B.B.A. 3rd Sem.
Subject- Marketing Management
SYLLABUS
B.B.A. III SEM
Subject – Marketing Management
UNIT – I
UNIT – II
Marketing: - Meaning - concept - functions - marketing Planning
& implementation marketing Programmes - Marketing
environment – Micro and Macro.
Market Segmentation and consumer behaviour – Influencing
factors, Decision process - Marketing Research - Marketing
information system
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B.B.A. 3rd Sem.
Subject- Marketing Management
UNIT – 1
Marketing
In order to bring out clearly the meaning of the term ‘marketing’, we have to analyze two or more
definitions.
“Marketing is a total system of business activities designed activities designed to plan, promote and
distribute want satisfying goods and services to present and potential customer.”
The American Marketing Association – Marketing is an organizational function and a set of processes
for creating, communicating, and delivering value to customers and for managing customer
relationships in ways that benefit the organization and its stakeholders.
Marketing Management as the art science of choosing target markets and getting, keeping and growing
customers through creating, delivering and communicating superior customer value.
What is marketed?
1. Goods
2. Services
3. Events
4. Experiences
5. Persons
6.
7.
8.
9.
10.
Places
Properties
Organizations
Information
Ideas
Marketer is someone who seeks a response (Attention, a purchase, a vote, a donation) from another
party, called the prospect. If two parties are seeking to sell something to each other, we call them both
marketers.
Marketing manager seek to Influence the level, timing and composition of demand to meet the
organization’s objectives, eight demand states are possible.
Negative demand – Consumers dislikes the product and may pay a price to avoid it.
Non- Existent demand – Consumers may be unaware or un interest in the product
Latent demand – Consumers may share a strong need that cannot be satisfied by existing product.
Declining demand – Consumers begin to buy the product less frequently or not at all.
Irregular demand – Consumers purchases vary on a seasonal, monthly, weekly, daily, or even hourly
basis.
Overfull demand – More consumers would like to buy the product than can be satisfied.
Full Demand – Consumers are adequately buying all products put into the marketplace.
Unwholesome demand – Consumers may be attracted to products that have undesirable social
consequences.
Markets – Traditionally a “market” was a physical place where buyers and sellers gathered to buy and
sell goods. Economists describe a market as a collection of buyers and sellers who transact over a
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B.B.A. 3rd Sem.
Subject- Marketing Management
particular product or product class (ex housing market or gain market.) Modern economics abound in
such markets, five basic markets and their connecting flows are shown in figure.
Resources
Resource
Markets
Money
Taxes,
Goods
Services,
Money
Manufacturer
Markets
Resources
Money
Services,
Money
Government
Markets
Taxes,
Consumer
Markets
Services,
Taxes,
Goods
Services,
Money
Money
Goods and Services
Taxes,
Goods
Intermediary
Markets
Money
Goods and Services
Concept of Marketing
Evolution of marketing
An orientation, in the marketing context, related to a perception or attitude a firm holds towards its
product or services, essentially concerning consumers and end-users. Throughout history, marketing
has changed considerably in conjunction with consumer taste.
Earlier approaches
The marketing orientation evolved from earlier orientation, namely, the production orientation, the
product orientation and the selling orientation.
Orientation
Production
Product
Profit
Driver
Western
European
timeframe
Description
A firm focusing on a production orientation specializes in
producing Production until the much as possible of a given
product or service. Thus, this signifies a firm exploiting
Productio
Until the economies of scale until the minimum efficient scale is
n methods 1950s
reached. A production orientation may be deployed when a
high demand for a product or service exists, coupled with a
good certainty that consumer tastes will not rapidly alter
(similar to the sales orientation).
A firm employing a product orientation is chiefly
Quality of
Until the concerned with the quality of its own product. A firm
the
1960s
would also assume that as long as its product was of a high
Product
standard, people would buy and consume the product.
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B.B.A. 3rd Sem.
