1

MODULE 1: INTRODUCTION TO MARKETING ENVIRONMENT

MEANING AND DEFINITION OF MARKETING

Market: The. Kotler defined market as “A set of all actual and poten al buyers of a product.” This defini on
implies that wherever there is a buyer of a product or service, there is a market. Further this defini on also
indicates that market refers to the existence of buyers of a product or service, that when these things get
exchanged, the marke ng process commences.

Marke ng: The American Marke ng associa on defined marke ng as “Market is an organiza onal func on
and a set of process for crea ng, communica ng value to customers and for managing customer rela onships
in ways that benefit the organiza on and its stakeholders."

DIFFERENCE BETWEEN MARKETING AND SELLING

Basis of
Marketing Selling
Comparison
Focus Customer needs and satisfaction Product and its sale
Orientation Market-oriented Product-oriented
To create value and build long-term customer To convert products into cash
Objective
relationships (short-term goal)
Wide scope – includes market research, product Narrow scope – mainly limited to
Scope
design, pricing, promotion, distribution, etc. promoting and convincing to sell
Pushing the product to increase
Emphasis Customer satisfaction and demand creation
sales
Pull strategy – attracting customers through Push strategy – persuading
Strategy
need fulfilment customers to buy
Long-term focus – brand loyalty, customer
Time Horizon Short-term focus – immediate sales
retention
Identifying customer needs and developing a
Starts With After the product is developed
product accordingly
Ends With Customer satisfaction and repeat business Sale of product
Effort Direction Toward identifying and meeting customer needs Toward persuading customer to buy
Market research, advertising, branding, Sales promotion, personal selling,
Tools Used
customer engagement discounts

FUNCTIONS AND IMPORTANCE OF MARKETING

A. Functions of exchange
1. Buying: Buying means getting the right products from suppliers so they can be sold to customers. It’s a
marketing function because it helps bring goods into the business for sale. Example: A grocery store
buys rice from a wholesaler to sell to customers.
 Planning: Deciding what to buy, how much, and when. It helps match the products with customer
demand. Example: A shop plans to stock more umbrellas during the rainy season.
2

 Contractual: Finding and keeping in contact with suppliers. This helps in regular and smooth supply
of products. Example: A retailer regularly contacts a textile wholesaler to order clothes.
 Assembling: Collecting similar goods from different places to one place. It helps serve all customer
needs in one shop. Example: A store brings soaps of different brands to give customers choices.
 Negotiation: Discussing terms like price and delivery with the seller. It helps in getting goods at
best rates. Example: A shopkeeper negotiates a discount with a wholesaler for bulk buying.
2. Selling: Helping goods move from sellers to customers. It's the final goal of marketing — to sell the
product. Example: A mobile store sells phones to walk-in customers.
 Product Planning: Planning products according to customer needs in price, size, quality, etc. This
makes the product suitable for the market. Example: A juice company launches small ₹10 packs for
school children.
 Contractual: Finding customers and keeping a relationship with them. It helps in regular sales and
customer loyalty. Example: A company regularly calls and emails its loyal customers about new
offers.
 Demand Creation: Activities like ads and offers to make people want the product. It increases sales.
Example: A shoe brand runs Instagram ads to attract teenagers.
 Negotiation: Discussing with customers about price, delivery, and payment. It helps close the sale
smoothly. Example: A customer bargains with a laptop seller for free accessories.

B. Functions of physical supply

1. Transportation: Moving goods from the factory to the shop. It ensures products are available where
customers need them. Example: A truck carries biscuits from the factory to shops in the city.
2. Storage: Keeping goods safe until needed. It helps manage supply and avoid shortages. Example: A
warehouse stores cold drinks until summer when demand rises.

C. Facilitating functions
1. Financing: Providing money or credit for buying, storing, and selling goods. It keeps the marketing
process running. Example: A seller takes a bank loan to buy Diwali stock in advance.
2. Risk Bearing: Handling chances of loss due to damage, theft, or price change. It protects the business.
Example: A warehouse insures its goods against fire.
3. Market Information: Collecting and using information about customer needs, prices, and competitors.
It helps in smart marketing decisions. Example: A brand checks customer reviews before launching a
new face cream.
4. Standardization: Keeping uniform size, quality, or features in products. It builds trust with customers.
Example: A milk brand ensures every packet has the same quantity and quality.
5. Pricing: Deciding the right price for a product. It affects demand and profits. Example: A soap company
prices a 100g bar at ₹25 after studying market rates.
6. Branding
Meaning: Giving a name, symbol, or design to a product. It helps customers identify and trust the
product. Example: "Dalda" is a popular brand name for vanaspati ghee.
7. Packaging: Wrapping or boxing the product attractively and safely. It protects and promotes the
product. Example: A chocolate is packed in shiny, colourful foil to attract kids.
8. Salesmanship: Personally helping and convincing customers to buy. It increases sales through
communication. Example: A showroom employee explains a washing machine’s features to a buyer.
3

9. Advertising: Telling people about the product through media. It creates awareness and interest.
Example: A detergent ad on TV shows how it removes stains easily.

IMPORTANCE OF MARKETING
Importance of Marketing Towards Society
1. Improves Standard of Living
Marketing helps make a variety of goods and services available to all sections of society — rich,
middle-class, and poor — at fair prices. By ensuring regular supply, it helps people live a more
comfortable life.
2. Creates Large-Scale Employment
Marketing involves many activities such as advertising, sales, transport, warehousing, and
packaging. Each of these creates job opportunities for people in different sectors.
3. Encourages Economic Growth
A strong marketing system increases demand, which leads to higher production, trade, and
investment. This helps the economy grow stronger and more stable.
4. Promotes New Products and Services
Through market research and promotions, new and useful products are introduced to society. This
improves lifestyles and solves modern-day problems.
5. Informs and Educates Consumers
Marketing informs people about new products, their features, usage, and benefits. This helps
consumers make smart choices and improves their overall satisfaction.

Importance of Marketing Towards the Company

1. Enables Smooth Flow of Goods
Marketing connects producers to consumers through wholesalers, retailers, and digital platforms,
ensuring goods move quickly and reach the market on time.
2. Generates Revenue and Profit
Sales created through marketing bring in income for the business. This revenue supports operations,
growth, and investment in new opportunities.
3. Helps Understand Consumer Needs
Marketing collects feedback and studies trends, helping businesses understand what customers
want and how to serve them better.
4. Supports Product Innovation
With changing customer preferences, marketing guides companies to develop new or improved
products that stay relevant in the market.
5. Builds Brand Image and Loyalty
Marketing creates a positive image of the company through advertising, social media, and public
relations, which helps attract and retain loyal customers.

HOLISTIC MARKETING APPROACH

4

Holistic marketing is a modern marketing approach that considers the entire business as a whole. It focuses
on the idea that all parts of a company are connected and should work together to create a strong and
consistent brand message. This means that everything a business does – from advertising, packaging,
customer service, internal training, to social responsibility – must be aligned to support the overall brand.
There are four major components of holistic marketing.
1. Internal marketing, which refers to marketing within the company. It involves keeping employees
well-trained, motivated, and aware of the company’s values and goals. When employees are happy
and informed, they serve customers better and represent the brand in a positive way. For example,
apple trains its employees to be innovative and customer-friendly, which helps the company
maintain its premium brand image.
2. Integrated marketing, which means that all marketing activities of the company should be
consistent and connected. This includes advertising, social media, packaging, sales promotions, and
customer communication. When all of these elements send the same message, it builds customer
trust and a clear brand identity. A good example is apple, which uses the same clean and simple
design in its advertisements, website, product packaging, and even in its retail stores.
3. Relationship marketing, which focuses on building strong and long-term relationships with
customers, employees, suppliers, and business partners. Instead of just trying to make a sale, the
company focuses on customer satisfaction, loyalty, and trust. For example, apple maintains good
relationships with its customers by offering excellent customer service and additional support like
AppleCare.
4. Societal marketing, which highlights the importance of social responsibility and environmental care.
A company should not only focus on profit but also think about the well-being of society and the
environment. For instance, apple has taken steps to reduce its environmental impact by using
recyclable materials and working towards becoming carbon neutral.
In conclusion, holistic marketing is about seeing the bigger picture in marketing. It ensures that all
departments of a business work together to build a strong, positive, and socially responsible brand.

MARKETING ENVIRONMENT
The marketing environment refers to all the external and internal factors that affect a company’s ability to
create, maintain, and grow relationships with customers. These factors influence marketing decisions,
customer needs, and the success of marketing strategies.
The marketing environment is divided into two main parts:
5

1. Micro Environment
The micro environment consists of factors that are closely related to the company and have a direct
impact on its day-to-day marketing activities. These are factors the company can somewhat control or
influence.
1. The Company
The internal environment like top management, finance, production, and R&D affects marketing. All
departments must work together to support marketing plans.
2. Customers
Customers are the most important part of the marketing environment. Understanding their needs and
preferences is essential for success. Customers may be individuals, businesses, or government bodies.
3. Competitors
Businesses must understand who their competitors are, what they offer, and how to position
themselves better in the market.
4. Suppliers
Suppliers provide the raw materials or products needed by the company. A strong relationship with
suppliers ensures quality materials, timely delivery, and fair prices.
5. Marketing Intermediaries
These are people or companies that help promote, sell, and distribute the company’s goods to final
buyers. Examples include wholesalers, retailers, and agents.
6. Publics
Publics are any group that has an actual or potential interest in the company. This includes media,
government, financial institutions, and the general public.

2. Macro Environment
The macro environment includes larger external forces that affect the entire market or industry. These
factors are uncontrollable by the business, but they must be studied and adapted to.
1. Political Factors
This includes government policies, political stability, tax laws, trade regulations, and more. These affect
how companies operate in a region or country.
2. Economic Factors
This refers to the economic conditions like inflation, interest rates, employment, consumer income, and
overall economic growth. These affect customer buying power and business profitability.
3. Social and Cultural Factors
These include lifestyle trends, education levels, family structures, cultural values, and demographics.
Businesses must adapt their marketing strategies to match social trends.
4. Technological Factors
Technology changes fast and affects how products are made, marketed, and delivered. Companies must
keep up with new tools, digital platforms, and innovations to remain competitive.
5. Legal Factors
Businesses must follow rules related to product safety, advertising, labor laws, environmental laws, and
consumer rights. Not following laws can lead to penalties.
6. Environmental Factors
These involve natural resources, weather, climate change, and environmental sustainability. More
companies are now focusing on eco-friendly marketing practices.
6

MARKETING SCENARIO IN INDIA

Below are some key areas that define the current marke ng scenario in India:
 Ethical Marke ng Prac ces
Ethical marke ng means promo ng products and services in a fair, honest, and responsible way without
misleading consumers. It builds trust and long-term rela onships with customers.
Example: The Tata Group is known for its ethical marke ng, always focusing on honesty, product
quality, and customer care.
 Trends in Marke ng
Marke ng trends refer to the latest methods businesses use to a ract and retain customers. These
trends change with me, technology, and customer behaviour.
Example: Influencer marke ng is trending in India, where brands use social media influencers to
promote their products to young audiences.
 Digital Marke ng
Digital marke ng is the use of online pla orms like websites, social media, search engines, and email to
promote products or services. It allows companies to reach a wide audience quickly and cost-effec vely.
Example: Zomato and Swiggy use digital ads and Instagram campaigns to a ract food lovers across
ci es.
 Virtual and Augmented Reality in Marke ng
This involves using VR and AR technology to give customers a be er experience with products before
buying. It makes marke ng interac ve and engaging.
Example: Lenskart uses augmented reality to let users virtually try on glasses using their phone camera.
 AI in Marke ng (Ar ficial Intelligence)
AI helps businesses understand customer behaviour, personalize marke ng messages, and automate
tasks like customer service or product sugges ons.
Example: Amazon uses AI to recommend products based on your past searches and purchases.
 Network Marke ng
Network marke ng is a business model where individuals earn by selling products and also by bringing
in new sellers under them, forming a network.
Example: Amway uses this model to sell health and personal care products through its vast distributor
network.
 Affiliate Marke ng
In affiliate marke ng, people promote a company’s products on their own pla orms and earn a
commission for each sale made through their referral link.
Example: Bloggers or YouTubers share Amazon product links and earn money when people buy through
those links.
 Marke ng Analy cs
Marke ng analy cs involves collec ng and analysing customer data to improve marke ng strategies
and make be er decisions.
Example: Flipkart uses customer browsing and purchase data to suggest relevant products and run
targeted ads.
 Social Marke ng
Social marke ng is used to promote social causes and public welfare instead of selling products. It
focuses on changing behaviour for the be erment of society.
7

Example: Government campaigns like Swachh Bharat Abhiyan or road safety awareness campaigns are
forms of social marke ng.

CONCEPTS OF MARKETING
Below are simple defini ons of the main marke ng concepts along with easy, India-specific examples:
1. The Produc on Concept: This concept believes that customers prefer products that are widely available
and inexpensive. Companies focus on high produc on efficiency and mass distribu on to lower costs.
Example: Tata Nano was designed to be an affordable car for the masses. Its produc on focused on cost
efficiency and wide availability to meet the needs of a large segment of Indian consumers.
2. The Product Concept: This concept holds that consumers Favor products that offer the best quality,
performance, or innova ve features. Businesses concentrate on con nually improving their products.
Example: Many Indian smartphone brands, like Micromax in its prime, aimed to offer advanced features
and quality at a compe ve price, believing that a superior product would naturally a ract customers.
3. The Selling Concept: The selling concept assumes that customers will not buy enough of a company’s
products unless aggressive sales efforts and promo ons are made.
Example: Insurance companies such as LIC use strong sales tac cs and persuasive marke ng campaigns
to convince customers to purchase policies, even though many may not ac vely seek insurance on their
own.
4. The Marke ng Concept: This concept is customer-focused. It suggests that the key to business success
is understanding and mee ng the needs and wants of customers be er than compe tors.
Example: E-commerce giants like Flipkart study customer behaviour and preferences to tailor their
product offerings, website layout, and promo ons, ensuring that they provide the right products for
their Indian customers.
5. The Holis c Marke ng Concept: Holis c marke ng takes a broad view by integra ng all aspects of
marke ng—from internal processes and employee engagement to customer rela onships, brand
communica ons, and social responsibility—ensuring every part of the company works together.
Example: The Tata Group is known for its holis c approach. Tata not only focuses on producing quality
products but also on ethical business prac ces, strong brand messaging, and social ini a ves that
benefit communi es, crea ng a well-rounded brand experience.
These examples illustrate how each marke ng concept is applied in the Indian context, highligh ng the
different approaches companies use to connect with and serve their customers.

