concepts of marketing....

[vikram chawla]

This is a thread where in marketing concepts will be discussed...

lets start with:

What is Umbrella Marketing?

[vikram chawla]

Umbrella branding refers to branding of products, services or ideas under the mother brand name. Mostly when the mother brand is very successful then the company extends this name to other new product lines and may be to the entire product mix.

Eg. Reliance had named many of its products upon its mother brand name of Reliance. Reliance energy, reliance poly-fibers, Reliance telecom etc..

[vikram chawla]

What is demarketing?

It is a process done to reduce the demand of a particular product that is available in scarce.ex:water

It can also be done for the welfare of the public.ex:alcohol, cigarette

[vikram chawla]

What is Viral Marketing

Viral marketing is often referred to as word of mouth publicity..
It is a kind of marketing in which people pass on the marketing message to other people...

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WORD OF MOUTH PUBLICITY:

Word of mouth is a reference to the passing of information from person to person. Originally the term referred specifically to oral communication (literally words from the mouth), but now includes any type of human communication, such as face to face, telephone, email, and text messaging.

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INFLUENCER MARKETING:

Influencer marketing is a form of marketing that has emerged from a variety of recent practices and studies, in which focus is placed on specific key individuals (or types of individual) rather than the target market as a whole. It identifies the individuals that have influence over potential buyers, and orients marketing activities around these influencers.

Influencers may be potential buyers themselves, or they may be third parties. These third parties exist either in the supply chain (retailers, manufacturers, etc) or may be so-called value-added influencers (such as journalists, academics, industry analysts, professional advisers, and so on)

[vikram chawla]

DIFFERENCE BETWEEN SALES AND MARKETING?

Marketing is wen u first understand the need of market &then the product is produced/designed,packed etc...

Where in sales the product is already produced and you have to sell it.

Sales is the part of marketing.

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Affiliate Marketing

Affiliate marketing is basically business sharing between online merchants and online salespeople. The money compensation is based on the form of sales, website hits, and website registrations. The online merchants are commonly referred to as affiliate merchants, and the salespeople are simply referred to as affiliates. The following paragraphs will discuss some of the benefits of affiliate marketing.

One of the benefits of affiliate marketing is that affiliate marketing has added to the rise of many online companies, including Amazon.com. It has become extremely common for industries to participate or offer affiliate marketing deals that are often built in a similar way as the industry offering them, making similar competitive changes when necessary.

Source: Dimacc.com

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Target Marketing

Target marketing is commonly used to identify a targeted group of consumers who would be most likely to purchase and use specific products or services. Target marketing is essential in order to reach your business goals and objectives. Imagine trying to hit a target you cannot see. The same can be said for starting a business without first target marketing.

Most businesses have the same basic objective, to make a profit and raise their product brand awareness. Target marketing will not only enable you to sell a more effective product or service, it will also allow you to do so while being more cost-efficient. Knowing what your targeted consumer group expects from your product and service will enable you to meet their demands, and spend less money on promotion. Target marketing will give you the opportunity to make your product or service a smash hit the first time around.

There are many target marketing methods you can use to compile data including hiring a professional target marketing firm. A professional firm can be costly, so many businesses compile the data on their own at a fraction of the cost. Surveys are the most popular method of collecting data to choose a targeted consumer group for their product or service. When using surveys to collect data for target marketing, in order to be effective, the questions on your surveys must be worded in order to obtain information including:

• geographical information
• demographic information
• behavioral information

There are many methods of target marketing. Starting a business without first targeting a consumer group to research their product expectations can be compared to throwing a ball while wearing a blindfold. Obtaining information and compiling data will help you to increase profits and give you a better idea of what the consumer expects from your product or service.

Source: dimacc.com

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Multilevel Marketing


In order to understand multilevel marketing and its benefits, you must first understand what multilevel marketing is. The following paragraphs will explain multilevel marketing and the advantages and disadvantages associated with it.

To help understand what multilevel marketing is, you must first understand what it isn't. Multilevel marketing is not a pyramid scheme. A pyramid scheme is where you invest money based on the promise of fast profit. Normally there is no product or service involved in pyramid schemes, just money, and there is no profit ever made by the investor. Pyramid schemes are illegal, and based solely on taking advantage of people for profit.

Multilevel marketing, on the other hand, is a legit business. Multilevel marketing is based on selling a real product or service to real people. While there are some people who make a substantial amount of money through multilevel marketing, their earnings are always a result of their hard work and dedication to selling the product or service.

It can take some time before you start seeing a profit with multilevel marketing, but there are many advantages. These advantages include:

• setting your own hours
• working from home
• income potential

With multilevel marketing, you can set your own hours. That can be a benefit for many reasons. Perhaps you attend school, or maybe you need to be home at undetermined times of the day. Multilevel marketing may work for you.

Working from home is also a great advantage that comes with multilevel marketing. By working from home, you are saving the expense of gasoline, parking, wear and tear on your vehicle, parking, and other expenses you would incur going to the office to work. Working from home is also ideal for students, home makers, retirees, and anyone who needs to be at home throughout the day.

Lastly, another advantage to multilevel marketing is the income potential. The income potential is great, as long as you have the desire and will power to earn.

Source: dimacc.com

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Business Marketing

One of the most important factors in good business marketing is to completely understand the potential customer's needs and to have a plan developed to ensure that you meet those needs. The most effective way to succeed and expand in your business is to develop a good business marketing plan. A good business marketing plan will aid in:

• gathering regular customers and clients
• encouraging an increase in sales

When you spend quality time researching and creating a good business marketing plan, you are bound to increase the amount of regular customers or clients you will have. A good marketing plan will enable you to guide your product or service development, to reach a broader range of potential consumers. When your product information reaches a broader range of potential consumers, you are bound to build a larger amount of regular customers and clients. Often adding promotional items into your business plan will also help with continuing business.

Another benefit of having a well thought out business marketing plan is it will likely increase the sales of your products or services. If you price your products or services competitively, you are bound to increase your sales numbers. Basing your prices and product standards on good business marketing research data can be very effective in raising your regular sales numbers.

A good business marketing plan, and obtaining business marketing research data can be the key to getting your new business off on the right foot. The benefits of a good business marketing plan are many, but include aiding in building regular clientele and increasing sales numbers. These are not the only benefits of business marketing; they are mere examples of the many choices of marketing plans. Do your research, and develop a good business marketing plan to ensure the best start for your new business.


Source: dimacc.com

[vikram chawla]

Shelf Space in marketing means occupying the prime position for display of products in retail outlets. This is mostly practiced by FMCG companies where there is a huge clutter and companies are fighting to get the attention of their consumers to be on top of their mind. With low involvement products, consumers might pick up those items which they could see infront of their eyes.

[vikram chawla]

Customer and Consumer

Customer - to whom you make your first sale. In short he is the one to buy the product, whether he uses it or not is immaterial.

Consumer - He is the one who uses your product, but doesnt mean that he has bought it.

[vikram chawla]

Market skimming is d pproach under which a producer sets a high price for a new high-end product (such as an expensive perfume) or a uniquely differentiated technical product (such as one-of-a-kind software or a very advanced computer). Its objective is to 'skim' maximum revenue from the market before substitutes products appear. After that is accomplished, the producer can lower the price ......

[vikram chawla]

The terms "below the line" promotion or communications, refers to forms of non-media communication, even non-media advertising. Below the line promotions are becoming increasingly important within the communications mix of many companies, not only those involved in fmcg products, but also for industrial goods.

[vikram chawla]

Transfer pricing

It refers to the pricing of contributions (assets, tangible and intangible, services, and funds) transferred within an organization. For example, goods from the production division may be sold to the marketing division, or goods from a parent company may be sold to a foreign subsidiary. Since the prices are set within an organization (i.e. controlled), the typical market mechanisms that establish prices for such transactions between third parties may not apply. The choice of the transfer price will affect the allocation of the total profit among the parts of the company. This is a major concern for fiscal authorities who worry that multi-national entities may set transfer prices on cross-border transactions to reduce taxable profits in their jurisdiction. This has led to the rise of transfer pricing regulations and enforcement, making transfer pricing a major tax compliance issue for multi-national companies.

[vikram chawla]

Abrasive Advertising are Annoying and unpleasant advertisements which can be very effective. Research shows that the abrasiveness of a commercial that uses this type of appeal will wear out over time and the brand name will remain in consumers’ memories. Although they can be questioned on ethical grounds.

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The Product Life Cycle:

A new product progresses through a sequence of stages from introduction to growth, maturity, and decline. This sequence is known as the product life cycle and is associated with changes in the marketing situation, thus impacting the marketing strategy and the marketing mix.

The product revenue and profits can be plotted as a function of the life-cycle stages.

Introduction Stage

In the introduction stage, the firm seeks to build product awareness and develop a market for the product. The impact on the marketing mix is as follows:

Product branding and quality level is established, and intellectual property protection such as patents and trademarks are obtained.

Pricing may be low penetration pricing to build market share rapidly, or high skim pricing to recover development costs.

Distribution is selective until consumers show acceptance of the product.

Promotion is aimed at innovators and early adopters. Marketing communications seeks to build product awareness and to educate potential consumers about the product.