Selling
Marketing
Subject- Marketing Management
A firm using a sales orientation focuses primarily on the
selling/promotion of a particular product, and not
determining new consumer desires as such. Consequently,
this entails simply selling an already existing product, and
Selling
1950s and
using promotion techniques to attain the highest sales
methods
1960s
possible. Such an orientation may suit scenarios in which a
firm holds dead stock, or otherwise sells a product that is
in high demand, with little likelihood of changes in
consumer tastes that would diminish demand.
The 'marketing orientation' is perhaps the most common
orientation used in contemporary marketing. It involves a
firm essentially basing its marketing plans around the
Needs and 1970
to marketing concept, and thus supplying, products to suit
wants of present
new consumer tastes. AS an example, a firm would employ
customers day
market research to gauge consumer desires, use R&D to
develop a product attuned to the revealed information and
then utilize. Promotion techniques to ensure
person'atXthe4ritluct exists.
Contemporary approaches
Recent approaches in marketing include relationship or industrial marketing with focus on an
customer, business marketing or industrial marketing with focus on an organization or institution and
social marketing with focus on benefits to society. New forms of marketing also use the internet and are
therefore called internet marketing or more generally e-marketing online marketing search engine
marketing, desktop advertising or affiliate marketing. it attempts to perfect the segmentation strategy
used in traditional marketing. it targets its audience more precisely, and its sometimes, called
personalized marketing or one-to-one marketing. Internet marketing is sometimes considered to be
broad in scope, because it not only refers to marketing on the internet, but also includes marketing
done via e-mail and wireless media.
Orientation
Profit Driver
Western
European
timeframe
Description
Building and
Emphasis is placed on the whole relationship between
Relationship
1960s to
keeping
supplier and customers. The aim is to provide the best
marketing /
present
good,
possible customer service and build customer loyalty.
Relationship
day
customer
management
relations
In this context, marketing takes place between
Building and
Business
businesses or organizations. The product focus lies on
keeping
1980s to
marketing/
industrial goods or capital goods rather than consumer
relationship
present
Industrial
products or end product. Different forms of marketing
between
day
Marketing
activities, such as Promotion advertising and
organizations
communication to the customer are used.
Similar characteristics as marketing orientation but
1990s to
Social
Benefit
to
with the added proviso that there will be a curtailment
present
marketing
society
of any harmful activities to society, in product,
day
production, or selling methods
1980s to In this context, "branding" is the main company
Branding
Brand value
present
philosophy and marketing is considered an instrument
day
of branding philosophy
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B.B.A. 3rd Sem.
Subject- Marketing Management
Difference between selling and marketing
In general we use 'marketing' and 'selling' as synonyms but there is a substantial difference between
both the /concepts. It is necessary to understand the differences between them for a successful
marketing manager. Selling has a product focus and mostly producer driven. It is the action part of
marketing only and has short —term goal of achieving market share. The emphasis is on price variation
for closing the sale where the objective can be stated, as "I must somehow sell the product". This short
— term focus does not consider a prudential planning for building up the brand in the market place and
winning competitive advantage through a high loyal set of customers. The end means of any sales
activity is maximizing profits through sales maximization.
Selling
1. Emphasis is on the product.
2. Company manufactures the product first.
3. Management is sales volume oriented.
4. Planning is short-run-oriented in terms of today's products and markets.
5. Stresses needs of seller.
6. Views business as a good producing process.
7. Emphasis on staying with existing technology and reducing
8. Different departments work as in a highly separate water tight compartments.
9. Cost determines Price.
10. Selling views customer as a last link in business
Marketing
1. Emphasis on consumer needs wants.
2. Company first determines customer's needs and wants and then decides out how to deliver a
product to satisfy these wants.
3. Management is profit oriented.
4. Planning is long-run-oriented in today’s product and terms of new products, tomorrow’s
markets and future growth.
5. Stresses needs and wants of buyers
6. Views business as consumer producing process satisfying process.
7. Emphasis on innovation on every existing technology and reducing every sphere, on providing
better cost value to the customer by adopting a superior technology.
