for Product Market Growth is ​a very useful tool for developing market
launch strategies. The matrix for product and market context provides decision makers,
entrepreneurs and marketers a framework for developing their company's growth
strategies.

The Ansoff Matrix was developed by Igor Ansoff and was originally published in the 1957
Harvard Business Review in his article “Strategies for Diversification”. The strategy tool has
since then been taught at universities for business students and used in companies worldwide.

Ansoff suggested that effectively there are only two approaches to developing a growth strategy;
by varying what is sold (product growth) and to whom it is sold (market growth). In combination
with the Ansoff matrix described above, it offers four strategic options, each with a different
level of risk.

The (classic) Ansoff Matrix

the four fields of the matrix and understand the growth opportunities it offers your company.

 Market penetration: Existing market and existing products

The first and most widely used growth strategy for companies in the Ansoff Matrix is ​the
strategy of market penetration. It is about winning new market shares with an existing product.
The company is trying to sell even more of its products to existing, new and customer
competitors.
The aim of this strategy is to increase market share. The market penetration has a relatively low
risk, but also small growth opportunities.

Market development: new market, existing products

The next strategy is to develop new markets with existing products. The new markets can be new
countries and new target groups. Market development usually involves only minor changes to the
product or products in order to adapt to the new markets.

Product development or product modification: Existing market, new products

Product development as a strategy takes place when a new product is introduced to an existing
market with existing customers. This may be the case when replacing existing products or
expanding the product range.
The advantage of product development is that customers and the market are already known to the
company.

Diversification / Innovation: new market, new products

The last of the four strategies is mostly used by startups and start-up companies. Companies offer
completely new products in new markets. Diversification thus offers the greatest potential for
growth, but also the greatest risks to failure.

The diversification strategy is broken down into horizontal, vertical and lateral diversification
according to the degree of risk appetite:

Extended Ansoff Matrix (9-field matrix)

Ansoff’s original product market matrix is ​a good foundation. However, she omits some possible
intermediate areas. Therefore, the so-called extended or 9-field matrix is ​frequently used, which
has the following additional fields:

• Market expansion
• Product modification or extension
• Limited diversification
• Partial diversification
KELLER’S BRAND EQUITY MODEL

UNIT 4

Advertising Management

Setting Advertising Objectives – Advertising Objectives Vs Marketing Objectives – DAGMAR

Approach – AIDA Model – Shannon Weaver Model - Advertising Agencies; Setting Media
Objectives – Media Objectives Vs Advertising Objectives – Principles of Media Planning –
Types of Broadcast Media, Telecast Media, Indoor Media, Outdoor Media and Digital Media;
Copywriting – Copy Testing and Diagnosis – Practice of Copywriting.

Meaning of Advertising - Advertising is an activity of attracting public attention to a product or

business, as by paid announcements in the print, broadcast, or electronic media.

Advertising is a paid form of a non-personal message communicated through the various media
by industry, business firms, nonprofit organizations, or individuals. Advertising is persuasive and
informational and is designed to influence the purchasing behaviour and/or thought patterns of
the audience. Advertising is a marketing tool and may be used in combination with other
marketing tools, such as sales promotions, personal selling tactics, or publicity.

Definition of Advertising - Advertising is defined differently by different people, some of the

definitions are as follows:

According to Richard Buskirk, "Advertising is a paid form of non-personal presentation of

ideas, goods or services by an identified sponsor."

According to Wheeler, "Advertising is any form of paid non-personal presentation of ideas,

goods or services for the purpose of inducting people to buy."
According to William J. Stanton, "Advertising consists of all the activities involves in
presenting to a group, a non-personal, oral or visual, openly sponsored message regarding
disseminated through one or more media and is paid for by an identified sponsor."

Objectives of Advertising - The real objective of advertising is effective communication

between producers and consumers with the purpose to sell a product, service, or idea. The main
objectives of advertising are as follows:

Informative: TO INFORM
Objective of advertising is to inform its targeted audience/customers about introduction of new
product, update or changes in existing products or product related changes, information
regarding new offers and schemes. Informative advertising seeks to develop initial demand for a
product. The promotion of any new market entry tends to pursue this objective because
marketing success at this stage often depends simply on announcing product availability. Thus,
informative advertising is common in the introductory stage of the product life cycle.