Growth Stage

In the growth stage, the firm seeks to build brand preference and increase market share.

Product quality is maintained and additional features and support services may be added.

Pricing is maintained as the firm enjoys increasing demand with little competition.

Distribution channels are added as demand increases and customers accept the product.

Promotion is aimed at a broader audience.

Maturity Stage

At maturity, the strong growth in sales diminishes. Competition may appear with similar products. The primary objective at this point is to defend market share while maximizing profit.

Product features may be enhanced to differentiate the product from that of competitors.

Pricing may be lower because of the new competition.

Distribution becomes more intensive and incentives may be offered to encourage preference over competing products.

Promotion emphasizes product differentiation.

Decline Stage

As sales decline, the firm has several options:

Maintain the product, possibly rejuvenating it by adding new features and finding new uses.

Harvest the product - reduce costs and continue to offer it, possibly to a loyal niche segment.

Discontinue the product, liquidating remaining inventory or selling it to another firm that is willing to continue the product.

The marketing mix decisions in the decline phase will depend on the selected strategy. For example, the product may be changed if it is being rejuvenated, or left unchanged if it is being harvested or liquidated. The price may be maintained if the product is harvested, or reduced drastically if liquidated.

Source: quickmba.com

[Kirtisoni]

Market Segmentation



The division of a market into different homogeneous groups of consumers is known as market segmentation.

Rather than offer the same marketing mix to vastly different customers, market segmentation makes it possible for firms to tailor the marketing mix for specific target markets, thus better satisfying customer needs. Not all elements of the marketing mix are necessarily changed from one segment to the next. For example, in some cases only the promotional campaigns would differ.

A market segment should be:
measurable
accessible by communication and distribution channels
different in its response to a marketing mix
durable (not changing too quickly)
substantial enough to be profitable

A market can be segmented by various bases, and industrial markets are segmented somewhat differently from consumer markets, as described below.

Consumer Market Segmentation

A basis for segmentation is a factor that varies among groups within a market, but that is consistent within groups. One can identify four primary bases on which to segment a consumer market:

Geographic segmentation is based on regional variables such as region, climate, population density, and population growth rate.

Demographic segmentation is based on variables such as age, gender, ethnicity, education, occupation, income, and family status.

Psychographic segmentation is based on variables such as values, attitudes, and lifestyle.

Behavioral segmentation is based on variables such as usage rate and patterns, price sensitivity, brand loyalty, and benefits sought.

The optimal bases on which to segment the market depend on the particular situation and are determined by marketing research, market trends, and managerial judgment.

Business Market Segmentation

While many of the consumer market segmentation bases can be applied to businesses and organizations, the different nature of business markets often leads to segmentation on the following bases:

Geographic segmentation - based on regional variables such as customer concentration, regional industrial growth rate, and international macroeconomic factors.

Customer type - based on factors such as the size of the organization, its industry, position in the value chain, etc.

Buyer behavior - based on factors such as loyalty to suppliers, usage patterns, and order size.

Profiling the Segments

The identified market segments are summarized by profiles, often given a descriptive name. From these profiles, the attractiveness of each segment can be evaluated and a target market segment selected.

Source:quickmba.com

[Kirtisoni]

Product Diffusion Curve



Consumers can be grouped according to how quickly they adopt a new product. On the one extreme, some consumers adopt the product as soon as it becomes available. On the other extreme, some consumers are among the last to purchase a new product. As a whole, the new product adoption process can be modeled in the form of a bell-shaped diffusion curve similar to the following:

Defining bins one standard deviation wide about the mean, five different product adoption groups can be defined:

Innovators - well-informed risk-takers who are willing to try an unproven product. Innovators represent the first 2.5% to adopt the product.

Early adopters - based on the positive response of innovators, early adopters then begin to purchase the product. Early adopters tend to be educated opinion leaders and represent about 13.5% of consumers.

Early majority - careful consumers who tend to avoid risk, the early majority adopts the product once it has been proven by the early adopters. They rely on recommendations from others who have experience with the product. The early majority represents 34% of consumers.

Late majority - somewhat skeptical consumers who acquire a product only after it has become commonplace. The late majority represents about 34% of consumers.

Laggards - those who avoid change and may not adopt a new product until traditional alternatives no longer are available. Laggards represent about 16% of consumers.

For this discussion, the term "consumers" represents both individuals and organizations.

The rate of adoption depends on many factors, including:
perceived benefits over alternative products
communicability of the product benefits
price and ongoing costs
ease of use
promotional effort
distribution intensity
perceived risk
compatibility with existing standards and values
divisibility (the extent to which a new product can be tested on a limited basis)

Even if a product offers high value to the customer, the firm nonetheless faces the challenge of convincing potential customers to try the product and eventually to adopt it. The product diffusion curve is partly responsible for the product life cycle, which calls for different management strategies that depend on the product's stage in the life cycle.

source: quickmba.com

[Kirtisoni]

Marketing Warfare


The marketing concept states that a firm's goal should be to identify and profitably satisfy customer needs. In Marketing Warfare Al Ries and Jack Trout argue that marketing is war and that the marketing concept's customer-oriented philosophy is inadequate. Rather, firms would do better by becoming competitor-oriented. If the key to success were to introduce products closest to those wanted by customers, then the market leader simply would be the firm that performed the best market research. Clearly, much more is required.

To illustrate their point, Ries and Trout compare marketing to a football game. If a team simply identifies the goal line and moves the ball towards it without regard to the competing team, they most likely will be blocked in their effort. To win the game, the team must focus its efforts on outwitting, outflanking, or over-powering the other side. This is the case in football, war, and marketing, according to Marketing Warfare. Because of the importance of the competition faced by the firm, a good marketing plan should include an extensive section on competitors.
2500 Years of War

There is much that marketers can learn from military strategy. Ries and Trout tell the story of several famous battles in history that illustrate lessons of warfare. These battles range from Marathon in 490 B.C. when the Greeks used the phalanx to defeat the more numerous Persian invaders, to the Normandy invasion of the second world war.

The lessons from these famous battles illustrate the concepts of planning, maneuvering, and overpowering the opposing side. These principles are relevant not only to warfare, but also to marketing. In Marketing Warfare, Ries and Trout quote Karl von Clausewitz and apply his principles to marketing.
The Principle of Force

There's a saying that it is easier to get to the top than to stay there. Ries and Trout disagree, arguing that once at the top, a company can use the power of its leadership position to stay there.

All other things equal, an army with a larger number of troops has an advantage over smaller armies. A larger vehicle has an advantage over a smaller vehicle in a collision. When several companies enter a new market, the one with the larger sales force is likely to become the leader. The larger company has the resources to outnumber smaller competitors. It can advertise more, perform more R&D, open more sales outlets, etc.

This is not to say that smaller companies do not stand a chance. Rather, smaller companies must recognize the principle of force and attempt to win the battle by means of a superior strategy, not by brute force.

Some managers may believe that they can overcome a larger competitor through superior employees. Ries and Trout maintain that while it may be possible to assemble a small group of star performers, on a larger scale the employee abilities will approach the mean.

Another argument is that a better product will overcome other weaknesses. Again, Ries and Trout disagree. Once consumers already have in their minds that a product is number one, it is extremely difficult for another product, even if superior, to take over that number one place in the consumer's mind.

The way to win the battle is not to recruit superior employees or to develop a superior product. Rather, Ries and Trout argue that to win the battle, a firm must successfully execute a superior strategy.
The Superiority of the Defense

An entrenched defense that is expecting an attack has an advantage that can only be overcome by an overwhelmingly larger attacker. For example, a defensive position that is in a trench or foxhole will be shielded from the attackers, and the attackers will suffer many more casualties than the defenders. For this reason, the attackers require a much larger force to overcome the defensive positions.

The same is true in marketing warfare. Many companies with insufficient resources have tried unsuccessfully to attack a leader. A study was made of 25 brands that held the number one position. Sixty years later, 20 of those 25 brands still held the number one position. It is very difficult to overtake the market leader.

The element of surprise helps the attacker, but when the market leader is large the attackers also must be large, and the logistics of launching a large scale attack or a large promotional campaign are such that the element of surprise is difficult to maintain and the defensive position becomes yet more difficult to upset. When the defenders are taken by surprise, it usually is because they ignored warnings or did not take them seriously.
The New Era of Competition

Increasingly, one hears marketing terms that are borrowed from the vocabulary of military strategy. From "launching a breakthrough campaign" to the "cola wars", the analogy between marketing and warfare is evident.

As in military strategy, it is unwise for a firm to publicly state deadlines for its victory. Deadlines often are missed, and the firm loses credibility in the propaganda war if it fails to live up to a prediction. Politicians who are wise to this rule tend to make their campaign promises vague. Publicly stated marketing promises should be vague for the same reason.