8. All departments of the business integrated manner, the sole purpose being generation of
consumer satisfaction.
9. Consumer determine price, price determines Cost.
10. Marketing views the customer last link in business as the very purpose of the business.
Marketing Mix
The marketing mix is a business tool used in marketing products. The marketing mix is often
synonymous with the 'four Ps': 'price', 'promotion', 'product', and 'place'. However, in recent times, the
'four Ps' have been expanded to the 'seven Ps' with the addition of 'process', 'physical evidence' and
'people'
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B.B.A. 3rd Sem.
Subject- Marketing Management
Marketing Mix
Product
Product Variety
Quality
Design
Features
Brand name
Packaging
Size
Services
Warranties
Returned
Target Market
Price
List Price
Discounts
Allowances
Payment period
Credit terms
Place
Channels
Coverage
Assortments
Locations
Inventory
Transport
Promotion
Sales promotion
Advertising
Sales force
Public relations
Direct Marketing
The 'four Ps' consists of the following
Product – A product is seen as an item that satisfies what a consumer needs or wants. It is a tangible
good or an intangible service. Intangible products are services based like the tourism industry & the
hotel industry or codes based products like cell phone load and credits. Tangible products are those can
be felt physically. Typically examples of mass produced, tangible objects are the motor car.
Price —The price is the amount a customer pays for the product. The price is very important as it
determines the company’s profit and hence, survival. Adjusting the price has a profound impact on the
marketing strategy, and depending on the price elasticity of the product often; it will affect the demand
and sales as well. The marketer should set a price that complements the other elements of the
marketing mix.
Promotion – Represents all of the methods communication that a marketer may use to provide
information to different parties about the product. Promotion comprises elements such as advertising,
public relations, personal selling and sales promotion.
Place – Refers to providing the product at a place which is convenient for consumers to access. Place is
synonymous with distribution. Various strategies such as intensive distribution, selective distribution,
exclusive distribution, franchising can be used by the marketer to complement the other aspects of the
marketing mix.
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B.B.A. 3rd Sem.
Function of marketing
A. Functions of exchange
 Buying and assembling
 Selling
B. Functions of physical supply
 Transportation
 Storage and warehousing
C. Facilitating function
 Financing
 Standardization and grading
 Pricing
Subject- Marketing Management



Marketing information
Risk-taking
Advertising and sales promotion
Importance of marketing
A. Importance of marketing to society
 Delivery of standard of living
 Provides employment
 Decrease in distribution cost
 Increase in national income
 Protection against business slump
B. Import of marketing to firm
 Helpful in business and decision-making
 Helpful in increasing profits
 Helpful in communication between firm and society
C. Importance of marketing in Underdeveloped or developing economy
D. Importance of marketing in developed economy
E. Importance of marketing in a Seller's or buyers market
Marketing Environment
The performance of a company depends on its sales and its sales depend upon the marketing
environment that influences its marketing activities. The marketing activities of an organization focus
on satisfying customer needs. Customer needs and wants are again the function of the environment.
Therefore the demand of a product is also affected by the environment, in which the organization
functions. With the marketing environment becoming increasingly dynamic, it is necessary for firms to
keep pace with the changing environment.
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B.B.A. 3rd Sem.
Subject- Marketing Management
Human Resource
Production Facility
R&D
Internal
Environment
Company Location
Financial Capability
Company Image
Suppliers
Firm
Micro
Environment
Marketing Intermediaries
Marketing Intermediaries
External
Environment
Demographic
Legal
Macro
Environment
Political
Technological
Socio-cultural
Economics
Natural
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B.B.A. 3rd Sem.
Subject- Marketing Management
Macro environmental factors
Macro environment forces do not affect the operations of a company and its relationship with its
customers directly and immediately. However, they affect the company on the long run. Following are
the factors.