Persuasive: TO PERSUADE TO BUY THE G/S

Objective of advertising is to increase demand for existing product by persuading new customer
for first time purchase and existing customers for repurchases. Persuasive advertising attempts to
increase demand for an existing product. Persuasive advertising is a competitive type of
promotion suited to the growth stage and the early part of the maturity stage of the product life
cycle.

Reminder: TO REMIND
The objective of advertising is to remind customers about existence of product, and ongoing
promotional activities. Reminder advertising strives to reinforce previous promotional activity by
keeping the name of a product before the public. It is common in the latter part of the maturity
stage and throughout the decline stage of the product life cycle.

some specific objectives of advertising.

o To make an immediate sale. 

o To build primary demand. 
o To introduce a price deal. 
o To build brand recognition or brand insistence. 
o To help salesman by building an awareness of a product among retailers. 
o To create a reputation for service, reliability or research strength. 
o To increase market share.
o To communicate with the customer
o To retain the loyalty of present and former customer
Advertising Objectives Vs Marketing Objectives

Advertising objectives Marketing objectives

Its objectives is to create awareness about Its objectives is how to bring clients or
product and its uses among potential customers customer to business.

It tries to find how to reach target customer and It decides what strategies are going to make
influence them to buy their product product famous

It decides how to create better and attractive What strategies gives maximum customer
advertisement as compared to competitors to satisfaction and make them happy
become popular more than the competitor
product

It decides the most suitable way to advertise What types of strategies will help to attract
like radio, newspaper, etc. to reach maximum customer of competitors.
customer

DAGMAR APPROACH

DAGMAR is an advertising model proposed by Russell Colley in 1961. Russell Colley

advocated that effective advertising seeks to communicate rather than to sell. Advertisers
discover whether their message conveyed enough information and understanding of a product to
their consumers and also its respective benefits from clear objectives.

DAGMAR is a marketing expression that stands for “Defining Advertising Goals

for Measured Advertising Results”. It is a marketing tool to compute the results of an advertising
campaign. DAGMAR attempts to guide customers through ACCA model. According to this
approach, every purchase encounter four steps; Awareness, Comprehension, Conviction, and
Action. DAGMAR method is an established technique of creating effective advertising.

DAGMAR MODEL HAS 4 STAGES:

1.AWARENESS
▪ Awareness of the existence of a product or a service is needful before the purchase
behavior is expected. The fundamental task of advertising activity is to improve the
consumer awareness of the product.
▪ Once the consumer awareness has been provided to the target audience, it should not
be forsaken. The target audience tends to get distracted by other competing messages
if they are ignored.
▪ Awareness has to be created, developed, refined and maintained according to the
characteristics of the market and the scenario of the organization at any given point
of time.
▪ The objective is to create awareness about the product amongst the target audience.

2. COMPREHENSION
Awareness on its own is not sufficient to stimulate a purchase. Information and
understanding about the product and the organization are essential. This can be
achieved by providing information about the brand features.
Example: In an attempt to persuade people to budge for a new toothpaste brand, it
may be necessary to compare the product with other toothpaste brands, and provide
an additional usage benefit, such as more effective than other toothpaste because it
contains salt or that this particular toothpaste is a vegetarian toothpaste, which will, in
turn, attract more customers.
The objective is to provide all the information about the product.

3. CONVICTION
▪ Conviction is the next step where the customer evaluates different products and
plans to buy the product. At this stage, a sense of conviction is established, and by
creating interests and preferences, customers are convinced that a certain product
should be tried at the next purchase.
▪ At this step, the job of the advertising activity is to mould the audience’s beliefs and
persuade them to buy it. This is often achieved through messages that convey the
superiority of the products over the others by flaunting the rewards or incentives for
using the product.
▪ Example: Thumbs up featured the incentive of social acceptance as “grown up”. It
implied that those who preferred other soft drinks were kids.
▪ The objective is to create a positive mental disposition to buy a product.

4. ACTION
▪ This is the final step which involves the final purchase of the product. The objective
is to motivate the customer to buy the product.

