Cultural & Social Factors Affecting Buyer Behavior

Cultural & Social Factors Affecting Buyer Behavior

What is culture? The values, beliefs preferences and tastes passed on from one generation to another generation in the society are called culture. Culture is one of the broadest determinants of Buyer’s behavior. A marketer needs to understand the culture to be able to do successful marketing. Culture keeps changing and so do the values, beliefs, preferences and tastes of the people. The successful marketer needs to monitors these changes and inculcates them in the marketing strategy of the firm.
Culture is very important in Global marketing. To market a product overseas, one needs to understand the cultural taboos, social customs, preferences, religious outlook and other things.
Social Factors: Man is a social animal. Every person belongs to social group or groups. Group imparts a major influence on a consumer’s buying decisions. These influences may be informational or normative.
In psychology, it is referred to as conformity. Conformity is a process by which an individual's attitudes, beliefs, and behaviors are conditioned by what is conceived to be what other people might perceive. Solomon Eliot Asch, an American Psychologist, first explained this and it was known as Asch Phenomenon. The group influences may be the result of subtle unconscious influences, or direct and overt social pressures.
Informational social influence occurs when a person turns to the members of his/ her group to obtain accurate information. Normative social influence occurs when a person conforms to be liked or accepted by the members of the group. It usually results in public compliance, doing or saying something without believing in it.
The impact can be easily seen in children. The decisions of children are often based upon their groups – what the other children are wearing, eating and doing. The people who affect a group like the brand ambassadors are known as Opinion Leaders who have the capability to act as trendsetters and affect the buyer’s behavior.
Family Influences: Family is a group and one of the most dominant factor affecting the purchase decisions of person. Family often has a set of norms and has different role and status for its members. Household decision-making depends upon the role of the family members.

Personal Factors Affecting Buyer’s Behavior

Personal Factors Affecting Buyer’s Behavior

Consumer behavior is also affected by internal factors such as personal & inter-personal factors. Each individual has his own set of unique needs, motives, perceptions, attitudes, learning and self concepts, to buying decisions. Individual purchase decisions are driven by the needs, motives, perceptions, attitudes, learning’s and self-concept. They have been discussed here:

• Needs and Motives: A need is necessary for a person to live a healthy life. need is different than want, a deficiency of need is a dysfunction or death. Needs can be physical needs or psychological needs. Physical needs involve water, food and shelter while the examples of social need are self -esteem. Want is something that is desired. Every person has unlimited wants, but his/ her resources are limited. Thus, people cannot have everything they want and must look for the most affordable alternatives.

  A need is an imbalance between the consumer's actual and desired states. This imbalance needs to be corrected A marketer does the job of creating an imbalance. Marketing makes the need felt and motivates the person to correct this imbalance. The action taken to bring the condition in equilibrium the ultimate goal of a marketer. This action leads to person's buying decision.

• Perceptions: The word "perception" is derived from Latin words perceptio, percipio, which mean "receiving, collecting, action of taking possession. Perceptions is what a person attributes the incoming stimuli gathered through five sense of hearing, sight, touch, smell, and taste. Perception is the process of attaining awareness and is dependent on the senses. Perception also involves a person's understanding which depends upon his / her Psyche; i.e. imagination, conscience, intellect, memory.
  Perception is widely used in management science. In consumer behavior, perception plays a very important role in driving the purchasing decisions at personal level.
• Attitudes: An attitude is a hypothetical construct. Attitude represents the degree of like or dislike of a person for an item/ idea/ information/event. Attitudes may be positive or negative views of a person, place, thing, or event. Attitudes affect the perception. The purchasing decisions are strongly based upon the current attitude about a product/ service / brand/ shop/ sales person. The marker's job is to create favorable attitude, which positively affect the brand preferences. Marketers need to determine the consumer attitude towards their products.
• Learning: Consumer learning is a process by which the consumer acquire the purchase and consumption knowledge and this experience affects the future purchases.
  Self Concept: A person’s multifaceted picture about himself or herself plays a very important role in the consumer behavior. The self-concept is an outcome of personal and interpersonal influences and they affect the buying behavior of a person.
  
  image:freedigitalphotos.net

Economical Factors Affecting Buyer’s Behavior:

Economical Factors Affecting Buyer’s Behavior:

A need when identifies an object to fulfill that need becomes a want. A want backed by a buying power becomes a demand. A demand leads the person to make a purchasing decision, which is duly affected by the economic factors such as personal income, family income, consumer credit, govt. policies, etc.

• Personal Income: Income of a consumer is most important factor affecting the demand and subsequently the purchase decisions. Every person has unlimited wants but limited resources so higher the income higher is want backed by the buying power i.e. demand. The demands may increase or decrease depending upon the person’s expectations about the future income. A person’s deposable income is what is left after fulfilling the basic needs and the disposable income increases the purchasing power of the consumers.
• Family Income: The low-income families have lesser demands and happy and prosperous family income have more demands.
• Consumer Credit: The facility of credit available to the consumer increases the demand.
  Government Policies: Tax rates and other government policies have a great impact on the consumer’s buying behavior.

image:freedigitalphotos.net

Understanding Market Segmentation

Understanding Market Segmentation

A market segment is a subset that fits with other subsets to constitute a whole market. A market is composed of people, consumers, institutions, firms with needs & wants backed by sufficient purchasing power and willingness to buy. Markets are heterogeneous and consist of elements that are not of the same kind or nature. However, the heterogeneous market can be divided into many homogenous customer segments using several variables. This division of the whole market into relatively homogenous groups is called market segmentation.

A market segment consists of people or organizations sharing with one or more characteristics that cause them to demand similar product and/or services based on qualities of those products such as price or function.