Firms also should avoid the trap of thinking that if they work hard enough, they will succeed in their attack. Ries and Trout argue that it is strategy and not hard work that determines success. In warfare, when a battle turns to hand-to-hand combat, the advantage resulting from the strategic plan no longer exists. In marketing, a firm achieves victory through a smarter strategy, not by spending longer hours with meetings, reports, memos, and management reviews. When management declares that it is time to "redouble our efforts", then the marketing battle has turned to hand-to-hand combat and is likely to end in defeat.
The Nature of the Battleground

In military warfare, a battle often is named after the geographic location where it took place - for example, The Battle of Waterloo. Ries and Trout argue that marketing battles do not take place in geographic areas, nor in stores. Rather, marketing battles take place in the mind of the consumer.

Before a military battle, the battlefield usually is mapped and studied in great detail. In marketing, market research traditionally has served this function. However, Ries and Trout propose that the most important information is to know which positions are held by which companies in the mind of the consumer. In other words, who holds the high ground.

In military warfare, mountains and higher altitude areas represent strong positions and often are used to present a strong defense. In marketing warfare, the question is one of who holds the mountains in the consumer's mind. For example, in the U.S., Kleenex holds the facial tissue mountain since it is the number one facial tissue in the minds of most consumers and many consumers consider the word "Kleenex" to be synonymous with facial tissue.

Mountains often are segmented and competitors may launch different brands each targeting a specific segment. General Motors successfully attacked Ford's market leadership when it launched Chevrolet, Pontiac, Oldsmobile, and Buick, each targeting a specific segment of the automobile market. Too often, the leader responds by attempting to counterattack in each segment, only to fail and even to lose its original leadership position.
The Strategic Square

Ries and Trout discuss four strategies for fighting a marketing war:
defensive
offensive
flanking
guerrilla

A firm's market share relative to that of competitors determines which strategy is appropriate. There often is a significant market share gap between two competitors such that each has approximately a factor of two more market share compared to the next weaker competitor. Because of this large gap, the principle of force plays an important role in the choice of each firm's strategy. For this discussion, assume that there are four firms and each is approximately twice the size of the next closest to it.

In such an environment, each of the four firms has different objectives:
Number 1 firm: market domination
Number 2 firm: increased market share
Number 3 firm: profitable survival
Number 4 firm: survival

According to Ries and Trout, the main competitor of the market leader that holds the majority of market share is not one of the other firms in the industry, but rather, the government. If the market leader attempts to grow larger, then anti-trust issues will be raised. If a major market leader wins the marketing war and causes the next largest firm to exit the market, then the government may take steps to break up the firm that is dominating the market. Consequently, the best strategy for such a firm is a defensive one.

The number two firm's best strategy is an offensive attack on the market leader if there is a large gap between the number two firm and number three. The reason is that the gaining of market share from the number three firm is unlikely to make a large impact on the much larger number two firm. However, there are potentially significant rewards if market share can be gained from the dominant firm.

The number three firm is too small to sustain an offensive attack on a larger firm. Its best strategy often is to launch a flanking attack, avoiding direct competition, for example, by launching a product that is positioned differently from those of the larger firms.

The smallest firm probably does not have sufficient resources to launch any type of sustained attack. If it launched a flanking product, a larger competitor likely would launch a similar one and would have the resources to win more customers. The smallest firm would do best to pursue a guerrilla strategy, identifying a segment that is large enough to be interesting to the small firm but not large enough to attract competition from any of the larger firms.

On the mountains in the mind of the consumer (see The Nature of the Battleground discussed previously), the high ground at the top of the mountain is owned by the market leader. The number two firm's offensive battle would seek to gain high ground from the leader. The leader's defensive battle involves coming down from the top to fight off offensive attacks. The number three firm's flanking attack would go around the mountain. The smallest firm's guerrilla tactics involve its going under the mountain.
Principles of Defensive Warfare

A defensive strategy is appropriate for the market leader. Ries and Trout outline three basic principles of defensive marketing warfare:

Defensive strategies only should be pursued by the market leader. It is self-defeating for a firm to pretend that it is the market leader for the purpose strategy selection. The market leader is the firm who has attained that position in the mind of the consumer.

Attacking yourself is the best defensive strategy. Introducing products better than your existing ones preempts similar moves by the competition. Even if the new product has less profit margin and may reduce short-term profit, it accomplishes the more important long-term goal of protecting the firm's market share.

The leader always should block strong offensive moves made by competitors. If the leader fails to do so, the competitor may become entrenched and permanently maintain market share.

A classic example of a well-executed defensive block was that of Johnson & Johnson when Bristol-Meyers decided to launch Datril to compete directly with Johnson & Johnson's successful Tylenol brand. Datril was to be priced 35% lower than Tylenol.

Johnson & Johnson learned of Datril before its launch, and informed Bristol-Meyers that it was cutting the price of Tylenol to match that of Datril. Johnson & Johnson even extended credits to its distribution channels to make the price cut effective immediately. This move was intended to prevent Bristol-Meyers from advertising Datril as a lower-priced alternative to Tylenol. However, Bristol-Meyers responded by accelerating the launch of the television advertising campaign. Finally, Johnson & Johnson countered by convincing the television networks not to run the Datril ads since they no longer could truthfully claim that Datril was priced lower than Tylenol. Johnson & Johnson's efforts were successful and Datril achieved less than a 1% market share. Tylenol sales soared on the publicity and lower prices.

Legal issues are an important factor in a market leader's strategy. Successfully attacking the competition and winning raises anti-trust issues. Attacking oneself is less risky from an anti-trust perspective. It also is preferable to expand vertically rather than horizontally into new markets since laws prevent a firm from using its monopoly in one market to develop a competitive advantage in another.

Finally, once there is marketing peace and the brand has affirmed its dominance, it can grow its sales by growing the market. For example, Campbell's Soup can run ads to increase soup consumption in general (e.g. "Soup is good food.") since it enjoys such a large share of all soup sales.
Principles of Offensive Warfare

An offensive strategy is appropriate for a firm that is number 2 or possibly number 3 in the market. However, in some cases, no firms may be strong enough to challenge the leader with an offensive strategy. In such industries, the market leader should play a defensive strategy and the much smaller firms should play a flanking or guerrilla one.

Ries and Trout present the following three principles of offensive strategy:

The challenger's primary concern should be the strength of the leader's position, not the challenger's own strengths and weaknesses.

The challenger should seek a weakness in the leader's strength - not simply a weakness in the leader's position.

Attack on as narrow a front as possible. Avoid a broad attack.

The strength of the leader's position is of primary importance because the leader has the top position in the mind of the consumer, and it is this position that must be attacked.

A weakness in the leader's strength must be found. Simply attacking any weakness is insufficient. For example, the leader may charge a premium price and the price may appear to be a weakness. However, the leader may in fact have large profit margins and may be willing to lower the price as much as necessary to defend its position. The leader usually has the resources to defend against an attack against its weaknesses, whereas there may be weaknesses inherent in the leader's strengths that cannot be defended.

There often is a flip side to the leader's strength that can serve as the target of the challenger's attack. For example, a leader may be so successful that it is crowded with customers, and the challenger then can exploit that success by offering a better customer experience. For example, Avis Rent a Car once advertised, Rent from Avis. The line at our counter is shorter. Sometimes the weakness in the leader's strength arises from the fact that it has a major investment in assets that cannot be readily adapted. A more flexible challenger can use this fact to its advantage.

The challenger should attack on as narrow a front as possible. Generally, this means one product rather than a wide range of products. The reason for keeping the attack narrow is the principle of force; a narrow attack allows the challenger to concentrate its resources in the narrow area, and in that area may present more force than the leader. Many number two and number three companies ignore this principle and try to increase market share by broadening their product lines to compete in more areas, often with disastrous consequences. FedEx made this mistake in its early years by offering a wide array of transit times such as overnight, 2-day, and 3-day delivery. FedEx became successful only when it began to focus on the next-day delivery market and won that position in the mind of the consumer using the slogan, when it absolutely, positively has to be there overnight.

A narrow attack is particularly effective when the leader has attempted to be all things to all people with a single product. In that situation, a challenger can identify a segment within the leader's market and offer a product that serves only that segment. The challenger then stands a chance of winning a position in the consumer's mind for that more narrow class of product.
Principles of Flanking Warfare

A flanking attack is not a direct attack on the leader, but rather, an attack in an area where the leader has not established a strong position. Ries and Trout present the following three flanking principles:

A flanking move is best made in an uncontested area. The product should be in a new category that does not compete directly with the leader and should be the first to target the segment.

A flanking move should have an element of surprise. Surprise is important to prevent the leader from using its enormous resources to counter the move before it gains momentum. Test marketing should be minimized to maintain the element of surprise. In the earlier example of Datril vs. Tylenol, Johnson & Johnson first learned of the impending launch of Datril from Bristol-Meyers' localized test marketing of Datril.

Follow-through (pursuit) is equally as important as the attack itself. The firm should follow-through and focus on solidifying its position once it is established before competitors launch competing products. Too often, management turns its attention to the products that are not performing well rather than strengthening the position of the winners. If the firm does not have the resources to strengthen its newly won position, then perhaps it should have used a guerrilla strategy instead of a flanking one.

A flanking move does not require a totally new product. Instead, the product only needs to be different enough to carve its own position. Ries and Trout offer the following examples of product variations on which to base flanking moves:

Low price - for example, Budget Rent a Car successfully flanked Hertz and Avis. Others such as Dollar and Thrifty followed, but Budget was ahead of the game and was able to solidify its position.

