Course Title: MARKETING THEORY

Course Objectives:
The purpose of the MBA Marketing Theory Subject is to develop an understanding of the
underlying concepts, strategies, and issues involved in the marketing of products and services.
Course Content:
Marketing Management contains five modules:
- Marketing Concepts and Challenges;
- Marketing Planning and Control;
- Marketing Mix,
- Understanding Customer, and
- Marketing Information System; and
- Marketing Strategies.
It explores the following topics in detail;
- Social Marketing,
- Marketing Mix,
- Customer Value,
- Competitor Analysis,
- Consumer Behaviour,
Demand Forecasting, Market Segmentation, Targeting, and Positioning.

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 CHAPTER ONE: MARKETING CONCEPTS AND CHALLENGES

1.1 Nature and Scope of Marketing Management

No matter which definition of marketing one prefers, the scope of marketing is unquestionably
broad. Often included are such diverse subject areas as consumer behavior, pricing, purchasing,
sales management. product management, marketing communications, comparative marketing,
social marketing, the efficiency/productivity of marketing systems, the role of marketing in
economic development. packaging. channels of distribution, marketing research. Societal issues
in marketing, retailing, wholesaling, the social responsibility of the society.

1.2 Definition and Meaning of Marketing

Marketing is about identifying and meeting human and social needs. One of the shortest good
definitions of marketing is “meeting needs profitably.” The American Marketing Association
offers the following formal definition: Marketing is the activity, set of institutions, and processes
for creating, communicating, delivering, and exchanging offerings that have value for customers,
clients, partners, and society at large. Coping with these exchange processes calls for a
considerable amount of work and skill. Marketing management takes place when at least one party
to a potential exchange thinks about the means of achieving desired responses from other parties.
Thus we see marketing management as the art and science of choosing target markets and getting,
keeping, and growing customers through creating, delivering, and communicating superior
customer value.

Marketing is the business function that controls the level and composition of demand in the market.
It deals with creating and maintaining demand for goods and services of the organization.
Marketing management is “planning, organising, controlling and implementing of marketing
programmes, policies, strategies and tactics designed to create and satisfy the demand for the
firms’ product offerings or services as a means of generating an acceptable profit. Marketing is the
process of communicating the value of a product or service to customers, for the purpose of selling
that product or service.
Marketing can be looked at as an organizational function and a set of processes for creating,
delivering and communicating value to customers, and customer relationship management that

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also benefits the organization. Marketing is the science of choosing target markets through market
analysis and market segmentation, as well as understanding consumer behavior. From a societal
point of view, marketing is the link between a society's material requirements and its economic
patterns of response and providing superior customer value. Marketing satisfies these needs and
wants through exchange processes and building long term relationships. Marketing may be defined
in several ways, depending on the role of the advertised enterprise in relation to the strategic role
in positioning the firm within its competitive market.

1.3 Marketing Process,

The marketing process, in simplest words, involves everything from need identification to
customers’ satisfaction. It also includes a different string of actions and reactions, while the
ultimate goal is customer satisfaction. Basically, the seller tries to satisfy the customers by
offering value and capturing value from them as well.
This is how “Principles of Marketing” (2nd edition) defines this process, “The process by which
companies create value for customers and build strong customer relationships in order to capture
value from customers in return.”
So the process starts with need identification and ultimately ends at customer satisfaction.

1.4 Marketing Environment,

The marketing environment consists of the task environment and the broad environment or the
micro and micro environments. The task environment includes the actors engaged in producing,
distributing, and promoting the offering. These are the company, suppliers, distributors, dealers,
and target customers. In the supplier group are material suppliers and service suppliers, such as
marketing research agencies, advertising agencies, banking and insurance companies,
transportation companies, and telecommunications companies. Distributors and dealers include
agents, brokers, manufacturer representatives, and others who facilitate finding and selling to
customers.
The broad environment consists of six components: demographic environment, economic
environment, social-cultural environment, natural environment, technological environment, and
political-legal environment. Marketers must pay close attention to the trends and developments in

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these and adjust their marketing strategies as needed. New opportunities are constantly emerging
that await the right marketing savvy and ingenuity. Here are two good examples

1.5 Marketing Challenges

Today, the needs, wants, and expectations of the customer are changing rapidly. It is a great
challenge not only for small marketers but for big players too. It requires extensive study of market
trends and consumer behavior while developing a new product or updating an existing product.
Competition today is global rather than just domestic. Marketers have to compete not only with
domestic players but with global players too. The intense and global competition is a great
challenge for marketers to deal with.
With the increase in popularity of the Internet a new spectrum of marketing channel is emerged.
The worldwide increase in the number of Internet users brought a shift from traditional print-based
media to new online platforms. It presents a new set of marketing challenges - the challenge of
deciding how much to allocate to digital v/s print-based media; the challenge of using social media
marketing largely because of regulatory issues and concerns over its measurability; and the
challenge of doing more with less money as the rise of the Internet made communication cheaper
and efficient.
The greatest challenge the marketers facing today is simply too many options. Too many potential
customer segments. Too many product or service options. Too many communication tools. It is
really difficult and challenging for marketers to choose among too many options. The marketers
today don’t suffer from lack of opportunities or options. The picture is totally opposite today. Now
they suffer from too many opportunities or options.

1.6 Concept of Green Marketing,

Environmental issues have gained importance in business as well as in public life through out the
world. It is not like that a few leaders of different countries or few big renowned business houses
are concerned about the day to day deterioration of oxygen level in our atmosphere but every
common citizen of our country and the world is concerned about this common threat of global
warming. So in this scenario of global concern, corporate houses has taken green-marketing as a
part of their strategy to promote products by employing environmental claims either about their
attributes or about the systems, policies and processes of the firms that manufacture or sell them.

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Clearly green marketing is part and parcel of over all corporate strategy; along with manipulating
the traditional marketing mix(product, price, promotion and place) , it require an understanding of
public policy process. So we can say green marketing covers a broad range of activities. Different
writers has given different definition about green marketing which tried to cover all major
components of green marketing
According to Polonsky (1994), green or environmental marketing consists of all activities,
designed to generate and facilitate any exchange indented to satisfy human needs and wants, such
that the satisfaction of these needs and wants occur with minimum detrimental impact on the
natural environment. Mintu and Lozada (1993) defined green marketing as the application of
marketing tools to facilitate exchanges that satisfy organizational and individual goals in such a
way that the preservation, protection and conservation of the physical environment is upheld”.

According to Stanton and Futrell (1987), all activities designed to generate and facilitate any
exchanges intended to satisfy human needs and wants; therefore it ensures that the interest of the
organization and all it consumers are protected, as voluntary exchange will not take place unless
the buyers and sellers are mutually benefited The definition also includes the protection of natural
environment by attempting to minimize the detrimental impact, this exchange has on the
environment.

1.7 Concept of Social Marketing,

Social Marketing is a process of changing behaviour and attitudes of the public (Target group) for
achieving social, economical, political and business objectives. Social Marketing refers to the
development of awareness among consumers, organisations (i.e. social, political, business etc.)
and general public regarding long term interests of the business world.
Philip Kotler and Gerald Zaltman defined social marketing as “ the design, implementation and
control of programmes calculated to influence the acceptability of social ideas and involving
considerations of product designing, pricing, communication, distribution and Marketing
research”.