CORE CONCEPTS OF MARKETING

 Needs, Wants, and Demands
Needs are basic human requirements such as food, clothing, and shelter. Wants are specific ways to
fulfil these needs, shaped by culture and personality (for example, wanting a pizza instead of a basic
meal). When these wants are supported by purchasing power, they become demands.
 Market Offerings (Products & Services)
A market offering is anything a company provides to satisfy customer needs—including products,
services, experiences, and ideas. Companies design these offerings to create value that attracts and
retains customers.
 Value and Satisfaction
Customer value is the balance between the benefits received and the cost paid. Satisfaction occurs
8

when the product or service meets or exceeds customer expectations, encouraging loyalty and repeat
purchases.
 Exchange and Transactions
Exchange is the process of obtaining a product or service by giving something in return, such as money,
time, or effort. A transaction is a specific instance of this exchange, usually involving the sale of goods
or services.
 Markets
A market consists of actual and potential buyers who share a common need or interest. Markets can
include consumer, business, government, and global segments, each requiring tailored marketing
strategies.
 Marketing Management
Marketing management is the process of planning, executing, and controlling marketing activities to
create customer value and meet business objectives. It involves activities like segmentation, targeting,
positioning, and managing the marketing mix (Product, Price, Place, and Promotion).

ETHICAL MARKETING:
 Honest Advertising:
Ensure that all promotional messages are truthful, accurate, and not misleading.
Example: A company clearly states the benefits and limitations of its product in an advertisement.
 Transparency:
Be open about product ingredients, pricing, and policies so customers know exactly what they’re
getting.
Example: A food brand lists all ingredients and nutritional information on its packaging.
 Fair Pricing:
Set prices that reflect the true value of the product without exploiting customers.
Example: An electronics company avoids price gouging during high demand periods.
 Social Responsibility:
Market products in a way that benefits society, supports community initiatives, or promotes social
causes.
Example: A clothing brand runs campaigns promoting fair trade and ethical labor practices.
 Environmental Consciousness:
Adopt eco-friendly marketing practices that minimize harm to the environment.
Example: A company uses recyclable materials for packaging and promotes sustainability in its ads.
 Respect for Customer Privacy:
Protect customer data and only use it with clear consent, ensuring privacy and security.
Example: An online retailer follows strict data protection guidelines and informs customers about how
their data is used.
 Cultural Sensitivity:
Ensure marketing messages respect diverse cultures and do not offend any group.
Example: A global brand tailors its advertising campaigns to respect local customs and traditions.
 Accountability:
Take responsibility for marketing claims and be prepared to address any issues or inaccuracies
promptly.
9

Example: A company issues a public apology and corrects misinformation if a product claim turns out to
be false.

UNETHICAL MARKETING:
 False Advertising:
Making claims about a product that are untrue or exaggerated.
Example: A company advertises that its product can cure a disease when it cannot.
 Misleading Information:
Presenting information in a way that confuses or deceives the customer.
Example: Using fine print to hide important terms that negatively affect the customer.
 Price Gouging:
Charging excessively high prices during times of high demand or crisis, exploiting customers.
Example: Increasing the price of essential medicines during a health emergency.
 Exploiting Vulnerabilities:
Targeting vulnerable populations with marketing that takes advantage of their insecurities or lack of
information.
Example: Aggressively marketing high-interest loans to financially struggling individuals without clear
disclosure of terms.
 Lack of Transparency:
Hiding important product details, such as ingredients or risks, leading customers to make uninformed
decisions.
Example: Not disclosing harmful additives in food products.
 Bait and Switch:
Advertising a product at a low price to attract customers and then pushing them toward a higher-priced
alternative.
Example: Promoting a low-cost electronic device that is out of stock, only to offer a more expensive
model instead.
 Deceptive Endorsements:
Using fake or paid endorsements without disclosing the relationship, misleading consumers about the
product's credibility.
Example: Paying individuals to post positive reviews online without revealing their sponsorship.
 Invasion of Privacy:
Collecting or using customer data without proper consent or in ways that compromise privacy.
Example: Tracking online behaviour without clear disclosure and selling personal information to third
parties.

KEY LEGAL FRAMEWORKS AND GUIDELINES IN INDIA THAT PROTECT CONSUMERS FROM
UNETHICAL MARKETING PRACTICES
1. Consumer Protection Act, 2019
This law safeguards consumer rights by addressing unfair trade practices, including false, misleading, or
deceptive advertising. It empowers consumers to file complaints against companies and holds
businesses accountable for the accuracy of their marketing claims.
10

2. Competition Act, 2002

The Competition Act promotes fair competition by preventing anti-competitive practices that distort
consumer choice. It allows for challenges against misleading advertisements and unfair tactics that can
give one company an undue advantage over others.
3. Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954
This act targets the pharmaceutical sector by prohibiting false or exaggerated claims about the efficacy
of drugs and magic remedies. It is designed to protect consumers from unproven or fraudulent health
claims in marketing.
4. Advertising Standards Council of India (ASCI) Guidelines
Although not a law, these self-regulatory guidelines help ensure that advertisements are honest, not
misleading, and socially responsible. Companies adhering to ASCI guidelines avoid harmful or offensive
content, and breaches can result in public censure and pressure to make corrections.
5. Information Technology Act, 2000
This act governs online content, including digital marketing practices. It provides legal provisions to
protect consumers from online fraud and deceptive marketing, ensuring that information disseminated
through websites, social media, and other digital platforms is truthful and secure.
6. Food Safety and Standards Authority of India (FSSAI) Regulations
FSSAI sets and enforces standards for food products, including the labelling and advertising of food
items. These regulations ensure that food products are marketed with clear, accurate information
about ingredients, nutritional content, and safety, protecting consumers from misleading claims.
7. Cable Television Networks (Regulation) Act, 1995
This act regulates the content broadcast on cable television, including advertisements. Its aim is to
ensure that TV ads do not mislead viewers and adhere to ethical standards, thereby protecting
especially vulnerable groups such as children.
8. Securities and Exchange Board of India (SEBI) Regulations
SEBI's guidelines ensure that the marketing of financial products and investment schemes is transparent
and clear. These regulations protect investors by requiring accurate disclosure of risks and returns, thus
preventing deceptive financial advertising.
9. Consumer Protection (E-commerce) Rules, 2020
These rules provide safeguards for consumers shopping online. They require e-commerce platforms to
offer clear, honest disclosure of product information, pricing, and seller details, reducing the potential
for deceptive practices in digital advertising.
10. Ministry of Information and Broadcasting Guidelines
These guidelines help maintain ethical standards in advertisements across various media channels. They
work in tandem with self-regulatory bodies like ASCI to ensure that advertisements are not offensive,
misleading, or harmful to the public.
11

MODULE 2: MARKETING SEGMENTATION, TARGETING, AND POSITIONING

MARKET SEGMENTATION
"The process of dividing a heterogeneous market into distinct subgroups of consumers who: (1) share
similar needs and preferences, (2) demonstrate homogeneous response patterns to marketing stimuli, and
(3) exhibit measurable characteristics that permit effective targeting

o BASES FOR SEGMENTATION

Market segmentation is the process of dividing a broad consumer market into smaller, more defined
categories based on various factors. The four primary types of market segmentation are:

1. Geographic Segmentation
Definition: This segmentation divides the market based on location, as consumer needs and preferences
vary by region.
Factors:
 Region: Consumers are categorized by continents, countries, states, or districts.
 County Size: Market is divided based on the size of the population or area.
 City Size: Large cities may have different needs compared to smaller towns.
 Population Density: Differentiates between urban, suburban, and rural consumers.
 Climate: Consumers in different climatic zones have varying needs.
Example: A company selling winter jackets focuses on colder regions like Canada rather than tropical areas
like Thailand.

2. Demographic Segmentation
Definition: This segmentation divides consumers based on measurable characteristics such as age, gender,
and income.
Factors:
 Age: Different products appeal to different age groups (children, teenagers, adults, seniors).
 Gender: Marketing strategies differ for men and women.
 Family Size: Larger families may have different consumption patterns compared to smaller ones.
 Family Life Cycle: Varies from young singles to married couples to retired individuals.
 Income: Luxury vs. budget-friendly product segmentation.
 Occupation: Different products and services appeal to professionals, labourers, or students.
 Education: Education level can influence purchasing decisions.
 Religion: Religious beliefs may impact product preferences.
 Race & Nationality: Cultural backgrounds influence buying behaviour.
Example: Luxury brands target high-income individuals, while budget brands focus on middle-class
consumers.

3. Psychographic Segmentation
Definition: This segmentation categorizes consumers based on their values, lifestyles, and personality
traits.
Factors:
 Social Class: Consumers are categorized as upper-class, middle-class, or working-class.
 Lifestyle: Consumers may prefer eco-friendly, health-conscious, or luxury-driven products.
 Personality: Different personality types (e.g., introverts vs. extroverts) have different product
preferences.
Example: A premium gym brand targets fitness enthusiasts, while a budget gym chain appeals to cost-
conscious consumers.
12

4. Behavioural Segmentation
Definition: This segmentation groups consumers based on their buying behaviour, product usage, and
response to marketing.
Factors:
 Purchase Occasion: Some consumers buy regularly, while others purchase for special occasions.
 Benefits Sought: Different consumers buy products for different benefits (e.g., whitening toothpaste
vs. cavity protection).
 User Status: Classifies consumers as new, regular, or former users.
 Usage Rate: Segments consumers based on frequency of product usage (light, medium, heavy
users).
 Loyalty Status: Identifies customers who are loyal to a brand versus those who switch frequently.
 Readiness State: Determines whether a consumer is ready to buy or still in the research phase.
 Attitude Toward Product: Some consumers have a positive perception, while others may be
indifferent or negative.
Example: Airlines have loyalty programs for frequent flyers and discounts for first-time travellers.

CRITERIA FOR EFFECTIVE MARKET SEGMENTATION

For market segmentation to be useful, it must meet certain criteria to ensure it leads to actionable and
profitable strategies. The key criteria for effective segmentation are:
1. Measurable
 The segment should be quantifiable in terms of size, purchasing power, and characteristics.
 Example: A company should be able to measure how many people fall into a particular income
bracket or age group.
2. Accessible
 The segment should be reachable through marketing efforts, such as advertising, distribution
channels, and promotions.
 Example: A business must ensure that its products can be delivered to rural areas if that is the target
market.
3. Substantial (Large Enough)
 The segment should be large and profitable enough to justify targeted marketing.
 Example: A high-end fashion brand may not find it worthwhile to target a small group of low-income
consumers.
4. Differentiable (Distinct & Unique Needs)
 The segment should be unique and respond differently to marketing strategies compared to other
segments.
 Example: Teenagers and senior citizens have different preferences for smartphones, requiring different
marketing approaches.
5. Actionable (Practical to Target)
 The company should be able to design and implement strategies to serve the segment effectively.
 Example: If a segment prefers eco-friendly products, the company must be able to provide
sustainable alternatives.

PROCESS OF SEGMENTATION
1. Target Audience / Market and the Size of The Market
This step involves identifying who the customers are (age, location, income, interests, etc.) and
understanding how big the market is. This helps businesses focus their resources on people most likely to
buy the product or service. To avoid wasting efforts on the wrong audience and tailor the marketing plan to
the most relevant group.

2. Set Expectations for the Targeted Audience

13

After knowing the audience, marketers need to understand their expectations—what they want from a
product or service. This includes product features, quality, price sensitivity, etc. To develop products and
campaigns that align with customer expectations, leading to better customer satisfaction.

3. Distinguish the Categories and Subcategories of Products

Divide products into smaller segments based on different customer needs—for example, phones for
students, working professionals, gamers, etc. To offer specialized options for each group, improving
customer satisfaction and sales.

4. Study or Research the Needs and Behaviour of the Targeted Consumers

Conduct surveys, observe buying patterns, and study customer feedback to understand what influences
their purchasing decisions. To create a product and marketing message that resonates well with each
segment.

5. Strategize the Marketing Campaign

Create a customized marketing plan (ads, promotions, social media campaigns, etc.) based on all the
research and segmentation done earlier. To connect with the target audience emotionally and logically,
increasing the chances of product success.

Example: Redmi/Xiaomi
Let’s apply all 5 steps to the success of Redmi/Xiaomi:
1. Target Audience / Market Size:
Xiaomi identified that a large portion of India's population was price-conscious and wanted feature-rich
smartphones at a low price. The market size was huge due to India’s growing smartphone demand.
2. Set Expectations:
The target audience expected affordable smartphones with modern features like good camera quality,
long battery life, and large screens. Xiaomi focused on delivering just that.
3. Categories/Subcategories:
Xiaomi offered different models:
o Budget phones for students and first-time users.
o Mid-range phones for working professionals.
o High-end phones under the "Mi" brand for tech-savvy users.
4. Consumer Research:
Xiaomi used social media, forums, and user feedback to understand customer needs and behaviours.
They learned that Indian consumers love value for money, regular software updates, and good after-
sales service.
5. Marketing Strategy:
Xiaomi used online flash sales, partnerships with e-commerce platforms, social media campaigns, and
word-of-mouth marketing to build a strong connection with customers. They focused on affordability
and trust, which matched what the market wanted.

