MARKETING MANAGEMENT HPIRR...........pdf

Authors
Dr.K.Manikandan
Head & assistant professor
Department of commerce
NPR arts and science college, Natham.
Tamil Nadu, India.
Mr.B.Vignesh.
Assistant Professor
Department of Commerce PA ,
NPR arts and science college, Natham.
Tamil Nadu, India.
Legal Adviser
Mr. P. RAJENDRA CHOLAN
ADVOCATE, BAR ASSOCIATION
THIRUTHIRAIPOONDI, THIRUVARUR
MARKETING MANAGEMENT

Text ©AUTHOR, 2024
Cover page © HEDUNA PEER INTERNATIONAL RESEARCH AND REVIEWS
Author ©: Dr.K.Manikandan. & Mr.B.Vignesh.
Editor: Dr N Hariharan
Publisher: Heduna Peer International Research and Reviews
T. Vadipatty, M.P Nagar, Madurai, Tamilnadu, India Phone: + 91 9345020835
E-mail:hpirrjournal@gmail.com
Book: MARKETING MANAGEMENT
ISBN - 978-81-969444-9-0
Edition: Mar – 2024 Price: Rs 449/
€ 5.02/-
Printed By: HYAENA PUBLISHERS INDIA
All rights are reserved. No part of this publication may be reproduced, stored in a retrieval
System, or transmitted in any form or by any means, electronic, mechanical, photocopying,
Recording, or otherwise, without the prior permission of the copyright holder.

I realize that this book will create a great deal of controversy. It has never been easy to
challenge the consensus because the System – of any kind, in any context – will try
to preserve the status quo, by all means possible.
.Hopefully, this account will raise the level of awareness among the general public and
initiate the discussion that, in turn, may entail major cultural change, as well as a
revision of the consumer basket. This book can be read ontwo different levels. First, it
may be read by ordinary people with a limited, if any, scientific background.
Throughout, the book has been written with this audience in mind. I hope that you won’t
be easily discouraged. Even if the chemical content of a given chapter is hard to
understand, the scientific evidence presented, the citations from original documents,
conclusions drawn, and recommendations made can be easily comprehended.
Represented by professionals from academia, and government agencies, as well as
consumer protection and advocacy groups. I do not expect everybody in the scientific
community to agree with the content and ideas put forth in this book. But I do hope that
the information and knowledge presented will become a wake-up call for the general
public, regulatory agencies, legislators, business leaders, and scientists comingto the
realization.
Dr N HARIHARAN
Founder and chief Editor of Heduna Peer
International Research and Reviews

ASSOCIATE DIRECTOR – HPIRR JOURNAL
Mr. LAKSHYA CHAUDHARY
RESEARCH SCIENTIST
NATIONAL PRESIDENT & CHAIRMAN
KOSHAMBI FOUNDATION, INDIA.
LEGAL ADVISOR – HPIRR JOURNAL
Mr. P. RAJENDRA CHOLAN
ADVOCATE, BAR ASSOCIATION
THIRUTHIRAIPOONDI, THIRUVARUR
HPIRR JOURNAL & HYAENA PUBLISHERS INDIA
HPIRR JOURNAL ADVISOR
Dr P SENTHIL KUMAR
PROFESSOR & JOURNAL ADVISOR
PGP COLLEGE OF ENGINEERING AND TECHNOLOGY, NAMAKKAL
IQAC AND NAAC COORDINATOR &
CO-ORDINATOR FOR RESEARCH AND INNOVATION COMMITTEE
MANAGING EDITOR
Dr. M KARUPPANASAMY
ASSISTANT PROFESSOR &
HEAD OF THE DEPARTMNET
DEPARTMENT OF COMMERCE
SSM COLLEGE OF ARTS AND SCIENCE, MADURAI

.
Dr. K. Manikandan, M.A., M.Phil., Ph.D., serves as the Head and Assistant Professor in the
Department of Commerce at NPR Arts and Science College, Natham, Dindigul. With a dynamic
background, he brings a wealth of experience to academia, nine years of industry expertise
alongside two years of dedicated teaching at the college level. Throughout his career, Dr.
Manikandan has demonstrated a fervent commitment to research and scholarship. He has authored
and published over seven research papers in the fields of Commerce and Economics, contributing
significantly to the academic discourse. His areas of expertise lie primarily in Share Market and
Mutual Funds, reflecting his deep-seated knowledge and passion for financial markets.
jkmanikandan11@gmail.com

Mr.B.Vignesh, M.Com., serves as the Assistant Professor in the Department of Commerce (PA) at
NPR Arts and Science College, Natham, Dindigul He has 2.5 years of teaching experience at the
college and university level and published more than 10 research papers in the field of Commerce
and Management. He has experience in handling subjects related to Commerce (Taxation and
Finance) and Management. His area of specialization is Taxation. As well he acted as a Resource
Person for National level seminars, workshops and Guest lecture programs. As well he is a
motivational speaker delivered a speech in various functions. He work and Get a Patent in the field
of IOT. He would like to practice the unique methodology of teaching that creates interest among
the students. For further communications kindly contact through email:
spkvignesh1100@gmail.com

MARKETING MANAGEMENT ISBN- 978-81-969444-9-0
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Sl.
No.
Chapter Particulars Page
No.
1 Chapter – I
Introduction to Marketing Management
Market – Definition – Marketing – Meaning – Definition – The 4 Ps of
Marketing – Marketing Management – Philosophies – Importance of
Marketing – Key elements of an Effective marketing strategy - Process –
Functions of Marketing – Analysis marketing opportunities – Selection target
consumer – Marketing Mix – Marketing environment – Importance -
10 - 40
2 Chapter-II
Consumer Behaviour
Meaning – Definition – Nature – Market segmentation – Types of Market
segmentation – Segmentation, Targeting and positioning – Repositioning
41 – 49
3 Chapter-III
Product Mix
Definition – New product development – Process – Role in product
management – Product manager – Project manager – Marketing manager –
Product life cycle - Strategies followed During Various Stages of Product Life
Cycle – Special categories of Product life cycle – Factors affecting life cycle –
Techniques used to improve sales.
Branding
Meaning – definition – Branding concepts – Brand architecture system –
Functions of branding – Features of good brand name – Packaging –
definition –meaning – Objectives – Need for packaging – Functions of
packaging – Qualities of Good Packaging – Kinds – Classification – Product
mix stratergys.
50 – 78
4 Chapter – IV
Pricing
Meaning – definition – Factors influencing pricing – Objectives of pricing –
Economic theories of pricing – Strategies of pricing – Methods of pricing .
79-83

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5 Chapter - V
Distribution channels:
Meaning - Need for selecting apprropriate channel distribution – Types
of Distribution Channel – Consumer and industrial marketing channels –
Factors influencing Distribution channel – Middle man – Definition –
meaning – importance – Types – Functions.
84 – 95
6 Chapter-VI
Promotion Stratergy:
Promotion stratergy – promotion Mix – Personal selling – Meaning –
Definition – Features – Importance – Personal selling process – Objectives.
96 – 105

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CHAPTER – 1
MARKET:
A market is any place where two or more parties can meet to engage in an economic transaction
even those that don't involve legal tender. A market transaction may include goods, services,
information, currency, or any combination that passes from one party to another.
Meaning:
An actual or nominal place where forces of demand and supply operate, and where buyers and
sellers interact (directly or through intermediaries) to trade goods, services, or contracts or
instruments, for money or barter.
Markets include mechanisms or means for
 Determining price of the traded item,
 Communicating the price information,
 Facilitating deals and transactions, and
 Effecting distribution.
The market for a particular item is made up of existing and potential customers who need it and
have the ability and willingness to pay for it.
DEFINITION:
American Marketing Association’s definition:
“Marketing is the activity, set of institutions, and processes for creating, communicating,
delivering, and exchanging offerings that have value for customers, clients, partners, and society
at large.”
MARKETING:
MEANING:
Marketing is one of, if not the, most important aspects of a business. What good is selling a life-
changing product if customers have never heard of it and don’t know anything about it? That’s
where capable marketers come in handy. Marketers help companies identify consumer and
industry trends, formulate campaigns and captivate audiences by showing how their products shine
over others.

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What, exactly, is marketing? Simply put, marketing is the activity of getting people aware of and
interested in a brand and its products, often by promoting its offerings so that customers perceive
them as valuable or desirable
DEFINITION:
“The science and art of exploring,creating, and delivering value to satisfy the needs
of a target market at a profit. Marketing identifies unfulfilled needs and desires. It defines,
measures and quantifies the size of the identified market and the profit potential. It pinpoints
which segments the company is capable of serving best and it designs and promotes the
appropriate products and services.” - Philip Kotler
THE 4 PS OF MARKETING
The 4 Ps of marketing is a popular framework for understanding the areas involved in marketing
strategy. Sometimes known as the marketing mix, the four Ps of marketing — product, price, place
and promotion — are vital to every good marketing campaign.