ADVANTAGES OF DAGMAR MODEL

According to Russell Colley, there are various advantages of well-founded objectives. These are:

▪ Be concrete and measurable

▪ Have a well-defined target audience or market
▪ Identify the benchmark and the degree of change
▪ Specify a timeframe to accomplish the objective

OBJECTIVES OF DAGMAR APPROACH

▪ Persuade a prospect to visit the showroom.
▪ Growth in market share.
▪ Improve sales turnover.
▪ Perform complete selling function.
▪ Advertise a special reason to buy.
▪ Stimulate impulse sales.
▪ Remind people to buy.
▪ Create awareness about the product and brand existence.
▪ Create favourable emotional disposition towards the product.
▪ Impart information regarding benefits and distinctive features of the product.
▪ Combat and offset competitive claims.
▪ Correct false impressions, wrong information and other hindrances to sales.
▪ Aid sales force with sales promotion and selling activities and boost their morale.
▪ Establish brand recognition and acceptance.

AIDA MODEL
The AIDA Model, which stands for Attention, Interest, Desire, and Action model, is an
advertising effect model that identifies the stages that an individual goes through during the
process of purchasing a product or service. The AIDA model is commonly used in digital
marketing, sales strategies, and public relations campaigns.
The AIDA Model Hierarchy
The steps involved in an AIDA model are:

● Attention: The first step in marketing or advertising is to consider how to attract the
attention of consumers.
● Interest: Once the consumer is aware that the product or service exists, the business must
work on increasing the potential customer’s interest level.
For example, Disney boosts interest in upcoming tours by announcing stars who will be
performing on the tours.

● Desire: After the consumer is interested in the product or service, then the goal is to make
consumers desire it, moving their mindset from “I like it” to “I want it.”
For example, if the Disney stars for the upcoming tour communicate to the target audience about
how great the show is going to be, the audience is more likely to want to go.

● Action: The ultimate goal is to drive the receiver of the marketing campaign to initiate
action and purchase the product or service.
Therefore, the AIDA model says that Awareness leads to Interest, which leads to Desire, and
finally, Action.

SHANON WEAVER MODEL OF COMMUNICATION

The Shannon and Weaver Model of Communication is a mathematical theory of
communication that argues that human communication can be broken down into 6 key
concepts: sender, encoder, channel, noise, decoder, and receiver.
It is known as the “mother of all models” because of its wide popularity. The model is also
known as ‘information theory’ or the ‘Shannon theory’ because Claude Shannon was the main
person who developed the theory.
The Shannon and Weaver model is a linear model of communication that provides a framework
for analyzing how messages are sent and received.
It is best known for its ability to explain how messages can be mixed up and misinterpreted in
the process between sending and receiving the message.

The Shannon Weaver model mathematical theory of communication follows the concept of
communication in a linear fashion from sender to receiver with the following steps:

1. Sender (Information Source)

The Shannon Weaver model starts with the sender or “information source”. They are the person
(or object, or thing – any information source) who has the information to begin with. The
information source starts the process by choosing a message to send, someone to send the
message to, and a channel through which to send the message.

A sender can send a message in multiple different ways: it may be orally (through spoken word),
in writing, through body language, music, etc.

Example: An example of a sender might be the person reading a newscast on the nightly news.
They will choose what to say and how to say it before the newscast begins.

2. Encoder (Transmitter)
The next step in the Shannon Weaver model is the ‘encoder’. The encoder is the machine (or
person) that converts the idea into signals that can be sent from the sender to the receiver. The
Shannon model was designed originally to explain communication through means such as
telephone and computers which encode our words using codes like binary digits or radio waves.

However, the encoder can also be a person that turns an idea into spoken words, written words,
or sign language to communicate an idea to someone.

Examples: The encoder might be a telephone, which converts our voice into binary 1s and 0s to
be sent down the telephone lines (the channel). Another encode might be a radio station, which
converts voice into waves to be sent via radio to someone.
3. Channel
The next step in the Shannon Weaver model is the ‘channel’. The channel of communication is
the infrastructure that gets information from the sender and transmitter through to the decoder
and receiver. We sometimes also call this the ‘medium’.

Examples: A person sending an email is using the world wide web (internet) as a medium. A
person talking on a landline phone is using cables and electrical wires as their channel.

If we’re face-to-face, perhaps we don’t have a channel, except the sound waves from our voice
that carry the sound from the sender’s mouth to the receiver’s ear.