Demographic environment
DEMOGRAPHICs are a branch of sociology that deals with the study of the characteristics of human
population such as size, growth, density, distribution, gender and marital status. Marketers are Keenly
interested in studying the demography, ethnic mix, educational levels and standard of living of different
cities, regions and nations because changes in DEMOGRAPHIC characteristics have a bearing on the
way people live, spend their money and consume.
Consumer groups
Demographic variables help in distinguishing consumer groups that is people having homogeneous
needs according to their specific wants, preferences and usage rates. For example, teenagers usually
have similar needs. Therefore marketers develop products to target specific consumer groups.
Consumer groups that can attract the attention of marketers can be classified as –
 Infants
 Children
 Adults
 Senior citizen
Apart from age, other demographics factors that influence a marketer’s decisions are –
 Women
 Singles
 Cultural diversity
 Location
 Occupational and Literacy
Political environment
Government policies shape the economic conditions and trade relationships and all influenced by the
political environment. Government policies influence the marketing decisions and strategies of firm.
Many marketers view the political environment as uncontrollable and try to adjust their strategies
accordingly. Organizations should closely monitor the political environment of countries in which they
are operate or are planning to operate.
Economic Environment
ECONOMIC ENVIRONMENT is the most significant component of marketing environment. It affects the
survival of a business, organizations as well as the success. The economic environment forces can be
studied into three broad categories.
A. General economic condition
 Agricultural trends
 Employment trends
 Per capita income trends
B. Industrial condition
 Market growth of the industry
 Its stage in product life cycle
 Demand patterns of the industry
C. State of supply of resources for production
 Land
 Labour
 Capital
 Machinery
 Managers


Economic systems
Price levels
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B.B.A. 3rd Sem.
Subject- Marketing Management
Technology
Technology is regarded as the use of scientific knowledge and tools, to solve specific problems and
perform tasks in an effective manner. It is equally important for marketers to know the type of
technology used, level of technological development in the country in general, type of R and D used by
the company and its competitor, speed with which technology is adapted and disposed. KOTLER
suggests that the aspects to which a marketing planner should pay attention include:
 High expenditure on research and development
 Concentration on product improvement and development
 Unlimited innovations in technology
 Accelerating pace of technological change
 Greater emphasis upon the regulation of technological change
Legal environment
 Marketing decisions are strongly affected by the laws pertaining to competition, price, setting,
and distribution arrangements, advertising etc. It is necessary for marketer to understand the
legal environment of the country and the jurisdiction of its courts. The following laws affects the
businesses in India are important
 Indian contract act 1872
 Factories act 1948
 Minimum wages act 1948
 Essential commodities act 1955
 Monopolies and restrictive trade practices act 1969
 Consumer protection act 1986
Natural Environment
It is man's duty to maintain the ecological balance. Technological developments have led to ecological
imbalances; examples are global warming, ozone layer depletion and increase in harmful gases due to
pollution. (Many companies have now realized their responsibilities towards maintaining the ecological
balance like refrigerator manufacturing companies are indicating on the Packaging that their products
are CFC(CHLORO FLURO CARBON) free.
Resources
Organizations consume natural resources for the production of goods and services. Sometimes
companies locate their production plants near the natural resources because the transportation cost
may increase the overall cost of their products.
Weather
Weather and climatic conditions create opportunities for marketers by increasing the demand. During
summer the demand for water coolers, air conditioners, soft drinks, and ice mains goes up.
Socio-cultural environment
The social environment of a nation determines the value system of the society which, in turn, affects the
marketing of products. Social factors are caste, customs, conventions, cultural heritage etc. for example
the nature of goods and services in demand depends upon people's attitudes, customs, social values etc.
for examples as the lifestyle of people have changed significantly last one decade, with both husband
and wife in a family earning, the market of readymade food and garments has increased.
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B.B.A. 3rd Sem.