MARKET TARGETING
"The strategic evaluation and selection of specific market segments based on three criteria: (1) segment
attractiveness (size, growth, profitability), (2) competitive position alignment, and (3) organizational
capability fit - followed by the allocation of resources to serve these chosen segments optimally."

Porters 5 force model

Porter's Five Forces Model, a framework developed by Michael E. Porter in 1979 to analyse the
competitive environment of an industry. It helps businesses understand the forces that shape competition
and profitability, guiding strategic decision-making.
14

1. Threat of New Entrants

Explanation: This force evaluates how easy or difficult it is for new companies to enter your industry. High
barriers (like high startup costs, regulations, or strong brand loyalty) protect existing firms. Low barriers
mean new competitors can disrupt the market.
Example: While giants like Flipkart and Amazon dominate, new platforms like Meesho (social commerce)
entered by targeting small-town sellers and low-cost products, proving niche innovation can bypass high
logistics/cost barriers.

2. Bargaining Power of Suppliers

Explanation: Suppliers can influence prices or quality if they are few, control scarce resources, or if
switching to alternatives is costly. Strong supplier power reduces industry profitability.
Example: E-commerce platforms rely on thousands of small sellers (suppliers) for products. Since sellers
depend on platforms for reach, their bargaining power is low (e.g., Flipkart charges commission fees,
dictates terms).

3. Bargaining Power of Buyers

Explanation: Buyers (customers) can demand lower prices or better quality if they are concentrated,
purchase in bulk, or have alternatives. Strong buyer power squeezes profit margins.
Example: Buyers in India have extremely high power—they compare prices on Amazon, Flipkart, and
offline stores instantly, forcing e-commerce firms to offer discounts/free delivery.

4. Threat of Substitutes
Explanation: Substitute products or services that fulfil the same need can threaten your business. The closer
the substitute’s performance or price, the higher the risk.
Example: E-commerce faces substitutes like offline retail (malls, local shops) and hyperlocal apps (Blinkit for
groceries), which offer instant delivery or tactile shopping experiences.

5. Intensity of Rivalry Among Competitors

Explanation: This force measures how fiercely existing competitors fight for market share. High rivalry (due
to slow growth, similar products, or high fixed costs) leads to price wars and reduced profits.
Example: Flipkart and Amazon engage in fierce rivalry with mega sales (Big Billion Days, Prime Day),
exclusive smartphone launches, and loyalty programs (Amazon Prime) to retain customers.

TARGET MARKETING STRATEGIES:

 Undifferentiated Marketing
Meaning: The company ignores segment differences and offers one product for the entire market. It
focuses on mass marketing with a single message.
Example (India): Parle-G biscuits are promoted as an affordable snack for everyone—children, adults,
rural and urban consumers.

 Differentiated Marketing
Meaning: The company targets two or more segments with different products and separate marketing
strategies for each. Example (India): Hindustan Unilever (HUL) offers different soaps for different
segments—Lifebuoy (health-conscious), Lux (beauty), Dove (premium/skin care).

 Concentrated (Niche) Marketing

Meaning: The company focuses on one specific market segment and caters only to that group’s needs.
Example (India): Royal Enfield focuses on a niche segment of motorbike lovers and adventure riders,
not the general two-wheeler market.
15

 Micromarketing
Meaning: The company tailors its products and marketing to suit individual customers or very small
local segments. It includes local and individual marketing.
Example (India): FabIndia promotes traditional and regional products based on local tastes and
handloom styles in different parts of India.

 Positioning
Posi oning means crea ng a specific image of a product or brand in the minds of the customers so that
they see it as different or be er than other compe ng products.
Example: Maggi is posi oned as a quick and tasty 2-minute snack loved by kids and adults.

UNIQUE SELLING PROPOSITION (USP)

1. Meaning of USP
USP stands for Unique Selling Proposition. It refers to the distinct feature, benefit, or value of a product
or service that makes it different from competitors. A good USP explains why customers should prefer
that brand over others.

2. Importance of USP
 Helps a brand stand out in a crowded market.
 Creates a clear identity in the minds of customers.
 Makes marketing and promotion more focused and effective.
 Builds brand loyalty by highlighting what makes the product special.

3. Characteristics of a Good USP

 It must be unique and different from the competition.
 It should be clear and easily understood by customers.
 The USP must focus on customer benefits or solutions.
 It should be simple, short, and memorable.

TYPES OF POSITIONING
1. Attribute Positioning:
This strategy highlights a specific feature or characteristic of the product to attract customers. For
example, Tata Salt is positioned as "Desh ka Namak" by focusing on its purity as the key attribute.
2. Benefit Positioning:
In this type, the product is promoted based on the main benefit or advantage it offers to the
customer. For instance, Colgate is positioned as a toothpaste that provides complete oral care and
strong teeth.
3. Use or Application Positioning:
The product is positioned as ideal for a specific use or application. For example, Surf Excel is
marketed as the best detergent for removing tough stains from children’s clothes.
4. User Positioning:
This strategy targets a particular group of users and positions the product as best suited for them.
An example is Horlicks, which is promoted as a health drink specifically for growing children and
mothers.
5. Competitor Positioning:
In this case, the brand is positioned by comparing it directly or indirectly with a competing product
to show superiority. Pepsi often positions itself as a cooler and more youthful choice in comparison
to Coca-Cola.
16

6. Product Category Positioning:

Here, the product is placed as a leader or expert within a specific product category. For example,
Clinic Plus is positioned as a trusted shampoo brand in the hair care category in India.
7. Quality or Price Positioning:
The product is promoted either for its premium quality or its affordable price, offering value for
money. Big Bazaar, for instance, was positioned as a store where Indian families could get the best
products at the best prices.
8. Emotional Positioning:
This strategy connects with the emotional feelings of the customers rather than focusing on product
features. A good example is Cadbury Dairy Milk, which promotes the brand using emotions like
happiness, love, and celebration.
9. Lifestyle Positioning:
The product is associated with a particular lifestyle or way of living, appealing to people who relate
to that image. Nike India uses this strategy by promoting a sporty and ambitious lifestyle with its
famous slogan “Just Do It.”
10. Problem-Solution Positioning:
In this approach, the product is shown as an effective solution to a specific problem faced by
customers. Moov is a good example, as it is positioned as a quick relief solution for back pain and
body aches.

PERCEPTUAL MAPPING
Perceptual Mapping is a marketing research technique used to visually represent how consumers perceive
and evaluate different brands or products within a particular market. It helps marketers understand the
positioning of their product in the minds of customers in comparison to competing brands.

Purpose of Perceptual Mapping

Perceptual maps are used to identify:
 Customer perceptions and preferences
 Competitive positioning
 Market gaps and opportunities for differentiation
 Strategic repositioning decisions

How It Works
Perceptual maps are usually two-dimensional graphs. The X and Y axes represent two important attributes
(e.g., price and quality). Brands are placed on the map based on consumer perception of these attributes.
This helps companies visually understand where their brand stands relative to competitors.
Example: In the mobile phone industry:

 Apple may be positioned as High Quality –

High Price
 Xiaomi (Redmi) may be placed as Good
Quality – Low Price
 Nokia may appear in the Medium Price –
Moderate Quality zone
17

MODULE 3: MARKETING MIX STRATEGIES

Product is anything that can be offered to a market to satisfy a want or need, including physical goods,
services, experiences, events, persons, places, properties, organizations, information, and ideas.

PRODUCT CLASSIFICATIONS

A. Based on Durability and Tangibility

 Nondurable goods – These are physical products that are consumed quickly and need to be purchased
often.
Example: Shampoo, soft drinks
 Durable goods – These are physical products that last for a long time and involve higher customer
involvement in buying.
Example: Refrigerator, laptop
 Services – These are intangible products that cannot be touched, stored, or owned, and are consumed
at the time of delivery.
Example: Haircut, banking service

B. Consumer Goods Classification

 Convenience goods – Products that consumers buy frequently, immediately, and with minimum effort.
Example: Biscuits, soap
 Impulse goods – Items bought suddenly without prior planning or search.
Example: Chocolates at checkout counters
 Emergency goods – Products purchased due to urgent or unexpected need.
Example: Raincoat during a downpour
 Shopping goods – Products that consumers compare based on quality, price, and style before buying.
Example: Shoes, television
 Specialty goods – Highly unique or branded items for which consumers make a special effort to
purchase.
Example: Apple iPhone, Rolex watch
 Unsought goods – Products that consumers do not think about buying until the need arises or they are
promoted.
Example: Life insurance, fire extinguisher

C. Industrial Goods Classification

 Raw materials – Basic natural or farm-based resources that are used to make finished products.
Example: Cotton, crude oil
 Manufactured parts – Finished components that are directly used in final products without any change.
Example: Car tyres, batteries
 Installations – Large, long-term assets used in production or business operations.
Example: Machinery, factory building
 Equipment – Tools or machines that support operations but are not part of the final product.
Example: Laptops, forklifts
 Supplies – Consumable items used in daily operations that do not become part of the final product.
Example: Stationery, cleaning liquids
18

 Business services – Professional services that help in managing or maintaining business activities.
Example: Legal service, IT support

PRODUCT DIFFERENTIATION

 Form
A product can be differentiated by its physical characteristics like size, shape, or structure.
 Features
A product can offer additional features beyond its basic function to provide extra value to the customer.
 Customization
Products can be personalized to meet the individual preferences or needs of specific customers.
 Performance Quality
This refers to how well the primary functions of a product are carried out based on its performance
level.
 Conformance Quality
It means how consistently the product matches its specifications in every unit produced.
 Durability
It is the expected lifespan of a product under normal or harsh conditions.
 Reliability
It measures how likely a product is to function properly without failure over a certain period.
 Repairability
It refers to how easily and quickly a product can be fixed when it breaks down.
 Style
It is about the appearance and feel of the product, which gives it a unique identity.

PRODUCT FEATURES

1. Tangibility
Tangibility refers to the physical nature of a product, meaning it can be seen, touched, and felt before
purchase. This helps customers evaluate the product based on its appearance, size, and material.
Example: A table is a tangible product that can be physically inspected before buying.

2. Intangibility (for services)

Intangibility means the product has no physical form and cannot be touched or stored. This usually applies
to services, where value is experienced rather than possessed.
Example: A haircut is intangible because it cannot be physically owned or stored.

3. Durability
Durability is the expected lifespan or operating life of a product under normal or stressful usage conditions.
Durable products are used repeatedly and last for a longer time without major wear and tear.
Example: A refrigerator is a durable product designed to last for several years.

4. Perishability
Perishability means the product, especially services or consumables, cannot be stored for long and loses
value after a specific time. It is especially important in food, services, and seasonal goods.
Example: A train ticket is perishable because it becomes useless after the train departs.

5. Quality
Quality refers to how well a product performs its intended purpose and meets customer expectations.
Higher quality builds customer satisfaction, loyalty, and brand reputation.
Example: A branded laptop offering smooth performance and durability is considered high quality.
19

6. Design
Design is the combination of the product’s appearance, structure, and usability. A good design makes the
product attractive, user-friendly, and functionally effective.
Example: A smartwatch with a stylish display and easy interface is praised for its design.

7. Features
Features are additional attributes or characteristics that enhance the product’s usefulness and appeal
beyond its basic function. Companies add features to differentiate their product from competitors.
Example: A smartphone with a fingerprint sensor and night mode camera has added features.

8. Brand Name
Brand name is the identity given to a product, which helps customers recognize, remember, and
differentiate it from other products. It builds trust and emotional connection.
Example: "Adidas" is a brand name that customers associate with quality sportswear.

9. Packaging
Packaging is the material used to wrap and protect the product. It also helps in product identification,
branding, and attracting customer attention in the market.
Example: A perfume packed in an elegant bottle attracts premium buyers.

10. Labelling
Labelling provides written information about the product such as ingredients, usage instructions, expiry
date, and manufacturer details. It builds transparency and helps in decision-making.
Example: A food item with a label showing nutritional value and expiry date.

LEVELS OF PRODUCTS

1. Core Benefit
The core benefit is the most basic need or want that the customer wants to satisfy. It is not the physical
product itself, but the value or solution it offers.
In the case of Amul Ice Cream, the core benefits the customer seeks is refreshment and indulgence or a
sweet treat to enjoy.

2. Basic Product
At this level, the marketer converts the core benefit into a basic, tangible product. It includes the
essential elements that must exist to deliver the core benefit.
Amul Ice Cream in its basic form is a frozen dessert in a cup, cone, or bar with ingredients like milk,
sugar, and flavour.

3. Expected Product
This includes the set of features or conditions that the customer normally expects when buying this
product. These are standard expectations in the customer's mind.
The customer expects Amul Ice Cream to taste good, be fresh, stored at the right temperature, come in
hygienic packaging, and be readily available in stores.

4. Augmented Product
At this level, the product offers additional features or benefits that exceed customer expectations and
differentiate it from competitors.
Amul offers unique flavours like Rajbhog, Shahi Anjeer, or Tricone with chocolate layers, combo packs,
and attractive branding. These extras provide more satisfaction than the customer expected.
20

5. Potential Product
This level includes all the possible future changes, improvements, or features that could be added to the
product to delight customers.
In future, Amul might launch sugar-free ice creams, seasonal flavours, personalized packaging, or ice
cream made with alternative milks (like almond or oat milk) to appeal to health-conscious customer

PRODUCT LIFE CYCLE

 Introduction Stage
This is the stage where the product is launched into the market for the first time. Sales are low as
customers are not yet aware of the product. Heavy marketing efforts are required to educate people
and build interest. The company usually faces losses due to high promotional costs and low revenue.
Example: When Maggi was first launched in India in the 1980s, people were unfamiliar with instant
noodles. Nestlé had to run campaigns to explain what Maggi was and how it could be made in 2
minutes.