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Commercial Marketing convinces consumers to buy different types of products and services on
the same line, people can be convinced to adopt social marketing products such as health care,
education or social reforms.
Andreasen defines social Marketing as “the application of commercial Marketing technologies to
the analysis’ planning, execution and evaluation of programmes designed to influence to voluntary
behaviour of target audiences in order to improve their personal welfare and that of their socity”3
Social Marketing is also referred as societal Marketing. It aims at achieving the following
objectives:-
i. Satisfaction of Customer needs.
ii. Improvement of quality of life.
iii. Implementation of long term policy for customers and society’s welfare.
iv. Freedom from all sorts of pollution and ecological destructions.

1.8 Concept of Alliance Marketing

Cooperation among different enterprises has existed for quite a long period of time. It was easier
to establish new enterprises through cooperation, new activities and alliances. As Draulans et al
(2003) noted, the cooperation among enterprises is a widely known phenomenon – business has
been uniting into alliances for more than one century; and during latter decade the number of those
has significantly increased. As the mentioned authors noted, the most significant increase in
alliances (from 10 per cent to 85 per cent) took place from the beginning of 1970s until the end of
1990s. During this period scientists were focusing on alliances through the scientific perspective,
where the attention was mostly paid to cooperation and collaboration among enterprises.

Strategic alliances are long-term agreements or short-term alliances among enterprises, which are
more important than ordinary market transactions. Possible forms of strategic alliances: common
enterprise, licenses, long-term supply agreements etc. (Porrte, 1990).

Strategic alliance is a voluntary agreement among enterprises including exchange or division of

product, technology or services development (Gulati, 1998).

Alliance is an agreement between two or more enterprises based on exchange and the common
property is not created (Barringer and Harrison, 2000)

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1.9 Marketing Mix
Marketing is a process that involves around a customer and to meet the requirements of a customer.
Marketers formulate and design a marketing mix also known as the four Ps or the four marketing
activities of product, price, place and promotion. Firms can control this mix to meet the need of
customers within its target market. Per Philip Kotler the pope of marketing, marketing mix is the
set of controllable variables in this context it refers to the four Ps which are product (goods,
services or ideas) that satisfies customer needs. Price (decisions) and action that establish pricing
objectives and policies and set product prices. Place (a convenient and timely availability of
products. Promotion (activities that are used to inform customers about organization and its
products. Successful marketing depends upon addressing a number of key issues.

a. Product:
- The perfect product must provide value for the customer. This value is in the eye of the
beholder we must give our customer what they want, not what we think they want.
- A product does not have to be tangible an insurance policy can be a product.
- Ask yourself whether you have a system in place to regularly check what your customers
think of your product, your supporting service, etc. what their needs and now and whether
they see them changing.
- Beware going too far with product quality. Don’t try to sell a Rolls-Royce when the
customer really wants a Nissan Micra.
b. Place:
- The place where customers buy a product, and the means of distributing your product to
that place, must be appropriate and convenient for the customer.
- The product must be available in the right place, at the right time and in the right quantity,
while keeping storage, inventory and distribution cost to an acceptable level.
- Customer surveys have shown that delivery performance is one of the most important
criteria when choosing a supplier.
- Place also means ways of displaying your product to customer groups. This could be in a
shop window, but it could also be via the internet.

c. Price:
- A product as well as a service is only worth what customers are prepared to pay for it.

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- The price also needs to be competitive, but not means the cheapest. The small operators
like us could add more value to our service to get more income.
- Thinking of price as ‘cost’ to the customer helps to underscore why it is so important.
- Price positions you in the market the more you charge, the more value or quality your
customers will expect from their money.
- Existing customers are generally less sensitive about price than new customers a good
reason for looking after them well.
d. Promotion:
- Promotion is the way a company communicate what it does and what it can offer customers.
- It includes activities such as branding, advertising, PR, corporate identity, sale
management, special offers and exhibition.
- Good promotion is not one-way communication it paves the way for a dialogue with
customers.
- Promotion should communicate the benefits that a customer obtains from a product or
service.
- The promotion material should be easy to read and enable the customer to identify why
they should buy your service/ product customers.
e. People:
- Anyone who comes into contact with your customers will make an impression, and that
can be a profound effect positive or negative on customer satisfaction.
- The reputation of your brand rests in your people’s hands. They must be appropriately
trained, well-motivated and have the right attitude.
- The level of after sales support and advice provided by a business is one way of adding
value to what you offer, and can give an important edge over your competitors. This will
probably become more important than price for many customers once they start to use you.
f. Process:
- The process of giving a service and the behavior of those who deliver are crucial to
customer satisfaction. - Issue such as waiting times, the information given to customers
and helpfulness of staff are all vital to keep customers happy.
- Customers are not interested in the detail of how your business runs. What matters to them
is that the system works.

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- Do customers have to wait? Are they kept informed? Are your helpful? Is your service
efficiently carried out? Do your people interact in a manner appropriate to your service?
- Process is often overlooked. For example, when the customers call in, we let them wait for
long time, and this phone system of process has been set to suit the company’s process
rather than the customers’ minded.
g. Physical Evidence
- A service cannot be experienced before it is delivered. This means that choosing to use a
service can be perceived as a risky business because you are buying something intangible.
- This uncertainty can be reduced by helping potential customers to ‘see’ what they are
buying. Facilities such as a clean, tidy and well-decorated reception area can also help to
reassure. If your premises aren’t up to scratch, why would the customer think your service
is?
- Although the customer cannot experience the service before purchase, he or she can talk to
other people with experience of the service. This is credible.
h. Productivity - Efficiency of human and non-human capitals in the production
process.

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 CHAPTER TWO: MARKETING PLANNING AND CONTROL

2.1 What Is Marketing Planning?

Any manager will readily agree that a sensible way to manage the sales and marketing function is
to find a systematic way of identifying a range of options, to choose one or more of them, then to
schedule and cost out what has to be done to achieve the objectives.
This process can be defined as marketing planning, which is the planned application of resources
to achieve marketing objectives.
Marketing planning, then, is simply a logical sequence and a series of activities leading to the
setting of marketing objectives and the formulation of plans for achieving them. Companies
generally go through some kind of management process in developing marketing plans. In small,
undiversified companies, this process is usually informal. In larger, more diversified organizations,
the process is often systematized. Conceptually, this process is very simple and involves a situation
review, the formulation of some basic assumptions, setting objectives for what is being sold and
to whom, deciding on how the objectives are to be achieved, and scheduling and costing out the
actions necessary for implementation
The problem is that, while as a process it is intellectually simple to understand, in practice it is the
most difficult of all marketing tasks. The reason is that it involves bringing together into one
coherent plan all the elements of marketing, and in order to do this at least some degree of
institutionalized procedures is necessary. It is this which seems to cause so much difficulty for
companies.