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1. Product
Product is the good or service that the company is offering. Quality products should be able to
satisfy customer needs, while also being able to satisfy customer demand. To effectively market a
product, marketers need to pinpoint the value it brings to the customer and why customers would
want it. The marketing team can start working on campaigns once these, and many other, questions
are answered.
2. Price
Price is obviously a large factor into whether a consumer buys your product or goes to a competitor.
Good marketing teams rely on industry research to appropriately price their products so they boost
their market share and reach more happy customers.
3. Place
It’s critical that marketing professionals take place — both digital and physical — into account
when marketing a product. Is a certain product more marketable in-store or online? Should you
sell a certain product internationally? How do you market to certain geographical locations? How
much does a location’s culture affect your marketing abilities? Marketing teams need to be hyper-
aware of where they’re marketing to truly optimize their efforts.
4. Promotion
What good is a marketing effort if there isn’t some excitement and build-up around a product?
Promotion includes the advertising, promotional strategy and public relations surrounding a
product. “Should we create a commercial?” “Should we sponsor a podcast?” “Should we just run
a Google Adwords campaign?” With some help from market research, marketing executives
should be able to know when to target their audience and through which medium. Executing the
promotion step of the marketing mix is vital because it helps to build fervor for a product and brand
awareness.
MARKETING MANAGEMENT:
MEANING:
Marketing management is a combination of all the techniques and processes an institution
uses to develop and implement its total marketing agenda. Find out more about education and
careers in the field of marketing management.
DEFINITION:

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American Marketing Association Defines, “Marketing management is a planning and
executing conception, pricing, promotion and distribution of ideas, goods, and services to create
exchange that satisfy individual and Organizational needs”.
MARKETING MANAGEMENT PHILOSOPHIES:
All the marketing efforts are guided by certain marketing management philosophies
that give the directions about how the Marketing Activities should be carried out. The marketing
management philosophies are actually a concepts, which is the central focus for the business to
do their operations. The organizations set their organizational goals in the light of these
marketing management philosophies that cover the interests of not only the organizational itself,
but also the customers and the society as a whole.
Although there are many Marketing Management Philosophies, but the following five are the
famous ones.
Production Concept:
Production Concept is much simpler idea that gives the companies to develop their
marketing strategies. It states that the highly affordable and available products are preferred by
the consumers. This means that the success of the company is based upon the effective
production and distribution of the products. This concept worked in the oldest era of the
marketing revolution, when there is not any competition, and whatever thing a businessman

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manufactures, will be sell easily. So, the main focus of the management of the firms was to
produce in bulk and made sure that these manufactured products are properly available to the
customers in the market. The customers have no choice of alternatives, so they are naturally
bound to buy those products.
Product Concept:
Product Concept is the amended form of the production concept in the marketing history.
In this marketing management philosophy, the main area of interest of the management of the
firm shifts towards the product. As the competition starts increasing, so there are more
alternatives available to the customers and their expectations about the quality and performance
of a product goes high and high with every passing day. Therefore, the management of company
needs to increase the quality of its product at a comparatively reasonable price. New features are
added in the product to improve its performance. A company that follows this philosophy should
innovatively changes its product continuously in order to be successful in the market. This
concept also requires a little promotional effort.
Selling Concept:
It is further modified form of the product concept in which the main area of concentration
is selling and promotional efforts. As there is increased competition in the market, so the
management of the company must increase its selling and promotional activities to increase its
sales and profit. The customers do not buy any product unless they are not compelled through
any selling or promotional channel. So, the companies need to reform their marketing strategies
that must cover large-scale promotions and selling activities. This philosophy is best for the
category of products that are unusual for the customers like the insurance policy, etc. The
companies follow this concept for identifying the prospective customers, and guide them about
the benefits of products to make them their potential customers.
Marketing Concept:
It is the modern marketing concept that focuses on customers rather than on product or
selling efforts. According to this philosophy, the company identifies the unsatisfied need and
want of customers first, and then manufactures the product accordingly, which deliver more
value to customers need and demands. In other words the product is based on the available
demand in the market, which means the company should only manufacture a product that has
certain need or demand; otherwise it is quite hard to sell the undesired product. Mostly people
confuse the selling with the marketing, which are quite different from each other. The main
difference is that the selling concept concentrates on the idea that first manufactures, and then
sells through selling and promotional activities. Whereas the marketing concept is based on the
idea that first analyze the need or demand in the market, and then manufacture the product
accordingly.

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Societal Marketing Concept:
It is the most advanced form of the marketing concept that is recently becoming popular
throughout the world. According to this marketing management philosophy, the unsatisfied need
and want is identified, and then the product is manufactured that provides more satisfaction than
the competitors do. In this way the company gets benefit together with the customers, but at the
same time the society is also getting benefit from the operations of the company. According to
societal marketing philosophy, the marketing concept is not sufficient enough to cure the ills of
the society and it only takes into account the short term benefits of the customers. So, there is
strong need of a new concept that should tackle the major societal problems. The company follows
the societal concept for maintaining the equilibrium between the three aspects, which are as follow.
1. Profits of company
2. Satisfaction of the customers
3. Overall benefit of the society.
Marketing management process:
The marketing plan to analyse whether he is on track or not. The marketing plan itself has
some Conduct market the marketing management process goes through various stages to ensure
the success of a product in an organization. A company is generally in the blind about any new
product. In a tough business environment, with a customer who knows everything before hand
because of the presence of online portals and websites, it is tough to plan and launch a new
product or a marketing strategy.
IMPORTANCE OF MARKETING:
1. Introduces New Products
In marketing management, you start by identifying your target market and analyzing your market.
This helps you understand the needs of your consumers, based on which you can introduce or
launch new products with an effective marketing campaign.NIn addition to that, you can study
customer interactions and buying patterns to learn more about your ideal customer and how to
pique their interest in your products or services. As a result, it helps you create brand awareness
and increase visibility for your business.
2. Boost Sales
Good marketing management helps you match your capabilities and resources with the needs of
the consumers. With this, you can plan and implement a successful marketing strategy and then
reach out to customers. It will enable you to find new customers and retain the current ones. This
will boost your sales and increase revenue. Not just that, with strategic planning and
implementation, good marketing management also helps reduce costs and expenses.

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3. Builds Reputation
Marketing management ensures that your company’s reputation remains unharmed because,
without it, your business will struggle to handle PR blunders or remain updated with the latest
trends. Good marketing management can help identify the best opportunities to pursue and threats
to steer clear from. It will help you expand to different audiences based on past experience through
advertising and customer engagement. This will help improve the reputation of the company!
4. Aid in Business Decisions
Having proper marketing management means that you will have an excellent marketing team that
has insights into consumer behavior, buying patterns, and the latest marketing trends. This helps
you make better decisions in the short run and the long run.Each time you are faced with a
dilemma or looking for ways to improve your goods and services or even considering making the
next big move in your business, your marketing management plan will always have your back.
5. Helps Compete with Big Companies
If you are a small business in a competitive industry, then good marketing management is all you
need to level up to bigger competitor companies. This is because it analyzes market behaviors
and competitor trends and helps your business focus on areas that are being underutilized by other
companies or doing something unique and fresh. As a result, your business can stand out and
emerge as a solid competitor in your industry, or even surpass them in certain cases. In addition
to all this (and more), good marketing management will guarantee an increase in revenue and
expansion of your business. Enough about why it’s important, now let’s get down to the real stuff
– how does marketing management work? What are the processes involved? The answers are
below! So, pay close attention, fellow marketers. You are going to need this! Let’s go!
5 KEY ELEMENTS OF AN EFFECTIVE MARKETING STRATEGY
1. Branding
To achieve long-term and consistent success, branding is the first step to focus on. Begin by
understanding long-term goals, identifying the organization’s strengths and weaknesses, and
determining what makes the business unique. Furthermore, utilize this knowledge to create a
distinct brand identity for the business: Incorporate elements such as a unique logo, carefully
selected colors, fonts, messaging, a consistent tone of voice, and clear brand values. Implementing
branding across all marketing channels fosters brand recognition, establishes credibility, and
builds trust with the target audience.
2. Target Market

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Secondly, it is crucial to identify and understand the target market for effective marketing. This
is because a target market can help businesses concentrate their marketing efforts on customers
who are more likely to make purchases. To find one’s target market, begin by conducting research
and analyzing the demographics, psychographics, and behaviors of an organization’s ideal
customers. By defining the target market, one can customize marketing efforts to align with their
needs, preferences, and pain points.
3. Clear Value Proposition
To differentiate the product or service from competitors, develop a compelling value proposition.
The value proposition should answer the question: “Why should customers choose your
offering?” Describe how the product fills a specific need, outline its additional benefits, and why
it surpasses similar products.
4. Multichannel Marketing Plan
Multichannel marketing is a highly effective approach for marketing for business. This strategy
involves utilizing various channels, such as social media marketing, advertising, direct mail,
emails, and text messages. With multichannel marketing, customers have the freedom to choose
and subscribe to their preferred communication channels. This strategy not only enhances brand
visibility but also facilitates engagement with customers at different stages of their journey.
Furthermore, it allows businesses to maximize their overall reach, ensuring a wider audience is
reached through diverse channels.
5. Marketing Measurement and Analytics
Lastly, effective marketing strategies necessitate continuous measurement and analysis to achieve
a greater Return on Investment (ROI). This approach aids in tracking performance and making
data-driven decisions. Key Performance Indicators (KPIs), such as traffic, conversion rates, and
customer acquisition cost, offer insights into the effectiveness of marketing. Furthermore,
leveraging these KPIs can identify successful tactics, optimize strategies, and allocate resources
efficiently. Consequently, this leads to more informed marketing decisions that yield a higher
ROI.
THE PROCESS OF MARKETING MANAGEMENT
1. Conduct Market Research