 Growth Stage
In this stage, the product gains acceptance in the market. Sales increase rapidly as more people
start buying it. Profits begin to rise as fixed costs are recovered. Competitors may enter the market
seeing the product's success. The company focuses on brand building and increasing availability.
Example: In the 1990s and early 2000s, Maggi became a household name in India. Sales grew fast,
and more Flavors and packs were introduced as demand increased.

 Maturity Stage
The product is well-established, and most potential customers have already bought it. Sales reach
their peak and start to stabilize. Competition becomes intense, and profit margins may shrink.
Companies try to maintain interest through offers and slight modifications.
Example: Around the mid-2000s, Maggi faced competition from brands like Top Ramen and Yippee.
Nestlé started launching new flavours, cup noodles, and multi-pack offers to stay relevant.

 Decline Stage
In this stage, sales and profits begin to fall due to market saturation, new innovations, or changes in
customer preferences. Companies may stop production, reduce marketing, or try to reinvent the
product.
Example: In 2015, Maggi faced a major crisis when it was banned due to alleged MSG content. Sales
dropped drastically, and the product went into decline.

 Revival (Optional Stage – not in original PLC but relevant)

Sometimes, a product can bounce back from decline through rebranding, relaunching, or emotional
21

marketing.
Example: After clearing safety tests, Maggi relaunched in India with emotional ads like “Welcome Back
Maggi,” and regained market trust.

NEW PRODUCT DEVELOPMENT

1. Idea Generation

At this stage, the company actively looks for new ideas through internal brainstorming, customer feedback,
market trends, competitors, R&D, and innovation. It’s the foundation of all further development.
Example: Ratan Tata got the idea for the Nano when he saw a family riding a scooter and wanted to create
an affordable car for middle-class Indians.

2. Idea Screening and Evaluation

All generated ideas are evaluated to filter out the impractical, risky, or irrelevant ones. Only ideas that
match the company’s goals and customer needs are selected for deeper development.
Example: Out of many ideas, Tata Motors chose the “1 lakh car” idea because it had strong market
demand and aligned with the vision of affordable mobility.

3. Concept Development / Testing

Here, the selected idea is shaped into detailed product concepts and tested on a small group of target
customers to gather feedback and refine the product features.
Example: Tata Nano’s concept of a basic, no-frills car was shared with potential buyers to check if they liked
the design, features, and the idea of owning a low-cost car.

4. Market Strategy Development

A marketing strategy is created, which includes the product’s positioning, target market, pricing,
promotional strategy, and distribution plan to guide the product’s success in the market.
Example: Tata Motors positioned Nano as "The People’s Car" and created a low-cost distribution and
advertising plan to appeal to budget-conscious customers.

5. Business Analysis

In this step, the company estimates the costs, expected sales, profits, and return on investment to ensure
the product is financially viable before moving to development.
Example: Tata calculated whether they could build and sell Nano under ₹1 lakh while covering costs like
materials, labor, logistics, and still earn profit.

6. Product Development (Prototyping)

The concept becomes a real, working product. Engineers and designers work together to build prototypes
that are tested for quality, safety, and performance.
Example: Tata Motors developed multiple prototypes of Nano, tested its engine, body, and safety features
to make sure it could be mass-produced at low cost.

7. Test Marketing
22

The product is introduced in a small market to measure customer response, correct any issues, and make
improvements before launching it on a larger scale.
Example: Nano was initially released in select Indian cities to see how people reacted and whether the
service and pricing model worked smoothly.

8. Commercialization

This is the official, full-scale product launch where the product becomes available in the market, backed by
ads, sales campaigns, and full distribution.
Example: Tata launched Nano all over India with major marketing events and a media campaign focused
on its price and unique value.

9. Evaluation of Results

After launch, the company continuously monitors the product’s sales, customer satisfaction, and overall
performance to learn what worked and what needs improvement.
Example: Tata analysed customer reviews, sales data, and market feedback to understand Nano’s
performance and address challenges like poor perception or limited interest.

PRODUCT MIX

The product mix (also called product assortment) is the complete range of product lines and items a company
offers for sale.

 Width
Meaning: Width refers to the number of different product lines the company offers. Each product line
serves a different customer need or market.
Example: Tata Motors has mul ple product lines such as Passenger Vehicles, Commercial Vehicles, and
Electric Vehicles.

 Length
Meaning: Length refers to the total number of products the company carries within all its product lines
combined.
Example: Tata Motors offers Tata Nexon, Tata Tiago, Tata Altroz, Tata Harrier, Tata Ace, Tata Tigor EV, etc.
The total number of all these models across all lines is the product mix length.

 Depth
Meaning: Depth refers to the number of varia ons offered within each product line or model—such as
different sizes, colours, features, or price points.
Example: Tata Nexon comes in mul ple variants like Nexon Petrol, Diesel, Nexon EV, and various trim
levels like XE, XM, XZ+, etc., which shows depth in the product line.

 Consistency
Meaning: Consistency refers to how closely related the product lines are in terms of their end use,
produc on requirements, or distribu on channels.
Example: Tata’s products like passenger and commercial vehicles are consistent because they are all
related to the automobile segment and use similar technology and distribu on networks.

PACKAGING
23

Meaning: Packaging refers to the process of designing and producing the container or wrapper for a
product. It plays a key role in protecting the product, attracting buyers, and providing information.

Example: The colourful, air-tight pouch of Lay’s chips not only keeps the chips fresh but also grabs customer
attention on store shelves.

Importance of Packaging

1. Protection:
Packaging protects the product from damage, spoilage, leakage, and tampering during transportation and
storage. Example: Glass bottles of Coca-Cola are packed in cardboard boxes with separators to avoid
breakage.

2. Attraction:
Attractive packaging helps in grabbing customer attention and influences purchase decisions. Example: The
sleek and modern design of Apple product boxes creates a premium feel and adds to brand appeal.

3. Information:
Packaging displays essential information like ingredients, expiry date, usage instructions, and brand details.
Example: A Dettol soap pack shows germ protection benefits, ingredients, weight, and MRP.

4. Differentiation:
Packaging helps distinguish a brand’s product from its competitors on the shelf. Example:
Frooti comes in a bright yellow tetra pack, making it instantly recognizable compared to other mango
drinks.

5. Convenience:
Good packaging makes the product easier to carry, open, use, and store. Example:
Zipper pouches for Aashirvaad Atta make storage and reuse convenient for customers.

Types of packing

1. Primary Packaging

Meaning: This is the first layer of packaging that comes in direct contact with the product. It holds the
product and protects it until it is used. Example: The toothpaste tube of Colgate is primary packaging—it
holds the paste directly.

2. Secondary Packaging

Meaning: This is the outer packaging that holds one or more primary packages together. It helps in
branding and protects during handling and display. Example: The cardboard box that contains multiple
tubes of Colgate toothpaste is secondary packaging.

3. Tertiary Packaging

Meaning: This is bulk packaging used for storage, handling, and transportation. It protects large quantities
of products during shipping. Example: A large corrugated box carrying several smaller Colgate cartons used
in warehouse distribution is tertiary packaging.

4. Transit Packaging
24

Meaning: Used during transportation and logistics to prevent damage. It’s designed for strength and
efficiency in bulk handling. Example: Shrink-wrapped pallets of Amul milk cartons during transport.

5. Consumer Packaging

Meaning: Packaging designed to attract customers and provide convenience, branding, and product info.
It’s usually what customers see in retail. Example: The colourful packet of Lay’s chips you buy from a shop.

6. Eco-Friendly or Sustainable Packaging

Meaning: Environmentally responsible packaging made from biodegradable, recyclable, or reusable

materials. Example: Paper straws or cardboard boxes used by brands like Paper Boat.

BRANDING

Meaning: Branding is the process of creating a unique identity, image, name, and perception for a product
or company in the customer’s mind. It helps in distinguishing the product from competitors and building
customer loyalty over time.

Example: Tata, a name trusted across multiple industries in India, is a strong brand that stands for
reliability and quality.

Importance of Branding

1. Product Identification

Meaning: Branding helps customers easily recognize and identify a product among many others in the
market. Example: The red label and taste of Coca-Cola make it instantly recognizable worldwide.

2. Builds Trust and Loyalty

Meaning: A strong brand builds emotional connection and trust with customers, leading to repeat
purchases and loyalty. Example: Many Indian households trust and repeatedly buy Parle-G biscuits due to
its consistent quality and legacy.

3. Helps in Product Differentiation

Meaning: Branding distinguishes a product from similar products in the market, giving it a competitive
edge. Example: Vivo and Oppo smartphones use youth-oriented branding to stand out in the Indian mobile
market.

4. Aids in Promotion and Advertising

Meaning: Strong brands make advertising more effective because customers already have recognition and
trust in the name. Example: Nike’s “Just Do It” campaign works well because the brand is already strong
and known for performance.

5. Supports Business Expansion

25

Meaning: A well-known brand name can help launch new products more easily, as customers are more
likely to try new items from brands they already trust. Example: Amul successfully launched various dairy
products using the strength of its core brand.

TYPES OF BRANDING

1. Product Branding

Meaning: Product branding focuses on creating a unique identity for a specific product. The aim is to
differentiate the product from competitors in the same category. Example: Maggi noodles by Nestlé is a
product brand known for its unique taste and "2-minute" tagline.

2. Corporate Branding

Meaning: Corporate branding refers to promoting the entire company or organization rather than just
individual products. It reflects the company’s values, vision, and mission. Example: Tata Group uses
corporate branding across its diverse businesses like Tata Steel, Tata Motors, and Tata Consultancy
Services.

3. Personal Branding

Meaning: This type involves building the image or reputation of an individual rather than a product or
company. It is common in entertainment, business, and social media. Example: Virat Kohli has built a
personal brand known for performance and fitness, which also supports endorsements.

4. Co-Branding

Meaning: Co-branding is a marketing strategy where two or more brands collaborate to create a product
that benefits from the reputation of both. Example: Intel Inside Dell laptops is a co-branding effort, where
both brands are promoted together.

5. Family Branding (Umbrella Branding)

Meaning: In family branding, multiple related products are sold under a single brand name, which helps
leverage the strength of the parent brand. Example: Amul uses family branding for a wide range of dairy
products like butter, milk, cheese, ice cream, etc.

6. Individual Branding

Meaning: Here, each product is given its own brand name and identity, independent of the parent
company. It helps avoid negative impact if one product fails. Example: HUL (Hindustan Unilever) owns
individual brands like Dove, Lux, and Surf Excel, each with its unique branding.

LABELLING

Meaning: Labelling refers to the process of designing and attaching a label to a product. The label contains
information like product name, brand, ingredients, usage instructions, manufacturing details, warnings,
and legal compliance. It helps identify the product and communicates essential details to the consumer.

Example: On a Dabur Chyawanprash bottle, the label includes the product name, ingredients like Amla and
Ashwagandha, expiry date, weight (1kg), and usage instructions in Hindi and English.
26

Importance of Labelling

1. Product Identification: Labels help consumers identify products easily on shelves.

2. Information to Customers: Labels provide key details about the product, including nutrition, price, and
usage.
3. Legal Compliance: Labels ensure the product meets government regulations like FSSAI codes, MRP,
batch number, etc.
4. Marketing tool: attractive labels can influence purchase decisions and convey brand image.
5. Helps in grading: labels often include product grades like “premium”, “deluxe”, “economy”, etc

Types of labelling

1. Brand Label
Meaning: A brand label only displays the brand name of the product without providing any other details. It
helps in identifying the product and building brand recall.
Example: A soap bar labelled only as “Dove” without any other information.
2. Descriptive Label
Meaning: This label provides complete information about the product such as its features, usage
instructions, ingredients, quantity, manufacturing and expiry date.
Example: Maggi noodles packet showing nutritional facts, cooking instructions, and ingredients.
3. Grade Label
Meaning: Grade labels are used to classify products based on quality standards or categories. It helps
customers differentiate between product grades.
Example: Milk packets labelled as “Toned,” “Double Toned,” or “Full Cream.”
4. Informative Label
Meaning: Informative labels provide essential product and manufacturer details such as manufacturing
date, MRP, batch number, place of origin, and expiry. It ensures consumer awareness and product
traceability.
Example: Medicine bottle showing batch number, MRP, expiry date, and manufacturer details.
5. Legal Label
Meaning: Legal labels are required by law to ensure compliance with safety, health, and regulatory
standards. These include mandatory logos and certifications.
Example: Packaged food showing FSSAI license number, green dot (for vegetarian), or ISI mark on
electrical goods.
6. Promotional Label
Meaning: This label is used as a marketing tool to promote sales by highlighting offers, discounts, or
contests to attract consumers.
Example: A chips packet with “Buy 1 Get 1 Free” or “Win a prize inside” sticker.