High price - customers tend to use price as a measure of quality. Orville Redenbacher's Gourmet Popping Corn and Haagen-Daz super-premium ice cream are examples of products that successfully positioned themselves in the high-price category. The higher profit margins allow the firm to follow through and solidify its position.

Small size - Sony with portable electronics and Volkswagen wth automobiles successfully won the position of small size. Volkswagen lost its position as it attempted to broaden its line to all sizes of cars.

Large size - for example, the Prince oversized tennis racquet.

Distribution - the product itself may not be substantially different but new distribution channels may be used. For example, Timex distributed its watches in drugstores and Hanes distributed L'eggs pantyhose in supermarkets using innovative packaging and displays.

Product form - for example, Close-Up was the first gel toothpaste and Softsoap was the first liquid soap.

Flanking is not a low-risk strategy. Market acceptance of an innovative product is unknown, and test marketing must be kept to a minimum to guard the element of surprise. Whether the leader will take prompt action in response is an unknown. Being well-tuned to the trade is helpful since in their public speeches executives often provide clues about their stances on potential products. For some products such as automobiles, the development time is several years and thus the flanking product has the potential to establish its position before incumbants can respond.
Principles of Guerrilla Warfare

Guerrilla marketing differs from a flanking campaign in that the guerrilla move is relatively small and differs significantly from the leader's position. Guerrilla marketing is appropriate for companies that, relative to the competition, are too small to launch offensive or flanking moves. Ries and Trout list the following three principles of guerrilla marketing warfare:

Identify a segment that is small enough to defend. For example, the scope can be limited geographically, demographically, by industry, or by price.

Never act like the leader, even if successful in the guerrilla attack. Some companies that make a guerrilla move are successful in it and begin to act like the leader, building a larger, bureaucratic organization that slows it down and increases overhead costs. A guerrilla should resist the temptation to give up its lean and nimble organization.

Be ready to enter or exit on short notice. If the market for the product takes a negative turn, the guerrilla should exit quickly rather than waste resources. Because the guerrilla has a nimble organization, it is better able to make a quick exit without suffering huge losses. Similarly, the guerrilla can respond more quickly to a market opportunity without spending months or years having committees analyze it. Guerrilla opportunities sometimes arise when a large company discontinues a product, leaving a gap on which the guerrilla firm can capitalize if it acts quickly.

The idea of guerrilla marketing is to direct resources into a limited area, using the principle of force to win that area.

Examples of geographic guerrillas include local retailers who win customers with offerings better tailored to the locale compared to the offerings of national chains. Locally-tailored city business publications are an example that fill a need that cannot be filled by a national publication such as the Wall Street Journal. Banks and airlines also have used a limited geographic scope successfully.

Demographic guerrillas target a specific demographic segment of the populuation. Inc. magazine is an example that targets small business owners who were not well served by publications such as Business Week.

Industry guerrillas target a specific industry, using vertical marketing to tailor a product to the special needs of that industry. The focus is narrow and deep rather than broad and shallow.


Product guerrillas offer a unique product for which there is a small market. The Jeep is an example of such a product.

High-end guerrillas offer a premium high-priced product. Rolls-Royce is a guerrilla in very high-priced automobiles. Because the volume is small and Rolls-Royce already has the lead, other manufacturers are deterred from competing directly. The high price creates a mystique about the product and raises the curiosity of consumers who seek to find out what makes the product so special that it commands such a high price. Line extensions of the main product do not work well here; high-end products should have a new name in order to establish a new position that is not diluted by the position of other products.

Alliances often are instrumental in a guerrilla strategy. In certain industries such as hotels, creating a brand that independents can join has been a successful strategy for many. A critical question when forming alliances is who the competitor is. Ries and Trout use the example of two motels across the street from one another on a resort island. On the surface it might appear that they are each other's competitors. Another way to view the situation is that they are allies attempting to attract tourists to their island rather than another resort island. An alliance might be more beneficial to the two motels than direct competition with one another.

For most companies, guerrilla marketing is the appropriate strategy simply because in most industries only a small percentage of firms are large enough to pursue defensive, offensive, or flanking strategies.
Marketing Warfare Case Studies

In Marketing Warfare, Ries and Trout include several cases to illustrate their strategic principles.

The "cola war" between Coke and Pepsi has been fought for decades. In 1915 Coca-Cola introduced its unique 6-1/2 ounce bottle that became closely associated with the brand. The size and shape was just right to fit the hand, and this bottle and its association with Coca-Cola was a major strength. However, when Pepsi introduced a larger bottle for the same price as the smaller bottle of Coke, Coke did not have many options to respond. Because of the way the size and shape of the bottle fit the hand, it could not be enlarged easily. Furthermore, the dispensing machines for Coke were designed for nickels only, so the price could not easily be changed. These weaknesses were a direct result of Coke's strength and illustrate the second principle of offensive warefare: the challenger should seek a weakness in the leader's strength. Many of the successes and failures of the Coke vs. Pepsi cola wars can be explained by principles of marketing warfare, including the success and failures of smaller challengers such as 7-Up (the Uncola) and Royal Crown Cola.

Ries and Trout also use the "beer war" to illustrate marketing warfare principles. Schlitz was the top brand, but lost its lead to Budweiser in a close battle. Then Heineken entered the market as an import with a successful flanking attack, maintaining its import lead by following through with strong advertising budgets. In the 1970's many brewers introduced light beers as line extensions. Ries and Trout believe that the line extensions are unwise because the extensions inadvertantly flank a firm's own leading brand. This happened to Miller High Life after Miller Lite was introduced. Miller Lite was successful, but Miller High Life suffered as it lost its position in the mind of the consumer as the working man's beer.

In the fast food industry, Ries and Trout use the "burger war" to illustrate a flanking attack. McDonald's was the leader, and Burger King tried offensive maneuvers. The moves that were unsuccessful were those that extended the product line and that copied McDonald's. The campaigns that were successful differentiated Burger King from McDonald's. For example, Have it your way attacked a weakness in McDonald's consistent production line process that had the flip side of being inflexible. Even more successful were the advertisements emphasizing the fact that Burger King's burgers were flame-broiled while McDonald's were fried. Wendy's successfully flanked McDonald's by targeting adults rather than children, offering adult-size portions and launching the highly successful Where's the beef? campaign. Finally, White Castle was the low-end guerrilla who limited their geographic scope, did not add a confusing array of other products, and maintained a high level of sales in each establishment. White Castle observed the guerrilla principle of never acting like the leader, and as a result was able to coexist peacefully.

Ries and Trout further reinforce their marketing warfare principles with the "computer war". IBM became the market leader in the 1950's, and many other companies attempted to emulate IBM, but IBM continued to hold a majority market share. In the 1960's Digital Equipment Corporation launched a successful flanking attack by introducing the PDP-8 minicomputer, winning the position of small computers. According to Ries and Trout, IBM should have blocked this move by introducing their own minicomputer, but they failed to do so until 11 years later. With DEC owning the minicomputer market, Ries and Trout argue that DEC should have been the company to introduce the PC in the business market. DEC failed to do so, and IBM launched its PC in 1981 with virtually no competition in the business market. IBM effectively flanked DEC with a product in the small computer market, just as DEC had done to IBM 15 years earlier. Many companies introduced their own PC's but IBM pursued the defensive strategy that a leader should pursue by attacking itself, first with the improved PC-XT and then with the PC-AT. While IBM owned the business PC market, Apple took the lead in home PC's. IBM unsuccessfully attempted to attack Apple in the home computer market with the PCjr, illustrating that a company's position is more important than its size.

Strategy and Tactics

Strategy can be developed using a top-down or a bottom-up approach. Ries and Trout argue for the bottom-up approach because a deep knowledge of the tactics actually used on the battlefield is needed to formulate a strategy that has the goal of achieving tactical objectives. More specifically, Ries and Trout argue that the sole purpose of strategy is to put the forces in motion to overpower the competitor at the point of contact using the principle of force. On the military battlefield, this means having more soldiers or force at the point of battle. On the marketing battlefield, it means overpowering the competitor in a specific position in the mind of the customer.

Ries and Trout explain that a good strategy does not depend on brilliant tactics. Mediocre tactics usually are sufficient for a good strategy. Even the best possible tactics are unlikely to compensate for a poor strategy. In marketing, advertising can be considered tactics and many managers falsely assume that success depends almost entirely on the quality of the advertising campaign. If a strategy requires top-notch tactics to win the battle, Ries and Trout maintain that such a strategy is unsound because tactical brilliance is rare.

Any strategy should take into account the probable response of the competitor. The best way to protect against a response is to attack the weakness in the leader's strength so that the leader cannot respond without giving up its strength.

To support the argument of a bottom-up strategy, Ries and Trout point out that many large companies incorrectly believe that they can do anything if they simply allocate enough resources. History shows otherwise when one considers failed attempts such as Exxon's entry into office systems and Mobil's acquisition of Montgomery Ward. Such diversions shift resources away from the point of battle where they are needed. This is one of the dangers that can be avoided by a bottom-up strategy based on what can be accomplished on the tactical level.
The Marketing General

Ries and Trout believe in having relatively few people involved in the strategic process. The organization needs a strong marketing "general" to formulate the strategy from the tactical realities. A marketing general has the following characteristics:

Flexibility - to adjust the strategy to the situation.