4. Noise
The next step in the Shannon Weaver model is ‘noise’. Noise interrupts a message while it’s on
the way from the sender to the receiver. It’s named after the idea that ‘noise’ could interrupt our
understanding of a message. There are two types of noise: internal and external.

Internal noise happens when a sender makes a mistake encoding a message or a receiver makes
a mistake decoding the message. Here’s the two points where it can happen:

● At the point of encoding (for example, when you misspell a word in a text
message);
● At the point of decoding (for example, when someone misinterprets a sentence
when reading an email)
External noise happens when something external (not in the control of sender or receiver)
impedes the message. So, external noise happens:

● At the point of transmission through the channel (for example, when we’re having
a conversation by a busy highway and the receiver is having trouble hearing over
the sound of cars)
One of the key goals for people who use this theory is to identify the causes of noise and try to
minimize them to improve the quality of the message.

Examples: Examples of external noise may include the crackling of a poorly tuned radio, a lost
letter in the post, an interruption in a television broadcast, or a failed internet connection.

Examples of internal noise may include someone having a headache so they can’t concentrate,
someone speaking with a heavy accent, or when the sender mumbles when speaking.

5. Decoder
The next step in the Shannon Weaver model is ‘decoder’. Decoding is the exact opposite of
encoding. Shannon and Weaver made this model in reference to communication that happens
through devices like telephones. So, in this model, there usually needs to be a device that
decodes a message from binary digits or waves back into a format that can be understood by the
receiver.

If we’re talking about direct communication between people without the use of technology, there
may still be a need for decoding. For example, you might need to decode a secret message, turn
written words into something that makes sense in your mind by reading them out loud, or you
may need to interpret (decode) the meaning behind a picture that was sent to you.

Examples: Decoders can include computers that turn binary packets of 1s and 0s into pixels on a
screen that make words, a telephone that turns signals such as digits or waves back into sounds,
and cell phones that also turn bits of data into readable (and listenable) messages.

6. Receiver (Destination)
The next step in the Shannon Weaver model is ‘receiver’ The receiver is the end-point of the
original Shannon and Weaver model of the technical communication process. This is the step
where the person finally gets the message, or what’s left of it after accounting for noise.

Examples: Examples of a receiver might be: the person on the other end of a telephone, the
person reading an email you sent them, an automated payments system online that has received
credit card details for payment, etc.

7. Feedback
The final step in the Shannon Weaver model is ‘feedback’. Actually, the ‘feedback’ step was not
originally proposed by Shannon and Weaver in 1948. Norbert Weiner came up with the feedback
step in response to criticism of the linear nature of the approach. (‘Linear’ means that the
messages are only going one way).
Feedback occurs when the receiver of the message responds to the sender in order to close the
communication loop. They might respond to let the sender know they got the message or to show
the sender:

● Whether they got the message clearly without noise

● How well they understand the message
Nonetheless, the ‘feedback’ elements seems like a post-hoc add-on to the model, and is the
subject of a lot of criticism (see later in this article on ‘disadvantages of the model’ for details).

Examples: Feedback does not occur in all situations. Sometimes, like when watching TV, we
don’t tend to let the people talking on the TV know what we’re thinking … we simply watch the
show.

Some times when feedback will occur include:

● During a chat between friends

● When you write a reply email
● Through your facial expressions and body language during a conversation, etc.

ADVERTISING AGENCIES
It creates ads, plans how, when and where it should be delivered after then hand it over it to its
clients.

What is Media Planning?

Media planning is the process by which marketers determine where, when, and how often they
will run an advertisement in order to maximize engagements and ROI. The media plan might
split advertising spend and resources between various online and offline channels such as
broadcast, print, paid ads, video ads or native content.
In today’s competitive marketing landscape, marketers need to serve consumers with the right
message, at the right time, on the right channel in order to see engagements. Media planning is
where marketers determine what these “rights” are.

Here are some of the most popular channels that marketers choose when media planning, along
with their attributes.

Offline Media
● Magazines: Magazines have a long shelf life and often stay in a consumer’s possession
for two to four weeks after being read. Information in this medium tends to be retained
longer, since people read faster than they can listen. Research has shown there is a higher
amount of trust in magazine ads than in other forms of media (60 percent of readers
trusted the advertisements they saw in magazines).