Basis Packaging Labelling Branding

Displaying
Enclosing products for
information on the Creating a unique identity
Meaning protection, storage,
product or its for a product or company.
and sale.
package.
Provides essential
Protects the product Differentiates the product
details like usage,
Purpose and facilitates from competitors and
ingredients, and
transportation. builds customer loyalty.
safety warnings.
27

Informs and
Establishes a memorable
Enhances product educates consumers,
Role in presence in the market,
appeal and attracts aiding their
Marketing fostering trust and
consumers. purchasing
recognition.
decisions.
Often required to Mandatory for most Not legally required but
Legal meet safety and products to ensure crucial for market
Requirement transportation consumer rights and competitiveness and
standards. safety. consumer perception.
First physical Builds trust by
Creates emotional
interaction; providing
Customer connections, encouraging
influences purchase transparent and
Impact brand loyalty and repeat
through visual necessary
purchases.
appeal. information.
Elements like logos,
Materials like boxes, Tags, stickers, or
slogans, and brand
bottles, or wrappers printed information
Components colours that convey the
that contain the detailing product
brand's message and
product. specifics.
values.
Medium-term;
Short-term; focuses Long-term; evolves over
remains with the
on immediate time to maintain
Timeframe product to guide
protection and relevance and consumer
usage and
attraction. connection.
compliance.
The Nike "Swoosh" logo
A glass bottle for A nutrition facts
and "Just Do It" slogan
perfume to prevent label on a cereal box
Examples representing athletic
leakage and detailing ingredients
excellence and
breakage. and caloric content.
motivation.

PRICING STRATEGIES
o INTRODUCTION TO PRICING DECISIONS
Pricing refers to the amount of money a customer must pay to acquire a product or service. It is the only
element in the marketing mix that generates revenue; the other Ps (Product, Place, Promotion) incur costs.
o FACTORS AFFECTING PRICE DECISIONS
Internal Factors
• Cost of the Product
Meaning: The total produc on, distribu on, and selling cost forms the base of pricing.
Example: A company making handmade sarees includes raw material, labor, and distribu on costs before
deciding the price.
• Marke ng Objec ves
Meaning: The company's pricing strategy depends on whether it wants to maximize profit, gain market
share, or survive in a compe ve market.
Example: A new startup may set low prices to a ract customers and gain market entry.
28

• Product Lifecycle Stage

Meaning: Price may vary according to the product’s stage—introduc on, growth, maturity, or decline.
Example: A new smartphone may be launched at a high price, then gradually reduced in later stages.
• Brand Image and Posi oning
Meaning: A brand posi oned as premium will have higher prices to reflect quality and exclusivity.
Example: FabIndia maintains higher prices to reflect its premium, tradi onal appeal.

External Factors
• Market Demand
Meaning: If demand is high and supply is limited, prices go up, and vice versa.
Example: AC prices go up during peak summer season due to high demand.
• Compe on
Meaning: Pricing decisions are affected by the compe tor's price, product quality, and market strength.
Example: When Ola offers discounts, Uber might match them to stay compe ve.
• Consumer Percep on and Behaviour
Meaning: Customers’ willingness to pay depends on perceived value and price sensi vity.
Example: Customers may pay more for organic vegetables due to health consciousness.
• Government Regula ons
Meaning: Legal controls like price ceilings, taxes, or GST influence pricing decisions.
Example: Price caps on essen al medicines by Indian government to ensure affordability.
• Economic Condi ons
Meaning: Infla on, recession, or general economic climate can affect both produc on costs and customer
purchasing power.
Example: During infla on, prices of FMCG products may rise due to increased input costs.

METHODS OF PRICING
 Cost-Based Pricing
This method sets the price by calculating the total cost of producing the product and then adding a fixed
profit margin. It ensures all costs are covered, including fixed and variable costs.
Example: A local bakery calculates the cost of ingredients, electricity, and labor, then adds a 20% profit
to price each cake.

 Mark-Up Pricing
The seller adds a standard mark-up percentage to the cost of the product to determine the price. It is
commonly used in retail.
Example: A clothing store buys shirts at ₹500 and adds a 50% mark-up, pricing them at ₹750.

 Target Return Pricing

This method involves setting the price to achieve a specific return on investment (ROI). The company
calculates the price needed to meet its profit goals.
Example: Maruti Suzuki sets car prices aiming to achieve a 12% return on capital employed.

 Value-Based Pricing
Price is set based on the customer’s perceived value of the product, not just on cost. Companies use
marketing insights and consumer research.
29

Example: Patanjali prices some ayurvedic products higher because of the perceived natural and
traditional value.

 Competition-Based Pricing
Companies set prices based on competitors’ pricing for similar products. It’s common in highly
competitive markets.
Example: Vodafone Idea sets its mobile recharge plans similar to Jio and Airtel to stay competitive.

 Skimming Pricing
A high price is charged initially to maximize profit from early adopters, then gradually reduced to
attract more price-sensitive customers.
Example: Samsung launches new Galaxy phones at premium prices, which drop after a few months.

 Penetration Pricing
A low price is initially set to enter the market quickly and attract customers, often used to gain market
share.
Example: Jio offered free data and calls during its initial launch to quickly build a customer base.

 Psychological Pricing
The price is set to make the product appear cheaper, using pricing tricks like ₹99 instead of ₹100 to
influence buyer psychology.
Example: Big Bazaar prices items like ₹199 or ₹499 to make them appear more affordable.

 Bundle Pricing
Multiple products are sold together at a single price that is lower than the total of individual prices.
Example: Domino’s offers combo meals with pizza, garlic bread, and drinks at discounted bundle rates.

 Geographical Pricing
Prices vary depending on the location due to shipping costs, local taxes, or demand.
Example: Tata Steel charges different prices for delivery in Gujarat vs. the Northeast due to logistics.

 Dynamic Pricing
The price changes frequently based on real-time market demand, competition, or customer behaviour,
often seen online.
Example: Ola and Uber use surge pricing during high demand hours.

 Optional Product Pricing

Basic product is sold at a base price, but optional accessories or add-ons are offered at an extra cost.
Example: Tata Motors offers car models with optional add-ons like alloy wheels or infotainment
systems at extra cost.
PLACE (DISTRIBUTION) STRATEGIES
Place refers to the distribution strategy used to make a product available to the customer at the right
location, time, and quantity. It includes all the decisions a business makes to ensure the product reaches
the target market effectively through proper channels, logistics, and outlets.
MARKETING CHANNELS
30

Marketing channels are sets of interdependent organizations participating in the process of making a
product or service available for use or consumption. They are the set of pathways a product or service
follows after production, culminating in purchase and consumption by the final end user.
Factors Influencing Selection of Marketing Channels
1. Product-Related Factors

Nature of Product: Products with mass usage (like FMCGs) require longer channels to reach a wide
customer base, while niche or customized products (like industrial machinery) need shorter channels for
direct and focused delivery.
Indian Example: Lakmé beauty products are distributed through multi-level retail outlets, while Bharat
Heavy Electricals Ltd. (BHEL) sells directly to clients.
Perishability: Perishable products like dairy or bakery items must reach the market quickly, so a shorter
distribution channel is used. Non-perishable items can be stored and passed through longer channels.
Indian Example: Amul milk uses a direct-to-retailer system, whereas Britannia biscuits go through
wholesalers and retailers.
Unit Value of Product: High-value products (like jewellery) are sold through shorter channels for better
control, while low-cost items can be sold through longer channels.
Indian Example: Tanishq jewellery is sold directly through company-owned stores, whereas Parle-G biscuits
are sold via long retail chains.
Product Complexity: Complex and technical products require personal selling and explanation, so they
use shorter channels. Simple products use standard retail channels.
Indian Example: Solar power systems by Tata Power Solar are sold through trained agents, while pens are
sold in supermarkets.
2. Company-Related Factors

Finance Available: Financially strong companies can afford shorter channels like company-owned retail
outlets. Limited finance pushes companies to rely on intermediaries.
Indian Example: Reliance Retail owns thousands of stores due to its strong financial base.
Core Competency: If the company focuses mainly on manufacturing, it may not invest in retailing and
prefers longer distribution channels.
Indian Example: Dabur focuses on production and uses a vast network of distributors and retailers.
Degree of Control: Companies wanting full control over their brand experience prefer direct and shorter
channels. Those with less focus on control use indirect, longer channels.
Indian Example: Apple India operates exclusive stores and website for tighter brand control.
3. Competitive Factors
31

Competitor’s Channel: Companies may adopt similar distribution strategies as their competitors to stay
relevant and competitive in the market.
Indian Example: If HUL uses a retail chain, ITC may adopt a similar route for FMCG distribution.
Distribution Policy: Some companies follow unique policies like multi-level marketing (MLM) or direct
selling and stay consistent with them regardless of market trends.
Indian Example: Amway strictly follows MLM and recruits’ individuals to sell directly.
4. Market-Related Factors

Market Size: Larger markets with wide customer bases need longer channels to reach far and wide,
while small target markets can be served directly.
Indian Example: Patanjali uses multiple retail formats across India for wide market reach.
Geographical Concentration: If customers are spread over a large area, longer channels help in
efficient distribution. Shorter channels suit concentrated local markets.
Indian Example: Agricultural tools in rural Punjab are sold through local dealers, whereas FMCGs in metro
cities follow long chains.
Quantity Purchased: If customers buy in large quantities (bulk buyers), a shorter channel is better. For
products sold in small units to many customers, a longer chain is suitable.
Indian Example: Cement companies sell directly to builders (bulk buyers), while soft drinks are sold to end
consumers through retailers.
5. Environmental Factors

Legal Environment: Government rules or restrictions can influence channel choice. Certain sensitive or
regulated products must follow strict, short channels.
Indian Example: Sale of firearms in India is allowed only through licensed, government-approved dealers.
Economic Conditions: During economic slowdown or recession, companies reduce costs by shortening
or simplifying distribution channels.
Indian Example: During COVID-19, many Indian brands used direct-to-consumer (D2C) channels via online
platforms to cut costs.
FUNCTIONS OF MARKETING CHANNELS
Sorting: This involves separating and classifying products based on quality, size, or other features
before sending them to the market.
Indian Example: A rice distributor sorts basmati rice into premium, standard, and economy grades before
sending to different retailers.
Allocation: This refers to breaking down large quantities of goods received from producers into smaller
lots suitable for retail selling.
32

Indian Example: A wholesaler in Delhi receives 1,000 cartons of Maggi noodles and allocates them into
batches of 20 for each Kirana store.
Product Promotion: Marketing channels help in promoting products through local events, displays,
demonstrations, and influencer-based promotion.
Indian Example: Distributors of Coca-Cola put up banners and provide fridges to local shops as part of
promotional efforts.
Risk Taking: Channel members bear the risk of loss due to damage, theft, spoilage, or unsold inventory
while handling goods.
Indian Example: A Flipkart seller takes the risk of returns or damaged goods during courier delivery.
Accumulation: This involves collecting small quantities of goods from multiple producers and combining
them for large-scale selling.
Indian Example: An APMC market collects fresh vegetables from hundreds of small farmers and supplies
them to big buyers.
Assorting: Marketing channels create a variety of related products to offer customers a choice in one
place.
Indian Example: A Big Bazaar outlet assorting groceries, clothes, electronics, and cosmetics to meet diverse
customer needs.
Negotiation: This function involves bargaining between producers, wholesalers, and retailers regarding
price, delivery, and terms.
Indian Example: A local Kirana store negotiates rates with a Hindustan Unilever distributor for bulk
purchase of soaps.
TYPES OF MARKETING CHANNEL
1. Direct Marketing Channel
A direct marketing channel involves no intermediaries—the product moves directly from the manufacturer
to the consumer. This gives the producer full control over distribution, pricing, and customer interaction,
and is often used in online selling or personal selling.
Example:
Mamaearth sells its products directly through its official website and app, eliminating middlemen.
2. Indirect Marketing Channel
An indirect marketing channel includes one or more intermediaries such as wholesalers, agents, or retailers
who help distribute the product from producer to consumer. It helps businesses reach wider markets
without managing the full logistics themselves.
33

Example:
Dabur distributes products like Chyawanprash using wholesalers and retail stores across India.
3. One-Level Channel:
In this channel, there is only one intermediary between the manufacturer and the consumer—usually a
retailer. It is commonly used for consumer durables or fashion items.
Example:
Titan watches are sold directly by Titan-to-Titan showrooms, which then sell to customers.
4. Two-Level Channel
This structure involves two intermediaries—a wholesaler and a retailer. It is a very common channel for
FMCG (Fast-Moving Consumer Goods) products.
Example:
Haldiram's packaged snacks go from manufacturer → wholesaler → retailer → consumer.
5. Three-Level Channel
In this extended channel, the product passes through three intermediaries—typically a distributor,
wholesaler, and retailer—before reaching the consumer. It is used for mass distribution and rural markets.
Example:
Patanjali products in remote areas often move from distributor → wholesaler → retailer → rural customer.
6. Dual Distribution Channel
In this model, the company uses more than one channel simultaneously to reach customers. For example,
a brand might sell through retailers and its own website or app at the same time.
Example:
Nike sells its shoes through exclusive Nike stores, e-commerce websites like Flipkart, and its own official
website in India.
7. Reverse Channel (Return/Recycle Channel)
This channel works in reverse direction—from customer back to the producer. It is used for returns,
recycling, or repairs. Growing in importance due to environmental concerns and online returns.
Example:
Flipkart and Amazon arrange reverse logistics for product returns or replacements.
8. E-Commerce Channel
This involves using online platforms to sell directly to consumers, often bypassing physical stores. Includes
company websites, marketplaces (like Amazon), and social media selling.
Example:
Nykaa sells beauty products through its online platform and app directly to customers.
34

9. Franchise Channel
Here, the producer licenses its brand and product rights to independent franchisees, who operate retail
outlets under the brand name and follow standard practices.
Example:
Domino’s India operates mostly through a franchise model where each outlet is owned by franchisees under
the Jubilant FoodWorks license.
10. Hybrid Channel (Multichannel Marketing)
This system blends traditional and digital distribution channels. A company may sell products via retailers,
e-commerce, and mobile apps, all at once.
Example:
Tanishq (Titan) uses a hybrid model: its jewellery is sold in stores, on its website, and through online
marketplaces.