2.2 Marketing Planning Process,

In most organizations, “strategic planning” is an annual process, typically covering just the year
ahead. Occasionally, a few organizations may look at a practical plan that stretches 3 or more years
ahead.
To be most effective, the plan has to be formalized, usually in written form, as a formal “marketing
plan.” This process typically follows a number of distinct steps. The process moves from the
general to the specific, from the overall objectives of the organization down to the individual action
plan for a part of one marketing program. Although at first glance this process looks complex, it
is, in fact, a very functional flowchart of the whole planning process and nicely illustrates the

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relationships between the various components. It is also an iterative process, so that the draft output
of each stage is checked—to see what impact it has on the earlier stages—and is amended
accordingly.
There are three main approaches, in terms of involvement of the organization as a whole:
- Top-down planning: Here, top management sets both the goals and the plans for lower-
level management. Although decision-making may be quick at the top level,
implementation of the plans may not be as quick because the various units (divisions,
groups, and departments) need time to learn about the plans and reorganize their tasks
accordingly to accomplish the new goals.
- Bottom-up planning: In this approach, the various units or the organization create their
own goals and plans, which are then approved (or not) by higher management. This type
of planning can lead to more creative approaches but can also pose problems for
coordination. More pragmatically, strategy all too frequently emerges from a consolidation
of tactics.
- Goals-down-plans-up planning: This approach is the most common, at least among the
organizations that invest in such sophisticated planning processes. Top management sets
the goals, but the various units create their own plans to meet these goals. These plans are
then typically approved as part of the annual planning and budgetary process.

2.3 Marketing Competitiveness

A universal and exact definition of marketing competitiveness does not exist. Competitiveness
means different things to different organizations. Some marketers view marketing competitiveness
as the ability to persuade customers to choose their offerings over alternatives; while others view
marketing competitiveness as the ability to deliver better values to customers than competitors.
“Marketing Competitiveness is the ability of a business to improve continuously marketing
process capabilities and deliver better value to customers than competitors.”
It is the ability of a business to add more values for its customers than competitors and attain a
position of relative advantage. It leads to a situation where a business has an advantage over its
competitors by being able to offer better value, quality, and service.

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2.3.1 Improving Marketing Competitiveness

 Customer values - Customer values should be viewed not only in terms of product
characteristics, but also in terms of processes which deliver the product. Both the product
and process concept have to be right to achieve customer satisfaction.
 Identify and Promote USP - Unique Selling Proposition is something that sets a product
apart from its competitors in the eyes of existing customers as well as new customers.
Marketers are required to identify USP of their product and effectively communicate it
with the target audience.
 Cost efficient operations - Business is required to be organized and operated efficiently,
so that the cost of production and distribution be minimized.
 Customer delight - Business organizations must provide proper customer services to
delight its customers.

2.4 Customer Value,

“Customer Focus” and “Customer Value” became lovely terms for the marketers and the
managers. Customer value is defined in the marketplace not in the factory or an agency. A small
but growing number of companies in the markets draw on their knowledge of what customers
value or they value to gain marketplace advantages over their less knowledgeable competitors
(Anderson, 1998). There is a market for offering as two elemental characteristics: its value and its
practice.
There have been many difficulties for many authors involved in defining value. In an attempt to
consolidate these diverse definitions, Woodruff (1997, p. 142) proposes: “Customer value is a
customer’s perceived preference for and evaluation of those product attributes, attribute
performances, and consequences arising from use that facilitate (or block) achieving the
customer’s goals and purposes in use situations”. Although the multiple contexts, tasks and criteria
in the upper definition reflect the richness and complexity of the concept. This definition has more
related to the customer but there is also the other side for the businesses.

Customer value is the difference between the values the customer gains from owning and using a
product and the cost of obtaining the product. On the other hand we may understand that the total

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customer value is the total sum of product value, services value, personnel value and image value.
Besides these monetary, time, physic and energy costs are the total costs of a customer. Should the
customer value be expressed as a formula:

Total Customer value = Product value + services value + personnel value + image value Total
customer cost = Monetary cost + time cost + physic cost + energy cost Customer Delivered
value = Total Customer value – Total customer cost

Customer value is the difference between total customer value and total customer cost. Put it very
simply, customer value is created when the perceptions of benefits received from a transaction
exceed the costs of ownership. The same idea can be expressed as a ratio (Chiristopher,1996):

Customer value = Perceptions of benefits

2.5 Identifying and Analyzing the Competitors

In this competitive world there is no business that operates in isolation, there are many businesses
that are marketing products similar to or substitute of products you are marketing. These
organizations are your rivals and you have to compete with your rivals. Business competition is
the rivalry of two or more businesses that target the same customers, for example Coca-Cola and
Pepsi, or McDonald's and Burger King. Business organizations to be successful in long run have
to identify their competitors and analyze their strengths and weaknesses to defeat them.

Competitor is a person or an organization against whom other person or organization is competing.

In business, competitor is a business organization or a company operating in the same industry or
a similar industry which offers a similar product or service. For example - Wal-Mart and
Target are big players in Retail chain industry, they both are competitor of each other.
The presence of competitors in an industry means consumers have more alternatives to choose
from, it forces competitors to reduce prices of their products or services to grab the maximum
share in the market.

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2.6 Identifying Competitors
In the process of developing a successful marketing strategy, the first step is to identify the key
competitors in your market. Competitor identification is important to increase managerial
awareness of competitive threats and opportunities. Identification of key competitors is necessary
to gain competitive advantage by offering your customers a greater value than the competitors.
Not only current competitors are required to be identified, but future competitors are also to be
anticipated.
According to Ferrell, Hartline, Lucas, and Luck, (1998), there are different varieties of
competitors :-

 Brand Competitors - Such type of competitors are those who market exactly similar
products, at similar price, and also to the same customers. For example, Pepsi and Coca-
Cola.
 Product Competitors - Such type of competitors are those who market similar products,
but with different features and benefits, and at different prices. For example, Pepsi and
Maaza (fruit drink).
 Generic Competitors - Such type of competitors are those who market different products,
but provide the same utility or benefit. For example, Audio cassettes and CDs, or Pepsi
and Water
 Total Budget Competitors - Such type of competitors are those who market different
products, but competing for the same financial resources of the customers. For
example, Pepsi and Potato-chips.

We use Peteraf and Bergen (2001) model for the identification and classification of competitive
set. By the use of this model we sort competitors under two categories - Market Commonality and
Resource Similarity. We classified candidate competitors on the basis of their resource
endowments and the market needs served. Under Market Commonality, we sort competitors on
the basis of the degree to which they serve market needs similar to the focal firm. Under Resource
Similarity, we sort competitors on the basis of the degree to which their resource endowment is
similar to that of the focal firm in terms of type and composition.

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2.7 Analyzing Competitors
Competitor analysis helps an organization to identify opportunities for and threats to the
organization from the competitive industrial environment. Competitor analysis is an assessment of
the strengths and weaknesses of current and potential competitors. It is an essential component of
corporate strategy; while formulating organization's strategy, managers must consider the
competitor organisations' strategies. Competitor Analysis can be defined as the analysis of data
and information about competitors to generate intelligence that is useful in strategic decision
making.