Consumers are also less resistant to these kinds of advertisements, as these often tie in
with their interests. Publications tend to be very targeted (e.g., running magazines or
cooking magazines). They reach a secondary audience in addition to the target audience,
since they are passed along to family and friends.
● Newspapers: Advertising with local newspapers is a great way to ensure a brand’s
message stays local. When selecting this medium, marketers can choose which section of
the newspaper ads are placed for further targeting. If they want to target those interested
in fashion, they can select that section of the newspaper for their ad.
Additionally, newspaper readers are more likely to have higher education and 7 out of
10 of households earning above $100,000 read the newspaper. This can be important
when selecting ad space based on demographics. 
● Radio: Radio ads have a local appeal, allowing you to target specific areas or regions of
the country. It is also an easy medium to build frequency with your target audience, and is
considered a lower-cost medium.. According to research, exposure to a radio ad and time
to purchase is the shortest of any medium. Additionally, if paired with other forms of
media, the overall campaigns were more effective.
● TV & Cable: This media is highly visual and can demonstrate products in everyday life.
For example, if you sell a cleaning product, consumers can see the benefits of your
product and how these can be applied in their home. This medium is very prevalent, as
the average American watches approximately five hours of television a day.
● Out of Home: Media such as billboards are large and get attention. In a busy area, your
message can reach 10,000 people in a month. Out of home isn’t limited by billboards,
only your creativity is. Out-of-home is also an extremely mobile option. (e.g., using
displays to advertise luggage at an airport).

Online Media
● Digital Publications: Many digital publications have opportunities for you to email their
database through a personalized email or newsletter. They can track open rates and
understand conversion rates to your site or asset. These are often specialized publications,
making it easy to reach your target audience, and are great tools for lead generation
campaigns.
● PPC: Advertisers can capitalize on search intent. Advertisers can retarget people who
have visited their site. PPC is an extremely cost-effective medium.
● Social Media: Like PPC, social media is an extremely cost-effective medium. It is also
extremely targeted, allowing marketers to target by interests, age, marriage status, etc.
Social platforms are constructed on a basis of community, which allows your brand to
connect more personally with consumers. It also gives your brand the chance for content
to go viral.
● Programmatic Advertising: Programmatic advertising is extremely targeted, using an
algorithm to find and target specific audiences across digital platforms. When looking
into this, there are two methods to consider:
o Programmatic Bidding - uses demand side platforms to buy ads on the digital
market based on target audience.
o Real-Time Bidding - allows advertisers to bid on impressions to their target
audience. If their bid wins, the ad is displayed right away.

Types of Broadcast Media Advertising

. Radio Advertising

Radio advertising is described as “word of mouth advertising on a large scale“.

It appeals through the ears. Nowadays all radio stations all over the world broadcast commercial
advertising.
The advertisers prepare the program beforehand keeping in view the interests of the listeners.

Here, the message is delivered orally, not visually.

This advertisement can be made through a spot announcement or through sponsored

programmes. It has two forms:

A. Spot Announcements

These are short advertisements with a duration of a few words.

These may consist of opinions, dialogues, etc.

Their cost is usually less.

B. Sponsored Programmes

They require a longer time and hence their costs are usually high. They create interest in the
listeners.

They are presented with musical entertainment, dramas etc.

Its common example is Binaca Heet Mala of Srilanka Broadcasting Corporation.

2. Television Advertising

It is the latest and novel method of advertising. It provides the coordination of sound, sight,
motion and immediacy that no other medium provides.

It combines radio, movies and theatre. It is a colourful presentation.

In this medium, the salesman can present and demonstrate the product. It is like personal
selling.

A variety of techniques reused to produce the commercial message like ‘line action‘ cartoon,
puppets and stop motion.

It has a promising role to play in the advertising world.

3. Advertising Films

Commercial films are produced to publicize the products with a story.

They prove effective because they give the oral and visual message.

They create interest in younger customers. Advertising films possess entertainment value.

These are shown when the audience is eager to see the main picture.

Films can be used for the concentration of advertising efforts in certain areas.

4. Slides

These are exhibited in cinema houses. They produce the effect like posters.

These are exhibited on the screen for an agreed period.

The slides are shown before the cinema shows or during the intermission.