Subject- Marketing Management
Unit – 2
Meaning of Market Segmentation
Market segmentation is a method for achieving maximum market response from limited marketing
resources by resources by recognizing differences in the response characteristics of various parts of the
market; segmentation gives special emphasis on the demand side of the market. Segmentation gives
special emphasis on the demand side of the market. It is a more rational and more precise adjustment
of the product and marketing effort is tuned with consumer needs and requirements.
Some important definitions of market segmentation are as follows –
According to Stanton, “Market segmentation consists of taking the total heterogeneous market for a
production dividing it into several sub-markets or segments each of which tends to be homogenous in
all significant aspects.”
Cundiff and still opine that ‘market segments are grouping of consumers according to such
characteristics as income, age, degree of urbanization race of ethic classification geographic location of
education, “Kotler has the same view
According to Kotler, ‘tile purpose of segmentation is to determine difference among buyers which may
be consequential in choosing among them or marketing to them.’
According to Davar, “Market segmentation is the sub-dividing of a market into homogeneous sub-sets
of customers where any sub-set may conceivable be selected on.
Features or characteristics of Market segmentation
1. Market segmentation is a process through which a market is divided into different segments. ‘A
market segment’ consists of a group of customers who share a similar set of wants.
2. The marketer does not create the segments. But identify the segments and decide which one to
target.
3. Market segmentation is the result of modern marketing concept and micro marketing which
emphasize on the fact that all buyers are different and the marketers must recognize the
importance of heterogeneous demand.
4. Varied and complex buyer behaviour is the root cause of market segmentation. Segmentation
gives special emphasis on the demand side of the market. It is a more rational and more precise
adjustment of the product and marketing efforts is tuned with consume needs and
requirements.
5. It is a method for achieving maximum market response from limited marketing resources by
recognizing differences in the response characteristics of various parts of the market.
6. Market segmentation has become the need in modern large business in which it is being sued as
strategy of divide and conquers, i.e., dividing markets in order to conquer them. It is an answer
to the question to whom should we sell our products and what should we sell them.
7. It enables the marketers to give better alternative to the selection of customers and offer an
appropriate marketing-mix for each chosen segment or a group of buyers having homogeneous
demand.
8. The purpose of segmentation is to determine difference among buyers which may be
consequential in choosing among them or marketing to them. Some other important objectives
are –
a. To divide customers in homogeneous groups on the basis of their attributes and nature so
that suitable marketing programmes may be prepared for each segment (group)
b. To find out customer’s preference, their interests and buying habits so that if may be
decided whether homogeneous marketing efforts would be suitable for all customers or not.
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B.B.A. 3rd Sem.
Subject- Marketing Management
c. To find out areas where new customers may be made while making proper marketing
effort.
d. To find out purchase potential of different customer groups.
e. To make organization customer-oriented so that profit may be earned through customer
satisfaction.
9. Market segmentation provides a basis for improved performance through correct application of
selected marketing concepts and techniques.
10. The basic idea of segmentation is to find group of people who react differently to marketing
efforts, and then to orchestrate the market mix to optimally appeal to the need of each segment
chosen as a target market.
Favourable conditions for effective market segmentation
The use of the concept market segmentation will be more useful in the following conditions –
1. The number of potential customers of the target market must be measurable.
2. The various required information and data about the target market must be accessible.
3. There must be consumers in sufficient number to provide profitable sales volume to the
company.
4. The prospective target segment must be accessible itself through the existing channels of
distribution of the company, the advertising media and sales-force to minimize cost and
unnecessary wastage of efforts.
Basis for market segmentation
1. The total market which is heterogeneous in nature can be divided into small homogeneous
segments with the help of various bases used by marketing companies for the purpose of
market segmentation. The bases for market segmentation could be understood at the glance
with the help of the following chart –
A brief description of the above mentioned bases for market segmentation is given below –
A. Geographical Bases for Market Segmentation – Geographically, markets can be segmented on
the basis of climate, region and topography. In India the climate of the north-western part
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B.B.A. 3rd Sem.
B.
C.
D.
E.