2.8 Defining the Competitive Strategy

Competitive strategy is the process of developing competitive advantage and earning
aboveaverage returns for stakeholders. Competitive advantage is achieved through the strategic
management of resources, capabilities, and core competences, as well as the firm’s responsiveness
to opportunities and threats in the external environment. Above-average returns are gains that are
superior to alternative investments with a similar risk profile.
Resources are the starting point of competitive strategy and are the inputs required to produce a
product or service. Tangible resources are raw materials, premises, machinery, and equipment.
Intangible resources are finance, technology, human capital, supplier networks, distribution
networks, patents, trademarks, established customer base, brand equity, and firm reputation.
Resources can be combined and developed into capabilities, which in turn create core
competences. Capabilities are the firm’s capacity to transform resources into competitive products
and processes.
Capabilities become embedded in a tacit manner into the firm’s internal processes. They are
difficult to document as procedures and therefore difficult to copy. Intangible resources tend to be
the main source of inimitable strategic capabilities. Capabilities are a more likely source of unique
core competences that create sustainable competitive advantages. How a firm nurtures and
supports its capabilities so that they can become core competencies is less visible to rivals, making
efforts to understand and imitate the firm’s capabilities more challenging.
Competitive strategy mitigates opportunities and treats in the external environment through
preemptive and reactive strategies. New opportunities are exploited in the wake of new
competitive positions that may be created in the process. The strategic conduct of the firm revolves

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around performance objectives (such as maximizing profits and increasing sales), pricing policies
(such as cost-plus, marginal cost, entry-deterring price, collusive pricing, price leadership, and
price discrimination), marketing strategies, and the extent of innovation and technical change.
Treats are minimized through continuous adaptation and development of the business model.

2.9 Marketing Control, and Control process.

Definition: Marketing control refers to the measurement of the company’s marketing performance
in terms of the sales revenue generated, market share captured, and profit earned. Here, the actual
result is compared with the standard set, to find out the deviation and make rectifications
accordingly.

Marketing is one of the crucial functions of any organization. Therefore, the management must
exercise proper control over the marketing operations to ensure error-free results, optimum
utilization of the resources and achievement of the planned objectives.

2.9.1 Marketing Control Process

Marketing control is a systematic and integrated process. A marketer follows the following steps
while exercising control over the marketing operation in an organization:

1. Determining Marketing Objectives: The initial step in marketing control is the setting up
of the marketing goals, which are in alignment with the organizational objectives.
2. Establishing Performance Standards: To streamline the marketing
process, benchmarking is essential. Therefore, performance standards are set for carrying
out marketing operations.
3. Comparing Results with Standard Performance: The actual marketing performance is
compared and matched with the set standards and variation is measured.
4. Analyzing the Deviations: This difference is then examined to find out the areas which
require correction, and if the deviation exceeds the decided range, it should be informed to
the top management.
5. Rectification and Improvement: After studying the problem area responsible for low
performance, necessary steps should be taken to fill in the gap between the actual and
expected returns.

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 CHAPTER THREE: MARKETING MIX, 4P'S OF MARKETING

3.1 Product Development

Definition of product: Product is one of the four elements of the marketing mix; the other three
being price, place and promotion, which are all geared towards serving and satisfying the target
market. Companies fix the product’s price, promote and distribute it to the target market.
Therefore, a product is the basic element of marketing mix. The word “Product” has several
meanings, but it is generally a bundle of satisfaction that customers purchase or patronize in order
to solve a problem. In our day-to-day life, we use many goods, such as soap, biro, book, ball, etc.;
as well as services like banking transport, healthcare, or legal services.
The term product has been defined differently by various authors and authorities in the field. For
example, Harry defines a product as the sum of the physical and psychological satisfactions the
buyer receives when he makes a purchase. It is thus a tangible and/or intangible attribute that is
offered to the market for sales. Other definitions of a product include:
i. “A product is anything that can be offered to a market for attention, acquisition, use, or
consumption that might satisfy a want or need: it includes physical objects, services,
personalities, organizations, and ideas.”
ii. “Product is a bundle of utilities that satisfy the customer’s needs and wants.”
iii. “A product consists of the intrinsic features, extrinsic characteristics, and its intangibles
associations”.

3.1.1 New product development

Product managers only manage the brands produced and introduced into the market. This goes to
show that a company has to first develop a product or follow any legal means to acquire a product
in order to sell it to the target market. For this reason, it may not be out of place if we appraise the
ways through which a company obtains a product. A company can use any of the following ways
to get a product, among others.

New product development process New product development (NPD) is a complete process of
creating and bringing a new product to market. New product development is the process of
exploiting market opportunity by turning it into a product or service available for sale. A good

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understanding of customer needs and wants, the competitive environment and continuous
practices, and strategies to better satisfy the customer requirements and increase their market share
regulate development of new products. The notion of new product needs to be explained here. By
and large, the newness of a product depends on what the customer or target market consider as
new. For this reason, a new product can be an invention (entirely new which does not exist before),
innovation (new to the company but existing in the industry), or product modification (changing
the package, size, design and other features). There are eight steps involved in new product
development namely:
A. Idea generation: It is the act of getting as many ideas as possible. Ideas for new products
can be obtained from customers, sales representatives, employees, distributors, company’s
research and development department, competitors, focus groups, or brainstorming. Lots
of ideas are generated about the new product and out of these ideas some are implemented.
Idea generation or brainstorming of new product, service, or store concepts usually begins
when market opportunities are identified so as to support your idea screening phase.
B. Idea screening: It is the process of screening the ideas generated in order to do away with
those ideas that are not consistent with the company’s objectives and resources. This is
with a view to eliminate ideas that are not feasible, viable, and acceptable. Many
organizations use different criteria in screening the ideas, but in general, screeners often
look at the viability, feasibility, and acceptability of the ideas at hand.
C. Concept development and testing: The ideas that pass through the screening stage are
then developed into concept on paper stating clearly the marketing and engineering details
of the product. In essence, the concept will indicate the target market for the product, its
benefits, features, and attributes as well as the planned proposed selling price for the
product. Similarly, concept should contain the estimated cost of producing the product and
its perceived competing brands in the chosen market. When the concept is developed, it
has to be tested by asking a number of prospective customers to evaluate the idea based on
its feasibility and marketability.
D. Business analysis: This stage of the new product development process is geared toward
evaluating the overall cost, sales revenue, and profit potentials of the contemplated product
idea. This is achieved through such analysis as industry’s market potential, market size and
growth rate, sales forecast and demand estimation, as well as the estimated profitability,

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 and break-even point for the target product. The main purpose of this analysis is identifying
those ideas that are apparently feasible and financially viable. Ideas that are not viable can
also be dropped at this stage.
E. Marketing strategy development: The most viable ideas that scaled through the previous
stages can be used as good candidates for marketing strategy development. In its basic
form, this stage calls for formulating the product, pricing, distributing, and promotion
strategies to be used in marketing the proposed products when it is introduced. It is
pertinent to note that these strategies should be flexible such that it can be modified to
conform to the dynamism of the environment.
F. Product development: It is at this stage that the actual or physical prototype of the
successful idea will be produced. For example, if a company is producing an auto car it
will produce a car prototype-like toy car containing all the features and designs specified
in the concept development stage. If it is a service, a complete service package will be
developed ready for test marketing.
G. Test marketing: Here, the company will test the product (and its packaging) in typical
usage situations by conducting focus group customer interviews, dealer research or test it
at trade shows to determine customer acceptance or otherwise. The company can use the
outcome of the test to make adjustments on the planned marketing strategy where
necessary. However, a company has to be extra careful in test marketing its planned new
product in order not to expose it to competitors who can easily see and imitate it to come
up with their own version sometimes even quicker and better than the initiator.
H. Commercialization: This is the final stage of the development process in which the new
product will be launched or born. Once it is introduced, it is no longer under the company’s
control but that of the market. Here a company has to decide on when, where, and how to
introduce the product. The timing of the launch is critical as it can make or mar the
product’s success.