Courage - to make a decision and stand by it.

Boldness - to act without hesitation when the time is right.

Knowing the facts - in order to formulate strategy from the ground up.

Knowing the rules - but internalizing them so they can be forgotten.

Lucky - marketing warfare has an element of chance; a good strategy only makes the odds more favorable.
Summary

Ries and Trout have identified interesting and useful commonalities between military strategy and marketing strategy. As in military warfare, the appropriate marketing warfare strategy depends on the firm's position relative to its opponents. In developing its strategy, the firm must objectively determine its position in the market. Once this is done, a defensive, offensive, flanking, or guerrilla strategy can be selected depending on the firm's position relative to the competition.

source: quickmba.com

[Kirtisoni]

Market Share



Sales figures do not necessarily indicate how a firm is performing relative to its competitors. Rather, changes in sales simply may reflect changes in the market size or changes in economic conditions.

The firm's performance relative to competitors can be measured by the proportion of the market that the firm is able to capture. This proportion is referred to as the firm's market share and is calculated as follows:

Market Share = Firm's Sales / Total Market Sales

Sales may be determined on a value basis (sales price multiplied by volume) or on a unit basis (number of units shipped or number of customers served).

While the firm's own sales figures are readily available, total market sales are more difficult to determine. Usually, this information is available from trade associations and market research firms.

Reasons to Increase Market Share

Market share often is associated with profitability and thus many firms seek to increase their sales relative to competitors. Here are some specific reasons that a firm may seek to increase its market share:

Economies of scale - higher volume can be instrumental in developing a cost advantage.

Sales growth in a stagnant industry - when the industry is not growing, the firm still can grow its sales by increasing its market share.

Reputation - market leaders have clout that they can use to their advantage.

Increased bargaining power - a larger player has an advantage in negotiations with suppliers and channel members.

Ways to Increase Market Share

The market share of a product can be modeled as:

Share of Market = Share of Preference x Share of Voice x Share of Distribution

According to this model, there are three drivers of market share:

Share of preference - can be increased through product, pricing, and promotional changes.

Share of voice - the firm's proportion of total promotional expenditures in the market. Thus, share of voice can be increased by increasing advertising expenditures.

Share of distribution - can be increased through more intensive distribution.

From these drivers we see that market share can be increased by changing the variables of the marketing mix.

Product - the product attributes can be changed to provide more value to the customer, for example, by improving product quality.

Price - if the price elasticity of demand is elastic (that is, > 1), a decrease in price will increase sales revenue. This tactic may not succeed if competitors are willing and able to meet any price cuts.

Distribution - add new distribution channels or increase the intensity of distribution in each channel.

Promotion - increasing advertising expenditures can increase market share, unless competitors respond with similar increases.

Reasons Not to Increase Market Share

An increase in market share is not always desirable. For example:

If the firm is near its production capacity, an increase in market share might necessitate investment in additional capacity. If this capacity is underutilized, higher costs will result.

Overall profits may decline if market share is gained by increasing promotional expenditures or by decreasing prices.

A price war might be provoked if competitors attempt to regain their share by lowering prices.

A small niche player may be tolerated if it captures only a small share of the market. If that share increases, a larger, more capable competitor may decide to enter the niche.

Antitrust issues may arise if a firm dominates its market.

In some cases it may be advantageous to decrease market share. For example, if a firm is able to identify certain customers that are unprofitable, it may drop those customers and lose market share while improving profitability.


source: quickmba.com

[Kirtisoni]

Marketing Strategy



The marketing concept of building an organization around the profitable satisfaction of customer needs has helped firms to achieve success in high-growth, moderately competitive markets. However, to be successful in markets in which economic growth has leveled and in which there exist many competitors who follow the marketing concept, a well-developed marketing strategy is required. Such a strategy considers a portfolio of products and takes into account the anticipated moves of competitors in the market.


The Case of Barco

In late 1989, Barco N.V.'s projection systems division was faced with Sony's surprise introduction of a better graphics projector. Barco had been perceived as a leader, introducing high quality products first and targeting a niche market that was willing to pay a higher price. Being a smaller company, Barco could not compete on price, so it traditionally pursued a skimming strategy in the graphics projector market, where it had a 55% market share of the small market. Barco's overall market share for all types of projectors was only 4%.

Even though Barco's market was mainly in graphics projectors, the company had not introduced a new graphics projector in over two years. Instead, it was spending a large portion of its R&D budget on video projector products. However, video projectors were not Barco's market.

Barco's engineers had been working long hours on their new projector that would not be as good as Sony's. Some people thought they should not stop work on that product since the engineers' morale would suffer after being told how important it was to work hard to get the product out. However, even considering the morale of the product team, it would not have been a good idea to introduce a product that was inferior to that of Sony. Barco wisely stopped working on the inferior product and put a major effort in developing a projector that outperformed Sony's.

The Barco case illustrates several marketing strategy concepts:

Price / Selling Effort Strategies: A firm that follows a skimming strategy seeks to be the first to introduce a product with very good performance, selling it to the innovator market segment and charging a premium price for it. It makes as much profit as possible, then moves on when the competition arrives. The price is likely to fall over time as competition is encountered. Such a skimming strategy contrasts with a penetrating strategy, which seeks to gain market share by sacrificing short-term profits, and increasing the price over time as market share is gained.

Competitors have certain strengths and abilities. To succeed, a firm must leverage its own unique abilities.

A firm should prepare defensive strategies before potential threats arrive. If the competition surprises a firm with the introduction of a vastly superior product, the firm should resist the temptation to proceed with its mediocre product. A firm never should introduce a product that is obsolete when it hits the market.

The competition's probable response to a firm's actions should be considered carefully.

Marketing Research for Strategic Decision Making

The two most common uses of marketing research are for diagnostic analysis to understand the market and the firm's current performance, and opportunity analysis to define any unexploited opportunities for growth. Marketing research studies include consumer studies, distribution studies, semantic scaling, multidimensional scaling, intelligence studies, projections, and conjoint analysis. A few of these are outlined below.
Semantic scaling: a very simple rating of how consumers perceive the physical attributes of a product, and what the ideal values of those attributes would be. Semantic scaling is not very accurate since the consumers are polled according to an ordinal ranking so mathematical averaging is not possible. For example, 8 is not necessarily twice as much as 4 in an ordinal ranking system. Furthermore, each person uses the scale differently.
Multidimensional scaling (MDS) addresses the problems associated with semantic scaling by polling the consumer for pair-wise comparisons between products or between one product and the ideal. The assumption is that while people cannot report reliably which attributes drive their choices, they can report perceptions of similarities between brands. However, MDS analyses do not indicate the relative importance between attributes.
Conjoint analysis infers the relative importance of attributes by presenting consumers with a set of features of two hypothetical products and asking them which product they prefer. This question is repeated over several sets of attribute values. The results allow one to predict which attributes are the more important, the combination of attribute values that is the most preferred. From this information, the expected market share of a given design can be estimated.

Multi-Product Resource Allocation

The most common resource allocation methods are:
Percentage of sales
Executive judgement
All-you-can-afford
Match competitors
Last year based

Another method is called decision calculus. Managers are asked four questions:

What would sales be with:
no sales force
half the current effort
50% greater effort
a saturation level of effort.

From these answers, one can determine the parameters of the S-curve response function and use linear programming techniques to determine resource allocations.

Decision algorithms that result in extreme solutions, such as allocating most of the sales force to one product while neglecting another product often do not yield practical solutions.

For mature products, sales increase very little as a function of advertising expenditures. For newer products however, there is a very positive correlation.

source: quickmba.com

[Kirtisoni]

BCG Growth-Share Matrix



Companies that are large enough to be organized into strategic business units face the challenge of allocating resources among those units. In the early 1970's the Boston Consulting Group developed a model for managing a portfolio of different business units (or major product lines). The BCG growth-share matrix displays the various business units on a graph of the market growth rate vs. market share relative to competitors:

Resources are allocated to business units according to where they are situated on the grid as follows:

Cash Cow - a business unit that has a large market share in a mature, slow growing industry. Cash cows require little investment and generate cash that can be used to invest in other business units.

Star - a business unit that has a large market share in a fast growing industry. Stars may generate cash, but because the market is growing rapidly they require investment to maintain their lead. If successful, a star will become a cash cow when its industry matures.

Question Mark (or Problem Child) - a business unit that has a small market share in a high growth market. These business units require resources to grow market share, but whether they will succeed and become stars is unknown.

Dog - a business unit that has a small market share in a mature industry. A dog may not require substantial cash, but it ties up capital that could better be deployed elsewhere. Unless a dog has some other strategic purpose, it should be liquidated if there is little prospect for it to gain market share.

The BCG matrix provides a framework for allocating resources among different business units and allows one to compare many business units at a glance. However, the approach has received some negative criticism for the following reasons:

The link between market share and profitability is questionable since increasing market share can be very expensive.

The approach may overemphasize high growth, since it ignores the potential of declining markets.