DISTRIBUTION STRATEGY – MEANING

Distribu on strategy refers to the company’s plan to deliver products from the manufacturer to the final
consumer in the most efficient and effec ve way. It involves choosing the right channels, intermediaries,
and logis cs methods to ensure product availability.
Indian Example:
Amul uses an extensive distribu on strategy to reach even remote areas of India through local dealers and
retailers.

 TYPES OF DISTRIBUTION STRATEGIES

1. Intensive Distribu on
This strategy aims to make the product available in as many outlets as possible. It is suitable for
convenience goods like snacks, toothpaste, or so drinks, where consumers don’t spend much effort in
purchase decisions.
Indian Example:
Parle-G biscuits are available at Kirana stores, supermarkets, tea stalls, and vending machines across
India.

2. Selec ve Distribu on
Here, the company uses a limited number of outlets in a geographical area. It balances market
coverage and control, and is used for shopping goods where customers compare brands.
Indian Example:
Samsung mobile phones are sold in selected mul -brand outlets, exclusive showrooms, and authorized
retailers.

3. Exclusive Distribu on
In this strategy, the company gives exclusive rights to a single distributor or retailer in a par cular
region. It is ideal for premium or specialty products requiring personalized selling or services.
35

Indian Example:
Lamborghini sells cars in India through only one or two exclusive dealerships.

4. Dual Distribu on (Hybrid Distribu on)

This involves using mul ple channels simultaneously to reach different customer segments. A company
might sell both online and through retailers.
Indian Example:
Apple products are sold in India through Apple’s official online store, exclusive stores, and other retail
partners.

5. Direct Distribu on
In this strategy, the manufacturer sells directly to the consumer without using any intermediaries. It
gives the company more control over the customer experience, pricing, and brand messaging.
Indian Example:
Patanjali sells products directly to customers via its exclusive Patanjali stores and official online portal.

6. Indirect Distribu on
Here, the company sells its product through intermediaries like wholesalers, distributors, and retailers.
It’s useful when the company doesn’t have direct access to large consumer bases or prefers lower
distribu on costs.
Indian Example:
Dabur uses distributors and retailers to sell its health and personal care products across India.

7. Online Distribu on (E-commerce Strategy)

This refers to selling products through online channels like company websites, online marketplaces
(Amazon, Flipkart), and mobile apps. It offers convenience, wider reach, and data insights.
Indian Example:
Mamaearth sells its skincare and baby care products via its website, Amazon, Nykaa, and Flipkart.

8. Franchise-Based Distribu on
A strategy where the company allows franchisees to sell products or services under the brand name. It
enables quick market expansion with lower capital investment.
Indian Example:
Domino’s Pizza in India operates through franchise outlets run by Jubilant FoodWorks.

10. Mul -channel Distribu on

Here, a company uses a combina on of tradi onal and modern channels—such as retail, e-commerce,
telemarke ng, and direct sales—to reach more customers and create convenience.
Indian Example:
Tanishq sells its jewellery via physical showrooms, a mobile app, and its online store.

DIFFERENCE BETWEEN PUSH AND PULL STRATEGY

Basis of
Push Strategy Pull Strategy
Comparison
The manufacturer pushes the product The manufacturer pulls the customer by
1. Defini on through intermediaries to the end crea ng demand that encourages
customer. purchase.
Focus is on channel partners
2. Focus Focus is on end consumers directly.
(wholesalers, retailers).
36

Trade promo ons, personal selling, and Adver sing, consumer promo ons, and
3. Tools Used
sales force. social media marke ng.
Products with low brand loyalty or Products with high brand loyalty and
4. Suitable For
impulse purchases. high consumer involvement.
5. Brand Choice Brand choice o en happens in the Brand is o en pre-decided before store
Timing store. visit.
6. Role of Very important – they are the main link Less crucial – consumers directly create
Intermediaries to the customer. demand for the product.
Manufacturer → Intermediary → Customer → Intermediary →
7. Marke ng Flow
Customer Manufacturer
8. Cost of More spent on adver sements and
More spent on distributor incen ves.
Promo on consumer promo ons.
9. Example
Toothpaste, Chocolates, Cold Drinks Laptops, Smartphones, Branded Apparel
Product Type

CHANNEL MANAGEMENT PROCESS

1. Analysing Customer Needs
Meaning: This step involves identifying what the customers expect from the distribution channel, such as
fast delivery, product variety, after-sales support, or convenience. The goal is to match the distribution with
customer expectations.
Example: Big Basket analysed that urban consumers want quick delivery of groceries and launched 90-
minute express delivery services.
2. Establishing Channel Objectives
Meaning: Based on the product, target market, and business goals, the company sets clear distribution
objectives like market coverage, customer accessibility, and cost efficiency.
Example: Raymond uses selective distribution to ensure their premium clothing brand is available in select
stores that match its brand image.
3. Identifying Major Channel Alternatives
Meaning: This step includes choosing the right type of intermediaries (retailers, wholesalers, agents),
deciding the number of intermediaries (intensive, selective, or exclusive), and defining the responsibilities of
each member in the channel.
Example: Dabur uses both wholesale and retail channels to reach urban and rural markets effectively.
4. Evaluating Major Channel Alternatives
Meaning: Each channel option is evaluated based on economic factors (cost vs. benefit), control over the
channel, and adaptability to changes. The goal is to choose the most profitable and sustainable option.
Example: HUL compares the effectiveness of general trade (kirana stores) vs. modern trade (supermarkets)
for different products.
5. Selecting Channel Members
Meaning: The company chooses specific partners (distributors, retailers, agents) based on their experience,
financial strength, reach, and reputation in the market.
Example: Apple India selects premium retail chains like Croma and Reliance Digital for its exclusive product
display and experience zones.
6. Motivating Channel Members
Meaning: Channel partners need motivation through support, training, incentives, or promotional schemes
to remain active and loyal to the brand.
37

Example: PepsiCo provides marketing support and attractive commission schemes to their distributors to
boost retail sales.
7. Evaluating Channel Members
Meaning: Regular assessment of channel members is done using performance metrics like sales volume,
customer service, and market feedback.
Example: Maruti Suzuki evaluates dealership performance monthly and awards top-performing dealers.
8. Modifying Channel Arrangements
Meaning: Changes are made in the channel structure based on evolving customer needs, new competition,
or product life cycle stages. New channels may be added or old ones removed.
Example: Tanishq launched an online shopping platform during COVID-19 to adapt to digital buying trends.
PROMOTION STRATEGIES
Promotion refers to all the activities a company undertakes to communicate, inform, and persuade
customers about its product or brand, with the goal of increasing sales and creating brand awareness. It
plays a crucial role in positioning the product and attracting the right audience by delivering the right
message through the right channels.
Example: Amul promotes its dairy products through humorous topical ads, social media campaigns, and
television commercials to connect with consumers and build brand loyalty.

INTEGRATED MARKETING COMMUNICATION:

According to The American Marketing Association: "Integrated Marketing Communication (IMC) is a
planning process designed to assure that all brand contacts received by a customer or prospect for a
product, service, or organization are relevant to that person and consistent over time".
10 Types of Integrated Marke ng Communica on (IMC)
1. Adver sing
Meaning: Adver sing involves the paid promo on of products, services, or ideas through various media
channels such as television, radio, newspapers, websites, and social media, with the goal of crea ng brand
awareness and delivering a consistent brand message.
Indian Example: Amul runs humorous and consistent TV and print ads to promote its dairy products and
strengthen brand recall.

2. Public Rela ons (PR)

Meaning: Public rela ons refer to the strategic management of a company’s image and reputa on through
unpaid or earned communica on such as press releases, media coverage, events, and sponsorships to
maintain a favourable public image.
Indian Example: Tata Group enhances its reputa on through CSR campaigns and posi ve media coverage
about its ethical business prac ces.

3. Sales Promo on
Meaning: Sales promo on includes short-term incen ves such as discounts, coupons, giveaways, and
loyalty programs that encourage customers to make immediate purchases and increase product demand.
Indian Example: Flipkart a racts customers with limited-period discounts and special offers during the Big
Billion Days sale.

4. Direct Marke ng
Meaning: Direct marke ng is a form of communica on where companies reach out to individual consumers
through personalized messages sent via email, SMS, telephone, or direct mail to generate an immediate
response or ac on.
38

Indian Example: ICICI Bank sends customized credit card offers through emails and text messages to its
exis ng customers.

5. Digital Marke ng
Meaning: Digital marke ng refers to promo ng products or services through digital pla orms such as
websites, search engines, email, apps, and social media, o en using SEO, paid ads, and influencer
marke ng to reach online users.
Indian Example: Zomato uses blog posts, push no fica ons, and social media content to connect with users
and increase engagement.

6. Social Media Marke ng

Meaning: Social media marke ng involves crea ng and sharing content, running adver sements, and
engaging with followers on pla orms like Instagram, Facebook, and Twi er to build brand loyalty and drive
interac ons.
Indian Example: Swiggy regularly posts quirky content on Instagram and collaborates with influencers to
maintain a fun brand image.

7. Content Marke ng
Meaning: Content marke ng focuses on crea ng and distribu ng valuable and relevant content—such as
blogs, videos, infographics, and podcasts—to a ract and engage a clearly defined target audience and
build long-term rela onships.
Indian Example: BYJU’S publishes educa onal videos and blog ar cles that offer value to students and
parents, posi oning itself as a trusted learning partner.

8. Sponsorships and Partnerships

Meaning: Sponsorships and partnerships involve aligning with events, organiza ons, or individuals to
enhance brand exposure and gain access to a wider audience while associa ng with the values of the
sponsored en ty.
Indian Example: Vivo sponsors the Indian Premier League (IPL) to increase visibility and strengthen its
presence in the Indian smartphone market.

9. Personal Selling
Meaning: Personal selling is a one-on-one interac on between a salesperson and a poten al customer
where the salesperson provides informa on, solves doubts, and persuades the customer to make a
purchase.
Indian Example: Maru Suzuki showroom execu ves personally assist customers by explaining car features,
arranging test drives, and offering financing op ons.

10. Experien al Marke ng

Meaning: Experien al marke ng is a strategy that creates memorable and interac ve brand experiences
for consumers, allowing them to engage with the product or service in a hands-on or emo onal way.
Indian Example: Maggi organizes cooking events in malls where consumers can taste and experiment with
new recipes using Maggi products.

11. Guerrilla Marke ng

Meaning: Guerrilla marke ng is an unconven onal and crea ve promo onal strategy that uses surprise
elements, public spaces, or viral content to grab a en on and generate buzz with minimal cost and
maximum impact.
39

Indian Example: Ne lix India created buzz for the show Sacred Games by pu ng up mysterious posters and
graffi around Mumbai with cryp c lines from the show, sparking curiosity and viral discussion.

COMPARISON OF IMC TOOLS

Public Sales
Personal Direct Guerrilla
Basis Adver sing Rela ons Promo
Selling Marke ng Marke ng
(PR) on
Direct
Short- contact
Managing Face-to-face Unconven on
Paid term with
public image selling and al, crea ve
promo on offers to customers
Meaning through interac on promo on to
through mass boost using
unpaid media with grab
media. sales personalize
and events. customer. a en on.
quickly. d
messages.
One-way or
One-way,
Direct and interac ve, Surprise-
One-way Two-way but short-
two-way depending based, o en
Approach communica indirect via term and
communica on the in public
on. media. incen ve
on. channel spaces.
-based.
used.
Non-
personal,
Non-personal,
Non-personal, usually Personal Non-personal
image-
Communica mass Personal and through but not but high
building
on Type communica interac ve. POP face-to- emo onal
communica
on. displays, face. impact.
on.
coupons
etc.
Moderat Low to
Low to
High cost due High due to e, moderate, Low budget
moderate,
Cost to media salaries and depends depends on but high
depends on
space/ me. training. on offer reach and crea ve cost.
coverage.
type. tools used.
Generate
Build Trigger
Build quick
awareness Build trust immedia Create buzz
rela onships responses
Goal and promote and maintain te buying and
and close or
brand reputa on. behaviou memorability.
sales. engageme
message. r.
nt.
Short to
Medium to
Long-term Long-term Short- medium-
long-term Short-term
Time Frame brand image term term
rela onship high impact.
building. management. ac on. engageme
selling.
nt.
Less control,
Full control High control Full Full control Limited
media may
Control over by the control if done control once
alter the
message. salesperson. over properly. it’s public.
message.
40

offer
details.
Maru Flipkart’s ICICI Bank
Tata’s CSR
Amul’s topical showroom “Big sending
Indian ini a ves
print and salespeople Billion SMS with
Example featured in
hoarding ads. guiding Days” credit card
the news.
buyers. sale. offers.

SERVICE MARKETING
o Meaning and Characteristics of Services
According to Philip Kotler, "A service is any activity or benefit that one party can offer to another that is
essentially intangible and does not result in the ownership of anything. Its production may or may not be
tied to a physical product." In short, services are intangible activities or benefits provided to customers to
satisfy their needs, without transferring ownership of any physical item.
Features of Services
Intangibility
Services do not have any physical form — they cannot be seen, touched, or stored. Customers experience
them only after delivery, and businesses cannot provide samples like tangible goods.
Indian Example: A person booking LIC insurance cannot see the service but trusts the promised financial
protection.
Perishability
Services cannot be stored, returned, or reused. Once the time for consumption passes, the service is lost
forever. It must be used in a fixed period.
Indian Example: If a hotel room in OYO is unbooked for the night, that revenue is permanently lost.
Variability (Heterogeneity)
The quality of services can vary based on who delivers them, when, where, and how. There is no fixed
standard like physical goods.
Indian Example: The behaviour of staff at Café Coffee Day may feel excellent one day and average on
another visit.
Lack of Ownership
Customers do not own the service they use — they only access or hire it for a limited period. Ownership
remains with the service provider.
Indian Example: A person hiring an UrbanClap plumber for repair pays for the service, not the plumber’s
tools or ownership.
Inseparability
Services are produced and consumed simultaneously. The presence of the provider is usually required while
41

delivering the service.