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3.1.2 Product Life Cycle
Products are like human beings, they spend their life in the market. Some stay longer in the market,
while others have a shorter life span. However, unlike human beings whose life is in the hands of
God, the life of a product is controlled by the company and its market. It depends on whether it is
adopted or rejected by the target market. Therefore, because companies know that the products
they sell all have a limited lifespan, majority of them invest heavily on new product development
in order to make sure that their businesses continue to grow. By and large, the product life cycle
has four very clearly defined stages, each with its own characteristics. These stages are
introduction, growth, maturity, and decline stage (Figure 1).

Product Life Cycle

a. Introduction Stage:
Once a product is launched in the market, it enters into the introduction stage. This is the first stage
in an ideal product life cycle. It is characterized by high promotion and intensive distribution
especially for fast moving consumer goods (FMCG). These marketing activities often lead to
increase in costs at the initial stage particularly for a company with a pioneering status which has
to spend a lot to create awareness. It is at this stage that the product is formally born and it enters
the competitive field in the market. This goes to show that once in a market, the product’s life is
determined by the market forces and the ability of the company to manage the product successfully
in the market. Thus, if the product is accepted in the market, it will attract other competitors to the
market if the market has no or low entry barriers. Otherwise, it may even die at this stage. This

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happened with Fanta blackcurrant soft drink brand of Nigerian Bottling company makers of Coca-
cola which died immediately after introduction.
b. Growth stage:
The growth stage is the next phase of the “S” shaped product life cycle. The growth here means
increased sales of the product because it is widely accepted by the target market. As the sales rise,
the market will also grow and revenues will now upset the initial cost of developing and launching
the product resulting to profit generation. To maintain the growth momentum, a company has to
emphasize brand preference in its promotion rather than brand awareness.
c. Maturity stage:
When sales stabilize and market is saturated the maturity stage sets in. This is probably the most
competitive time for most products and businesses. Companies here need to consider the strategy
of product modifications, market expansion, or marketing mix modification, which might give
them a competitive advantage. The aim here is to get more customers for the product.
Organizations usually like to maintain their products in this stage in order to enjoy the cash inflows
from the market, but it is very difficult to manage.
d. Decline stage:
This stage is characterized by steady decrease in sales and profit in the market. This may be
because the product has lost its appeal with the customers or presence of better products in the
market or the product becomes obsolete, and therefore needs further improvements. Companies
do not like this stage because of its adverse consequences and will do everything possible to avoid
it. However, for some products this stage is inevitable, and as a result, measures should be put in
place to either resuscitate the product or phase it out of the market. In general, the main objective
of the product life cycle stages is to enable product managers to know how they can enhance the
performance of the products within the context of the company’s business strategies.

3.1.3 Product Mix Decisions

It is equally important for companies to appreciate the significance of product mix and product
line in the product management discourse. This is because of the relevance of the two concepts in
determining the level and complexity of managing a product portfolio. A product mix is the set of
all products and items a particular company offers for sale. It is the total product portfolio that a
company manages. While a product line is a group of closely related products that are considered

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a unit because of marketing, technical, or end-use considerations. In other words, a product line
consists of a set of brands that are closely related due to the similar functions they perform, they
are sold to the same customer groups, use the same channel of distribution or fall within the same
price range An example of a product mix and product line width, length, depth, and consistency
for Jaiz Bank.
A company’s product mix has a certain width, depth, and consistency. The width of a product mix
refers to how many different product lines the company carries. In the table, Jaiz Bank has four
lines of services. Product mix depth is the total number of product items under each line. the depth
of retail banking line is 11 different services. While the consistency is the degree to which all the
products in the mix are related in one or the other. This may be in terms of the market being served,
distribution channel used, or common production processes. All the services of Jaiz Bank are
consistent in their banking focus. Companies normally develop a basic platform and modules that
can be added to meet different customer requirements. This modular approach enables the
company to offer variety while lowering production costs.

3.1.4 Branding, Packaging, and Labelling

i. Brands and Branding:

Almost every concern wants to name its products. These names given are brand names. Branding

plays more role than a mere name. It is because; brands name is quite different from ordinary

name.

What Brands and Branding Mean?

A brand is a symbol, a mark, a name that acts as a means of communication which brings about

an identity of a given product. Brand is product image, brand is quality of product; brand is value;

it is personality.

It is nothing but naming the product; and naming product is like naming a child. Parents know that

the success and happiness of their children is primarily dependent on the development of their

character, intelligence and capacity and not on their name. But they, nonetheless, take care in
naming their children for the identification.

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Products are children of manufacturers, unlike human children; products are not brought into world
by accident. There is conscious decision to give birth. Once a product takes birth, it needs an
identity and that is brand; and recognizing it as branding.

‘Product differentiation’ is the note-worthy feature of manufactured goods; one such device of
product differentiation is branding the products. A brand is a symbol, a mark, a name, that acts as
a means of communication which brings about an identity of the product. Brand is the quality of a
product. Brand is the value.

ii. Product Packaging:

Packaging is the other side of the product identification. Traditionally, the function of packaging
was to protect goods. However, it is a promotional tool and the major image builder contributing
to the product success. It is a point of sale display that develops a favourable consumer appeal.

‘Packing’ is a process that speaks of company’s ability to contain economically man made or
natural products for shipment, storage, sale or final use. It comprises the activities of wrapping or
creating the product for performing the marketing functions more easily and economically.

In simple words, packing is the act of housing the product in the packages or containers like tins,
cans, bags, jars, bottles, boxes, kegs, casks, and the like. A ‘package’ is a wrapper or a container
in which a product is enclosed, encased, housed or sealed.

‘Packaging’ on the other hand, deals with activities of planning and designing of different means
of packing the products. What are clothes to human-beings, so are the packages for the products.

Definitions:
“Packaging is the general group of activities in designing the containers or wrappers for the
products”. “Package design is the unique combination of colours, graphics and symbols to
distinguishing the products.” “Packaging is an activity which is concerned with the protection,
economy, convenience and promotional considerations”. Professor Philip

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Thus, it embraces the functions of package selection, manufacture, filling and handling. It is worth
noting, here, that the word ‘packing’ is more comprehensive and, hence, covers ‘packaging’.
Packing is concerned with product protection while packaging with product promotion.

iii. Product Labelling:

Labelling is another significant means of product identification like branding and packaging.
Labelling the act of attaching or tagging labels. A label is anything may be a piece of paper, printed
statement, imprinted metal, leather which is either a part of a package or attached to it, indicating
value of contents of price of product name and place of producers.

It carries verbal information about the product, producer or such useful information to be beneficial
to the user. Thus, a label is an informative tag, wrapper or seal attached to a product or product’s
package.

3.2 Right Pricing, Managing Price Changes

It is true to say that – “Setting the right price of goods and services is an important part of effective
marketing.” Pricing the products properly is crucial for the success of any business. According to
Charles Toftoy, associate professor of management science at George Washington
University, “Pricing is probably the toughest thing there is to do.”

Out of four P’s of marketing, Pricing is the only element of marketing mix that generates revenue;
remaining elements - product, place, and promotion are cost to the business.

3.2.1 Right Pricing

There are many factors that affect profitability of a business, pricing is one of them. Setting the
right price is an important part of effective marketing and crucial step toward achieving that profit.
Setting the right price not only maximise profit, but also help in maintaining a good relationship
with customers. Right pricing help businesses avoid the serious financial problems that may occur
if the prices are too high or too low.