The model considers market growth rate to be a given. In practice the firm may be able to grow the market.

These issues are addressed by the GE / McKinsey Matrix, which considers market growth rate to be only one of many factors that make an industry attractive, and which considers relative market share to be only one of many factors describing the competitive strength of the business unit.

source: quickmba.com

[Kirtisoni]

GE / McKinsey Matrix



In consulting engagements with General Electric in the 1970's, McKinsey & Company developed a nine-cell portfolio matrix as a tool for screening GE's large portfolio of strategic business units (SBU). This business screen became known as the GE/McKinsey Matrix.


The GE / McKinsey matrix is similar to the BCG growth-share matrix in that it maps strategic business units on a grid of the industry and the SBU's position in the industry. The GE matrix however, attempts to improve upon the BCG matrix in the following two ways:

The GE matrix generalizes the axes as "Industry Attractiveness" and "Business Unit Strength" whereas the BCG matrix uses the market growth rate as a proxy for industry attractiveness and relative market share as a proxy for the strength of the business unit.

The GE matrix has nine cells vs. four cells in the BCG matrix.

Industry attractiveness and business unit strength are calculated by first identifying criteria for each, determining the value of each parameter in the criteria, and multiplying that value by a weighting factor. The result is a quantitative measure of industry attractiveness and the business unit's relative performance in that industry.

Industry Attractiveness

The vertical axis of the GE / McKinsey matrix is industry attractiveness, which is determined by factors such as the following:
Market growth rate
Market size
Demand variability
Industry profitability
Industry rivalry
Global opportunities
Macroenvironmental factors (PEST)

Each factor is assigned a weighting that is appropriate for the industry. The industry attractiveness then is calculated as follows:
Industry attractiveness = factor value1 x factor weighting1
+ factor value2 x factor weighting2
.
.
.

+ factor valueN x factor weightingN



Business Unit Strength

The horizontal axis of the GE / McKinsey matrix is the strength of the business unit. Some factors that can be used to determine business unit strength include:
Market share
Growth in market share
Brand equity
Distribution channel access
Production capacity
Profit margins relative to competitors

The business unit strength index can be calculated by multiplying the estimated value of each factor by the factor's weighting, as done for industry attractiveness.

Plotting the Information

Each business unit can be portrayed as a circle plotted on the matrix, with the information conveyed as follows:
Market size is represented by the size of the circle.
Market share is shown by using the circle as a pie chart.
The expected future position of the circle is portrayed by means of an arrow.

The following is an example of such a representation:


The shading of the above circle indicates a 38% market share for the strategic business unit. The arrow in the upward left direction indicates that the business unit is projected to gain strength relative to competitors, and that the business unit is in an industry that is projected to become more attractive. The tip of the arrow indicates the future position of the center point of the circle.

Strategic Implications

Resource allocation recommendations can be made to grow, hold, or harvest a strategic business unit based on its position on the matrix as follows:

Grow strong business units in attractive industries, average business units in attractive industries, and strong business units in average industries.

Hold average businesses in average industries, strong businesses in weak industries, and weak business in attractive industies.

Harvest weak business units in unattractive industries, average business units in unattractive industries, and weak business units in average industries.

There are strategy variations within these three groups. For example, within the harvest group the firm would be inclined to quickly divest itself of a weak business in an unattractive industry, whereas it might perform a phased harvest of an average business unit in the same industry.

While the GE business screen represents an improvement over the more simple BCG growth-share matrix, it still presents a somewhat limited view by not considering interactions among the business units and by neglecting to address the core competencies leading to value creation. Rather than serving as the primary tool for resource allocation, portfolio matrices are better suited to displaying a quick synopsis of the strategic business units.

[vikram chawla]

POP - Point of Purchase
Point-of-purchase displays, or POP displays, are marketing materials or advertising placed next to the merchandise it is promoting. These items are generally located at the checkout area or other location where the purchase decision is made. For example, The checkout counters of many convenience stores are cluttered with cigarette and candy POP displays

[vikram chawla]

Pricing decision depends upon:

Pricing is one of the most complex decisions facing any company.
the pricing decision of the company is based on many factors like:
1. Product
2. Market to serve
3. target segment
4. Size of the company

[vikram chawla]

network effect -
the phenomenon whereby a service becomes more valuable as more people use it, thereby encouraging ever-increasing numbers of adopters.

[vikram chawla]

permission marketing -
Marketing centered around obtaining customer consent to receive information from a company. This form of marketing requires that the prospective customer has either obtained explicit permission to send their promotional message or implicit permission

[vikram chawla]

Distribution channel:

An organized network of agencies and institutions which in combination perform all the functions required to link producers with end customers to accomplish the marketing task.

[vikram chawla]

Market profile:

A summary of the characteristics of a market, including information of typical purchasers and competitors, and often general information on the economy.

[vikram chawla]

PARITY PRODUCT:
Product categories where the several brands within that category possess functionally equivalent attributes, making one brand a satisfactory substitute for most other brands in that category.

[vikram chawla]

Counter advertising:
Advertising that takes a position contrary to an advertising message that preceded it. Such advertising may be used to take an opposing position on a controversial topic, or to counter an impression that might be made by another party's advertising.

eg: when mountain dew countered back when it was ridiculed by sprite....

[vikram chawla]

Motivation research:

Research used to investigate the psychological reasons why individuals buy specific types of merchandise, or why they respond to specific advertising appeals, to determine the base of brand choices and product preferences.

[vikram chawla]

Product positioning:

The consumer perception of a product or service as compared to it's competition.

[vikram chawla]

Marketing research:

The systematic gathering, recording, analyzing, and use of data relating to the transfer and sale of goods and services from producer to consumer.

[vikram chawla]

Publicity:

A type of public relations in the form of a news item or story which conveys information about a product, service, or idea in the media.

[kapilsaimbi]

hey there i have a project on advertising, the project name is advertising an investment or a expence.

[vikram chawla]

COMPETITION ORIENTED PRICING:

A pricing strategy that is based upon what the competition does. this pricing strategy is used by many organisations.

[vikram chawla]

Co-operative advertising:
A system by which ad costs are divided between two or more parties. Usually, such programs are offered by manufacturers to their wholesalers or retailers, as a means of encouraging those parties to advertise the product.

[vikram chawla]

Deceptice advertising:

Deceptive advertising is a representation, omission, act or practice that is likely to mislead consumers acting reasonably under the circumstances.

[vikram chawla]

Eye tracking:

A research method that determines what part of an advertisement consumers look at, by tracking the pattern of their eye movements.

[vikram chawla]

COST EFFICIENCY:

For a media schedule, refers to the relative balance of effectively meeting reach and frequency goals at the lowest price.

[vikram chawla]

ADVERTORIAL:
An advertisement that has the appearance of a news article or editorial, in a print publication.

[vikram chawla]

MASS MARKETING:

A target marketing strategy that assumes all customers in a large market seek the same benefits and, consequently, a marketer appeals to this market with a single marketing strategy including a single product.

[vikram chawla]

Augmented Product

A component of the Total Product offered by the marketer, this represents goods and services that surround the Actual Product in order to provide additional value to the customer’s purchase and include guarantees, warranties and training services.

[vikram chawla]

Trade Sales Promotions

Sales promotions that are primarily directed at a marketer’s channel members with the primary intention of “pushing” a product through the channel by encouraging resellers to purchase and possibly promote the product to their customers.

[vikram chawla]

Marketing Myopia

Narrow-minded approach to a marketing situation where only short-range goals are considered or where the marketing focuses on only one aspect out of many possible marketing attributes. Because of its shortsightedness, marketing myopia is an inefficient marketing approach.

[vikram chawla]

Multi segment marketing:

Market coverage strategy whereby a company attempts to appeal to two or more clearly defined market segments with a specific product and unique marketing strategy tailored to each separate segment. Typically differentiated marketing creates more total sales than undifferentiated marketing, but it also increases the costs of doing business.

[vikram chawla]

Green Marketing:

The development of ecologically safer products, recyclable and biodegradable packaging, energy-efficient operations, and better pollution controls are all aspects of green marketing. Green marketing has produced advances such as packages using recycled paper, phosphate-free detergents, refill containers for cleaning products, and bottles using less plastic.

[vikram chawla]

Packaging:

Container or wrapper for a consumer product that serves a number of purposes including protection and description of the contents, theft deterrence, and product promotion. Innovative packaging may actually add value to the product. The labels on packages are important components of the overall marketing mix and can support advertising claims, establish brand identity, enhance name recognition, and optimize shelf space allocations.

[vikram chawla]

Perceived value

Benefit a consumer expects to gain from a product or service. Perceived value is derived from a combination of benefits that are tangible, like hunger abatement, and benefits that are psychosocial in nature, like status enhancement. The perceived value of a product has a direct effect on demand and should be one of the factors considered when establishing a price.

[vikram chawla]

Target audience:

Audience to whom the advertising is directed. The target audience is defined in terms of demographic (and sometimes psychographic ) characteristics, such as age, sex, education, income, buying habits, and the like.