Subject- Marketing Management
varied season to season. For the woolen mills, there are goods marketing opportunities in the
winter season. Similarly, there will be good marketing opportunities in the summer season for
products like ice-creams, desert refrigerators, air conditioners and soft drinks.
Demographic Bases for Market – Segmentation In the demographic bases for market
segmentation the distribution characteristics of the population are used. The population of the
target market can be distributes on the basis of religion: metro, urban, sub-urban and rural, agegroup; sex; education; language; family life cycle and size of the family.
Socio-economic Bases for market segmentation – Under this category, income levels, culture,
religion, social classes, ethics groups and type of the family are used for the purpose of market
segmentation. India is a country of ancient and rich culture which comprises different religions,
social-classes, rigid caste system and nucleus as well as joint families’ n vast numbers.
Perceptions, attitudes and consumer behaviour will vary with the application of each base.
Psychographic Bases for Market Segmentation – Markets can be segmented on the basis of the
personality, psyche, self-concept, life styles, autonomy enjoyed, ambitiousness and
gregariousness of consumers. A marketing company can take full advantages of product
differentiation and non-price competition by segmenting the market on the houses of
psychography.
Marketing Elements Bases for market Segmentation – Marketing elements can also be used for
the purpose of market segmentation. The demands and requirements of ultimate consumers
and industrial users vary in many terms. Each market requites separate marketing strategy.
Selection of Target Segment
In evening different market segments the firm must look at two factors the segment’s overall
attractiveness, and the company’s objectives and resources. In brief, the following points should be kept
in mind while evaluating and selecting a target market –
1. Size of the segment – In evaluating the segment, its size must be considered whether it is
sizeable or not. Simply, biggest market may be more sizeable than premium segment. If a firm
wants a very large volume it should think on popular segment (bigger market) in comparison to
premium segment.
2. Growth Potential – In the evaluation of the segments, growth rate (present ad potential) of
that segment should also be considered. Usually, business firms seek out the high growth
segments. If a firm sees potentially high growth rate in a segment, then it may consider that
segment while avoiding present growth rate.
3. Attractiveness – It is also an important factor of consideration in evaluating the segments. It
focuses on whether a potential segment has characteristics that make it generally attractive,
such as size, growth, profitability, scale economies and low risk.
4. Must be Measurable – The degree to which any information about the segment (buyer
characteristics) obtainable could be measured determines the market targeting. Many
suggestive characteristics are not easy for measurement. It is hard to measure the number of
customers who are motivated to buy a car with accessories primarily by consideration of credit
facility. Therefore, measurability should also be considered ill oviihioling segments.
5. Accessible – Ramaswami opines that the popular segment (higher market) may be accessible
only to firms with cost advantages, since price is major determinant in this segment.
6. Conformity with company Goals and objectives.
7. Resources – In evaluating different market segments, the firm should consider its objectives
and resources. If the resources of the firm are limited, popular segment be the natural choice,
and for others, the premium segment.
Santon has suggested the following four guidelines about how to determine which segment should be
the target market.
1. The target market should be compatible with the organization’s goals and image.
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B.B.A. 3rd Sem.
Subject- Marketing Management
2. It should match with the market opportunity represents in the target market with the
company’s resources.
3. An organization should seek markets that will generate sufficient sale, volume at a low enough
cost to result in a profit.
4. A company ordinarily should seek a market where there are least and smallest competitors.
Targeting Strategies
Market Targeting strategies – In market segmentation the sellers identify groups of buyers with
different characteristics and wants. In market targeting the sellers identify special market segments or
groups that it intends to serve and satisfy. In a heterogeneous market, the market has three targeting
options –
Mass Market
Strategy
Concentration
strategy
Multi-segment
strategy
Single
Marketing Mix
Single
Marketing Mix
Several
Marketing Mix
Mass
Market
A B C D E F
A B C D E F
1. Mass Marketing Strategy – It is also called as undifferentiated marketing strategy. In this case, the
seller introduced only one product. The marketer intends to get many customers by introducing
only one product. The marketer provides only one marketing mix – one product, one price, same
promotion and distribution channel in the entire market.