“Setting the price for a product at which both the customer and the business are happy (i.e.
customer is willing to pay, and business is able to cover cost and make maximum profit) is
called right pricing.”

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3.2.2 How to Set Right Price for Products or Services
Research help in setting right pricing. Research of following three key areas is required to set right
pricing :-

1. Research of existing cost: The research of existing cost is done to identify the actual costs,
to take into account any hidden and infrequent costs such as superannuation, insurance,
licensing, adviser fees, or any professional development, training or networking cost, and
to reduce cost in some areas.

It may be difficult to reduce cost in some areas like rent and wages, but some costs can be
reduced like purchasing cost if the stock is purchased in bulk taking into consideration the
cash flow, storage, and product delivery.

2. Research of competitors' pricing: Research of competitors’ pricing is necessary to know

the pricing strategies of competitors to rightly set the price of products or services. If the
price is much higher than the competitors’ price, the pricing is out of the market. If the
price is much lower than the competitors’ price, there is the risk of underselling the product
or service. Both problems can be avoided by doing the research of competitors' pricing
before setting the prices of products or services.
3. Research of target market: It is necessary to know how much the target market is willing
to pay for the product or service that is offered. If customers believe that the price of offered
product or service is too high they will probably buy from the competitor. If they believe
the price is too low they may question the quality of offered product or service and buy
elsewhere. Target market research help in understanding the target market and setting the
right prices.

3.3 Role of Advertising in Marketing Communications, and Process of Advertising,

The finest products, the most attractive price tags, and the best marketing channels are of no mean
if the target customers don't know the product; and the chances of product success is low. Effective
marketing communication is crucial for the success of a product or a business. In marketing
communications advertising plays an important role.

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3.3.1 Role of Advertising in Marketing Communication
Marketing communications are the means by which organisations attempt to inform, persuade, and
remind consumers about products, services, or brands. Marketing communications inform and
make consumers aware about the availability of the product or service, about its usage, price and
special offers. Marketing Communications attempt to persuade potential consumers to purchase
and try the product. Marketing communications can also be used to reinforce experiences, or to
remind consumers about their needs and their past experiences related to the product with a view
to convince them for repurchases. Marketing communication also differentiate products in markets
where there is little to separate competing products and brands.

Advertising is a paid form of a non-personal message communicated through the various media
by industry, business firms, nonprofit organisations, or individuals. Advertising is persuasive and
informational and is designed to influence the purchasing behavior and/or thought patterns of the
audience.

The advertising message has to reach a billion people, speaking different languages, practicing
many religions. Advertisers can reach their audiences through television, radio, cinema, print
medium, outdoor advertising, sales promotion and the Internet. Hence, advertising is a form of
mass communication.
3.3.2 Process of Advertising
Following are the steps that are required to be followed for development and execution of
advertising :-

1. Briefing - Advertising process starts with briefing - a document confirming understanding

between client and advertising agency on - what product to advertise, objective of
advertising, time-frame of ad campaign, strategies to reach the audience, and total
estimated cost.
2. Market Research - After briefing market research will done. Research include -
comparison of advertiser's product or service with competitor's product or service,
consumers' perception of their brand in comparison to their competitors, study of
competitors' advertising, and response of consumers to competitors' advertising.

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 3. Identify Target Audience - Next step is to identify target audience. Using the market
research, the advertising agency will identify the target audience.
4. Media Selection - Using the research, the advertising agency or the media agency will
select the media that should be used to reach the target audience in the most cost effective
way.
5. Ad Designing & Ad Creation - At this step the creative people of advertising agency will
convert the advertising communication into words and pictures. The copywriter will write
the copy of advertising and the art director will visually implement the copywriter's
message. The advertising agency may get the filming or taping done by outside production
companies.
6. Decide Place & Time - This step is to decide where and when the advertisement will be
shown. Traffic department within the advertising agency will ensure that the commercials
are ready on time and all required legal approvals have been granted.
7. Execution - Finally the advertisement will be executed.
8. Performance Check - Once the advertisement is executed, the media agency will check
its performance.

3.4 Value Analysis

Value analysis (VA) is a tool to enhance cost efficiency by evaluating the functionality of a product
or a process about its cost. It helps identify and eliminate unnecessary costs incurred while making
a product or conducting a business function.

Cost reduction helps a business spend less on expenses leaving it with more profit at the end of a
year. As such, businesses devise innovative ways to reduce costs while ensuring that the quality
of their products, services, or processes is not compromised.
Value Analysis is a method to achieve cost reduction by analyzing the utility or value of a product,
service, or process about the cost incurred on it. In the process, the value analysis team conducts
a thorough examination of different segments or components of a product/service/process and
identifies areas of avoidable costs. It then comes up with innovative ways to enable cost reduction.
The solutions are then implemented to enhance profits by reducing costs.

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For example, value analysis of a wall clock will involve applying different methods to break down
a wall clock’s functions and the cost involved at various stages to bring in those functions. Finally,
the team will analyze the functions of the wall clock for customers, which will be to see the time
and add to the beauty of their homes.

A classification between necessary and unnecessary functions will become possible based on
function analysis. As a result, the business can achieve cost-reduction by eliminating unnecessary
functions that add to the cost but are neither improving quality nor enhancing customer
satisfaction. Not only does it help in cost-saving, but it will make the product available to the
customer at a lower price.

The analysis involves more complex steps, which we will study under the steps of value analysis.

3.4.1 Steps of Value Analysis

a. Familiarization to gain information

The first step involves the team familiarizing itself with the process, product, or service that
requires value analysis. Then, each component is studied in detail, keeping in mind the
department’s goals and the organization. Other details could be how much loss it incurred or profit
it attained in the last quarter, people employed to carry out the process, etc.

The team also takes down all the costs involved at all levels. It is like the research stage in which
the team also documents competitor-related information regarding cost and function to favor
comparisons.

b. Analysis to identify problem areas

Once the team has all the relevant information, it gets into the analysis. The analysis is focused on
breaking down the functions of the subject in question. Usually, a product or a process serves two
functions, primary and secondary. For example, the primary function of the wall clock was to see
the time. Its secondary function was adding to the beauty of the house. There could be several
functions that all need to be studied from the point of view of customer satisfaction.

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Functions have a weightage and a cost. A detailed analysis is done regarding how a particular
function meets customer requirements and the cost of that function. In this process, the value
analysis team compiles a list of all the functions in descending order of their utility. The cost
incurred on these functions is mentioned alongside. Some formulas like cost-benefit ratios are
applied to give weight to the study. The most unnecessary function which will have the least utility
can be removed.

c. Innovation

In this stage, the team searches for alternative ways that allow reduction, change, or modifications
in the existing components and functions. This stage thus emphasizes producing new ideas and
finding alternative ways of accomplishing the basic and secondary functions.

The underlying idea behind innovation focuses on delivering the said process or product at a
reduced cost without compromising its quality. In other cases, it focuses on bringing in some
investment like automation while suggesting lay off for cost-cutting.

Sometimes, the team suggests enhancing the quality for greater profits at a lower cost by replacing
a component. For example, replacing the clock’s wooden digits with cheaper but similar-looking
ceramic ones could make the product available at a cheaper rate. As a result, it could increase its
sales and help the business make greater profits at a lesser cost.

d. Evaluation and Selection

The evaluation phase estimates the value of each idea generated during the innovation phase and
selects the best. Evaluation involves checking the feasibility and cost of various ideas presented.
It also measures the value of the best alternative. Cash flow analysis or break-even point are
some of the techniques which may be used for this.
The evaluation phase may be carried out via qualitative analysis or quantitative analysis. The
overall process involves computing the cost and picking the most feasible idea based on
quantitative or qualitative analysis.