[namrata22]

Add-On Sales

Definition: The sale of additional products or services to a customer at the time of purchase.
Also Known As: Loading
Examples: When a shopper purchases certain items in our store, the POS system alerts the cashier to certain add-on sales available for that product. This means when someone buys a computer system, the cashier lets the customer know that a warranty or tech support package is available at an additional charge.

[vikram chawla]

Zone pricing

Strategy of setting selling prices according to the geographic area (zone) in which the product will be sold, allowing for the costs of product shipping and handling to the zone. Zone pricing provides a uniform delivered price to all buyers within a geographic area. However, selling prices are incrementally higher as the zones get further away from the place of product manufacture.

[Kalpana Heliya]

Price Skimming.

Charge a high price because you have a substantial competitive advantage. However, the advantage is not sustainable. The high price tends to attract new competitors into the market, and the price inevitably falls due to increased supply. Manufacturers of digital watches used a skimming approach in the 1970s. Once other manufacturers were tempted into the market and the watches were produced at a lower unit cost, other marketing strategies and pricing approaches are implemented.

Premium pricing, penetration pricing, economy pricing, and price skimming are the four main pricing policies/strategies. They form the bases for the exercise. However there are other important approaches to pricing.


source: marketingteachers.com

[vikram chawla]

Financial advertising

Advertising geared to the world of finance, such as brokerage firms, banks, or insurance companies. Typical products in financial advertising are publicly offered financial products such as mutual fund shares or limited partnership shares.

[vikram chawla]

Database marketing

Collection, storage, analysis, and use of all available data about a prospect or customer; usually maintained on a computer file. Data may be collected from past purchases, such as items purchased, and the recency, frequency, and monetary value of purchases, or it may be nonpurchase related, such as income, education level, and age. Data can be generated by the marketer's activities (sales, surveys) and supplemented by data purchased from other sources. Database marketing assumes that the marketer can predict future purchase behavior through analysis of customer characteristics and past actions.

[vikram chawla]

Duplicated audience

Listeners, viewers, or readers who are reached more than once by the same commercial or advertisement appearing in different media.

[vikram chawla]

Telemarketing

Use of the telephone as an interactive medium for promotion or promotion response; also known as teleselling. Telemarketing as a response vehicle includes receiving orders, inquiries, and donation pledges in response to print and broadcast advertisements, catalogs, and direct-mail promotions, and also receiving customer inquiries and complaints.

[vikram chawla]

Tie-in advertisement

Print advertisement that relates to other advertising. A tie-in advertisement may be run by a retail store owner in conjunction with a manufacturer's advertisement for a product carried in the store. It may also be an advertisement for several different products (involving several different manufacturers) that ties in with a local sales promotion. A tie-in advertisement is paid for by the retailer who sponsors it.

[vikram chawla]

Integrated marketing

Coordination of a variety of promotional vehicles (e.g., print/broadcast advertising, public relations, direct marketing, in-store promotions) and multiple stages in a promotional campaign to ensure that the marketing message is consistently received by the greatest possible number of people in the target market.

[vikram chawla]

Institutional advertising

Form of image advertising intended to change the public perception of a company in relationship to an issue such as the environment, health, product safety, or some public issue. It is an attempt to create a positive public awareness of a company and distinguish it from competitors.

[vikram chawla]

Interactive media

Communication channels that function to actively involve the consumer in the promotional effort. Interactive media can take many forms such as World Wide Web sites, virtual reality mall kiosks, CD-ROMs, point-of-purchase displays using multimedia technology, the Internet, and commercial on-line services. Each of these forms is capable of creating a dialogue with the consumer and providing more materials or information as the user asks for it. Interactive media are very effective because, unlike more traditional advertising, they can provide information to help consumers from the beginning and throughout the purchase and consumption processes.

[gurpreetsingh]

Brand Marketing

Brand marketing is becoming one of the major part of marketing of most companies at present. Brand marketing is defined as a type of marketing in which firms try to market their brand more than their products. In this type of marketing the prime focus of companies is toward brand building because brand building is important for super success of any product.
It is clear that the products having good brand image sell with their brand mane rather than name of product.

Recent example of brand marketing is VIDEOCON who have put all strength and advertising focused toward their brand name without showing products this have resulted in building more interest among users for videocon which was already died in the market. Now they are slowly slowly showcasing their products.

Another example is of IBM and Intel which are focusing more on brand rather than product.

I think it is going to be the base for future marketing and very soon maximum companies operating in India will also start following it.

:SugarwareZ-145:

[Kalpana Heliya]

What is Telemarketing?


Telemarketing is marketing conducted over the telephone. Most telemarketing calls are "cold calls," meaning the recipient of the call has not requested that the telemarketer contact them. Telemarketing is one of the most controversial types of marketing.

The purpose of telemarketing is to make a sale. Sometimes telemarketers have personal information when they call a customer, knowing the person has purchased products similar or related to theirs from other vendors or outlets.

source:wisegeek.com

[vikram chawla]

Repositioning

Modification of consumer perception of a product or service relative to competitive products or services. Repositioning is necessary when the preferences of the market shift. For example, a premium brand of shampoo sold at a relatively high price with advertising that emphasizes its superior performance may need to be repositioned as consumers become more price sensitive. One way would be to position it as the best value brand with price cuts and advertising that emphasizes that a little bit goes a long way. The costs associated with repositioning a brand, in terms of product, price or promotion modifications, must be weighed against the added revenue potential.

[vikram chawla]

Repetition

Multiple consumer exposures to an advertisement over a period of time. Repetition has been proven to increase recall and comprehension, particularly if the message is complex. However, a message may lose effectiveness if the consumer is overexposed to the advertisement through excessive repetitions, causing the consumer to lose interest in the message.

[vikram chawla]

Nonprofit marketing

Marketing that works to serve the public interest, as opposed to marketing purely for financial gain. Nonprofit marketing is conducted for organizations, such as relief agencies or charitable groups; individuals, such as political candidates; or ideas, such as the rights of freedom; as well as for goods and services, and it is more likely to promote social programs and ideas, such as highway safety, recycling, gun control, or energy conservation.

[gurpreetsingh]

Market Segementation

One of the major part and important topic of marketing is market segmentation. Market segmentation is a process of dividing market into various small parts or we can say segments according to various factors like-:
1-Age
2-Tastes and Preferences
3-Income level
4-Sex
5-type of product
6-Income level
these are few basis on which market segments are made. For proper and efficient marketing segments are necessary as they avoid confusion and make work easy for sales force also.

:SugarwareZ-200:

[gurpreetsingh]

Marketing Communication

Marketing communication is a process of communication which is slightly different from communication.
Marketing communication is defined as process of sending a message of information to the marketing team. The information which is sended through marketing communication can be regarding company's strategies, Sales targets, etc. Marketing communication makes the communication between sales force much more easy and effective.
With the passage of time marketing communication has become more and more quick and high tech some of the major medium of marketing communication are Emails, P.D.As, telephone, video conferencing,etc

[gurpreetsingh]

Marketing Research

marketing research is also known as the research which is done on the topics or issues related to market and its environment. Market research is generally conducted by companies to know following things-
1- Market Share of company
2- Product Performance in the market
3- Annual or quarterly sales in market
4- Advertisement Awareness in market
5- Competitors Analysis
6- Future Scope for product

These types of researches are also conducted by various magazines, organizations to check performance level of companies at regular intervals to provide information to users of that information. Like Government, investors,stockholders, bankers,consumers etc.
:SugarwareZ-167:

[Kalpana Heliya]

The Adoption Process (also known as the Diffusion of Innovation) is more than forty years old. It was first described by Bourne (1959), so it has stood the test of time and remained an important marketing tool ever since. It describes the behaviour of consumers as they purchase new products and services. The individual categories of innovator, early adoptor, early majority, late majority and laggards.

source: marketingteacher.com

[Kalpana Heliya]

e-Marketing..

eMarketing by its very nature is one aspect of 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. As such an aspect, eMarketing has its own approaches and tools that contribute to the achievement of marketing goals and objectives.

[vikram chawla]

Captive market

Potential consumers in an area where there are no competitive sources for products, and the only choices are to purchase what is available or to make no purchase at all. Generally a captive market is the victim of higher product pricing. Hotel shopping arcades, airport restaurants, and sports arenas are examples of captive-market environments.

[vikram chawla]

Channel management

Process by which a marketer ensures the effectiveness of its middlemen in terms of product knowledge, sales volume, and profitability. Marketers must provide their middlemen with the tools they need to promote and sell the product effectively as well as adequate incentives to do so. The middleman is not an employee of the marketer and will not share the same objectives unless given some incentive to do so.

[vikram chawla]

Deceptive advertising

Advertising that makes false claims or misleading statements, as well as advertising that creates a false impression. If retailers systematically advertise merchandise at low prices to get customers into their store and then fail to have the merchandise, they are guilty of deceptive advertising. Deceptive practices can take many other forms as well, such as false promises, unsubstantiated claims, incomplete descriptions, false testimonials or comparisons, small-print qualifications of advertisements, partial disclosure, or visual distortion of products.

[vikram chawla]

Direct promotion

Sales communication delivered directly to the consumer without use of any intervening media. Examples of direct promotion are house-to-house selling, shop-at-home services, direct mail, and telemarketing. Direct promotion offers consumers the advantages of convenience and personal attention.