Advantages –
a. Large number of customers can be served with a single product
b. There are lower costs of production and marketing
c. The marketer can save time and effort in marketing the product.
d. It may result in large profits for the marketers.
Disadvantages
a. The marketer may not be able to satisfy the needs and wants of all customers.
b. The marketer may find difficult to face competition.
c. This strategy is not suitable for certain types of products such as luxury products or premium
priced products.
d. In the long run, marketers may lose market share to the competitors.
2. Concentration marketing strategy – In this case, a marketers can select one particular market
segment and develop best possible product for that segment. The marketer may resort to niche
marketing strategy. Normally, only one marketing mix ix developed to satisfy the buyers.
Advantages –
a. The marketer can easily understand needs wants of its target buyers.
b. The marketer may enjoy economics of large scale production and distribution
c. The firm may enjoy brand loyalty from its buyers.
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B.B.A. 3rd Sem.
Subject- Marketing Management
d. This strategy is suitable to new entrants in the markets
Disadvantages
a. In the long run, the firm may find it difficult to enter in new segments.
b. There is more marketing risk to concentrate only on one segment. The firm may not be able to
spread marketing risks.
c. There may be competition from other new entrants in the market.
d. This strategy may affect the profits of the marketer.
3. Multi-segment strategy – It is known as differentiated marketing strategy. In this case, the
marketer casters to several segments of the market. The marketer develops several marketing
mixes in older to satisfy the various segments of the market.
Advantages –
a. The firm will be in a position to spread its marketing risks as it caters to several segments.
b. The firm will be able to make optimum use of its production capacity by producing different
types of products.
c. The firm is in a position to cater several segments of the market and as such it can earn name
and goodwill of large number of buyers in the market.
d. The firm may find it easier to launch new products in the market as it enjoys the goodwill of
several segments.
Disadvantages –
a. Promotion costs will be higher as the marketer have to use different media to satisfy various
sections or segments.
b. The firm may not be able to achieve economies of large scale in respect of various products.
c. The administrative expenses will be higher.
d. There may be large inventory costs, as the marketer has to maintain inventory of several
products. The marketer fall into the trap of tying to satisfy everybody and ending up with
satisfying nobody.
Positioning
Philip Kotler defines positioning as “the act of designing the company’s offering and image to occupy a
distinctive place in the mind of the target market.”
Importance of product positioning
1. Develops Brand Image – Product positioning enables a firm to develop favourable brand
image of the product in the minds of the target audience. For instance. Maruti Suzuki has
developed a positive image (a reliable company) of the firm through their positioning “Court on
us”.
2. Creates Demand – Proper positioning helps to generate demand for the product in the market.
Effective positioning can induce the buyers to buy the products. For instance, the positioning of
Lux soap “Beauty Soap of Film Starts” has bought success to the brand, as people buy the brand
with of hope of becoming beautiful person.
3. Helps to Face Competition – Positioning enables to face competition in the market. The
company composition its product favourably against the competitors. Through effective
positioning, a firm can differentiate its product. For instance, Hero Honda gained tremendous
success with its “fuel efficiency” positioning of its brand Hero Honda CD 100.
4. Facilitates Consumers’ Choice – Product positioning enables the customers to make a proper
choice of the product depending upon the image created in the mind of customers.
5. Creates Value – A marketer can highlight the special benefits of the product.
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B.B.A. 3rd Sem.
Subject- Marketing Management
Steps involved in product positioning
1. Identify Competitive Differences – The marketer should identify the competitive differences
of his product or service. The differences can be –
a. Product differences such as features, design, packaging etc.
b. Service differences such as delivery, after-sale service etc.
c. Personal (sales people service technicians etc.) differences such as competence,
nature/manners etc
d. Image differences such as the goodwill of the producer, brand name, brand price, brand
advertising etc.