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The first step in the marketing management process is conducting market research and market
analysis. You can do this by gathering consumer data, doing surveys, conducting interviews,
assessing the economic patterns, etc. You can also collect your current consumer data and
previous marketing campaigns’ KPIs. If you want, you can even rely on the traditional SWOT
analysis of identifying your company’s internal strengths, opportunities, weaknesses, threats, etc.
An employee conducting marketing research
Based on all the research, you can get a full understanding of your target customer, their needs
and pain points, the trends in consumer buying patterns, and how to offer a product or service to
meet the market demands. It also helps you identify areas where your business could succeed,
highlights potential challenges that your business needs to address, and forecast the future
potential.
2. Set Marketing Objectives
No process can ever continue without setting objectives and goals because they set the very
foundation of your entire marketing journey. That’s why the marketing management process also
involves setting achievable marketing objectives or goals and creating a benchmark to measure
success. You set your marketing objectives based on different factors that influence customers in
your target market such as market demand, buying patterns, social, political, environmental
factors, etc. Try to include sales goals, budgeting expectations, brand development plans, etc.
while creating your goals.
3. Develop a Marketing Strategy
Now that the market research is done and the marketing objectives are set, the next logical step
in a marketing management process is to develop a marketing strategy. The decisions made in the
strategy focus on which markets to target and how to position your products for existing and new
customers in relation to your competitors.
Segmentation – Where you segment or divide the market to identify a similar set of customers
who are likely to respond to your marketing program.
Targeting – Where the segments are further divided so that you can focus on a very specific target
to produce new products and services.
Positioning – Where your brand’s image is perceived in terms of quality or price or value and is
positioned in the minds of the target market.
Marketing mix – Utilizing the elements of the marketing mix – product, price, place (distribution),
and promotion to deliver customer satisfaction and achieve organizational goals.

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In addition to this, competitor’s strategies, environmental changes, financials, and production
should also be analyzed to form a marketing strategy.
4. Make a Marketing Plan
Once a marketing strategy is developed, the next marketing management process is to make a
written marketing plan. This is to analyze where the company is and where it wants to reach in a
given period of time. With a plan on paper, you can refer to it anytime and analyze whether your
marketing management process is on the right path or not, and also keep track of your company’s
progress. To make a marketing plan, you have to first focus on the business environment analysis
and your company’s internal analysis.
Then, you have to form a strategic plan that outlines the pros and cons of your marketing strategy.
After this, you move on to the financials where you forecast sales and expenses and plan the
budget for your marketing strategy. Then you plan your implementation process by focusing on
product and pricing strategies. Finally, follow-up is done to ensure that your marketing strategy
is on track.
5. Implement Marketing Program
The next step is one of the most important steps in the marketing management process –
Implementation. You can say that it is putting your marketing strategies and plans into action and
executing them in a way that you achieve all your marketing objectives and goals. Start your
implementation process by identifying how and when you will launch your planned strategy. You
can do this by persuading customers about your products or services through various methods
like advertising, sales promotion, public relations, etc. Then you can allocate your resources such
as cash and staffing to market your product, organize people to execute your tasks, and manage
all the minor details for each goal.
6. Monitor
The final stage of the marketing management process is to monitor and track the progress of your
campaigns. This step requires you to regularly measure and evaluate the results of your planning
and strategize to make sure that everything is on track.
FUNCTIONS OF MARKETING:

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Selling
Selling is the crux of marketing. It involves convincing the prospective buyers to actually complete
the purchase of an article. It includes transfer of ownership of products to the buyer. Selling plays
a very vital part in realizing the ultimate aim of earning profit. Selling is groomed by means of
personal selling, advertising, publicity and sales promotion. Effectiveness and efficiency in selling
determines the volume of the firm’s profits and profitability.
Buying and Assembling
It deals with what to buy, of what quality, how much from whom, when and at what price. People
in business purchase to increase sales or to decrease costs. Purchasing agents are much tempted
by quality, service and price. The products that the retailers buy for resale are selected as per the
requirements and preferences of their customers. Assembling means buying necessary component
parts and to fit them together to make a product. ‘Assembly line’ marks a production line made up
of purely assembly functions. The assembly operation includes the arrival of individual component
parts at the work place and issuing of these parts for assembling.
Buying and Assembling

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Assembly line is an arrangement of employees and machines in which each individual has a
particular job and the work is passed directly from one employee to the next until the product is
complete.
Transportation
Transportation is the physical means through which products are moved from the places where
they are produced to those places where they are needed for consumption. It creates locational
utility. Transportation is very important from the procurement of raw material to the delivery of
finished products to the customer’s places. Transportation depends mainly on railroads, trucks,
waterways, pipelines and airways.
Storage
It includes holding of products in proper, i.e., usable or saleable, condition from the time they are
produced until they are required by customers in case of finished products or by the production
department in case of raw materials and stores.Storing protects the products from deterioration and
helps in carrying over surplus for future consumption or usage in production.
Standardization and Grading
Standardization means setting up of certain standards or specifications for products based on the
intrinsic physical qualities of any item. This may include quantity like weight and size or quality
like color, shape, appearance, material, taste, sweetness etc. A standard gives rise to uniformity of
products. Grading means classification of standardized items into certain well defined classes or
groups. It includes the division of products into classes made of units possessing similar features
of size and quality. Grading is very essential for raw materials; agricultural products like fruits and
cereals; mining products like coal, iron and manganese and forest products like timber.
Financing
Financing involves the application of the capital to meet the financial requirements of agencies
dealing with various activities of marketing. The services to ensure the credit and money needed
and the costs of getting merchandise into the hands of the final user are mostly referred to as the
finance function in marketing.
Financing is required for the working capital and fixed capital, which may be secured from three
sources — owned capital, bank loans and advance & trade credit. In other words, different kinds
of finances are short-term, medium-term, and long-term finance.
Risk Taking
Risk means loss due to some unforeseen situations. Risk bearing in marketing means the financial
risk invested in the ownership of goods held for an anticipated demand, including the possible

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losses because of fall in prices and the losses from spoilage, depreciation, obsolescence, fire and
floods or any other loss that may occur with the passage of time. They may also be due to decay,
deterioration and accidents or due to fluctuation in the prices induced by changes in supply and
demand. The different risks are usually termed as place risk, time risk, physical risk, etc.
Market Information
The importance of this facilitating function of marketing has been recently marked. The only sound
foundation on which marketing decisions depend is timely and correct market information. The
importance of this facilitating function of marketing has been recently marked. The only sound
foundation on which marketing decisions depend is timely and correct market information.
ANALYSIS MARKETING OPPORTUNITIES:
1. Consumer segmentation:
To understand your demand, you must identify consumer segments that share common
characteristics. These characteristics can be “hard” variables such as age, gender, place of
residence, educational level, occupation and level of income or “soft” variables such as lifestyle,
attitude, values and purchasing motivations.
Hard variables can help estimate the number of potential customers a business can have.
For example, a nappies/diapers producer should know how many children under 3 years live in
a certain country as well as the birth rate. Soft variables can help identify motivations that lead
to purchasing decisions including price, prestige, convenience, durability and design.
An example of how segmentation can help identify market opportunities is Aguas
Danone, a bottled water company in Argentina. Several years ago the company´s sales were
falling and they were looking for a new product. Aguas Danone identified two drivers behind
non-alcoholic drinks consumption: health and flavor. Bottled water was perceived as healthy
but did not offer the attribute of good taste. Soft drinks and juices tasted good, but were perceived
as highly caloric. The company realised there was an opportunity for healthy drinks offering
both taste and flavour. As a result, they launched flavored bottled waters Ser with great success.
According to data from Euromonitor International, Aguas Danone has been the leader of
Reduced Sugar Flavoured Bottled Water in Argentina since launching in 2002, beating giants
such as Coca Cola and Nestlé. As of 2016, Aguas Danone still had 57% off-trade value share of
Reduced Sugar Flavoured Bottled Water as well.
2. Purchase situation analysis:
Purchase situations must also be examined to uncover expansion opportunities.
Questions to ask when reviewing purchase analysis are:

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• When do people buy our product or service?
• Is it when they need it?
• Where do people make the purchase?
• How do they pay?
Looking at distribution channels, payment methods and all other circumstances that involve
purchasing decisions can teach you how consumers buy and how you can position your product
appropriately. Offering new shopping alternatives may bring new customers. For example,
vending machines offering snacks like yoghurt and individual juices have been introduced in the
hallways of the subway of Santiago de Chile, promoting on-the-go consumption.
Another aspect to explore is the acceptance of different means of payment. For example,
Amazon recently launched Amazon Cash in the US, enabling consumers without credit cards to
shop online by adding credit to their personal Amazon accounts.
3. Competition analysis:
In addition to analysing demand and purchasing situations, it is important to analyse
supply. Knowing the existing players in the market where you are competing or going to
compete is important when evaluating opportunities. Relevant questions in this case are:
What are the products and brands of our industry that are growing more significantly and why?
• What is their value proposition?
• What competitive advantage do we have over them?
For example, SKY airline, competing in the Chilean market against a notably positioned
brand such as LAN, found there was an opportunity to differentiate itself with a low cost model,
which until then had not existed in Chile. SKY lowered its costs, by eliminating complimentary
food and beverages for all passengers during flights and in doing so lowered its ticket prices.
This helped the company increase its share of carried passengers from 10% in 2008 up to 20%
in 2017, according to Euromonitor International.
4. Indirect competition analysis:
Opportunities can also be found by analysing substitute industries. For example, thanks
to the decrease in air fares, airlines may look for opportunities in consumer segments currently
supplied by other means of transport. Air carriers should research how many people travel on
long-distance buses and trains, which routes are the most in demand, how much travelers pay
for their tickets, what the occupation rate of long-distance buses and trains is and what is
necessary to persuade a current passenger of buses or trains to choose to travel by plane instead.
This type of analysis helps establish competitive advantages against indirect competitors and
provide insight on additional opportunities for growth.
5. Analysis of complementary products and services:

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Companies should monitor the performance of other companies’ products, which are
complementary to their own. For instance, a packaging company should monitor sales of
products that it could potentially package, while a company producing coffee machines should
gather insights on the evolution of different types of coffee sales. Trends in complementary
markets should be taken into account when making investment decisions.
6. Analysis of other industries:
In some cases the objective of companies is not to continue operating within an
industrial sector but to expand a certain business model or philosophy. For example, a British
holding of companies, Easy Group, started maximising the occupancy rate of flights with the
airline Easy Jet. Easy Group understood that it was preferable to sell a seat at a lower price than
not selling it at all. Easy Jet opted for a rate management model that depended on the occupancy
rate of flights and the time remaining until the day of the flight. With this business model it
managed to increase occupancy rates. Easy applied the same model to cinemas when it created
Easy Cinema and then with buses for Easy Bus. In any case, to enter a new industry it is
important to learn about competition first: market sizes, market shares, growth rates, unit prices,
per capita sales and brands positioning.
7. Foreign markets analysis:
When a company operates in a mature or saturated market, exploring other countries may
lead to additional opportunities. Markets in different countries grow at different paces for several
reasons, including disparities in the level of economic development and local habits. Knowing
the evolution of per capita consumption of a given product in a given country can serve as an
indicator of the maturity of the product’s life cycle. Having information on the size of the market
and competitors in other countries will help to estimate the business potential.
In addition to product sales you can also investigate what happens in more developed
countries in terms of consumption habits. For example:
 What is the percentage of people who use the smartphone to pay for their purchases?
 What is the market share of private labels in a certain industry?
Answers to those questions in more developed countries can serve as indicators of the
potential the indexes have in the own country. On the other hand, monitoring what happens in
other countries may lead to new products or services present still absent in your current market.
8. Environment analysis:
Market opportunities can also be identified by analysing changes in the environment
with technological and scientific developments generating new business opportunities. For
example, the growth of Internet and smart phones penetration has enabled the arrival of
companies with new business models such as Airbnb and Uber. According to Euro monitor
International, the share of mobile internet subscriptions to mobile telephone subscriptions in the

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world was 20% in 2011, reaching 53% in 2016. And while globally only 17% of households
possessed a smart phone in 2011, this percentage reached 45% in 2016. Beyond mobile and the
Internet, artificial intelligence, robotisation, internet of things, biotechnology and renewable
energy sources also provide multiple business opportunities.
Changes in a country’s regulatory framework can also create opportunities. Since June
2016, Chile requires companies to include labels on products high in calories, sodium, sugars
and saturated fats. This obligation may represent a growth opportunity for healthier products
not affected by the new labels. Euro monitor International expects product sales in Chile will
be impacted depending on the product type. Obtaining more market research on category and
product sales in Chile may help identify categories that have growth opportunities for new
products without labels.
Other transformations in the environment such as climate change, geopolitical
movements and changes in financial markets also influence market opportunities. It is
imperative to consider using market research to gain insight on the local business environment;
ensuring that your strategy will flourish in a new or developing marketplace.
SELECTING TARGET CONSUMER:
1. Analyze the features of your products and services. Determine the benefits that your customers
get from your products and how your products fill the needs of those customers. Make a list
of those features and needs to make the analysis easier.
2. Look at the types of customers who are likely to purchase your products and use your services.
Consider things such as age, gender, income level, marital status, occupation, educational
level, gender and ethnic background. Identify which customer categories have the greatest
need for your products.
3. Consider the personal characteristics of your potential customers and determine how the
customer’s lifestyle affects a need for your products. Think about the customer’s interests, values
and personality traits. Consider how and when your customer will use your services, as well as
the features that appeal to the customer.
4. Look at your competition’s target market. Analyze the needs that your competition fills for
their target market. Identify the areas of the market that have been overlooked by the
competition. Seek to fill the void within the market, rather than targeting the same market as
your competition.

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5. Take a look at your current customer base, if your business is already operating. Identify the
products or services that interest your current customers and determine what benefits these
customers get from those services.
6. Compile all of your research findings. Use your findings to determine which types of
customers have the most need for your services. Keep the market well-balanced so that your
target market is not too big or too small.
Marketing Mix:
The marketing mix definition is simple. It is about putting the right product or a combination
thereof in the place, at the right time, and at the right price. The difficult part is doing this well,
as you need to know every aspect of your business plan.
Marketing Mix 4P's
A marketing expert named E. Jerome McCarthy created the Marketing 4Ps in the 1960s. This
classification has been used throughout the world. Business schools teach this concept in basic
marketing classes.
The marketing 4Ps are also the foundation of the idea of marketing mix.
1. Marketing Mix – Product:

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A product is an item that is built or produced to satisfy the needs of a certain group of people.
The product can be intangible or tangible as it can be in the form of services or goods.
You must ensure to have the right type of product that is in demand for your market. So
during the product development phase, the marketer must do an extensive research on the life
cycle of the product that they are creating.
A product has a certain life cycle that includes the growth phase, the maturity phase, and the
sales decline phase. It is important for marketers to reinvent their products to stimulate more
demand once it reaches the sales decline phase.
Marketers must also create the right product mix. It may be wise to expand your current
product mix by diversifying and increasing the depth of your product line.
All in all, marketers must ask themselves the question “what can I do to offer a better product
to this group of people than my competitors”.
In developing the right product, you have to answer the following questions:
• What does the client want from the service or product?
• How will the customer use it?
• Where will the client use it?
• What features must the product have to meet the client’s needs?
• Are there any necessary features that you missed out?
• Are you creating features that are not needed by the client?
• What’s the name of the product?
• Does it have a catchy name?
• What are the sizes or colors available?
• How is the product different from the products of your competitors?
* What does the product look like?
2. Marketing Mix – Price
The price of the product is basically the amount that a customer pays for to enjoy it. Price is a
very important component of the marketing mix definition.

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It is also a very important component of a marketing plan as it determines your firm’s profit
and survival. Adjusting the price of the product has a big impact on the entire marketing strategy
as well as greatly affecting the sales and demand of the product.
This is inherently a touchy area though. If a company is new to the market and has not made
a name for themselves yet, it is unlikely that your target market will be willing to pay a high price.
Although they may be willing in the future to hand over large sums of money, it is inevitably
harder to get them to do so during the birth of a business.
Pricing always help shape the perception of your product in consumers eyes. Always
remember that a low price usually means an inferior good in the consumers eyes as they compare
your good to a competitor.
Consequently, prices too high will make the costs outweigh the benefits in customers eyes,
and they will therefore value their money over your product. Be sure to examine competitors
pricing and price accordingly.
When setting the product price, marketers should consider the perceived value that the product
offers. There are three major pricing strategies, and these are:
* Market penetration pricing
* Market skimming pricing
* Neutral pricing
Here are some of the important questions that you should ask yourself when you are setting the
product price:
• How much did it cost you to produce the product?
• What is the customers’ perceived product value?
• Do you think that the slight price decrease could significantly increase your market share?
* Can the current price of the product keep up with the price of the product’s competitors?
3. Marketing Mix – Place
Placement or distribution is a very important part of the product mix definition. You have to
position and distribute the product in a place that is accessible to potential buyers.