[vikram chawla]

Dual brand loyalty

Tendency of a consumer to purchase either of two brands most of the time without exhibiting a consistent preference for one brand over the other. This differs from brand loyalty in that two brands share an equal degree of preference. Dual brand loyal consumers are easily influenced by brand availability, discount promotions, or special point-of-purchase displays.

[gurpreetsingh]

SALES AND DIFFERENT TYPES OF SALES

Sales of any product is ultimate motive of any marketing project or campaign. Why marketing is done ? its done for making product popular and why to make product popular? its for sales.
Sales is a major part of marketing of product it refers to selling product to its ultimate user on behalf of some money and that money which we earn from sales is known as revenue and after deducting expenses whatever left with us is known as our profit.

Sales are of two types

A- Direct Sales - In this producer of product directly sells its products to consumer without involvement of intermediaries. Major examples of this type of sales are- tele marketing, door to door marketing, marketing through company outlets etc

B- Indirect Sales- In this producer sells his/her goods and services to the consumer with the help of market intermediaries( C&F agents, Distributors, Whole sellers, Super Stockists, Retailers and salesman). This is also known as channel based sales.
Channel Based sales

Manufacturer----------Distributor-----------Consumer

Manufacturer--------Distributor-------Retailer---------Consumer

Manufacturer-------C&F Agent----Super Stockist---Distributor-----Retailer---Consumer

Above are the major channels of Indirect Sales

[vikram chawla]

View impression

Measurement of the size of the audience for a web site, web page, or banner ad, expressed in terms of the number of times it is viewed. Page views do not indicate whether a viewer made a purchase or actually read the page.

[vikram chawla]

Focus of sale

Primary issue, benefit , or claim about a product or service that will be emphasized in the advertising and toward which the prospective customer will be directed by the advertising strategy.

[vikram chawla]

Franchise

Privilege granted by a franchisor to a franchisee permitting the latter to operate using the franchisor's name. The franchisee must pay a franchise fee for such right. In addition, the franchisee is typically required to use the franchisor's products. The franchisee usually receives other benefits from the franchisor, such as advertising.

[vikram chawla]

Factory pricing

Prices that are discounted to compensate the buyer for the cost of transportation from the seller's place of business to the buyer's. Factory pricing saves the seller from the expense and management of shipping and places the risk of loss during transport to the buyer. Marketers who are located close to their customers can better afford to sell with factory pricing than marketers who are located at a greater distance. For example, a metal bed frame manufacturer who sells a relatively heavy weight product at a low price could not compensate for the cost of transportation to a customer in a distant location.

[vikram chawla]

Web marketing

Web marketing is the general term for marketing done on the Internet. It's basically a computer-based version of traditional marketing objectives that involve a product, price, packaging, promotion and place. Marketing is ultimately about propelling a product or service through the proper channels and web marketing uses the Internet as that channel. The umbrella term of web marketing covers a comprehensive range of business activities such as generating sales leads, selling products or services and supporting other business through affiliate marketing.

[vikram chawla]

Mail-order advertising


Advertising that creates orders for purchase through the mail. Mail-order advertising can utilize almost any form of media, although catalogs , such as the Spiegel catalog, are the most popular form. The catalogs are distributed through the mail, and then orders are likewise placed through the mail (although, as a convenience to customers, some mail-order houses or catalog houses offer a telephone ordering service, through the use of an 800 or toll-free telephone number). The important characteristic of mail-order advertising is that there is no interaction between the consumer and the advertiser and that, except when using the telephone option, the only means of communication between consumer and advertiser is through the mail.

[vikram chawla]

Market development

Manufacturer's attempt to identify and develop new markets for marketing current products. There are three general strategies applied in market development: (1) working within the demographic market to see if any particular demographic group can be encouraged to buy more of the product or if any new group within the demographics can be encouraged to purchase the product; (2) looking at the institutional market to see if these buyers can be increased; (3) attempting to develop markets in new geographical areas. To effect these strategies, marketers will attempt new distribution methods, change the design of promotional efforts, and attempt to discover and promote innovative uses for an existing product.

[vikram chawla]

Market niche

Small segment of a market that is particularly suitable as a target audience for a specific product. Generally a market niche offers significant potential for sales of the product and is often free of competitors for the particular product. For example, an automobile manufacturer may produce a car that is substantially less expensive than its competitors and that appeals only to those consumers in the vast automobile market who are interested in purchasing an inexpensive automobile. Although the target audience for the inexpensive auto represents only a small percentage of the total number of automobile buyers, the audience is still substantial enough to allow the auto manufacturer to carve out a niche and make a profit.

[vikram chawla]

Test marketing

One of the final stages in new product development , where the product and the marketing program are introduced on a small scale into one or more selected cities or market areas. Test marketing provides the marketer the opportunity to observe consumer behavior toward the product in a real market situation, gain experience with the marketing program, and assess potential problem areas before launching a full-scale product introduction. Test marketing provides a great deal of information about the future success of the product and is often used to make profit and sales forecasts .

[vikram chawla]

Testimonial advertising

Advertising copy approach using an individual who has tried a product and been satisfied with it to favorably endorse the product. The endorsement may be in the form of a statement or a letter, and the individual may be a well-known personality, such as an actor or athlete, or a satisfied customer appearing as an impartial "person in the street." The idea behind testimonial advertising is that a prospective customer may be favorably influenced to try a product when it has been praised by another impartial consumer, or by a known personality whom the consumer may wish to emulate.

[vikram chawla]

Transit advertising

Out-of-home advertising on transportation vehicles such as buses, taxicabs, subways, commuter trains, rapid transit trains, and ferries, as well as in transportation vehicle terminals. There are three major types of transit advertising: car cards found inside the vehicles in a fleet; outside posters, located outside the vehicles in a fleet; and station posters located in carrier terminals.

[vikram chawla]

Product Research and Development (PR&D)

Activity performed by a team of professionals working to transform a product idea into a technically sound and promotable product; also called research & development (R&D). Corporate research and development (R&D) departments are found in both large and small companies and are generally responsible for product development and testing, researching brand names, and creating an effective packaging concept.

[vikram chawla]

Remarketing

Marketing efforts to spur demand for a product that is experiencing declining demand by marketing it as though it were a new product. The success of a remarketing effort is dependent upon a good understanding of what market changes have caused demand to decline so that the remarketing strategy can be based upon the current market environment.

[vikram chawla]

Variable pricing

Marketing strategy that allows a different price to be charged to different customers or at different times. This type of pricing is common among street vendors, antique dealers, and other small, independently owned businesses but is not practical for direct marketers, who rely upon preprinted promotion forms. Variable pricing risks the loss of customer goodwill when one customer discovers another paid less.

[vikram chawla]

Worked mail

Outgoing mail that has been through all the necessary lettershop processes, including presort , and is ready for mailing.

[vikram chawla]

Emotional appeal

Type of advertising in which the copy is designed to stimulate one's emotions, rather than one's sense of the practical or impractical. When copywriters use emotional appeal in advertising, they are attempting to appeal to the consumer's psychological, social, or emotional needs. The copy is written to arouse fear, love, hate, greed, sexual desire, or humor, or otherwise create psychological tension that can best be resolved by purchase of the product or service.

[vikram chawla]

Exclusive distribution

Marketing strategy that gives intermediaries an exclusive right to sell products in specified geographic areas.

[beenu]

hi its a very useful concepts of marketing

[vikram chawla]

Copyright:

The right of copyright gives protection to the originator of material to prevent use without express permission or acknowledgement of the originator.

[vikram chawla]

Counter advertising

Advertising that takes a position contrary to an advertising message that preceded it. Such advertising may be used to take an opposing position on a controversial topic, or to counter an impression that might be made by another party's advertising.

[vikram chawla]

Lifestyle segmentation:

Separating consumers into groups, based on their hobbies, interests, and other aspects of their lifestyles.

[vikram chawla]

Fixed positioning

Matching advertising or marketing claims to the consumer's prior knowledge or experience so that a product or service will fit within a prospective buyer's thought patterns. For example, when General Electric attempted to get into the mainframe computer business, it told prospective buyers that its computers were better than those of IBM. However, the buying public did not believe General Electric because IBM enjoyed a fixed position in the prospective mainframe computer buyers' minds.

[vikram chawla]

Open distribution

Distribution of the same merchandise within a specified region or area by different dealers. In this type of distribution, dealers can carry competitive lines and there are no restrictions regarding the number of products a dealer can sell, offer for sale, or deliver to retailers.

[vikram chawla]

Factory pricing

Prices that are discounted to compensate the buyer for the cost of transportation from the seller's place of business to the buyer's. Factory pricing saves the seller from the expense and management of shipping and places the risk of loss during transport to the buyer.

[vikram chawla]

Behavior segmentation

Market segmentation strategy whereby the division of the target market is made according to the patterns in which the people in the market live and spend their time and money. Buyers in a market will differ in their wants, resources, locations, buying attitudes, and buying practices, and any of these variables can be used to divide a market.

[vikram chawla]

Advertising elasticity:

The relationship between a change in advertising budget and the resulting change in product sales.