Generally, bold letters and eye-catching colours are used in slides.

Mostly, local retailers make use of of this medium.

5. Video Advertising

This medium has grown rapidly in advertising circles. broadcast media and examples

Video commercial films are produced to make publicity of products.

Sometimes, video commercials are linked with film cassettes which are used by video audience.

This advertising is shown in video parlours and clubs.

6. Cable TV Advertising

Cable TV has opened up various avenues for advertisers to promote their products.
It is in the form of spots sold to national advertisers on programming on networks. cable offers
the opportunity to create innovative advertisements.

This medium is ideal for products that require demonstration.

This medium gives immediate response. Here, we have some idea of the target audience.

It is a good medium for advertising products like ceasefire meant for the upper-middle and
middle classes.

Only national advertisers use this medium.

7. Drama and Music Programme

This medium is used largely for advertising in rural areas.

Advertisement is presented with religious dramas and music programs.

Advantages of Broadcast Media Advertising

1. It is a vehicle of mass communications.

2. It has a deep impact on the minds and emotions of the audience.
3. It is a highly flexible and selective medium.
4. It makes life lie presentation. It is creative and persuasive.
5. It includes popular means like radio, television, drama, music etc.
6. The message can be changed according to the requirements of the product or listeners.
7. People listen to the radio and watch TV at leisure time. Thus, the selling message can be
easily conveyed to them due to their receptive mood.

Disadvantages of Broadcast Media Advertising

1. It is highly perishable as compared with press media.

2. The cost of time and talent of this medium is very high.
3. All goods are not suitable for this medium.
4. It is able to appeal only to those people who use these entertaining means.
5. Effectiveness of this advertising cannot be measured easily.
6. It is often argued that some radio, TV programs and commercial films are of poor taste.
Vulgarity, nude symbols are often used for advertising.

INDOOR AND OUTDOOR MEDIA

Indoor advertising can be defined as – a type of advertising where messages and
announcements about merchandise, events or services are published within a closed area that you
control.

So, in everyday terms, advertising that you see in supermarkets, coffee shops, toilets, bus stations
and sports clubs will all be examples of indoor advertising.

Forms of indoor advertising include:

● Promotional posters
● Flyers
● Floor graphics
● Shop-windows
● Promotional stands
● Information table
● Light boxes
● Pull up banners
● Leaderboards
● Gross advertising

Outdoor advertising is anything that advertises your business, event or product outdoors can be
classed as outdoor advertising.

Forms of outdoor advertising include:

●Billboards
●Bus stop advertising
●Banners, building wraps, flags
●Interior and exterior of buses, taxis and business vehicles
●Outdoor signage
DIGITAL MEDIA

Digital media means any communication media that operate with the use of any of various
encoded machine-readable data formats. Digital media can be created, viewed, distributed,
modified, listened to, and preserved on a digital electronics device. Digital can be defined as any
data represented by a series of digits, while media refers to methods of broadcasting or
communicating these information. Together, digital media refers to mediums of digitized
information broadcast to us through a screen and/or a speaker.[1] This also includes text, audio,
video, and graphics that are transmitted over the internet for viewing or listening to on the
internet.

Examples of digital media include software, digital images, digital video, video games, web

pages and websites, social media, digital data and databases, digital audio such
as MP3, electronic documents and electronic books. Digital media often contrasts with print
media, such as printed books, newspapers and magazines, and other traditional or analog media,
such as photographic film, audio tapes or video tapes.

COPYWRITING

Copywriting is the act or occupation of writing text for the purpose of advertising or other forms
of marketing.[1] The product, called copy or sales copy, is written content that aims to
increase brand awareness and ultimately persuade a person or group to take a particular action.[2]
Copywriters help
create billboards, brochures, catalogs, jingle lyrics, magazine and newspaper advertisements, sale
s letters and other direct mail, scripts for television or radio commercials, taglines, white papers,
website and social media posts, and other marketing communications.
Copy testing is a specialized field of marketing research that determines an advertisement's
effectiveness based on consumer responses, feedback, and behavior. Also known as pre-testing,
it might address all media channels including television, print, radio, outdoor signage, internet,
and social media.