2. Analyse the differences – The marketer must analyse the differences. He must conduct costbenefit analysis of each and every difference.
3. Selecting Important Differences – The marketer must select the most important differences
that would differentiate it from that of the competition.
4. Developing Positioning Strategy – The marketer should then make efforts to develop
positioning strategy. The marketer may position the brand by following any of the following
positioning strategy
a. Using specific product features
b. Positioning by price
c. Positioning by use
d. Positioning by competitor etc.
5. Communicating the Company’s Positioning – The marketer should select proper media to
communicate the company’s positioning. The right media must be selected to communicate the
image of the brand. For example, an expensive watch like, Rolex communicates its image by
associating with the Wimbledon Tennis Tournament. Roles Watches may not be able to
communicate the rich image of the brand if it sponsors like cricket which is played by few
countries and that too like by masses.
6. Follow-up of positioning – The marketer may try to follow up the positioning of the brand.
This can be done by undertaking research or by analyzing the sales of the brand. If the
positioning strategy is not successful, the marketer may re-position the brand with alternative
strategies, as to create a distinct image in the minds of target customers.
Product Positioning Strategies
The advertiser can adopt different positioning strategies in order to develop or reinforce a particular
image for the brand in the mind of the audience. The various positioning strategies are –
1. Positioning by product benefits – Consumers purchase products to derive functional,
emotional or self self-expressive benefits. Most marketers use “benefit strategy” to position
their brands. The advertisers Tay preferably select a single benefit positioning strategy as
multiple benefit strategies are difficult to implement.
Examples of benefit positioning
a. Functional Benefit Positioning – Can be used in the case of technologically superior
product by highlighting special features. “The leather that weathers” from Woodlands
shoes.
b. Emotional Benefit Positioning – Can be used by exploiting buying motives such as
security, health, love and affection, beauty etc. “Beauty Soap of Film Stars” Lux Soap.
c. Self-expressive Benefit – Where style and appearance, of the product (motorbikes/textiles/garments etc.) can be highlighted in positioning strategy. The advertiser may
use high profile personalities or models to endorse the brand.
2. Positioning by Price and Quality – In many product categories, the price-quality feature is so
important that it needs to be considered in any positioning decision. The advertiser may
position the product as quality that is worth the money (Good Quality Costs Little More). Others
may position the product as quality product but still an reasonable/ affordable price. For
example, “Good Jeans for Less” Newport Jeans.
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B.B.A. 3rd Sem.
Subject- Marketing Management
3. Positioning by Use – The brand can be positioned by associating it with a use or application.
For example – Fast to cook, God to Eat” – Maggie Noodles. The advertiser may extend the use of
the brand. For instance, “The Paan with a Hole” Campaign of Polo.
4. Positioning by User Category – The brand may be associated with a particular class of users.
For instance, Luxury items like Rolex Watches. Rolls Royee Cars, are normally used by the rich
and famous. The advertiser may, therefore, position the brand associating with the user
category. For instance, Rolex Watch is positioned as a luxury item and not as a wrist watch.
5. Positioning by Product class – Some advertiser highlight the product-class association. The
toilet soap dove positioned itself apart from the soap category as a cleansing cream product for
women with dry skin.
Positioning by cultural symbols/Names – Some advertisers may use cultural symbols to differentiate
their bands from competitors. For example – Marlboro cigarettes used the American cowboy a Godrej
soaps made a reference to “Ganga River” for their soap “Ganga”.
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The difference between the brands shows that there is a relatively high level of differentiation
in brand positioning between the relating brands Invogue and Fast Fashion.
It is very rare that using just two attributes adequately reflects the diversity of opinion and
preferences of the target market. Using multidimensional scaling techniques it is possible to add
further attributes and create a composite picture of the main segments that constitute a market.
Perceptual mapping can provide significant insight into how a market operates. For example, it
provides marketers with an insight into how their brands are perceived and it also provides a
view about how their competitor’s brands are perceived.
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