A true market segment is distinct from other segments as different segments have different needs. A market segment is homogeneous within the segment and exhibits common need, wants and demands. A true market segment responds similarly to a marketing stimulus.
Market segmentation is based upon the assumption that markets of all commodities are heterogeneous. Two groups of people are never common in all characteristics and all products seldom succeed by appealing to everybody. The marketers with clear marketing communications target the identified homogenous segments.
“Marketing Guru Philip Kotler defines market segmentation as the subdivision of a market into homogenous subsets of customers where any subject may conceivably be selected on a market target to be reached with a distinct marketing mix.”
Market segmentation helps the marketing decision in following ways:

1. By helping the marketer to identify the groups of customers to whom he can more effectively target marketing efforts.
2. By helping the marketer to avoid trial and error methods of strategy formulation.
3. By helping the marketer in addressing the customer needs and satisfying them.
4. By providing important data to the marketer on which long term plans can be formulated.
5. By helping, the marketers to stay focused rather than scattering their marketing resources.

Features of a Market Segment:

• The market segment must be internally homogenous because consumers within the segment would be more similar to each other in characteristics.
• The market segment must be identifiable so that the individuals can be placed within or outside the segment.
• The market segment must be accessible to that it can be reached by an advertising media and distributionReturn to investors of the accumulated income of a trust or mutual fund and distribution of capital gains. channels
• The market segment must represent an effective demand.

A Marketer’s Questions on Segmentation Analysis

A Marketer’s Questions on Segmentation Analysis

Market segmentation makes it possible for a firm to best utilize its available resources. It needs intensive marketing research. Once it is decided to go for market segmentation, there are lists of questions, which must be answered. The examples of the questions are given as under. These are just general steps, which make you aware of the market segmentation, and each firm may have its own set of questions.

1. What is the marketing objective of the firm?
2. Is marketing looking for new segments?
3. If yes, what about the research, shall the firm use the existing data or will invest money in research?
4. If no, how to better satisfy the existing market segments?
5. What is the size of the total market and its various segments?
6. What are the users and non users of the products / services
7. What are the factors that distinguish between users and non-users?
8. Who are the competitors and what are their market / niche segments?
9. What is the firm’s position in the competition in the market?
10. How the firm can differentiate the consumers?
11. What are the possible segment profiles?
12. Does this segment profile makes internally homogenous groups?
13. Is the number of segments needs to be reduced or increased?
14. Which segments represent the best competencies and market opportunities?
15. What are the target segment’s characteristics and market behavior?
16. Who are the competitors in the target segment?
17. What kind of market mix will be suitable to this segment?
18. Does the firm have the necessary resources to carry out a segment strategy?
19. How flexible is this segment strategy? Can this be broadened in future?
20. Does this segment strategy fits the corporate strategy?

Variables of Segmentation: Consumer Markets

Variables of Segmentation: Consumer Markets

There are two types of the markets- consumer markets and industrial market. Consumer markets are those markets where the ultimate consumers for their personal use purchase the products. In Industrial markets, the goods and services are purchased for use directly or indirectly in the production of other goods and services for resale.
Marketers use different variables for market segmentation.
The variables of dividing the consumer markets can be placed in two broad categories. One is Consumer background characteristics, which include Geographical, Demographical, Psychographical & General Life-style variables. Another is consumer’s market history, which includes product usage, product benefit and Decision process.
Here is a brief discussion about them:
Consumer background characteristics:

1. Geographical variables: The geographic segmentation is the oldest, most basic and most conventional way of segmenting the markets. The variables included in geographical segmentation are Region of product distributionReturn to investors of the accumulated income of a trust or mutual fund and distribution of capital gains. , Cultural differences, languages, accessibility to the target market, mobility of the consumers and so son …
2. Demographic Variables: Demographic features of the markets are also basic variables of market segmentation. Demographic variables include the Age, Sex, Income, Educational level, Social status etc.
3. Psychographic Variables: The psychographic variables include the personality traits, perception, and attitudes, Reference Groups like family and friend circles, and Social roles of the consumers.
4. General Lifestyle Variables: General lifestyle provides a multidimensional profile of the consumers and deal with the general way of life of the consumers. The represent a correlation of demographic, geographic and psychographic variables.

Consumer's Market History:

1. Product Usage: The market can be segmented based upon the product usage. For example, the market can be divided into heavy, medium, light and non-users of a particular product or service. The variables can be use, Brand loyalty and attitude of the consumer towards a product. It also involves the durability and no durability of a product.
2. Product benefit: Product benefit variables are used in product positioning as well. This variable includes expectations of product performance, the needs which are fulfilled by the product, brand perception, brand satisfaction etc.
3. Consumer decision process: This variable segment the markets based upon sensitivity to the markets, shopping patterns, Product information searches etc.

Variables of Segmentation: Industrial Markets

Variables of Segmentation: Industrial Markets

Industrial marketing involves the marketing of goods and services from one business to another. The industrial gods are used in the industry for producing different end products. The segmentation of the Industrial markets takes into account the Size of Industry, Size of company, Location, Infrastructure, purchasing criteria and so on. These variables have been divided into 5 broad categories viz. Demographic variables, Operating Variables, Purchasing approaches, Situational Factors and Personal characteristics. Here is a brief discussion:

1. Demographical Variables: The demographic variables of Industrial market segmentation include the type of industry, type of the target companyA Target company is a listed company i.e. whose shares are listed on any stock exchange and whose shares or voting rights are acquired/ being ....., its location. Some marketers target a specific type of industry while some marketers seek a group of industries to target. For example, a company, which produces clutch wires for motorcycles, may target a motorcycle company. On the other hand, a company which deals with multiple products such as Spoilers, GRP Components, GRP Panels, Car Styling Kits, Rear Parcel Shelves, Door Trim Panels, Injection Molding, Azdel Components, Tractor Body Parts etc. will look for a portfolioA collection of securities owned by an individual or an institution (such as a mutual fund) that may include stocks, bonds and money market securities. ..... of target companies such as Automobiles, Trucks and Buses manufacturers, tractors and construction equipment manufacturers, Locomotives and Railways, Defense, Airport furniture manufactures, medical equipment, windmills and so on.........
2. Operating Variables: Operating variables deal with the customer technologies, user and no user or heavy user status, and the customer capabilities.
3. Purchasing Approaches: Some companies have centralized purchasing while others have decentralized purchasing. Industrial marketing often involves competitive tendering. In this process, the purchasing organization undertakes to procure goods and services from suitable suppliers. This is normally done for high value of some purchases and the purchasing organization shall seek a number of bids from competing suppliers and choose the best offering. This is called strategic procurement. Organizational structure or power structure is also important criteria. This gives an insight into the general purchase policy of the buying organization.
4. Situational Variables: These variables include the urgency, quick deliveryPresentation of securities with transfer deeds in fulfillment of a transaction. or scheduled delivery of the goods and services. The other criteria may be specific application and size of the order.
5. Personal Characteristics: Personal selling is very important & effective in industrial marketing because many products need to be customized to suit the requirements of the individual customer. Other criteria are buyer-seller similarity, attitude towards risk and loyalty of a industrial customer.

Understanding Targeting Approaches: Differentiated, Undifferentiated, Niche & Micromarketing

Understanding Targeting Approaches: Differentiated, Undifferentiated, Niche & Micromarketing

Identification of the market segment leads a firm to decide how to approach the selected markets. However, there are many firms, which do not segment the market and would work for the aggregate market. This is called market aggregation which exactly opposite to segmentation. There are different kinds of targeting approaches and each marketing firm has its own unique way of targeting its customers. These targeting approaches are simply divided into four kind’s viz. undifferentiated marketing, differentiated marketing, concentrated marketing and Micro marketing.

Here is a brief discussion:

1. Undifferentiated marketing: Undifferentiated marketing refers to an approach when a firm produces only one product or product line and targets all of its customers with a single marketing mix. The other term used for this approach is mass marketing. In Mass Marketing, the market coverage strategy essentially ignores the market segment differences and goes after the whole market with one offer. This marketing approach attempts to sell through persuading a wide audience. Usually the idea is to broadcast the message with an aim to reach the largest number of people possible. Mass marketing focuses on media coverage such as radio, television and newspapers. The idea is to maximize the exposure to the product. Examples of mass marketing products are toothpastes, which are not made especially for one consumer group or segment and are sold in huge quantities. Other examples are furniture, artwork, automobiles, residential communities, cola drinks and personal computers.
2. Differentiated Marketing: The differentiated marketing refers to the approach of the firms, which produce numerous products with different marketing mixes. These products are designed to satisfy the smaller segments. In this approach, instead of marketing one product with a single marketing program the firm approaches the different consumer groups with products customized for each group. Most companies do this for specialization and to remain competitive. The differentiated marketing essentially requires market segmentation and incurs a higher production cost, inventory cost and marketing costs.
3. Concentrated marketing: The popular term for concentrated marketing is niche marketing. Another term for the same is “Focused Market”. A niche market is a subset of the market on which a specific product is focusing. Each niche market essentially defines specific product features such as product design, price range, production quality and the demographics that is intended to impact. In niche marketing, the firm essentially focuses. Niche marketing chooses a small segment provided it’s a profitable segment. This approach is most suitable to smaller firms, which have lesser resources.
4. Micromarketing: This is the narrowest approach of targeting. It is most effective technique for small business users to sustain, build and grow their own brand. It targets the potential customer at the very basic and personal level.

Understanding Marketing Mix : 4P's and 4C's

Understanding Marketing Mix : 4P's and 4C's

The selection of a target market leads the marketers to focus their activities towards profitability of the target segment. For this purpose, they need to manipulate many variables. Such variables were named marketing mix. The term marketing mix was first of all used by Neil Borden, in his American Marketing Association presidential address in 1953. However, E. Jerome McCarthy proposed a classification of marketing mix in four areas viz. Product, Price, Place & Promotion.

The marketing mix is the blending of these four elements as per the needs and
preferences of the specific target market.

Each element of marketing mix has its own set of sub elements. For service industry, an extended version of Marketing Mix with 7P’s has been proposed. Here is a brief Discussion about the 4P’s of marketing mix.

• Product : A product may be a tangible product or an intangible product. A product is produced with a specific volume of units with an aim to satisfy the needs of the customers.. The sub elements of product are Product design, positioning, branding, packaging & labeling, Product line, customer service, warranties & guarantees, new product development, and product life cycle.
• Price: Amount a customer pays for the product is its price. Price is determined by a lot of factors such as demand, supply of raw components. Market share, competition, material cost and operational cost (production cost), and customer's perceived value of the product. The sub elements of Price include Manufacture, Wholesaler and retailer prices, terms and conditions of pricing, bidding tactics. DiscountWhen a security is quoted at a price below its nominal or face value, it is said to be at a discount. policies, Price differentiation and Skim vs. Penetrating prices.
• Promotion: Promotion refers to all of the communications that a marketer may use in the marketplace. The supplements are Advertising, Sales force polices, direct marketing, Public relationships, Price promotions, Trade shows and special events. The four distinct factors of promotion are advertising, public relations, word of mouth and point of sale. Promotion may be paid or unpaid. Paid promotions include advertising through various media, sponsorship deals, exhibitions, conferences, seminars, paid participation in trade fairs and events and unpaid promotion include the press releases, word of mouth etc.
• Place: Place refers to the location where a product can be purchased. It represents the distributionReturn to investors of the accumulated income of a trust or mutual fund and distribution of capital gains. channel. The Distribution channel may be direct or indirect. Channel length and channel breadth matter a lot. Some other sub elements are sublets, franchisees, direct sales agents, wholesalers, retailers etc.