UNIT 5

Introduction of the Digital Marketing, importance, Search Engine Optimization (SEO) Social
Media Optimization (SMO) using Facebook, Twitter, Corporate Blogs, LinkedIn, Google plus;
Search Engine Marketing- Tools used for Search engine Marketing, Marketing Analytics: Point
of Sale Data- Assortment Optimization- Shelf Space Optimization- Market Basket Analysis.

Introduction of the Digital Marketing

Digital marketing is the use of the Internet, mobile devices, social media, search engines, and
other channels to reach consumers. Some marketing experts consider digital marketing to be an
entirely new endeavor that requires a new way of approaching customers and new ways of
understanding how customers behave compared to traditional marketing.

Digital marketing targets a specific segment of the customer base and is interactive. Digital
marketing is on the rise and includes search result ads, email ads, and promoted tweets –
anything that incorporates marketing with customer feedback or a two-way interaction between
the company and customer.
Internet marketing differs from digital marketing. Internet marketing is advertising that is solely
on the Internet, whereas digital marketing can take place through mobile devices, on a subway
platform, in a video game, or via a smartphone app.

Importance OF DM

1. You reach people where they spend their time

2. Your competitors are already doing it

3. You can compete with larger corporations

4. You can target your ideal audience

5. You can monitor your campaigns and optimize them for better results

6. You get an impressive return on your investment (ROI)

1. Cost-Effective
Digital marketing efforts require barely any initial investment. This is great for small businesses.
Most digital marketing tools offer basic features free of cost. It is up to the businesses to make
the best use of them. Check out the types of digital marketing tools.
2. High Reach 
With digital marketing, the reach is global. Hence, you can take orders for your product or
service from all over the world and it need not be limited to one area. And when you go global,
you can still niche your audience to selected individuals. Thus, it’s a win-win. 
3. Brand Awareness 
If a customer has no awareness of your brand then he cannot make a conversion. To tackle this,
brand visibility is extremely important. With pay-per-click and other kinds of paid promotions,
you can really attract customers to your small business. We recommend this Facebook and
Instagram Ads online course to understand some more.
4. Building a Customer Base
The challenge with small businesses is that one needs to build a customer base. This is based on
building a rapport with a strong customer relationship. With CRM tools such as HubSpot and
Oracle, you can manage this easily. 
The challenges for big businesses are slightly different. They need to retain existing business and
focus on brand reputation, client retention and on the growth of the business.
5. Brand Image 
An established company’s image is everything. The right campaign strategies can make or break
a company’s brand image. Through digital marketing, effective campaigns can be designed and
the scope fixing any glitches immediately is there.
6. Measurable Results 
With digital marketing, big companies can have real-time measurable results. With this, they can
analyze the effectiveness of the campaign and accordingly formulate strategies. Today, the
significance of analyzing data is very important to evaluate the effectiveness and success of your
campaigns. 
7. Increase in ROI
Companies can increase their revenue with digital media by investing in ads and thus, increasing
conversions. The investment in digital media is much lesser than traditional media and the
returns are also higher. Did you know? You can run ads on certain digital platforms for as low as
1$. 
8. Retaining Loyal Customers
The main goal of digital marketing for big businesses apart from increasing their business is
ensuring that their customer base is loyal and satisfied. 
These are reasons enough to indicate that the importance of digital marketing for businesses is
crucial and thus, you must consider adopting it for your business. A smart and solution-based
option would be to go for digital marketing corporate training. 

Search Engine Optimization (SEO)

SEO stands for “search engine optimization.” In simple terms, it means the process of improving
your site to increase its visibility when people search for products or services related to your
business in Google, Bing, and other search engines. The better visibility your pages have in
search results, the more likely you are to garner attention and attract prospective and existing
customers to your business.

Social Media Optimization (SMO) using Facebook, Twitter, Corporate Blogs, LinkedIn, Google
plus

Social media optimization (SMO) is the use of social media networks to manage and grow an
organization’s message and online presence. As a digital marketing strategy, social media
optimization can be used to increase awareness of new products and services, connect with
customers, and mitigate potential damaging news.

For many years, search engine optimization (SEO) was the standard for digital marketing efforts.
While social media optimization and search engine optimization have similar goals—to generate
web traffic and increase awareness for a company's website—search engine optimization is the
process of increasing the quality and quantity of website traffic by increasing the visibility of a
website or a webpage to users of a web search engine, especially Google.