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This comes with a deep understanding of your target market. Understand them inside out
and you will discover the most efficient positioning and distribution channels that directly speak
with your market.
There are many distribution strategies, including:
* Intensive distribution
* Exclusive distribution
* Selective distribution
* Franchising
Here are some of the questions that you should answer in developing your distribution strategy:
* Where do your clients look for your service or product?
* What kind of stores do potential clients go to? Do they shop in a mall, in a regular brick
and mortar store, in the supermarket, or online?
*How do you access the different distribution channels?
* How is your distribution strategy different from your competitors?
* Do you need a strong sales force?
* Do you need to attend trade fairs?
* Do you need to sell in an online store?
4. Marketing Mix – Promotion
Promotion is a very important component of marketing as it can boost brand recognition
and sales. Promotion is comprised of various elements like:
* Sales Organization
* Public Relations
*Advertising
* Sales Promotion

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Advertising typically covers communication methods that are paid for like television
advertisements, radio commercials, print media, and internet advertisements. In contemporary
times, there seems to be a shift in focus offline to the online world.
Public relations, on the other hand, are communications that are typically not paid for. This
includes press releases, exhibitions, sponsorship deals, seminars, conferences, and events.
Word of mouth is also a type of product promotion. Word of mouth is an informal
communication about the benefits of the product by satisfied customers and ordinary individuals.
The sales staff plays a very important role in public relations and word of mouth.
It is important to not take this literally. Word of mouth can also circulate on the internet.
Harnessed effectively and it has the potential to be one of the most valuable assets you have in
boosting your profits online. An extremely good example of this is online social media and
managing a firm's online social media presence.
In creating an effective product promotion strategy, you need to answer the following questions:
• How can you send marketing messages to your potential buyers?
• When is the best time to promote your product?
• Will you reach your potential audience and buyers through television ads?
• Is it best to use the social media in promoting the product?
• What is the promotion strategy of your competitors?
Your combination of promotional strategies and how you go about promotion will depend on
your budget, the message you want to communicate, and the target market you have defined
already in previous steps.
Marketing Mix 7P's
The 7Ps model is a marketing model that modifies the 4Ps model. The 7Ps is generally used in the
service industries.

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5. Marketing Mix – People
Of both target market and people directly related to the business.
Thorough research is important to discover whether there are enough people in your target
market that is in demand for certain types of products and services.
The company’s employees are important in marketing because they are the ones who deliver
the service. It is important to hire and train the right people to deliver superior service to the clients,
whether they run a support desk, customer service, copywriters, programmers…etc.
When a business finds people who genuinely believe in the products or services that the
particular business creates, it's is highly likely that the employees will perform the best they can.
Additionally, they'll be more open to honest feedback about the business and input their own
thoughts and passions which can scale and grow the business.
This is a secret, “internal” competitive advantage a business can have over other competitors
which can inherently affect a business's position in the marketplace.
6. Marketing Mix – Process
The systems and processes of the organization affect the execution of the service. So, you
have to make sure that you have a well-tailored process in place to minimize costs. It could be
your entire sales funnel, a pay system, distribution system and other systematic procedures and
steps to ensure a working business that is running effectively. Tweaking and enhancements can
come later to “tighten up” a business to minimize costs and maximise profits.
7. Marketing Mix – Physical Evidence
In the service industries, there should be physical evidence that the service was delivered.
Additionally, physical evidence pertains also to how a business and it's products are perceived in
the marketplace. It is the physical evidence of a business' presence and establishment. A concept
of this is branding. For example, when you think of “fast food”, you think of McDonalds.

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When you think of sports, the names Nike and Adidas come to mind.
You immediately know exactly what their presence is in the marketplace, as they are generally
market leaders and have established a physical evidence as well as psychological evidence in their
marketing.
They have manipulated their consumer perception so well to the point where their brands appear
first in line when an individual is asked to broadly “name a brand” in their niche or industry.
Marketing Mix 4C's
The 4Cs marketing model was developed by Robert F. Lauterborn in 1990. It is a modification
of the 4Ps model. It is not a basic part of the marketing mix definition, but rather an extension.
Here are the components of this marketing model:
Cost – According to Lauterborn, price is not the only cost incurred when purchasing a product.
Cost of conscience or opportunity cost is also part of the cost of product ownership.
Consumer Wants and Needs – A company should only sell a product that addresses consumer
demand. So, marketers and business researchers should carefully study the consumer wants and
needs.
Communication – According to Lauterborn, “promotion” is manipulative while communication
is “cooperative”. Marketers should aim to create an open dialogue with potential clients based
on their needs and wants.
Convenience – The product should be readily available to the consumers. Marketers should
strategically place the products in several visible distribution points.

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Whether you are using the 4Ps, the 7Ps, or the 4Cs, your marketing mix plan plays a vital role.
It is important to devise a plan that balances profit, client satisfaction, brand recognition, and
product availability. It is also extremely important to consider the overall “how” aspect that will
ultimately determine your success or failure.
By understanding the basic concept of the marketing mix and it's extensions, you will be
sure to achieve financial success whether it is your own business or whether you are assisting in
your workplace's business success.
The ultimate goal of business is to make profits and this is a surefire, proven way to achieve
this goal.
MARKETING ENVIRONMENT
Environment is the combination of external and internal factors Marketing and forces which
affect the company’s ability to establish a relationship and serve its customers.
The marketing environment of a business consists of an internal and an external
environment. The internal environment is company specific and includes owners, workers,
machines, materials etc. The external environment is further divided into two components: micro
& macro. The micro or the task environment is also specific to the business but external. It
consists of factors engaged in producing, distributing, and promoting the offering. The macro or
the broad environment includes larger societal forces which affect society as a whole. The broad
environment is made up of six components: demographic, economic, physical, technological,
political-legal, and social-cultural environment.
“A company’s marketing environment consists of the actors and forces outside of
marketing that affect marketing management ability to build and maintain successful
relationships with target customers”. – Philip Kotler
Components of Marketing Environment
The marketing environment is made up of the internal and external environment of the
business. While internal environment can be controlled, the business has very less or no control
over the external environment.
Internal Environment
The internal environment of the business includes all the forces and factors inside the
organisation which affect its marketing operations. These components can be grouped under the
Five Ms of the business, which are:
 Men
 Money
 Machinery

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 Materials
 Markets
The internal environment is under the control of the marketer and can be changed with the
changing external environment. Nevertheless, the internal marketing environment is as important
for the business as the external marketing environment. This environment includes the sales
department, marketing department, the manufacturing unit, the human resource department, etc.
External Environment
The external environment constitutes factors and forces which are external to the business
and on which the marketer has little or no control. The external environment is of two types:
Micro Environment
The micro component of the external environment is also known as the task environment.
It comprises of external forces and factors that are directly related to the business. These include
suppliers, market intermediaries, customers, partners, competitors and the public
 Suppliers include all the parties which provide resources needed by the organisation.
 Market intermediaries include parties involved in distributing the product or service of the
organisation.
 Partners are all the separate entities like advertising agencies, market research organisations,
banking and insurance companies, transportation companies, brokers, etc.
which conduct business with the organisation.
 Customers comprise of the target group of the organisation.
 Competitors are the players in the same market who targets similar customers as that of the
organisation.
 Public is made up of any other group that has an actual or potential interest or affects the
company’s ability to serve its customers.
Macro Environment
The macro component of the marketing environment is also known as the broad
environment. It constitutes the external factors and forces which affect the industry as a
whole but don’t have a direct effect on the business. The macro environment can be divided
into 6 parts. .
1.Demographic Environment
The demographic environment is made up of the people who constitute the market. It
is characterised as the factual investigation and segregation of the population according to
their size, density, location, age, gender, race, and occupation.
2.Economic Environment

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The economic environment constitutes factors which influence customers’ purchasing
power and spending patterns. These factors include the GDP, GNP, interest rates, inflation,
income distribution, government funding and subsidies, and other major economic variables.
3.Physical Environment
The physical environment includes the natural environment in which the business operates.
This includes the climatic conditions, environmental change, accessibility to water and raw
materials, natural disasters, pollution etc.
4.Technological Environment
The technological environment constitutes innovation, research and development in
technology, technological alternatives, innovation inducements also technological barriers to
smooth operation. Technology is one of the biggest sources of threats and opportunities for the
organisation and it is very dynamic.
5.Political-Legal Environment
The political & Legal environment includes laws and government’s policies prevailing in
the country. It also includes other pressure groups and agencies which influence or limit the
working of industry and/or the business in the society.
6.Social-Cultural Environment
The social-cultural aspect of the macro environment is made up of the lifestyle, values,
culture, prejudice and beliefs of the people. This differs in different regions.
Importance of Marketing Environment:
Every business, no matter how big or small, operates within the marketing environment.
Its present and future existence, profits, image, and positioning depend on its internal and
external environment. The business environment is one of the most dynamic aspects of the
business. In order to operate and stay in the market for long, one has to understand and analyze
the marketing environment and its components properly.
1) Essential for planning
It is necessary for the management of the company to understand the Importance of
Marketing Environment astutely as it helps in planning of the business operations such as planning
the nature and features of the new products and services to be launched in the market. It also helps
in planning of various
marketing and promotional strategies so as to match the offerings of the company to the current
Marketing environment.