The above marketing mix is product focussed. There is a customer-focused marketing mix which is known as 4C model. The elements are 4 C model of marketing mix are Commodity, Cost, Channel and Communication.

The Extended Marketing Mix for Service Industry: Additional 3 P’s

Marketing Aptitude

Summary Notes 5

1. Factors affecting Buyer behaviorConsumer behavior is affected by many internal, personal factors, as well as interpersonal ones. Each individual brings unique needs, motives, perceptions, attitudes learning and self-concepts to buying decisions. 2. What is Market Segmentation? The market place is heterogeneous with differing wants and varying purchase power. The heterogeneous marketplace can be divided

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Marketing Aptitude - Summary Notes 3

Two exams are coming very shortly: one is Union bank of India Marketing Officers exam (September 6) and another SBI management Executive Exam (September 13). Its not possible to frame enough quizzes which can help my readers. so I am here by writing some compendiums each with 10 points with absolutely objective info. They might

Read More »

Understanding Product Positioning

The “Concept of Positioning “is very important in the Marketing Management. Positioning refers to the concept of placing a product in a certain position in the minds of the prospective buyers. The concept was introduced by Positioning Gurus named Al Ries and Jack Trout in their article in "Advertising Age". Their work “Positioning: The Battle

Read More »

Concept of Product

Generally market offering of any kind is called a product. In management, a product is anything that is offered in the market to satisfy a need or want. The products may be raw materials in industries, merchandise in retailing or services in service industry. The raw materials are called commodities often. Commodity is also something

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Marketing Aptitude Summary Notes 2

Q.1 What are the marketing Functions? There are 8 universal functions of MarketingThe ultimate aim of marketing is exchange of goods and services from producers to consumers in a way that maximizes the satisfaction of customer’s needs. ....., categorized into 3 broad categories: Buying, Selling, Transporting, Storing, Standardizing and grading, Financing, Risk taking Securing marketing

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The Extended Marketing Mix for Service Industry: Additional 3 P’s

The marketing mix of product marketing consists of 4Ps, the services marketing takes in 3 more P’s making the extending market mix for service industry: 7P’sThe additional 3Ps are People, Process and Physical Evidence. Why additional P’s?These additional 3P are required because of the special characteristics of the Service Industry. The product of a service

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Marketing Aptitude Summary Notes 2

Marketing Aptitude Summary Notes 2

• Q.1 What are the marketing Functions?

There are 8 universal functions of MarketingThe ultimate aim of marketing is exchange of goods and services from producers to consumers in a way that maximizes the satisfaction of customer’s needs. ....., categorized into 3 broad categories:

1. Buying,
2. Selling,
3. Transporting,
4. Storing,
5. Standardizing and grading,
6. Financing,
7. Risk taking
8. Securing marketing information.

• Q.2 What are Concepts of Marketing ?

The 5 concepts of marketing are as follows:

1. Needs, wants and demands
2. Products
3. Value and satisfaction
4. ExchangeRegulated market place where capital market products are bought and sold through intermediaries. , transactions and relationships
5. Markets

• Q.3 Internet has empowered the customer. Write a Brief note

In the connected world, the customers empowered by Internet can

1. Get objective information for multiple suppliers without relying on the manufacturer or the retailer(http://www.alibaba.com/ )
2. Initiate requests for information and advertising from manufacturers (e.g., http://www.dealtime.com/)
3. Design and configure customized offerings e.g., http://www.hp.com/
4. Use buying agents to pit sellers against each other http://www.indiamart.com/
5. Unbundle offerings and arbitrage(1) Technically, arbitrage consists of purchasing a commodity or security in one market for immediate sale in another market (deterministic arbitrage).  Popular usage has expanded ..... across channels http://www.naaptol.com/
6. Payby the minute, by the month, by the mile http://www.paypal.com/
7. Communicate with peers and experts for feedback on products and brands http://www.amazon.com/ and http://www.epinions.com/

Q.4 What are Different Steps in marketing Process?

Different Steps in Marketing Process are as follows:

1. Strategy formulation – the development of the broadest marketing/business strategies with the longest term impact
2. Marketing planning – the development of longer-term plans which have generally stronger impact than the short-term programs
3. Marketing programming, allocating and budgeting – the development of short-term programs which generally focus on integrated approaches for agiven product and on the allocation of scarce resources such as sales effort orproduct development time across various products and functions
4. Marketing implementation – the actual task of getting the marketing job done5. Monitoring and auditing – the review and analysis of programs, plans and strategies to assess their success and to determine what changes must be made
5. Analysis and research – the deliberate and careful acquisition and examination of qualitative and quantitative data to improve decision making
   

Q.5 What are 5 C's of Marketing Decision Making?

Following are five major areas of analysis (5 Cs) that underlie marketing decision making :

1. Customer needs - What needs do we seek to satisfy?
2. Company skills - What special competencies do we possess to meet those needs
3. Competition - Who competes with us in meeting these needs?
4. Collaborators - Who should we enlist to help us and how do we motivate them?
5. Context - What environmental (say, cultural, technological or legal) factors limit what is possible?

Q 6. Write a brief note on Nature of Marketing

1. Marketing is a universal activity
2. Marketing is an art as well as science
3. Marketing is a human activity
4. Marketing is a socio economical activity
5. Product or service is the subject matter of marketing
6. For marketing presence of market is a must
7. The basisIn a futures market, basis is defined as the cash price (or spot price) of whatever is being traded minus its futures price for the ..... of marketing is exchange
8. Marketing is consumer oriented and not product oriented

Concept of Product

Concept of Product

Generally market offering of any kind is called a product. In management, a product is anything that is offered in the market to satisfy a need or want. The products may be raw materials in industries, merchandise in retailing or services in service industry. The raw materials are called commodities often. Commodity is also something offered in an open market.
A product essentially has utility. A product is a bundle of utilities consisting of various features and services.
The bundle of utilities here means that the product is not the physical product but the total package of the benefits obtained by a customer.