Indian Example: A student must attend a BYJU’S live session in real time to receive the benefit of the
teacher’s service.
Fluctuating Demand
Demand for services changes frequently, depending on time, season, or day. It is difficult for businesses to
predict and manage this variation.
Indian Example: IRCTC sees a spike in train ticket bookings during Diwali and low demand during exam
months.
Difficult to Measure Quality
Services cannot be measured objectively or tested in a lab. Judging service quality depends on individual
perception and experience.
Indian Example: A patient’s satisfaction with treatment at Apollo Hospitals depends on their own
expectations and experience.
Direct Interaction Between Producer and Customer
Services usually involve direct personal interaction between the provider and the customer, influencing
satisfaction and trust.
Indian Example: A makeup artist doing bridal makeup builds rapport with the bride while delivering the
service.
EXTENDED MARKETING MIX (7PS)
Product: It refers to the core service or benefit offered to satisfy customer needs. For services, this
includes features, quality, design, and added value.
Indian Example: ICICI Bank’s product includes personal banking services like savings accounts, loans, and
credit cards.
Price: The amount customers pay for the service. It includes pricing strategies like premium pricing,
discount offers, bundling, and value-based pricing.
Indian Example: Zomato offers premium subscription (Zomato Gold) at a price that provides additional
benefits to loyal customers.
Place: It refers to how the service is delivered and where it is available. It focuses on distribution
channels — online, offline, or both.
Indian Example: Flipkart delivers products across India using a mix of website, mobile app, and delivery
partners.
Promotion: It includes all communication tools used to inform and attract customers — such as
advertising, social media, sales promotions, and PR.
42

Indian Example: Big Bazaar promotes its weekend discounts through newspaper ads, hoardings, and SMS
alerts.
People: These are all the individuals involved in service delivery — their behaviour, appearance,
training, and interaction style directly affect customer satisfaction.
Indian Example: Staff at Apollo Hospitals are trained in soft skills to ensure polite and professional
interaction with patients.
Process: Refers to the method, system, or steps followed to deliver the service smoothly and efficiently.
It affects customer convenience and speed.
Indian Example: IRCTC’s online ticket booking process makes railway reservations quick and accessible to
millions.
Physical Evidence: The visible elements that support the service experience. As services are intangible,
customers rely on physical surroundings to judge service quality.
Indian Example: The ambiance, interior design, and neat uniforms at a Lakmé Salon reflect its professional
service quality.
SERVICE DIFFERENTIATION
 Ordering Ease
It refers to how simple it is for a customer to place an order with the company.
 Delivery
It is about how quickly, accurately, and safely a product or service reaches the customer.
 Installation
It refers to the process of setting up the product so it functions properly at the customer's location.
 Customer Training
It involves educating the customer to use the product effectively and efficiently.
 Customer Consulting
It includes offering professional advice and support to help customers make better use of the product.
 Maintenance and Repair
This refers to the support provided to keep the product in working condition over time
43

MODULE 4: CONSUMER BUYING BEHAVIOR

 MEANING AND DEFINITION-
Philip Kotler - Consumer behavior is the study of how individuals, groups, and organizations select, buy, use,
and dispose of goods, services, ideas, or experiences to satisfy their needs and wants.
ROLE IN MARKETING
1. Understanding Customer Needs
Consumer behaviour helps iden fy the actual needs, preferences, and expecta ons of customers. It reveals
why consumers buy certain products and how those purchases solve specific problems. By understanding
these needs, marketers can create products that offer meaningful solu ons and value.

2. Effec ve Market Segmenta on and Targe ng

Studying consumer behaviour allows marketers to divide the market into dis nct segments based on shared
characteris cs such as demographics, psychographics, or buying mo ves. This enables the development of
targeted marke ng strategies for each segment, leading to higher efficiency and effec veness in reaching
poten al customers.

3. Product and Service Design

Insights from consumer behaviour guide product development by iden fying which features, styles, and
benefits are most valued by the target audience. This leads to the design of products and services that are
user-friendly, a rac ve, and capable of mee ng customer expecta ons in terms of func on and quality.

4. Pricing Strategy Development

Consumer behaviour analysis provides informa on about how much value customers a ach to a product,
how sensi ve they are to price changes, and what price range they consider acceptable. This helps
marketers set prices that reflect both the perceived value and compe ve posi oning, leading to increased
customer acceptance.

5. Promo onal Strategy Development

Understanding how consumers receive and interpret messages helps marketers cra more effec ve
adver sing and promo onal content. It guides the choice of message tone, communica on channels, and
ming, ensuring that promo ons connect with the emo onal and ra onal triggers of the target audience.

6. Customer Sa sfac on and Loyalty Building

When marketers understand what drives sa sfac on and dissa sfac on among customers, they can
enhance the customer experience at every touchpoint. This leads to higher sa sfac on levels, greater brand
loyalty, and improved customer reten on, which are all vital for long-term success.

7. Predic ng Future Buying Trends

By analyzing pa erns in consumer behaviour, marketers can an cipate shi s in customer preferences and
emerging market demands. This enables proac ve decision-making in product development, branding, and
promo onal efforts, keeping the company compe ve in a dynamic environment.
44

8. Distribu on and Placement Decisions

Consumer behaviour insights reveal preferred shopping habits, such as whether consumers prefer online or
offline channels, convenience, or variety. Marketers can use this informa on to select the most appropriate
distribu on methods, ensuring that products are available where and when customers want them.
FACTORS INFLUENCING CONSUMER BEHAVIOUR

1. Cultural Factors

Cultural aspects like values, traditions, social class, and ethnicity deeply affect consumer behaviour.

 Culture
Culture shapes basic values and preferences. It influences what people consider acceptable or desirable.
Example: In India, cultural norms may lead people to celebrate festivals like Diwali by buying new
clothes and electronics.
 Subculture
Subgroups within a culture—like region, religion, caste, or language—have specific preferences.
Example: South Indian customers may prefer filter coffee over instant coffee, so marketers tailor their
products regionally.
 Social Class
Social hierarchy influences tastes, spending habits, and brand preferences. It is determined not just by
income, but also education, occupation, and lifestyle.
Example: Upper-middle-class Indian consumers may opt for premium brands like FabIndia or Titan.

2. Social Factors

An individual’s social environment affects choices through relationships and social roles.

 Reference Groups
Groups that influence attitudes or behaviour, especially for visible items. They also include opinion
leaders.
Example: A college student might buy sneakers endorsed by a celebrity athlete due to peer influence.
 Family
Family roles and dynamics affect what and how a person buys. Marketers study who holds influence in
decision-making.
Example: A child’s demand may influence a family’s choice to buy a specific breakfast cereal like
Kellogg’s Chocos.
 Roles and Status
A person plays multiple roles in society, and each role has a status attached. These influence
preferences.
Example: An Indian woman who is both a CEO and a mother may buy formal wear for office and
educational toys for her child.

3. Personal Factors

Personal traits and characteristics play a strong role in shaping preferences.

 Age and Life Cycle

Consumer needs and buying habits change with age and life stage.
Example: Young Indian singles may spend more on smartphones and fashion, while older people
prioritize health products.
45

 Occupation
Profession impacts income, lifestyle, and dressing or product needs.
Example: A teacher may prefer budget clothing while a corporate executive might shop from Raymonds.
 Economic Situation
Income, savings, and overall financial health affect spending capacity.
Example: A salaried Indian might buy EMI-based two-wheelers, while a wealthier individual opts for
luxury cars.
 Lifestyle
Lifestyle reflects how people spend their time and money, influenced by interests and activities.
Example: An Indian with a fitness-focused lifestyle may spend on gym memberships and healthy snacks.
 Personality
Traits like confidence, dominance, and sociability affect choices.
Example: A bold and outgoing Indian youth might choose bright, trendy clothes from brands like H&M.

4. Psychological Factors

Internal mental processes influence how people interpret and respond to marketing stimuli.

 Motivation
A need becomes a motive when it becomes urgent and drives action.
Example: A hungry office-goer in India might stop at Swiggy or Zomato due to the immediate need for
food.
 Perception
How people interpret information shapes buying decisions. It includes:
o Selective Attention – noticing what interests them
o Selective Distortion – interpreting info to fit beliefs
o Selective Retention – remembering what supports beliefs
Example: An Indian customer loyal to Maruti may ignore ads for Tata Motors, or misinterpret them
unfavourably.
 Beliefs and Attitudes
These shape brand preferences and buying behaviour over time.
Example: An Indian consumer who believes Patanjali is healthier may prefer it over other FMCG brands.

o CONSUMER BUYING DECISION PROCESS

1. Need Recognition

Meaning: The buying process begins when a consumer identifies an unfulfilled need. This recognition can
come from internal stimuli (e.g., hunger, thirst, discomfort) or external stimuli (e.g., advertisements, peer
pressure, product display). Until a need is recognized, no buying action takes place. Marketers aim to create
or highlight these needs through promotion and persuasion.

Example: In a middle-class Indian household during summer, the old refrigerator stops cooling properly.
The family realizes they need a new one. Ads on television showcasing advanced fridges and seeing a
neighbor’s brand-new fridge further reinforce the need to upgrade. This awareness of a problem—the need
for better food storage—starts the buying journey.
46

2. Information Searching

Meaning: After recognizing a need, the consumer looks for ways to fulfill it. Information search may be
intensive or limited based on the urgency and importance of the purchase. Consumers gather data from:

 Personal sources (friends, relatives),

 Commercial sources (ads, dealers, packaging),
 Public sources (media, online reviews),
 Experiential sources (product trials, showroom visits).
The aim is to reduce uncertainty and make a confident decision.

Example: The family talks to relatives about fridge brands, watches Hindi YouTube reviews, visits Reliance
Digital or Croma stores to touch and feel the models, and browses e-commerce sites like Amazon or Flipkart
to compare prices, energy ratings, and user reviews. This helps them shortlist the best options.

3. Evaluation of Alternatives

Meaning: In this stage, consumers assess available choices based on various criteria, such as product
features, brand image, price, quality, warranty, and expected satisfaction. Each individual may weigh
these attributes differently based on their priorities. The goal is to choose the most suitable product that
offers the highest perceived value.

Example: The family compares Samsung, LG, and Whirlpool fridges based on power consumption, price,
storage capacity, inverter technology, and customer service. They prioritize energy efficiency and warranty
due to high electricity costs and want value for money. They begin forming a preference for a particular
model that meets most of their expectations.

4. Purchase Decision

Meaning: The consumer is now ready to make the final decision regarding what to buy, where to buy,
when to buy, and how to pay. Even after evaluating, the final decision can be affected by others’ opinions
(like family or peers) and situational factors (like budget, offers, stock availability). A favorable
combination of these results in the actual purchase.

Example: The wife chooses a large double-door fridge with a smart inverter, but the husband, keeping the
budget in mind, prefers a more affordable model. They compromise and go for a model offering no-cost
47

EMI, festival discount, and energy efficiency. They finally purchase it from a local electronics showroom
that also provides free delivery and installation.

5. Post-Purchase Behavior: After buying and using the product, the consumer evaluates whether it meets
their expectations.

 If it matches or exceeds expectations, satisfaction occurs.

 If it falls short, dissatisfaction follows.
This evaluation influences future purchases and brand loyalty. Sometimes, consumers feel cognitive
dissonance—doubt or regret after the purchase—which they reduce by justifying their choice, seeking
positive feedback, or ignoring alternative options.

Example: After a week of using the new fridge, the family is happy with its performance—fast cooling, low
noise, and low electricity bills. They feel they made the right decision. They tell friends about it and leave a
good online review. Any doubts they had fade away as they justify that the purchase was both smart and
economical.

o TYPES OF BUYING DECISIONS:

Buying behaviour refers to how consumers decide what products to purchase. It depends on two major
factors: the level of involvement (how important or risky the purchase feels) and the perceived differences
between brands. Based on these two factors, buying behaviour is classified into four types. Understanding
these helps businesses create be er marke ng strategies.

 Complex Buying Behaviour (High Involvement + Significant Brand Differences)

This occurs when the consumer feels the product is important, risky, or expensive, and there are clear
differences among available brands. Consumers do detailed research and careful comparisons before
deciding.
Example: A so ware engineer in Hyderabad comparing OnePlus, Samsung, and iPhone before buying a new
mobile phone by checking features, reviews, and offers.

 Dissonance-Reducing Buying Behaviour (High Involvement + Few Brand Differences)

This type happens when the purchase is important or costly, but the consumer finds only minor differences
between brands. The decision may be quick, but later the buyer might feel uncertain and look for reassurance.
Example: A family in Gujarat choosing Asian Paints for their home renova on mainly based on dealer advice,
and later feeling confident a er seeing posi ve ads and feedback from neighbors.