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It is necessary to pay due attention to the Importance of Marketing Environment as some
of the factors such as budgeting and internal company policies are controllable but other external
and macro factors such as changing government policies and political scenario are not under the
control of the management and hence, the planning of business operations and strategies has to be
done in accordance to the evolving factors of the marketing environment.
2) Understanding Customers
The next on the list of the Importance of Marketing Environment is the firm gets to
understand the exact needs and requirements of its existing as well as prospective customers.
The various factors of marketing environment such as political influences, advancements in the
realms of technology, increase in the market share of the competitor’s brands, and change in the
government rules and policies have an effect on the tastes and preferences of the customers.
There is a possibility that even the loyal set of customers leave the brand of their choice
and go for the products and services offered by the competitors owing to their evolving tastes.
Hence, giving Importance to the Marketing Environment helps the company to retain its loyal
set of customers and attract the new customers as well.
3) Tap new trends
Business is known for its volatile nature as the dynamics keep on changing and
developing at a very fast pace with the change in the codes and policies of the government
authorities, the onset of competition from the domestic and international brands, and customers
opting for the new and innovative trends in the market. It is necessary for the brand to understand,
tap, and embrace the new trends that are ruling the market in order to stay relevant and consistent
amidst the changing dynamics.
4) Keep a check on threats
Giving attention to the Importance of Marketing Environment, the company is able to
keep a thorough check on the factors that can have a negative impact on its business operations
and act as an obstacle in its trajectory of growth and success. The brand has to keep an eye on the
threatening factors such as growing competition in the market, price variations, evolving tastes of
the customers, and other socio-economic factors.
5) Harp on the opportunities
There are various and fruitful opportunities as well as that come along the way of
business with the threats and with a dedicated attention to the Importance of Marketing
Environment, the management is able to catapult and harp on opportunities such as
technological advancements and change in the government rules and regulations that work in
the benefit of the company and its business operations and provides impetus in attaining the
desired goals and objectives.

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6) Understand the competition
The company is able to survive and thrive in the competitive market by keeping a
detailed eye on the competitors by checking and understanding that what are the features and
nature of their offerings, levels of customer service experience provided by them, marketing and
promotional strategies, steps opted to retain the customers such as loyalty programs, discount
offers, and more along with their pricing strategy; the company is able to plan its offering and
the marketing strategies that are a notch higher than that of the competition to gain the advantage
in the market.
7) Helps building strategy
Paying the required concentration to the Importance of Marketing Environment, helps
the company to plan and build various business strategies such as deciding on the nature and
unique attributes of the offerings, have competitive pricing, and working on the channel partner
and distribution network amongst others along with planning the marketing strategies such as
selecting the potent mix of marketing platforms such as television, radio, print, social media,
outdoor hoardings, digital marketing, events, trade shows, and participation in various
exhibitions amongst others.
8) Innovation
The company is able to come up with the innovative line of products and services
to its customers as per the modern and technological advancements, positive impact on the
business with the fruitful government policies, relaxing norms on the tax procedures, and
other such external factors that helps carve a distinctive identity in the marketplace amidst
the tough and ever growing competition.
ONE WORD

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1. ______ Where deal is accomplished between buyers & sellers through a
medium of phone, letter or through medium of internet.
(a) Market
(b) Marketing
(c) Selling
(d) Planning
2. Which of the following is the feature of the marketing?
(a) Needs and wants
(b) Creating a market offering
(c) Customer value
(d) All of the above
3. _________ concept is based on those companies who believe in this philosophy
that quality of goods or services of good standard can easily attract
customers.
(a) Marketing concept
(b) Production concept
(c) Product concept
(d) Selling concept
4. Which of the statement is not true for selling?
(a) Focuses on the need of seller
(b) Aims at maximizing sales
(c) Involves fragmented approach to sell
(d) Selling is limited to exchange of goods and services
5. _________ is the process of classification of products into different groups on
the basis of some of its important characteristics.
(a) Grading
(b) Packaging
(c) Standardization
(d) Branding
6. With reference to product hierarchy, life insurance is an example of:
a) Product family
b) Product class
c) Product line
d) Product type
7. Distribution is a decision primarily regarding___
a) Product
b) Price
c) Promotion
d) Place
8. Which among the following is not included in 4 Ps of marketing mix given by
Booms and Bitner?

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a) Process
b) People
c) Physical Evidence
d) Politics
9. Which of the following statements represents marketing?
a) It views business as a good producing process
b) The seller determines what product is to be offered
c) It views business as a customer satisfying process
d) The cost determine the price
10. The 4 P’s of marketing are:
a) Purpose, product, price, promotion
b) Plan, purpose, product, price
c) Purpose, plan, product, promotion
d) Product, place, promotion, price
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CHAPTER – II : Consumer Behaviour
Meaning and Definition:
Consumer behaviour is the study of how individual customers, groups or organizations select,
buy, use, and dispose ideas, goods, and services to satisfy their needs and wants. It refers to the
actions of the consumers in the marketplace and the underlying motives for those actions.
Marketers expect that by understanding what causes the consumers to buy particular
goods and services, they will be able to determine—which products are needed in the
marketplace, which are obsolete, and how best to present the goods to the consumers.
The study of consumer behaviour assumes that the consumers are actors in the
marketplace. The perspective of role theory assumes that consumers play various roles in the
marketplace. Starting from the information provider, from the user to the payer and to the
disposer, consumers play these roles in the decision process.
The roles also vary in different consumption situations; for example, a mother plays
the role of an influencer in a child’s purchase process, whereas she plays the role of a disposer for
the products consumed by the family.
Some selected definitions of consumer behaviour are as follows:
1. According to Engel, Blackwell, and Mansard, ‘consumer behaviour is the actions and
decision processes of people who purchase goods and services for personal consumption’.
2. According to Louden and Bitta, ‘consumer behaviour is the decision process and
physical activity, which individuals engage in when evaluating, acquiring, using or disposing of
goods and services’.
Nature of Consumer Behaviour:
1. Influenced by various factors:
The various factors that influence the consumer behaviour are as follows:
a. Marketing factors such as product design, price, promotion, packaging, positioning and
distribution.
b. Personal factors such as age, gender, education and income level.
c. Psychological factors such as buying motives, perception of the product and attitudes towards
the product.

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d. Situational factors such as physical surroundings at the time of purchase, social surroundings
and time factor.
e. Social factors such as social status, reference groups and family.
f. Cultural factors, such as religion, social class—caste and sub-castes.
2. Undergoes a constant change:
Consumer behaviour is not static. It undergoes a change over a period of time depending
on the nature of products. For example, kids prefer colourful and fancy footwear, but as they
grow up as teenagers and young adults, they prefer trendy footwear, and as middle-aged and
senior citizens they prefer more sober footwear. The change in buying behaviour may take place
due to several other factors such as increase in income level, education level and marketing
factors.
3. Varies from consumer to consumer:
All consumers do not behave in the same manner. Different consumers behave differently.
The differences in consumer behaviour are due to individual factors such as the nature of the
consumers, lifestyle and culture. For example, some consumers are technoholics. They go on a
shopping and spend beyond their means.
They borrow money from friends, relatives, banks, and at times even adopt unethical means to
spend on shopping of advance technologies. But there are other consumers who, despite having
surplus money, do not go even for the regular purchases and avoid use and purchase of advance
technologies.
4. Varies from region to region and country to county:
The consumer behavior varies across states, regions and countries. For example, the
behaviour of the urban consumers is different from that of the rural consumers. A good number
of rural consumers are conservative in their buying behaviours.
The rich rural consumers may think twice to spend on luxuries despite having sufficient
funds, whereas the urban consumers may even take bank loans to buy luxury items such as cars
and household appliances. The consumer behaviour may also varies across the states, regions and
countries. It may differ depending on the upbringing, lifestyles and level of development.
5. Information on consumer behaviour is important to the marketers:
Marketers need to have a good knowledge of the consumer behaviour. They need to study
the various factors that influence the consumer behaviour of their target customers.

