Marketing Management – 14th October, 2020.

Market Analysis

Step 1: Market Definition

We should not define too narrow of a market or as well as not define a too broader of a market.
We should define our products not let customers define our products.
We should be clear about our main line of business.

Step 2: Environment Analysis

Once we have defined the market, we know its configurations and boundaries, now our aim is to analyse the
environment,

Example: When Colgate entered India – it was next to impossible for any MNC to cover entire India, so they decide to
focus on Urban market only – (few people were using toothpaste – the task was to convert Babool users to toothpaste,
many people were having trouble negative attitude towards dental hygiene, Colgate use fears of poor dental hygiene
to convert these people.)

Without knowledge of market environment, we cannot develop effective marketing environment.

Environment refers to surrounding, from marketing perspective we can define environment as people, situation,
events, forces which can affect company’s marketing decisions.

Example: Corona pandemic, face to face interaction an issue, do remember every problem is a challenge initially but
once we figure out a way to tackle it, companies evolve. For example, McDonalds is asking customers to pay online,
book online, not interact with staff, reserve table, food will come to you.

Microenvironment Factors - it consists of all the factors that affect particularly your business. They have the ability to
influence your daily proceedings and general performance of the company. Still, the effect that they have is not a long-
lasting one.
The micro-environment includes customers, suppliers, resellers, competitors, and the general public.

Macroenvironment Factors – consists of broader forces that have an impact on a firm’s marketing ops as well as
various constituents of its micro environment. Example: Online Classes, Canteen Milk Problem, Developing Countries
– Raw Material Problem, Supply Chain Control Problem.

5 Element Framework – Political, Economic, Technological, Socio-Cultural, Demographic. (PESTEL)

Competitive Analysis – What competitors are doing, competency & weakness, example: Colgate isn’t competing on
basis of price alone.

We should be aware of competitors’ Distribution Channel – Middleman, Wholesaler, Retailer, Commission etc., and
Quality of product & services.

Publics: A wide array groups of people and organization such as various government agencies, environmentalists,
social organizations and consumer protection groups.

Example: Tanishq Example – Apparently the ad was against Hindu Sentiments.

Physical Environment: geographical conditions such as climate, topography and natural resources of the marketplace.
These features affect: Market Size, Demand Pattern, Logistical Decisions (physical distribution).
Increased concern for Ecology: Environmental legislation, eco-labelling
India: Huge Population, Growth, all sorts of people makes India a very lucrative market for any MNC. Family Size: It’s
reducing compared to earlier times.

Indian rural market is still untapped and it differs from the urban market on some fundamental ideologies, hence we
need to adapt accordingly, what worked in urban market not necessarily will work in rural work.

Distribution of Population by Age: Data was old, Census of 2001, anyway 77% people are of age 0-39. The pattern is
changing between 2001 & 2011. For 2011, 64% is from 15-60 – a huge market potential to tap into, buying patterns
and behaviours are changing.

Urban people show greater receptivity towards new Idea, Rurals are largely conservative. Urban people are modern,
materialistic – quite opposite to rural audience, our young urban people identify with global brands and mindset more.
(Some more stuff about the entire rich vs poor divide, rich don’t buy in small quantities and on a daily basis.

But we cannot ignore the rural market, 70% stays there, there are certain people more rich than urban fellows – it’s
the mindset that bottlenecks. You won’t find buyer for all of your product, it took a while for people to switch to
toothpaste, rural income is also seasonal in nature.

Credit based model might work in rural areas but the ability to repay varies.
Logistics is also an issue and marketing infrastructure is also not in place – Infrastructure in the sense, roads, power,
storage etc.

Marketing Management – 19th October, 2020.

Economics Environment: Pertains to aspects such as income, infrastructure, market conditions and economic policies
of the government.

Income: Our GDP per capita has increased post liberalization, emergence of middle class as a category of its own, the
demand subsequentially increased manifolds. (Currently India’s GDP per capita income is INR 20,000 per month.)

Infrastructure: In 50s, 60s, 70s – the Indian infrastructure was very poor, but post liberalization a lot of development
in almost all sectors has taken place.

Market Conditions: In current times due to COVID 19, all countries have been affected, demand has dwindled
significantly – so as a marketer we’ve to keep track of such market conditions. E.g. Mobile and Data penetration.

Economic Policies: Liberalization – opened up market for new products (phones & colour TV), it shifted from seller’s
market to buyer’s market, monopoly ended, nationalisation of certain firms end, banks could not advertise – as they
were national companies (RBI used to regulate a lot of things for the banks – number of branch, distribution channel)
– now RBI has liberalized its policies – Banks within same band can have different rates, can sell MFs etc.

Marketing is a socio-cultural phenomenon.

Geographic Environment: Marketers need to convey their message in different languages, cultures – some of the time
literal translation won’t work and could also backfire for the brand.

For example, when Nescafe entered India – Northern regions felt it to be quite a hard coffee (largely because there
isn’t a coffee culture in Northern India) and in South people perceived it to be a not so strong of a coffee, Nestle being
an international brand – it was also hard for them to compete with locals especially in terms of price of the product,
when we include other cost that goes into a product – marketing, operations, and after sales service.
India is a diverse country in terms of language, culture, fiscally – so marketers need to be aware of the diversity of the
area they’re promoting their product and adapt accordingly to succeed in the market.

Aesthetics: a set of principles underlying the work of a particular artist or artistic movement – concerned with beauty
or the appreciation of duty, so in advertisements we need to aware of what colours signify – how is it associated with
the brand and what personality the colour portrays.

E.g. India weddings vs western weddings colour, Brand colours convey a message of the personality of the brand –
food outlets have bright engaging colors, where in a financial service company probably won’t have a fun logo – as
people might perceive it to be not serious organization.