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The alternative that reduces cost without compromising the quality will be selected. Many
additional details include organizational goals, constraints, customer preference, competitor
analysis, impact on the pollution, law abidance, etc.

e. Implementation, Monitoring and Corrective Actions

The next step involves implementing the selected alternative. Over months or as defined in the
report, the performance of the alternative implemented will be constantly monitored and
documented. Any deviations from plans will need to be rectified to ensure high performance.
Companies usually monitor the performance very carefully and make it a permanent practice upon
the initial implementation’s success.

Over the years, value analysis and value engineering have come to be understood as similar terms
as both involve an in-depth analysis to help reduce costs. However, one salient feature of value
engineering compared to value analysis is that the former is usually undertaken at the design stage
of new or old projects and products.

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 CHAPTER FOUR: UNDERSTANDING CUSTOMER AND MARKETING
INFORMATION SYSTEM

4.1 Types of Consumers,

Consumer behavior is the study of how individuals, groups, and organizations select, buy, use, and
dispose of goods, services, ideas, or experiences to satisfy their needs and wants.2 Marketers must
fully understand both the theory and reality of consumer behavior.

4.1.1 Factors Influencing Consumer Behavior

A consumer’s buying behavior is influenced by cultural, social, and personal factors. Of these,
cultural factors exert the broadest and deepest influence.

a. Cultural Factors

Culture, subculture, and social class are particularly important influences on consumer buying
behavior. Culture is the fundamental determinant of a person’s wants and behavior. Through
family and other key institutions, a child growing up in the United States is exposed to values such
as achievement and success, activity, efficiency and practicality, progress, material comfort,
individualism, freedom, external comfort, humanitarianism, and youthfulness. A child growing up
in another country might have a different view of self, relationship to others, and rituals. Marketers
must closely attend to cultural values in every country to understand how to best market their
existing products and find opportunities for new products.

i. Subcultures Each culture consists of smaller subcultures that provide more specific
identification and socialization for their members. Subcultures include nationalities,
religions, racial groups, and geographic regions. When subcultures grow large and
affluent enough, companies often design specialized marketing programs to serve
them.
Virtually all human societies exhibit social stratification, most often in the form of
social classes, relatively homogeneous and enduring divisions in a society,
hierarchically ordered and with members who share similar values, interests, and
behavior.

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Social class members show distinct product and brand preferences in many areas, including
clothing, home furnishings, leisure activities, and automobiles. They also differ in media
preferences; upper-class consumers often prefer magazines and books, and lower-class consumers
often prefer television. Even within a category such as TV, upper-class consumers may show
greater preference for news and drama, whereas lower-class consumers may lean toward reality
shows and sports. There are also language differences—advertising copy and dialogue must ring
true to the targeted social class.

b. Social Factors

In addition to cultural factors, social factors such as reference groups, family, and social roles and
statuses affect our buying behavior.

i. Reference Groups

A person’s reference groups are all the groups that have a direct (faceto-face) or indirect influence
on their attitudes or behavior. Groups having a direct influence are called membership groups.
Some of these are primary groups with whom the person interacts fairly continuously and
informally, such as family, friends, neighbors, and coworkers. People also belong to secondary
groups, such as religious, professional, and trade-union groups, which tend to be more formal and
require less continuous interaction.

Reference groups influence members in at least three ways. They expose an individual to new
behaviors and lifestyles, they influence attitudes and self-concept, and they create pressures for
conformity that may affect product and brand choices. People are also influenced by groups to
which they do not belong. Aspirational groups are those a person hopes to join; dissociative groups
are those whose values or behavior an individual rejects.

Where reference group influence is strong, marketers must determine how to reach and influence
the group’s opinion leaders. An opinion leader is the person who offers informal advice or
information about a specific product or product category, such as which of several brands is best
or how a particular product may be used. Opinion leaders are often highly confident, socially
active, and frequent users of the category. Marketers try to reach them by identifying their
demographic and psychographic characteristics, identifying the media they read, and directing
messages to them.

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 ii. Family

The family is the most important consumer buying organization in society, and family members
constitute the most influential primary reference group. There are two families in the buyer’s life.
The family of orientation consists of parents and siblings. From parents a person acquires an
orientation toward religion, politics, and economics and a sense of personal ambition, self-worth,
and love.8 Even if the buyer no longer interacts very much with his or her parents, parental
influence on behavior can be significant. Almost 40 percent of families have auto insurance with
the same company as the husband’s parents.

A more direct influence on everyday buying behavior is the family of procreation—namely, the
person’s spouse and children. In the United States, husband–wife engagement in purchases has
traditionally varied widely by product category. The wife has usually acted as the family’s main
purchasing agent, especially for food, sundries, and staple clothing items. Now traditional
purchasing roles are changing, and marketers would be wise to see both men and women as
possible targets.

For expensive products and services such as cars, vacations, or housing, the vast majority of
husbands and wives engage in joint decision making. Men and women may respond differently to
marketing messages, however. Research has shown that women value connections and
relationships with family and friends and place a higher priority on people than on companies.
Men, on the other hand, relate more to competition and place a high priority on action.

iii. Roles And Status

We each participate in many groups—family, clubs, organizations. Groups often are an important
source of information and help to define norms for behavior. We can define a person’s position in
each group in terms of role and status. A role consists of the activities a person is expected to
perform. Each role in turn connotes a status. A senior vice president of marketing may be seen as
having more status than a sales manager, and a sales manager may be seen as having more status
than an office clerk. People choose products that reflect and communicate their role and their actual
or desired status in society. Marketers must be aware of the status-symbol potential of products
and brands.

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 c. Personal Factors

Personal characteristics that influence a buyer’s decision include age and stage in the life cycle,
occupation and economic circumstances, personality and self-concept, and lifestyle and values.
Because many of these have a direct impact on consumer behavior, it is important for marketers
to follow them closely.

i. Age And Stage in the Life Cycle

Our taste in food, clothes, furniture, and recreation is often related to our age. Consumption is also
shaped by the family life cycle and the number, age, and gender of people in the household at any
point in time. U.S. households are increasingly fragmented—the traditional family of four with a
husband, wife, and two kids makes up a much smaller percentage of total households than it once
did.

In addition, psychological life-cycle stages may matter. Adults experience certain “passages” or
“transformations” as they go through life. Their behavior as they go through these passages, such
as becoming a parent, is not necessarily fixed but changes with the times.

Marketers should also consider critical life events or transitions—marriage, childbirth, illness,
relocation, divorce, first job, career change, retirement, death of a spouse—as giving rise to new
needs. These should alert service providers—banks, lawyers, and marriage, employment, and
bereavement counselors—to ways they can help. For example, the wedding industry attracts
marketers of a whole host of products and services.

ii. Occupation and Economic Circumstances

Occupation also influences consumption patterns. Marketers try to identify the occupational
groups that have above-average interest in their products and services and even tailor products for
certain occupational groups: Computer software companies, for example, design different products
for brand managers, engineers, lawyers, and physicians.