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The knowledge of consumer behaviour enables them to take appropriate marketing
Decisions in respect of the following factors:
a. Product design/model.
b. Pricing of the product
c. Promotion of the product
d. Packaging
e. Positioning
f. Place of distribution
6. Leads to purchase decision:
A positive consumer behaviour leads to a purchase decision. A consumer may take the
decision of buying a product on the basis of different buying motives. The purchase decision leads
to higher demand, and the sales of the marketers increase. Therefore, marketers need to influence
consumer behaviour to increase their purchases.
7. Varies from product to product:
Consumer behaviour is different for different products. There are some consumers who may
buy more quantity of certain items and very low or no quantity of other items. For example,
teenagers may spend heavily on products such as cell phones and branded wears for snob appeal,
but may not spend on general and academic reading. A middle- aged person may spend less on
clothing, but may invest money in savings, insurance schemes, pension schemes, and so on.
8. Improves standard of living:
The buying behaviour of the consumers may lead to higher standard of living. The more a
person buys the goods and services, the higher is the standard of living. But if a person spends
less on goods and services, despite having a good income, they deprives themselves of higher
standard of living.
9. Reflects status:
The consumer behaviour is not only influenced by the status of a consumer, but it also reflects
it. The consumers who own luxury cars, watches and other items are considered belonging to a
higher status. The luxury items also give a sense of pride to the owners.
Market segmentation:

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There are 4 types of Market segmentation which are most commonly used. Market
segmentation is one of the oldest marketing trick in the books. With the customer population
and preferences becoming more wider, and the competitive options becoming more available,
market segmentation has become critical in any business or marketing plan. In fact, people
launch products keeping the market segmentation in mind.
There are three ways to classify what the customer wants. It is known as needs, wants and
demands. However, to decide the needs, wants and demands, you need to carry out segmentation
first. And in segmentation, the first step is to determine which type of customer will prefer your
products. Accordingly, that customer will be from your targeted segment. Who would want your
product and whether it falls in the needs segment, the wants segment or the demands segment.
Once you decide the product you are going to make, then you decide on the market segmentation.
There are 4 different types of market segmentation and all of them vary in their implementation
in the real world. Let us discuss each of them in detail.
Types of Market Segmentation
1) Demographic segmentation
Demographic segmentation is one of the simplest and most widest type of market segmentation
used. Most companies use it to get the right population in using their products. Segmentation
generally divides a population based on variables. Thus demographic segmentation too has its
own variables such as Age, gender, family size, income, occupation, religion, race and
nationality. To read more, click on this link for demographic segmentation.
Demographic segmentation can be seen applied in the automobile market. The automobile
market has different price brackets in which automobiles are manufactured. For example –
Maruti has the low price bracket and therefore manufactures people driven cars. Audi and BMW
have the high price bracket so it targets high end buyers. Thus in this case, the segmentation is
being done on the basis of earnings which is a part of demography. Similarly, Age, life cycle
stages, gender, income etc can be used for demographic type of market segmentation.
2) Behavioral segmentation
This type of market segmentation divides the population on the basis of their behavior,
usage and decision making pattern. For example – young people will always prefer Dove as
a soap, whereas sports enthusiast will use Lifebuoy. This is an example of behavior based
segmentation. Based on the behavior of an individual, the product is marketed.
This type of market segmentation is in boom especially in the smart phone market. For
example – Blackberry was launched for users who were business people, Samsungwas

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launched for users who like android and like various applications for a free price, and Apple
was launched for the premium customers who want to be a part of a unique and popular niche.
Another example of behavioral segmentation is marketing during festivals. Say on
christmas, the buying patterns will be completely different as compared to buying patterns on
normal days. Thus, the usage segmentation is also a type of behavioral segmentation. To read
more in depth about behavioral segmentation, do read this article.
3) Psychographic segmentation
Psychographic segmentation is one which uses lifestyle of people, their activities, interests as
well as opinions to define a market segment. Psychographic segmentation is quite similar to
behavioral segmentation. But psychographic segmentation also takes the psychological aspects
of consumer buying behavior into accounts. These psychological aspects may be consumers
lifestyle, his social standing as well as his AIO. Do refer more to Activities, interests and
opinions.
Application of psychographic segmentation can be seen all across nowadays. For example
– Zara markets itself on the basis of lifestyle, where customers who want the latest and
differential clothing can visit the Zara stores. Similarly Arrow markets itself to the premium
office lifestyle where probably your bosses and super bosses shop for the sharp clothing. Thus,
this type of segmentation is mainly based on lifestyle or AIO.
4) Geographic segmentation
This type of market segmentation divides people on the basis of geography. Your potential
customers will have different needs based on the geography they are located in. In the article on
geographic segmentation, i have explained how people who are located in non municipal areas
might require a RO water purifier whereas those located in municipal areas might need UV based
purifiers. Thus, the need can vary on the basis of geography.
Segmentation, Targeting, and Positioning
Segmentation, targeting, and positioning together comprise a three stage process.
(1) determine which kinds of customers exist, then
(2) select which ones we are best off trying to serve and, finally
(3) implement our segmentation by optimizing our products/services for that segment and
communicating that we have made the choice to distinguish ourselves that way. Segmentation
involves finding out what kinds of consumers with different needs exist. In the auto market,

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For example, some consumers demand speed and performance, while others are much more
concerned about roominess and safety. In general, it holds true that “You can’t be all things to all
people,” and experience has demonstrated that firms that specialize in meeting the needs of one
group of consumers over another tend to be more profitable.
Generically, there are three approaches to marketing.
In the undifferentiated strategy, all consumers are treated as the same, with firms not
making any specific efforts to satisfy particular groups. This may work when the product is a
standard one where one competitor really can’t offer much that another one can’t. Usually, this is
the case only for commodities.
In the concentrated strategy, one firm chooses to focus on one of several segments that
exist while leaving other segments to competitors. For example, Southwest Airlines focuses on
price sensitive consumers who will forego meals and assigned seating for low prices.
In contrast, most airlines follow the differentiated strategy: They offer high priced tickets
to those who are inflexible in that they cannot tell in advance when they need to fly and find it
impractical to stay over a Saturday. These travelers—usually business travelers—pay high fares
but can only fill the planes up partially. The same airlines then sell some of the remaining seats
to more price sensitive customers who can buy two weeks in advance and stay over.
Note that segmentation calls for some tough choices. There may be a large number of
variables that can be used to differentiate consumers of a given product category; yet, in practice,
it becomes impossibly cumbersome to work with more than a few at a time. Thus, we need to
determine which variables will be most useful in distinguishing different groups of consumers.
for example, that the variables that are most relevant in separating different kinds of soft drink
consumers are (1) preference for taste vs. low calories, (2) preference for Cola vs. non-cola taste,
(3) price sensitivity—willingness to pay for brand names; and (4) heavy vs. light consumers. We
now put these variables together to arrive at various combinations. Several different kinds of
variables can be used for segmentation.
• Demographic variables essentially refer to personal statistics such as income, gender,
education, location (rural vs. urban, East vs. West), ethnicity, and family size. Campbell’s
soup, for instance, has found that Western U.S. consumers on the average prefer spicier
soups—thus, you get a different product in the same cans at the East and West coasts.
Facing flat sales of guns in the traditional male dominated market, a manufacturer came
out with the Lady Remington, a more compact, handier gun more attractive to women.
Taking this a step farther, it is also possible to segment on lifestyle and values.”
• Some consumers want to be seen as similar to others, while a different segment wants to
stand apart from the crowd.
• Another basis for segmentation is behavior. Some consumers are “brand loyal”—i.e., they
tend to stick with their preferred brands even when a competing one is on sale. Some
consumers are “heavy” users while others are “light” users. For example, research

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conducted by the wine industry shows that some 80% of the product is consumed by 20%
of the consumers—presumably a rather intoxicated group.
• One can also segment on benefits sought, essentially bypassing demographic explanatory
variables. Some consumers, for example, like scented soap (a segment likely to be
attracted to brands such as Irish Spring), while others prefer the “clean” feeling of
unscented soap (the “Ivory” segment). Some consumers use toothpaste primarily to
promote oral In health, while another segment is more interested in breath freshening.
the next step, we decide to target one or more segments. Our choice should generally depend on
several factors. First, how well are existing segments served by other manufacturers? It will be
more difficult to appeal to a segment that is already well served than to one whose needs are not
currently being served well. Secondly, how large is the segment, and how can we expect it to
grow? (Note that a downside to a large, rapidly growing segment is that it tends to attract
competition). Thirdly, do we have strengths as a company that will help us appeal particularly to
one group of consumers? Firms may already have an established reputation. While McDonald’s
has a great reputation for fast, consistent quality, family friendly food, it would be difficult to
convince consumers that McDonald’s now offers gourmet food. Thus, McD’s would probably be
better off targeting families in search of consistent quality food in nice, clean restaurants.
It is possible using to target very specific customer groups based on magazine subscriptions, past
purchases, and demographic variables. A number of list brokers will sell lists of names and
addresses of homeowners in a particular area (information they get from county registrars) or the
subscribers to various magazines. Firms will often sell lists of their customers to competitors since
it is widely believed in the industry that more catalogs tend to result more in incremental sales than
in losing share in fixed-size pie. One can also buy e-mail lists, but it is generally not legal to send
solicitng e-mails to individuals with which one does not already have an established business
relationship, and these are also likely to be discarded by "spam" filters. In the "mergepurge"
process, lists from several sources are combined (since none contains every relevant individual by
itself), after which duplicates are removed. Here is an illustration of what could be used by an
online merchant of surf gear seeking to find additional potential customers:
Positioning involves implementing our targeting. For example, Apple Computer has chosen to
position itself as a maker of user-friendly computers. Thus, Apple has done a lot through its
advertising to promote itself, through its unintimidating icons, as a computer for “nongeeks.”
The Visual C software programming language, in contrast, is aimed a “techies.”
Michael Treacy and Fred Wiersema suggested in their 1993 book The Discipline of Market Leaders
that most successful firms fall into one of three categories:
• Operationally excellent firms, which maintain a strong competitive advantage by
maintaining exceptional efficiency, thus enabling the firm to provide reliable service to the
customer at a significantly lower cost than those of less well organized and well run
competitors. The emphasis here is mostly on low cost, subject to reliable performance,
and less value is put on customizing the offering for the specific customer. Wal-Mart is an
example of this discipline. Elaborate logistical designs allow goods to be moved at the