A product is a mixture of tangible plus intangible attributes.

For example if we buy a book or CD from amazon.com, the product is not only the book but also the guarantee of getting delivered with 24 hours. The book in this example is the core product or core benefit. A product as a bundle of tangible and intangible attributes is a Total product and the concept is called Total Product Concept.
This bundle is represented by the following graphic:

Core Benefit refers to what the product means to a customer. The Generic product is the unbranded and undifferentiated commodity which provides the core benefit. A Branded product gives an identity to the generic product. For example water is a generic product, but Bisleri and Aquafina are the brands. Car is a generic product which offers the benefits of convenience in travelling but Wagon R or Mercedes are brands.
The generic products are undifferentiated products. However, differentiated products have a distinction from other similar products. The differentiation is mostly claimed by the marketers; however It may or may not have the real distinction of ingredient, quality, utility and service. For example Pacimol and Calpol are two brands which offer Paracetamol as ingredient used for fever medicines.
In customized product, the customer requirements are taken into account. The augmented products involve the voluntary improvements made by the product manufacturers. The potential product is tomorrow’s product which may possibly introduced by the firm in future depending upon the technological and economic resources of the firm

Understanding Product Positioning

Understanding Product Positioning

The “Concept of Positioning “is very important in the Marketing Management. Positioning refers to the concept of placing a product in a certain position in the minds of the prospective buyers. The concept was introduced by Positioning Gurus named Al Ries and Jack Trout in their article in "Advertising Age". Their work “Positioning: The Battle For Your Mind” is the industry standard for the subject.

They define positioning as "

an organized system for finding a window in the mind. It is based on the concept that communication can only take place at the right time and under the right circumstances" According to them “Positioning starts with the product, but positioning is not what you do to the products. Positioning is what you do to the mind of the prospect"

In other words by “Positioning” marketers try to create an image or identity in the minds of their target market for its product, brand, or organization in contrast with the competing products/ brands and organizations. The positioning strategy has a crucial impact on the marketing success of a company.
Anything that makes a brand or product unique is positioning. There are different possibilities of positioning. Some companies use some attribute or benefit of the product. This is called attribute positioning. Some examples of attribution positioning are Volvo (safety) , Dettol (Hygiene), Fairness (Fair & Lovely), Tough Shoes (Woodland) etc.
Quality or price positioning refers to product positioning as the best value for money. Competitive Positioning is when a comparison is highlighted with the competitor. Product category positioning refers to the positioning of a product belonging to a particular category.
Some companies use unique taglines for better brand positioning. For example “Jeete raho…….. “ (ICICI-Prudential) , Jindagi ke saath bhi Jindagi Ke Baad bhi (LIC) , Thanda Matlab ….. (Coca Cola), Just do it (Nike) , Hum Hai na..."(ICICI Bank), Pure banking Nothing Else (SBI) all these taglines have a great brand recall value.
Product positioning is closely related to market segment focus. Product positioning involves creating a unique, consistent, and recognized customer perception about a firm's offering and image. A product or service may be positioned on the basisIn a futures market, basis is defined as the cash price (or spot price) of whatever is being traded minus its futures price for the ..... of an attitude or benefit, use or application, user, class, price, or level of quality. It targets a product for specific market segments and product needs at specific prices. The same product can be positioned in many different ways.

Positioning is a process to create an image or identity in the minds of their target market. Positioning is the brand identity & value proposition in a perspective customer's mind. Positioning demonstrates an advantage over competing brands

The following presentation from www.zstudylive.com is dedicated to Positioning:
[youtube=http://www.youtube.com/watch?v=oC3V_PsdRoY]

Marketing Aptitude - Summary Notes 3

Marketing Aptitude - Summary Notes 3

Two exams are coming very shortly: one is Union bank of India Marketing Officers exam (September 6) and another SBI management Executive Exam (September 13). Its not possible to frame enough quizzes which can help my readers. so I am here by writing some compendiums each with 10 points with absolutely objective info. They might be useful for the readers. We devote next 2 days for this compilation.

1.There are four types of Utilities : Form, Place, Time & Ownerships
2.There are some myths about marketing and selling:

1. Marketing and selling are synonymous
2. The job of marketing is to develop good advertisements
3. Marketing is pushing the product to the customers
4. Marketing is transaction-oriented than relationship-oriented
5. Marketing is a short-term business strategy
6. Marketing is an independent function of a business
7. Marketing is part of selling

There are 5 Eras of Evolution & Marketing:

1. Production Era : Cut costs. Profits will take care of themselves
2. Product Era: A good product will sell itself’
3. Sales Era : Selling is laying the bait for the customer
4. Marketing Era : The customer is King!’
5. Relationship Marketing Era : Relationship with customers determine our firm’s future’

4.There are 4 Ps of Marketing
Product, Place, Price and promotion
5.There are a few types of marketing :

1. Product marketing,
2. Service marketing,
3. Consumer marketing,
4. Industrial marketing,
5. International marketing,
6. Non-profit marketing

6.There are three types of Marketing Functions:

1. ExchangeRegulated market place where capital market products are bought and sold through intermediaries. Functions (Buying & selling),
2. Physical DistributionReturn to investors of the accumulated income of a trust or mutual fund and distribution of capital gains. Functions (Transporting & Storing) and
3. Facilitating Functions (Standardizing and grading, Financing, Risk taking)

7.There are 5 types of Marketing Concepts

1. Needs wants and demands,
2. Products
3. Value & satisfaction
4. Exchange, Transactions and Relationships
5. Markets

8.Marketing Process: The Marketing Process involves 6 step process as follows:

1. Strategy formulation – the development of the broadest marketing/business strategies with the longest term impact
2. Marketing planning – the development of longer-term plans which have generally stronger impact than the short-term programs
3. Marketing programming, allocating and budgeting – the development of short-term programs which generally focus on integrated approaches for a given product and on the allocation of scarce resources such as sales effort or product development time across various products and functions
4. Marketing implementation – the actual task of getting the marketing job done
5. Monitoring and auditing – the review and analysis of programs, plans and strategies to assess their success and to determine what changes must be made
6. Analysis and research – the deliberate and careful acquisition and examination of qualitative and quantitative data to improve decision making

9.Nature of Marketing:

1. Marketing is a Human Activity
2. It’s a socio economic activity
3. The subject matter of marketing is products and services
4. Certain Type of market is a must for marketing to happen
5. It’s a consumer oriented process and not a product oriented process
6. Marketer performs the marketing and consumer is required to do marketing
7. The base of marketing is Exchange
8. Its an art as well science
9. It is a universal activity

10. There are five major areas of analysis (5 Cs) for marketing decision making:

1. customers,
2. company,
3. competitors,
4. collaborators
5. context.

Summary Notes 5

Summary Notes 5

1. Factors affecting Buyer behavior
Consumer behavior is affected by many internal, personal factors, as well as interpersonal ones. Each individual brings unique needs, motives, perceptions, attitudes learning and self-concepts to buying decisions.

2. What is Market Segmentation?
The market place is heterogeneous with differing wants and varying purchase power. The heterogeneous marketplace can be divided into many homogeneous customer segments along several segmentation variable. The division of the total market into smaller relatively homogeneous groups is called market segmentation.

3. Roles Market Segmentation Plays

1. Segmentation helps the marketer by identifying groups of customers to whom he could more effectively ‘target’ marketing efforts for the product or service
2. Segmentation helps the marketer avoid ‘trial-and-error’ methods of strategy formulation by providing an understanding of these customers upon which he can tailor the strategy
3. In helping the marketer to address and satisfy customer needs more effectively,
4. segmentation aids in the implementation of the marketing concept
5. On-going customer analysis and market segmentation provides important data on which long-range planning (for market growth or product development) can be based.

4. Characteristics of a market Segment ?

1. Segments must be internally homogeneous --- consumers within the segment will be more similar to each other in characteristics and behavior than they are to consumers in other segments.
2. Segments must be identifiable --- individuals can be ‘placed’ within or outside each segment based on a measurable and meaningful factor
3. Segments must be accessible --- can be reached by advertising media as well as distributionReturn to investors of the accumulated income of a trust or mutual fund and distribution of capital gains. channels. Only then, the segments can be acted upon.
4. Segments must have an effective demand --- the segment consists of a large group of consumers and they have the necessary disposable income and ability to purchase the good or service.

5. Variables of Market Segmentation:

1. Geographic Segmentation
2. Demographic Segmentation
3. Psychographic Segmentation
4. General Life style
5. Product Usage
6. Product Benefit
7. Decision process

6. Geographic Segmentation :
Geographic segmentation is one of the oldest and most basic of market descriptors. In most cases, it alone is note sufficient for a meaningful consumer segmentation. It involves

1. Region of product distribution
2. Cultural differences
3. Mobility of consumers

7. Demographic Segmentation:

Also basic and included as a variable in most segmentation analyses. Demographic profiles of segments are important especially when making later advertising media decisions. It Involves :

1. Age
2. Sex
3. Income
4. Educational level
5. Social status

8. Psychographic Segmentation:

Psychographic variables are more useful because there is often no direct link between demographic and market behavior variables. These consumer profiles are often tied more directly to purchase motivation and product usage. It involves:

1. Personality traits
2. Perceptual styles
3. Attitudes
4. Reference groups
5. Social roles

9. Segmentation on General Life Style :

Provides a rich, multi-dimensional profile of consumers that integrates individual variables into clearer pattern that describes the consumer’s routines and general ‘way of life’ It Involves:

1. Correlation of demographic and psychographic variables
2. Activities and interests

10. Segmentation on Product Usage
Segmenting the market into heavy, medium, light and non-users gives good understanding of present situation in market. It involves

1. Frequency of brand/product use
2. Brand loyalty
3. Attitudes toward product

11. Segmentation on Product Benefit:

Very useful if product can be positioned in a number of ways. Primary use of this variable segments the market into groups that look for different product
benefits. Involves:

1. Expectations of product performance
2. Needs product must fill
3. Perceptions of brands
4. Satisfaction ( and dissatisfaction measures)

12. Segmentation on Decision process : Use of this variable segments the market into price/non-price sensitive, shoppers/impulse buyers and other segments which characterize the market behaviour of each group. Must be used in conjunction with analysis of consumer characteristics to allow identification of the individuals involved. It involves :

1. Shopping patterns
2. Media-use patterns
3. Product information searches
4. Sensitivities to price,
5. to promotion and to place (channel)

13. Positioning:

The concept of positioning seeks to place a product in a certain ‘position’ in the minds of the prospective buyers. Positioning is the act of designing the company’s offer so that it occupies a distinct and valued place in the target customers’ minds.

Basics of Brand

Basics of Brand

A brand is a symbol or a mark that helps the customers in instant recall and differentiates it thereby from the competitor products of same nature.
The American Marketing Association (AMA) defines brand as follows:

“A Brand name is a part consisting of a word, letter, groups of words or letters to identify a product or a service of a seller or group of sellers to differentiate them from those of competitors”.