 Variety-Seeking Buying Behaviour (Low Involvement + Significant Brand Differences)

This occurs when the product is low-cost or low-risk, but there are many choices available. Consumers o en
try different brands not because of dissa sfac on, but for change and fun.
Example: A student in Delhi trying different chips brands like Lays, Bingo, and Kurkure every me for a new
taste experience.
48

 Habitual Buying Behaviour (Low Involvement + Few Brand Differences)

This happens when the product is not very important and all brands seem similar. People buy out of rou ne
or habit, without thinking much or comparing op ons.
Example: A housewife in Chennai buying the same brand of salt (like Tata Salt) every month without
checking other brands.
Conclusion: Consumers show different buying behaviours depending on how involved they feel in the
purchase and how much difference they see among brands. Some decisions involve research and comparison,
while others are quick or based on habit. By iden fying these pa erns, companies can tailor their marke ng
methods—like providing detailed informa on for high-involvement products or maintaining brand visibility
for rou ne purchases.
 BUYING MOTIVES

D. J. Durdian, “Buying mo ves are those influences or considera ons which provide the impulse to buy, induce
ac on or determine choice in the purchase of goods and services.”
CLASSIFICATIONS OF BUYING MOTIVES

1. Physical, Psychological, and Sociological Buying Motives

Physical Motives: These are based on the need to satisfy essential physical needs like hunger, thirst,
sleep, clothing, and shelter. The purchase is made for bodily comfort or survival. Example: Buying Amul milk
to drink in the morning due to daily dietary need.
Psychological Motives: These are related to inner emotional needs such as safety, self-respect, pride, or
desire for recognition. The buyer wants mental and emotional satisfaction. Example: Buying a Raymond
suit to feel confident and respected at a formal event.
Sociological Motives: These arise from social expectations, trends, or the desire to fit into society. The
buyer wants to gain social acceptance or improve their image. Example: Wearing a FabIndia kurta during a
festive event to match cultural and social norms.
2. Inherent and Acquired Buying Motives
Inherent Motives: These are natural motives that exist from birth. They are driven by basic human
instincts like hunger, safety, rest, or play. Example: Buying Bisleri water when feeling thirsty while
travelling.
Acquired Motives: These are learned from surroundings such as society, family, media, and education.
They include desires for style, quality, savings, or social approval. Example: Choosing to buy a Samsung
smartphone based on advertisements and peer recommendations.

3. Primary and Selective Buying Motives

Primary Motives: These create demand for a general category of products. The focus is on fulfilling the
need, not on choosing a specific brand. Example: Deciding to buy a washing machine, regardless of brand.
Selective Motives: These influence the buyer to choose a particular brand or product among several
options based on preferences. Example: Choosing LG washing machine over others due to brand trust.

4. Conscious and Dormant Buying Motives

Conscious Motives: These are known clearly by the buyer. The purchase is made willingly without any
external influence like advertising or promotions. Example: Buying Lifebuoy soap every month out of habit
and satisfaction.
49

Dormant Motives: These are hidden or inactive motives that become active only after promotional
efforts like ads or sales staff influence the buyer. Example: Wanting a smartwatch after watching an ad,
even though the buyer didn’t feel the need before.
5. Rational and Emotional Buying Motives (Alfred Gross)
Rational Motives: These are based on logical thinking. The buyer considers price, quality, usefulness,
durability, or savings before buying. Example: Buying a Bajaj mixer grinder after comparing features and
price with other brands.
Emotional Motives: These come from personal feelings like love, pride, care, fear, or comfort. Decisions
are made from the heart, not logic. Example: Buying a gift hamper from Ferns N Petals to express affection
to a loved one.
6. Product and Patronage Buying Motives
Product Motives: These are linked to the product’s own features, benefits, or usefulness. The buyer
focuses on what the product can offer. Example: Buying Colgate toothpaste for freshness and cavity
protection.
Patronage Motives: These are reasons for preferring a particular seller or shop, such as trust, good
service, offers, or convenience. Example: Regularly buying from Reliance Smart because it provides
discounts and good customer service.
 CUSTOMER RELATIONSHIP MANAGEMENT (CRM)
CRM refers to the strategies, technologies, and prac ces that businesses use to manage and improve
interac ons with their current and poten al customers. The goal of CRM is to build long-term customer
rela onships, increase sa sfac on, and grow business profits by understanding customer needs and
providing be er service.
Indian Example:
MakeMyTrip uses CRM so ware to track customer bookings, preferences, and feedback to offer be er
travel deals and improve service.

IMPORTANCE OF CRM

1. Improves Customer Service

CRM systems help businesses respond faster and more effec vely to customer ques ons and problems,
leading to higher customer sa sfac on. Example: Airtel uses CRM to resolve customer complaints quickly
through call centers and chat support.

2. Increases Customer Reten on

By maintaining a strong rela onship through personalized communica on and support, CRM helps
companies keep their exis ng customers for longer periods. Example: LIC sends policy renewal reminders
and personalized messages to policyholders to retain customers.

3. Enhances Sales and Revenue

CRM allows sales teams to track customer preferences, manage leads, and follow up effec vely, which leads
to increased sales and profits. Example: Bajaj Auto uses CRM to track customer interests and suggest
suitable two-wheeler models, leading to higher conversion rates.
50

4. Helps in Be er Marke ng
CRM helps companies understand customer behavior and preferences, allowing them to create targeted
marke ng campaigns and promo ons. Example: Nykaa uses CRM data to send personalized beauty product
offers to customers based on their past purchases.
5. Supports Decision Making
CRM provides useful reports and analy cs about customer trends, sales pa erns, and feedback, which helps
in be er strategic decisions. Example: Reliance Retail uses CRM reports to plan stock based on customer
buying pa erns in different ci es.

6. Improves Team Coordina on

CRM brings customer-related data into one system, so different departments (sales, service, marke ng) can
work together smoothly. Example: ICICI Bank uses CRM to coordinate between loan departments and
customer care for smooth customer service.

o TRENDS IN CRM
1. Social CRM
Social CRM refers to using social media pla orms to engage with customers, respond to queries, collect
feedback, and promote brands. It helps build stronger rela onships through direct, informal
communica on.
Example: Zomato replies humorously to customer tweets and handles complaints directly on Twi er to
improve public rela ons.

2. Mobile CRM
Mobile CRM allows employees to access customer informa on and manage sales ac vi es from
smartphones or tablets, enabling flexibility and faster response.
Example: ICICI Bank rela onship managers use mobile CRM apps to check customer por olios and give
instant sugges ons during mee ngs.

3. Cloud-Based CRM
Cloud CRM systems store customer data on remote servers, allowing real- me access, easy scalability, and
reduced IT costs without needing physical infrastructure. Example: Small Indian startups use Zoho CRM
(cloud-based) to manage leads and track customer interac ons without inves ng in costly servers.

4. AI and Automa on in CRM

Ar ficial Intelligence (AI) is used in CRM to automate tasks like sending follow-up emails, managing
schedules, answering FAQs, and predic ng customer needs using data. Example: HDFC Bank uses AI-based
chatbots like “Eva” to instantly answer customer queries and guide users through banking services.

5. Data Analy cs and Predic ve CRM

CRM tools analyze customer data to understand behavior, preferences, and future needs, enabling
companies to make smarter decisions and targeted offers.
Example: Amazon India uses customer browsing and purchase history to recommend personalized products
during sales.
6. Omnichannel CRM
Omnichannel CRM ensures customers get a seamless experience across all pla orms like websites, mobile
apps, stores, emails, and customer care. It maintains consistent service and support everywhere.
Example: Tata CliQ offers product support through its app, website, customer care line, and WhatsApp – all
connected to one CRM system.
51

7. Personaliza on and Customer Experience

Modern CRM focuses on sending personalized messages, offers, and experiences to each customer based on
their preferences and behavior, which increases sa sfac on and loyalty.
Example: BigBasket sends personalized grocery sugges ons and discount offers based on the user’s past
purchases.

8. Integra on with Other Tools

CRM systems are now integrated with tools like email marke ng pla orms, ERP systems, WhatsApp
Business, and billing so ware to work more efficiently and provide complete customer informa on.
Example: Flipkart integrates its CRM with email marke ng tools and delivery apps to send shipping updates
and promo onal emails to customers automa cally.
52

MODULE 5: KEY MARKETING METRICS

MEANING AND ROLE OF KEY MARKETING METRICS

Marke ng metrics are quan fiable performance indicators that help businesses measure, monitor, and
evaluate the effec veness of their marke ng strategies and campaigns. These metrics reflect how well a
company is achieving its marke ng objec ves in terms of sales performance, customer behavior, campaign
outcomes, and financial returns. By conver ng marke ng data into meaningful numbers, these metrics serve
as a scien fic and strategic tool for con nuous improvement.

Expanded Role of Key Marke ng Metrics:

1. Evalua ng Campaign Effec veness:

They help determine which adver sing or promo onal campaigns are most effec ve by analyzing
outcomes such as reach, conversions, and cost-efficiency.
2. Enabling Forecas ng and Planning:
Metrics support demand forecas ng and long-term strategic planning by iden fying trends in
consumer responses and market behavior.
3. Improving Budget Alloca on:
Marke ng metrics guide marketers in alloca ng their budgets more efficiently by iden fying which
channels or strategies yield the highest returns.
4. Strengthening Customer Rela onships:
By analyzing engagement and sa sfac on metrics, businesses can refine their CRM strategies to
build stronger, long-term customer rela onships.
5. Suppor ng Product and Pricing Decisions:
Metrics like sales volume, market share, and customer feedback influence product posi oning,
pricing adjustments, and new product development.
6. Real-Time Monitoring and Agility:
Modern digital marke ng tools provide live metrics, enabling companies to quickly adapt and
op mize ongoing campaigns for be er results.
7. Demonstra ng Marke ng Accountability:
Marke ng departments can use metrics to jus fy expenditures, report success to senior
management, and show how marke ng contributes to business growth.
8. Measuring Brand Health:
Certain metrics like brand recall, brand equity, and Net Promoter Score (NPS) help assess the public
percep on and strength of the brand in the market.

o DIFFERENCE BETWEEN TRADITIONAL AND ONLINE MARKETING METRICS

Basis of
Tradi onal Marke ng Metrics Online Marke ng Metrics
Comparison
Mostly based on es mated figures or Data is collected digitally and is precise
1. Data Nature
surveys. and quan fiable.
Uses tools like Google Analy cs,
2. Measurement Relies on tools like readership reports,
Facebook Insights, and Email Marke ng
Tools TRP ra ngs, and market surveys.
dashboards.
3. Time to Access Results are delayed and o en require Results are available in real me
Results me-consuming data collec on. through analy cs dashboards.
53

Rela vely less accurate due to Highly accurate as it tracks user

4. Accuracy dependence on third-party sampling and behavior directly through digital
indirect feedback. touchpoints.
Limited ability to measure actual Engagement such as clicks, shares,
5. Tracking
engagement beyond reach or likes, and me spent can be precisely
Engagement
impressions. tracked.
6. Cost Provides direct metrics like ROI, CPA
Difficult to link marke ng spend with
Effec veness (Cost per Acquisi on), and CPC (Cost
outcome (indirect ROI measurement).
Analysis per Click).
Enables personalized targe ng based
7. Audience Broad targe ng based on general
on user behavior, preferences, and
Targe ng demographics or regions.
loca on.
8. Campaign Once executed, campaigns cannot be Campaigns can be adjusted in real- me
Op miza on easily altered or op mized. based on ongoing results and feedback.
Can track user ac vity based on specific
9. Geographic Limited to broad areas and general
loca ons, devices, and even me of
Tracking audience segmenta on.
engagement.
CTR (Click Through Rate), Bounce Rate,
10. Example Readership rate, TRP (Television Ra ng
Conversion Rate, Customer Reten on
Metrics Points), foo all es mates.
Rate.
o CORE PERFORMANCE METRICS:
These are foundational indicators used to assess the financial and operational performance of marketing
strategies.

a. Return on Marketing Investment (ROMI): Measures the profitability of marketing activities by

comparing the revenue generated to the marketing cost.
Formula: ROMI = (Revenue from Marketing – Marketing Cost) / Marketing Cost

b. Customer Acquisition Cost (CAC): Represents the total cost spent to acquire a new customer. It includes
expenses like advertising, sales efforts, and marketing overhead.
Formula: CAC = Total Marketing Cost / Number of New Customers Acquired

c. Conversion Rate: Indicates the percentage of users who take a desired action, such as filling a form,
signing up, or making a purchase.
Formula: (Number of Conversions / Total Visitors) × 100

d. Customer Lifetime Value (CLV or LTV): Estimates the total revenue a business can expect from a
customer over the entire relationship.
Formula (Basic): CLV = Average Purchase Value × Purchase Frequency × Customer Lifespan

e. Click-Through Rate (CTR): Shows how often users click on an ad or link compared to how many times it
was shown.
Formula: (Clicks / Impressions) × 100

f. Cost per Click (CPC): Reflects the cost a business pays for each click on its paid advertisements.
Formula: CPC = Total Advertising Spend / Number of Clicks

g. Net Promoter Score (NPS): A customer satisfaction metric that gauges loyalty by asking how likely a
customer is to recommend the brand to others.
54

Scale: -100 to +100

Classification: Promoters (9–10), Passives (7–8), Detractors (0–6)

2. Lead Generation Metrics: These metrics are used to evaluate the effectiveness of lead-generation
strategies and the quality of potential customers entering the sales funnel.

a. Number of Leads Generated: The total number of prospects acquired through marketing campaigns
during a specific period.

b. Lead Conversion Rate: The percentage of leads that convert into paying customers.
Formula: (Number of Converted Leads / Total Leads) × 100

c. Quality of Leads: Assesses how likely a lead is to become a customer based on their engagement, intent,
and fit with the product/service.

d. Marketing Qualified Leads (MQL): Leads that have shown interest and meet the criteria set by the
marketing team, indicating potential for conversion.

e. Sales Qualified Leads (SQL): Leads that are vetted by the sales team as ready for direct sales
engagement due to higher intent or readiness to purchase.

3. Brand Awareness Metrics

These metrics help assess how well a brand is known among the target audience and how it is perceived.

a. Brand Reach: The total number of unique individuals exposed to the brand’s message during a
campaign.

b. Impressions: Refers to the number of times an advertisement or piece of content is displayed, regardless
of user interaction.

c. Sentiment Analysis: Evaluates the emotional tone and opinion behind online mentions or reviews of a
brand, indicating how customers feel about it