More recently, social media marketing has come to the fore, at times converging with SEO and
in some instances replacing it as the most effective way to strengthen a brand, conduct lead
generation, increase a company's visibility in the online space, and connect to an audience.
Various social media platforms can be used for digital marketing, including Facebook, Twitter,
Instagram, Snapchat, YouTube, Pinterest, and TikTok.

Social media optimization often directs the public from these social media platforms to the
company's website, where more information can be provided. For example, a campaign to raise
awareness about a new automobile on social media may direct the visitor to a company webpage
that provides information about where local dealerships are located and how to schedule a test
drive.

Search Engine Marketing- Tools used for Search engine Marketing

Search engine marketing tools help marketers manage and optimize paid search ads. SEM tools
allow users to research keywords, set a budget, run paid ad campaigns, act on intelligent bidding
recommendations, automate bidding and copy generation, and analyze and forecast results.

SEM software provides valuable insights that help you grow your online business in an
increasingly competitive marketplace. Website owners can use these tools to research effective
keywords, set budgets for online ad campaigns, and analyze online marketing results.

SEM tools have different features that allow you to optimize paid search results. All SEM apps
have a keyword research feature. You can use the tool to find out relevant keywords for your
website.

Additionally, the application allows you to analyze competitors to find out relevant high
impression keywords. Some tools also allow you to analyze and boost online ad campaigns so
that they attract maximum qualified leads towards your website.

Q #3) What is the difference between SEO and SEM?

Answer: Search Engine Optimization (SEO) and SEM are two different digital marketing
techniques that help website owners to improve the online visibility of websites. SEO focuses on
improving organic search engine ranking.
List Of Most Popular SEM Software
1. Semrush
2. Wordstream
3. Google Ads
4. Supermetrics
5. Optmyzr
6. Keywordtool.io
7. Spyfu
Marketing Analytics: Point of Sale Data-

Assortment Optimization

Assortment planning is the process to determine what and how much should be carried in a
merchandise category. Assortment plan is a trade-off between the breadth and depth of products
that a retailer wishes to carry. Assortment optimization refers to the problem of selecting a set of
products to offer to a group of customers to maximize the revenue that is realized when
customers make purchases according to their preferences. Assortment affects costs because it
drives inventory decisions. Poorly conceived inefficient assortments raise inventory costs and
waste valuable shelf space. Assortment optimization is essential to a wide variety of application
domains that includes retail, online advertising, and social security. The process brings order out
of the mind-numbing complexity of thousands of SKUs across scores of markets and retailers.
This process demands internal alignment within manufacturers and retailers before they enter
into a collaborative process with one another. Like inventory optimization, assortment
optimization too takes demand and supply volatility into account.

Shelf Space Optimization

Shelf-space optimization models support retailers in determining the optimal shelf configuration.
They determine the number of facings for each item included in the assortment. A common
characteristic of these models is that they do not account for in-store handling processes.
However, shelf-space planning and in-store processes are strongly interrelated. Keeping more
shelf stock of one item increases demand of this item due to higher visibility, decreases the
replenishment frequency and increases inventory holding costs. However, as space is scarce, it
requires the reduction of stock of other items and an increase of their replenishment frequencies.
Furthermore, the possibility to keep stock in the retailers’ backroom allows for additional
showroom shelf space, but also induces additional refilling costs. Finally, the replenishment
frequencies for each item impact the quantities that can be kept on showroom shelves and in the
backroom. We conducted a time-and-motion study with a German grocery retailer to identify
relevant in-store replenishment processes. Based on this, we propose an optimization model that
addresses the mutual dependence of shelf-space and in-store processes. The model optimizes
retail profits through determining the optimal number of facings, the optimal quantities kept on
shelves and in the backroom, as well as optimal order frequencies, while accounting for
space-elasticity effects as well as limited shelf and backroom space.

Market Basket Analysis.

Market Basket Analysis is one of the key techniques used by large retailers to uncover
associations between items. It works by looking for combinations of items that occur together
frequently in transactions. To put it another way, it allows retailers to identify relationships
between the items that people buy.

Association Rules are widely used to analyze retail basket or transaction data, and are intended to
identify strong rules discovered in transaction data using measures of interest, based on the
concept of strong rules.