• 
  
  Generic Brand:
  A brand name over which the original owner has lost the exclusive claim because all offerings in the associated class of products have geneally known as the the brand name can be called a "Generic Brand". Generic brand products are often of equal quality but lesser prices as that of a branded product.
• 
  
  A Brand v/s a Trade Mark:
  A brand that has legal protection and is granted solely to its original owner is a Trade mark.
• 
  
  Brand preference / Brand Loyalty:
  It is the degree to which customers are commitetted to a brand. It refers to the chances that a customer chooses the brand over another brand.
• 
  
  Brand insistence:
  The customer’s willingness to search a brand and insisting to buy a brand is brand insistence.
• 
  
  Brand EquityThe ownership interest in a company of holders of its common and preferred stock. :
  It is the overall value of a brand in the market
• 
  
  Brand awareness:
  Brand awareness measures consumers' knowledge of a brand's existence. The extent to which a brand associated with a particular product is authenticated by potential and existing customers either positively or negatively is Brand Awareness. Creation of brand awareness is the primary goal of advertising at the beginning of any product's life cycle in target markets. In fact, brand awareness has influence on buying behavior of a buyer. Brand awareness can be measured by showing a consumer the brand and asking whether or not they knew of it beforehand.
• 
  
  Brand Recall
  The extent to which a brand name is recalled as a member of a brand, product or service class, as distinct from brand recognition is brand recall. For example if I am asked to name a few favourite cars – I may recall Wagon R, Santro Xing, and so on…
  Brand recall may be "unaided" and "aided" "Aided recall" measures the extent to which a brand name is remembered when the actual brand name is prompted. An example of such a question is "Do you know of the "Honda" brand?"
• 
  
  Brand Recognition
  The extent to which a brand is recognized for stated brand attributes or communications is Brand Recognition. It is basically an aided recall. If a product name can be associated with a certain tagline, logo or attribute, there is presence of certain level of Brand recognition.

Product Mix, Product Lines & Cannibalization

Product Mix, Product Lines & Cannibalization

The combination of all the products offered by a firms is a Product Mix. In marketing the decisions related to product mix and product lines are very important. When we discuss product mix, we discuss all the products offered by a company. In simple words, any organization which is selling more than 1 product has a product mix. A product line is a broad group of products, intended for similar uses and having similar characteristics. For example Hindustan Uniliver has a broad product mix with several product lines such as Soap Line, Food Line, Personal care Line Home Care line and so on..

The number of items in each product line is called the Product Mix length. For example Hindustan Unilever has Breeze, Hamam, Lifebuoy, Lux, Rexona, Le sancy and Liril in its soap line. The width of the product mix refers to the number of product lines a company has.

One typical example is Amul. The product lines of Amul are Bread Spreads, Milk Drinks, Powder Milk, Fresh Milk, Cheese, Cooking, Desserts & Health Drinks. Each line has several products to offer. You can view the product line of Amul here

There may be a number of reasons to alter either an existing product or a product line. These reasons may include supporting the marketing strategy, Improving sales, Expansion of market share etc. The product line can be altered by altering one or more of the following attributes.

1. Composition of product line
2. Expansion or contraction of the product line
3. Value addition
4. Brand Image
5. Packaging
6. Physical characteristics
7. Positioning

Addition of new products to a product line is expanding the product line. The product line may be too long of reducing product line length results in more profits. The product line may be too short if addition of new products increases profits. When a range of product line (often the price range) is increased it is called line stretching. When a company operates at the lower end of the market and introduces new products to enter the upper market, it is called upward stretching. This is done by introducing premiumIf an investor buys a security for a price above its eventual value at maturity he has paid a premium for it. products and services. If a company working in a high end market introduces new products to enter the lower markets as well, this is called downward stretching. Many companies start with higher end and move towards the lower end. For example parker started selling premium pens , out of reach to many of the consumers and later the company introduced the lower end products. The lower end market products are also called budget products. The Budget products are advertised heavily to bring the customer to the entire product line of the company.
If a company works in a moderate market and decides to survive both the low end and upper end of the market is Two Way Stretch.
There is one more concept called cannibalization. Cannibalism is the act of any animal consuming members of its own type or kind. In marketing, Cannibalization refers to a reduction in the sales volume, sales revenue, or market share of one product as a result of the introduction of a new product by the same producer. Introduction of diet Pepsi or diet coke may eat up some of its sales of regular coke or Pepsi. Introduction of a new car may eat up the sales of an older model of the same car.

Convenience Goods, Shopping Goods and Specialty Goods

Convenience Goods, Shopping Goods and Specialty Goods

Convenience Goods: The items which are bought frequently, immediately and with minimum shopping efforts are convenience goods. These include candy, ice-cream, cold drinks, cigarettes, magazines, medicines etc. the shops which keep the convenience goods are called convenience stores. Often convenience goods are non durable.

Some common features:

1. 
   
   Generally non durable
2. 
   
   Purchased at convenient locations.
3. 
   
   Regular and continuous demands
4. 
   
   Generally small unit of purchase and low prices
5. 
   
   Most of them are standardized in prices
6. 
   
   Sales promotion, schemes etc. are very important.

Shopping Goods:
Shopping is the activity of examination and selection of the goods or services from retailers with the intent to purchase at that time. The selection & purchasing is a result of a comparison of products based upon their suitability, quality, price, style and so on.. Examples are furniture’s, dresses, electronic items & appliances etc. Most of the shopping goods are durable.
Some common features:

1. 
   
   Generally durable
2. 
   
   Generally high price in contrast with convenience goods.
3. 
   
   Comparison is main factor in making purchase decisions.
4. 
   
   Purchase is generally pre planned
5. 
   
   Retailers have very important role to play.

Specialty Goods:
The specialty goods incur special purchasing efforts and the items posses some special features.

The buyers are willing to spend a lot of time & money to buy them in contrast with the shopping goods. The rare arts collections, antiques, prestige brands, style goods, automobiles etc. are the examples. The particular hotel, restaurant, hair salon, spa & resorts are examples of services.

The comparison factor is absent in specialty goods.
Some common features

1. 
   
   Limited demand and limited number of buyers
2. 
   
   Costly products generally
3. 
   
   Sold at few places
4. 
   
   Aggressive promotion is required.