Attitudes, Values and Beliefs

People’s attitudes and values towards wealth, work, leisure, shopping, role of women in society, cleanliness and
hygiene, etc.

These differ from one group of persons to another and have profound impact on firm’s marketing activities.

Political and Legal Environment

• Political Party System

• Political Philosophy
• Political Risks
• Legislation

(After this I got distracted and started using LinkedIn.)

Marketing Management – 21st October, 2020.
Consumer Markets

It consists of individual and households.

What factors customers take into consideration while buying a product/ service - we as marketer need to be aware
of.

Reference Groups: It refers to a group of people you refer to, while making buying decisions. It is a group that serves
as a reference point for an individual for his/ her beliefs, attitudes and behaviour. A group could be 2 or more
individuals who share a set of norms, values or be and have a defined relationship such that their behaviour is
interdependent. They are small in size and differ for individual to individual e.g. Family, Relatives, Friends etc or
could be common organizations such as colleges, Schools etc. Also individuals (Celebrities, Athletes or Political
Leaders.)

Reference Groups Influence Consumers in 3 ways:

1. Informational: Individuals alter their behaviour/ beliefs to meet the expectation of a particular group.
2. Utilitarian: When people can’t asses a product/brand on their own observations.
3. Value Expressive: Trying to fit in, when need for psychological association with a group causes acceptance of
its norms, values, attitudes, or behaviours.

Characteristics of Reference Groups

1. People who share common interests.

2. People whose opinion is considered before a buying decision is made.
3. Opinion/ Recommendation of made by people in any RG have huge impact on consumer behaviour.
4. RGs acts as the factor responsible for aspiration in other members.
5. RGs can suggest products with reference to lifestyles.
6. RGs set standard with respect to buying decisions – time to time.
7. RGs are highly effective when there’s homogeneity.

Why RGs are important?

1. Social Power – Capacity to alter action of others. – E.g. Influencers.

2. Referent Power – Copying behaviours of a prominent person they admire. – E.g. Bhai ka Bracelet
3. Information Power – Influencing consumer opinion by their “assumed” access to truth. – E.g. Dhruv Rathee
4. Legitimate Power – Granted to people by virtue of social agreements. (iPhones in India – used to be treated
as luxury than utility.)
5. Expert Power – Derived from having a knowledge about the content. – MKBHD
6. Reward Power – Positive Reinforcement. – Sandeep Maheshwari, Role Model based advertisements.
7. Coercive Power – Influencing a person by social or physical intimidation. – E.g. Moms trying to get their kid
to drink milk, or Peer Pressure (happened with teens during Blackberry times, and to this date with iPhone.)

Nature of Reference Groups

1. Norms: There are certain unwritten rules or code of conduct that is assigned to an individual within the
group.
2. Roles: These are functions - an individual could assume, e.g. influencer, gatekeeper, decision maker,
purchaser, consumer.
3. Status: Position of authority within the group, higher the position, higher the influence.
4. Socialisation: This is how an individual learns the group norms and role expectations.
Types of Reference Groups

1. Membership Groups (Group to which a person is the member of the group)

a. Primary Group – sufficient enough for an unrestricted direct interaction (e.g. family)
b. Secondary Group – direct interaction too – but more sporadic, less comprehensive, and less influential.
(colleagues)

2. Non-Membership Groups (Group to which a person is not member of the group)

a. Aspirational Groups – desire to adopt norms, values, and behaviours of others with whom individuals
aspire to associate. E.g. “trying to fit in with the “Cool Kids” – leads to behavioural changes.
b. Dis-associative Groups – Groups from which an individual tries to avoid association. E.g. RCB IPL Team.

3. Formal Groups: There’s a definite structure (often written) and a known list of members and requirements
for membership. E.g. CRT

4. Informal Groups: Have less structure than formal groups and are likely to be based on friendships and
interests. E.g. – Anime fan in our class.

5. Virtual Groups: Groups that are based on virtual communities rather than geographic ones. E.g.
CarryMinati’s 14-year-old’s army.

Reference Group Influence on Consumer Behaviour

1. Creates pressures for conformity.

2. Exposes people to new behaviour and life style.
3. Influences attitudes and perceptions – product and brand choices

Marketing Implications

• Take into account influence of reference groups on consumer behaviour.

• Identify opinion leaders and influence them to bring about changes in the target market consumers.

Opinion leaders are people within a reference group who because of special skills, knowledge, personality or other
characteristics, exert influence on others.
Family

- Most influential primary group

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Types of Family:

• Family of orientation
• Family of procreation

Influence on Consumer Behaviour

1. Roles of husband and wife vary across:

- Product categories
- Dimensions of a purchase decision
2. Increasing role of children in decision making

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Intrapersonal/ Personal Factors

A. Demographic Factors
- Age – People of different ages have different needs.
- Occupation – White Collar vs Blue Collar, Professionals, Businessman, salaries workers have different
demands.
- Economic Characteristics (Income, Disposable Income – level, stability, and time pattern, Saving and Assets,
Borrowing Power)
- Life Cycle Stage – Newly Born, Teenager, Bachelor, Marries, Paren, Grand Parent – Tapak Gaye!!
- Personality – Aggressive, Shy, Introvert, Extrovert, Conservative, Experimental.

B. Motives
- A need becomes a motive when it is aroused to a sufficient level of intensity.

Theories of Motivation
 Sigmund’s Freud’s Theory
Psychological forces shaping human behaviour are largely unconscious
- Need for motivation research through in-depth interviews, projective, techniques, etc.

C. Beliefs and Attitudes

- Beliefs: A descriptive thought a person holds about something.

- Attitude: Set of enduring (consistent) feelings.