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lowest cost, with extensive systems predicting when specific quantities of supplies will be
needed.
• Customer intimate firms, which excel in serving the specific needs of the individual
customer well. There is less emphasis on efficiency, which is sacrificed for providing more
precisely what is wanted by the customer. Reliability is also stressed. Nordstrom’s and
IBM are examples of this discipline.
• Technologically excellent firms, which produce the most advanced products currently
available with the latest technology, constantly maintaining leadership in innovation.
These firms, because they work with costly technology that need constant refinement,
cannot be as efficient as the operationally excellent firms and often cannot adapt their
products as well to the needs of the individual customer. Intel is an example of this
discipline.
Treacy and Wiersema suggest that in addition to excelling on one of the three value dimensions,
firms must meet acceptable levels on the other two. Wal-Mart, for example, does maintain some
level of customer service. Nordstrom’s and Intel both must meet some standards of cost
effectiveness. The emphasis, beyond meeting the minimum required level in the two other
dimensions, is on the dimension of strength.
Repositioning involves an attempt to change consumer perceptions of a brand, usually because
the existing position that the brand holds has become less attractive. Sears, for example, attempted
to reposition itself from a place that offered great sales but unattractive prices the rest of the time
to a store that consistently offered “everyday low prices.” Repositioning in practice is very
difficult to accomplish. A great deal of money is often needed for advertising and other
promotional efforts, and in many cases, the repositioning fails.
To effectively attempt repositioning, it is important to understand how one’s brand and
those of competitors are perceived. One approach to identifying consumer product perceptions is
multidimensional scaling. Here, we identify how products are perceived on two or more
“dimensions,” allowing us to plot brands against each other. It may then be possible to attempt to
“move” one’s brand in a more desirable direction by selectively promoting certain points.
There are two main approaches to multi-dimensional scaling. In the a prior approach,
market researchers identify dimensions of interest and then ask consumers about their perceptions
on each dimension for each brand. This is useful when
(1) the market researcher knows which dimensions are of interest and
(2) the customer’s perception on each dimension is relatively clear (as opposed to being “made
up” on the spot to be able to give the researcher a desired answer). In the similarity rating
approach, respondents are not asked about their perceptions of brands on any specific
dimensions. Instead, subjects are asked to rate the extent of similarity of different pairs of
products (e.g., How similar, on a scale of 1-7, is Snicker’s to Kitkat, and how similar is
Toblerone to Three Musketeers?) Using a computer algorithms, the computer then identifies
positions of each brand on a map of a given number of dimensions. The computer does not

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reveal what each dimension means—that must be left to human interpretation based on what
the variations in each dimension appears to reveal. This second method is more useful when
no specific product dimensions have been identified as being of particular interest or when it
is not clear what the variables of difference are for the product category.
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CHAPTER – III
PRODUCT MIX:
Definition:
The Product Mix also called as Product Assortment, refers to the complete range of
products that is offered for sale by the company. In other words, the number of product lines that
a company has for its customers is called as product mix.
The Product Line refers to the list of all the related products manufactured or marketed by a
single firm. The number of products within the product line are called as the items, and these might
be similar in terms of technology used, channel employed, customer’s needs and preferences or
any other aspect. For example, the product lines of ITC are FMCG, Hotels, Paper Board and
Packaging, Agribusiness.
The product mix has four dimensions: Breadth, Length, Depth, and Consistency.
The Breadth of a product mix shows the different kinds of product lines that firm carries.
Simply, it shows the number of items in the product line. This dimension of the product mix
represents the extent to which the activities of the firm are diversified. In the example below, there
are 4 product lines that show the width of the ITC.
The Length of a Product mix refers to the number of items in the product mix. In the
example below the length is 11. As in the foods line, the number of items is 3, in cigarettes is 3
and so on.. On adding all the items, we get the length of a product.

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The Depth of a product mix refers to the variants of each product in the product line. For example,
in the example below, curry, pastes, biryanis, conserves, etc. shows the depth of the foods product
line.
The Consistency of a product mix shows the extent to which the product lines are closely related
to each other in terms of their end-use, distribution requirements, production requirements, price
ranges, advertising media, etc. In the above example, it is clear that ITC’s product lines are less
consistent as these perform different functions for the buyers.
These terms in a product assortment help the firm to take a decision regarding the addition or
removal of the product items in the product lines. Generally, the firms introduce a new product

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item into the existing product line as it is easy to gain the customer support for the new product
due to the customer’s familiarity with the existing product line.
NEW PRODUCT DEVELOPMENT:
In business and engineering, new product development (NPD) covers the complete process
of bringing a new product to market. A central aspect of NPD is product design, along with various
business considerations. New product development is described broadly as the transformation of
a market opportunity into a product available for sale. The product can be tangible (something
physical which one can touch) or intangible (like a service, experience, or belief), though
sometimes services and other processes are distinguished from "products." NPD requires an
understanding of customer needs and wants, the competitive environment, and the nature of the
market. Cost, time and quality are the main variables that drive customer needs. Aiming at these
three variables, innovative companies develop continuous practices and strategies to better satisfy
customer requirements and to increase their own market share by a regular development of new
products. There are many uncertainties and challenges which companies must face throughout the
process. The use of best practices and the elimination of barriers to communication are the main
concerns for the management of the NPD .
NEW PRODUCT DEVELOPMENT PROCESS:
1. New Product Strategy – Innovators have clearly defined their goals and objectives for the
new product.
2. Idea Generation – Collective brainstorming ideas through internal and external sources.
3. Screening – Condense the number of brainstormed ideas.
4. Concept Testing – Structure an idea into a detailed concept.
5. Business Analysis – Understand the cost and profits of the new product and determining
if they meet company objectives.
6. Product Development – Developing the product.
7. Market Testing – Marketing mix is tested through a trial run of the product.
8. Commercialization – Introducing the product to the public.
Roles in product management:
Every product team consists of several players. At the management level. Usually, there are three:
a product manager, a project manager, and a product marketing manager.
Each manager has one’s own responsibilities, limited to his or her sphere of concern. The
product manager’s role is much wider and includes activities on every level. Let’s define the
responsibilities of the first two to understand a product manager’s role better.
PRODUCT MANAGER:
The product manager is the person who creates internal and external product vision and
leads product management from scratch. The product manager develops positioning strategy while

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working with stakeholders and teams throughout the process. The main responsibilities of the
product manager are:
• Understand customer experience
• Develop vision
• Prioritize processes and activities
• Develop product pricing and positioning strategies
• Negotiate with stakeholders
• Build and follow a roadmap
• Arrange product testing groups
• Drive product launch
• Participate in the promotion plan development
• Build and maintain product awareness on all levels among product teams
Shared responsibilities with Project manager: develop project documentation, communicate with
stakeholders and clients, report the stages of the work to the clients and/or stakeholders.
Shared responsibilities with Product marketing manager: pricing, customer feedback collection
through interviews, surveys, focus groups; market research, development of sales tools, analysis
The product manager’s skillset includes:
• understanding a product and related needs of the customers
• market knowledge
• innovation awareness
• strategic thinking
• technical knowledge
• expert communication skills
• relationships management
• user behavior understanding and empathy
• ability to explain business and technical requirements to all members of a team
• ability to measure the success of a product
Project manager:
This person coordinates the internal process of product development making sure that the
project follows a timeline and fits a budget. The project manager tracks progress and coordinates
all internal resources and members of the team (engineers and designers) to deliver the product on
time.
Marketing manager:
This the person responsible for commercialization, branding, and positioning of the product.
The Product Marketing Manager provides market research, packaging, sales team training, and
planning of promotional activities and events. This person is responsible for:

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• Defining user persona and learning about the customers
• Creating the product’s marketing strategy Communicating the product’s value to the
market
• Developing sales tools for a product
Stakeholders:
These are the people who have an interest in the final product, can influence the process of product
management and development, and are involved in decision-making. In product management,
stakeholders can be clients, investors, even users of a product, or all of them combined.
Their responsibilities are to:
• Provide feedback on product ideas
• Describe the requirements in details
• Contribute new features to the product development
• Approve or disapprove product features
• Influence decision making and timeline
• Identify potential risks and issues in product management
• Provide necessary resources for product development
• Stay informed about the lifecycle of the product
Product Life Cycle:
The product life cycle is the process a product goes through from when it is first introduced
into the market until it declines or is removed from the market. The life cycle has four stages -
introduction, growth, maturity and decline.
While some products may stay in a prolonged maturity state, all products eventually phase out
of the market due to several factors including saturation, increased competition, decreased demand
and dropping sales.
Additionally, companies use PLC analysis (examining their product's life cycle) to create
strategies to sustain their product's longevity or change it to meet with market demand or
developing technologies.
4 Stages of the Product Life Cycle:
There are four stages to the product life cycle, from the product's development to its decline in
value and eventual retirement from the market.
1. Introduction:

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