Summary Notes 4

Summary Notes 4

1. The 5 C's of analysis of marketing Decision making are as follows:

1. Customer needs - What needs do we seek to satisfy?
2. Company skills - What special competencies do we possess to meet those needs?
3. Competition - Who competes with us in meeting these needs?
4. Collaborators - Who should we enlist to help us and how do we motivate them?
5. Context - What environmental (say, cultural, technological or legal) factors limit what is possible?

2. The external EnvironmentEnvironment of Marketing comprises:

1. Competitive environment
2. Political-legal environment
3. Economic environment
4. Technological environment
5. Social-cultural environment

3. Competitive Environment:
In involves direct competition and indirect competition , Monopoly, Monopolistic Competition Oligopoly etc.

4. Political-legal Environment:

Rules of the game must be understood before a new marketer starts marketing. The politico-legal environment involves:

1. Laws and their interpretations : Ignorance of laws, ordinances and regulations or failure to comply with them can result in fines, embarrassing negative publicity and possibly expensive civil damage suits.
2. Designing, labeling, packaging, distributing, advertising and promoting goods and services.
3. The national foreign policy can dominate the international business decisions of the local firms
4. The political ideology of the Government can affect the international brands wanting to enter a market
5. The competitors who work closely with the government can help erect trade barriers for a firm
6. Global trade organizations can enforce trade barriers when their regulations and guidelines are not observed
7. A host nation may levy anti-dumpingIn the securities market the offering of large amounts of stock without regard for the effect on prices on the market. In the international trade, ..... duties on a foreign firm and such a decision may be dominated by the local businesses lobbying with the government
8. Copyright infringements, trademark and intellectual property rights violations
9. Direct comparative advertisements may not be allowed in few countries
10. Use of children is advertising and advertising to children are banned in certain countries
11. Price regulations preempt any pricing strategy of a firm
12. A detailed displaying of the ingredients in product labels is mandatory in most countries
13. The channel members are given the additional responsibility of verifying the eligibility of the prospective buyers for certain products
14. Use of certain raw materials or methods of manufacturing are prohibited in certain countries
15. Industry watch dogs and consumer groups are always on the prowl for any unethical trade practices
16. Each one of the above issues has serious implications for the marketer in his marketing decision making. Ignorance of the law is no excuse and breaking of the law is an offence.

5. The Economic Environment
The overall health of the economyeconomy influences how much consumers spend and what they buy.This relationship affects marketing. All marketing activity is directed toward satisfying consumer wants and needs, marketers must understand how economic conditions influence consumer buying decisions.

Economic environment consists of forces that influence consumer buying power and marketing strategies. They include

1. The stage of the business cycle,
2. Inflation,
3. Unemployment,
4. Resource availability
5. Income.

6. Technological Environment
It represents the application to marketing of discoveries in science, inventions and innovations. New technology results in new goods and services for consumers; it also improves existing products, strengthens customer service and often reduces prices through new, cost-efficient production and distributionReturn to investors of the accumulated income of a trust or mutual fund and distribution of capital gains. methods. Technology can quickly make products obsolete, but it can just as quickly open up new marketing opportunities.

7. The Social-Cultural Environment
It involves the relationship between marketing and society and its culture. Marketers must cultivate sensitivity to society’s changing values and to demographic shifts such as population growth and age distribution changes.
It involves demography, cultural aspects, Psychographic aspects and Consumer behavior.

8. Consumerism:
Changing social values have led to the consumerism movement which is a social force within the environment designed to aid and protect buyers by exerting legal, moral and economic pressures on business. Consumerism also advocates the rights of the consumers such as:
1. The right to choose freely – consumers should be able to choose among a range of goods and services
2. The right to be informed – consumers should have access to enough education and product information to make responsible buying decisions
3. The right to be heard – consumers should be able to express legitimate complaints to appropriate parties – be it manufacturers, sellers, consumer assistance groups and consumer courts.
4. The right to be safe – consumers should feel assured that the goods and services they purchase will not cause injuries in normal use. Product designs should allow average consumers to use them safely.
9. Stimuli of buying Behavior
The 4 ps and 4 types of Marketing environment given as above function as stimuli of Consumer Behavior which ultimately lead to buyer's response.

10. Importance of MarketingWhether a firm is a profit making organization or a nonprofit making organization, marketing has to play a very important role in the firm’s business, .....

1. To obtain physical distribution function
2. Maximise the profit of the Firm & Minimise the cost (per unit)
3. Innovation
4. Maximise sales
5. Reach the Target Consumer
6. GoodwillThe part of value of a business that is based on good customer relations, high employee morale and other factors. creation
7. Market Information and Research
8. Employment
9. Social Values
10. Corporate Social Resposiblity (CSR) :
11. Optimum Use of Resources
12. Increase in Income of nation

Product versus Goods

Product versus Goods

Products and goods are used as synonyms in common parlance. However, a good is something that is tangible in contrast with the services which are intangible. Both goods are services are products. Anything, whether good or service offered in the market is a Product. Goods may be consumer goods or Industrial Goods. The consumer goods and services refer to the products that are meant for final consumption by the ultimate Consumer. The examples are Bread, Butter, Soap, Toothpaste (Consumer Goods) and hair cut , personal healthcare etc. (Consumer service).
Industrial Goods refer to the goods that are meant to be used in commercial production of other goods and services or any other business activity. Raw materials, engines, lubricants, tools, etc. are some examples.
Here are few more differences between Consumer Goods and Industrial Goods:

1. The number of customers for consumer goods is often very large
2. The demand for consumer goods is autonomous demand. This means that they are demanded by the ultimate consumers directly. The demand for Industrial Goods is derived demand, which means that demand for one good is a result of demand of another good.
3. The consumers often don’t do through analysis and research their demanded products. In case of industrial goods, extensive study is done.
4. The difference in quantity demanded. In Industrial goods, often the demanded quantity per customer is high.
5. Market for consumer goods is large and open market, while in the case of Industrial goods it is often limited.