As the recent recession clearly indicated, both product and brand choice are greatly affected by
economic circumstances: spendable income (level, stability, and time pattern), savings and assets
(including the percentage that is liquid), debts, borrowing power, and attitudes toward spending
and saving. Luxury-goods makers such as Gucci, Prada, and Burberry are vulnerable to an

34
economic downturn. If economic indicators point to a recession, marketers can take steps to
redesign, reposition, and reprice their products or introduce or increase the emphasis on discount
brands so they can continue to offer value to target customers. Some firms—such as Snap
Fitness—are well-positioned to take advantage of good and bad economic times to begin with.

iii. Personality and Self-Concept

Each person has personality characteristics that influence his or her buying behavior. By
personality, we mean a set of distinguishing human psychological traits that lead to relatively
consistent and enduring responses to environmental stimuli (including buying behavior). We often
describe personality in terms of such traits as self-confidence, dominance, autonomy, deference,
sociability, defensiveness, and adaptability.

Personality can be a useful variable in analyzing consumer brand choices. Brands also have
personalities, and consumers are likely to choose brands whose personalities match their own. We
define brand personality as the specific mix of human traits that we can attribute to a particular
brand.

Stanford’s Jennifer Aaker researched brand personalities and identified the following traits:

1. Sincerity (down-to-earth, honest, wholesome, and cheerful)

2. Excitement (daring, spirited, imaginative, and up-to-date)

3. Competence (reliable, intelligent, and successful)

4. Sophistication (upper-class and charming)

5. Ruggedness (outdoorsy and tough)

Aaker analyzed some well-known brands and found that a number tended to be strong on one
particular trait: Levi’s on “ruggedness”; MTV on “excitement”; CNN on “competence”; and
Campbell’s on “sincerity.” These brands will, in theory, attract users high on the same traits. A
brand personality may have several attributes: Levi’s suggests a personality that is also youthful,
rebellious, authentic, and American.

Consumers often choose and use brands with a brand personality consistent with their actual self-
concept (how we view ourselves), although the match may instead be based on the consumer’s

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ideal self-concept (how we would like to view ourselves) or even on others’ self-concept (how we
think others see us).

These effects may also be more pronounced for publicly consumed products than for privately
consumed goods. On the other hand, consumers who are high “self-monitors”—that is, sensitive
to how others see them—are more likely to choose brands whose personalities fit the consumption
situation.

Finally, often consumers have multiple aspects of self (serious professional, caring family member,
active fun-lover) that may be evoked differently in different situations or around different types of
people. Some marketers carefully orchestrate brand experiences to express brand personalities.

iv. Lifestyle and Values

People from the same subculture, social class, and occupation may lead quite different lifestyles.
A lifestyle is a person’s pattern of living in the world as expressed in activities, interests, and
opinions. It portrays the “whole person” interacting with his or her environment. Marketers search
for relationships between their products and lifestyle groups. A computer manufacturer might find
that most computer buyers are achievement-oriented and then aim the brand more clearly at the
achiever lifestyle. Here’s an example of one of the latest lifestyle trends businesses are targeting.

Lifestyles are shaped partly by whether consumers are money constrained or time constrained.
Companies aiming to serve money-constrained consumers will create lower-cost products and
services. By appealing to thrifty consumers, Walmart has become the largest company in the
world.

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4.1.2 Consumer Decision-making Process
It is vital to know the consumer buying decision process. The consumer buying decision process
are the decision-making processes begin by the consumer to buy the goods or services in
exchange of money in the market before, during and after the purchase of goods or services. It
helps the seller/marketer for selling its goods or services in the market.

i. Need recognition:
It is the first stage of consumer buying decision process. It is also known as “Problem
recognition”. It starts with the basic need like air, water, food and shelter. It may also start with a
step ahead of basic need. The company should understand the consumer need and focus on to
satisfy it. In the need recognition, the companies can find out the need of the consumer and creates
marketing strategies. For instance; a person is hungry then the food is its desire, but a good food
may satisfy it. So, the company should focus on to satisfy the need of consumer. After this stage,
the next stage is information search.

ii. Information search:

It is the second stage of consumer decision-making process. When a consumer goes to the market
for buying goods or services then consumer recall his/her thinking towards the product, if the
pastexperience positive or good and consumer satisfied then consumer buy that product and search

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of information end itself. But the past-experience negative or not good then the consumer begins
the information of search of that product. The consumer also searches the information of the
product when he/she want to try new product.
The consumer begins search about the product in this stage through several sources. The Kotler
stated that “Consumer can obtain information from any of several sources. These include personal
sources (family, friends, neighbours, acquaintances), commercial sources (advertising, sales
people, dealer and manufacturer, web and mobile sites, packaging, displays), public sources (mass
media, consumer rating organization, social media, online searchers and peer reviews) and
experimental sources (examining and using the product)”. For instance; if a person wants to buy a
smartphone then the person gives more attention to the smartphone ads, he can get the input from
family or friends and he also gets the information regularly regarding the smartphone.

iii. Evaluation of alternatives:

This is the third stage of consumer buying decision making process. It comes after the information
search which is the second stage of buying decision-making process. When a consumer collects
the information of a product or a brand then the consumer ranks the product or brand and then next
step is evaluate it. For ex; a consumer wants to buy a car then he/she will collect information about
the car brand after collecting the prefer brand, he/she will evaluate from the alternative brands.

iv. Purchase decision

This is the fourth stage of consumer buying decision-making process. The consumer has decided to buy a
product after collecting information from several sources, evaluate it and decided for the where to purchase
and what to purchase. Consumer purchase the brand or product which he/she gives the highest rank in the
evaluation stage. The purchase decision also influenced by the surrounding environment.

v. Post-purchase decision
The post-purchase decision is the fifth and last stage of consumer buying decision-making
process. The companies work doesn’t stop if the customer buys a product. The companies should
know the behaviour or view of the consumer towards the products. After the use of the product,
the customer might be satisfied or dissatisfied. If the consumer satisfied, then the chances of
retention are more of the same product and satisfied consumer can also influence the other people

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to buy the product. The chances of increasing the loyalty of consumer towards the product are
maximum and if the consumer become loyal towards the product then the chances of retention of
product are maximum by the satisfied consumer. If the consumer retains the product then the sales
of the product increases, if the sales of the product increase then the overall aim of the company
getting profit will achieve.

4.2 MIS-Subsystems
Marketing information is the lifeblood of marketing process, marketing decision won't be taken in
the absence of marketing information. Marketing decisions are affected by many internal and
external environmental variables, so the marketing decision maker needs a great deal of
information related to these variables, to predict their directions and their expected effects on the
internal activities of the organization and the market, in order to make the rational marketing
decisions in an uncertainty environment facing the marketing administration.

4.2.1 The Concept of MIS

Marketing information system plays an important role in raising the efficiency of economic
performance to the companies in highly competitive markets, through providing the necessary
information for the various administrative levels. The success of the marketing process depends to
a large extent on the marketing information system and the success in each elements of this system.
Marketing information system has been needed by marketing management for the purpose of
identifying, measuring, and forecasting marketing opportunities, besides, analyzing of market
segments. Marketing information system consists of people, facilities, and integrated procedures
that used to provide management with accurate and regulated information about the environment-
related marketing, which helps decision makers to hunt opportunities and build strategies and
marketing plans.rtant sources in obtaining marketing information.

Marketing information system consists of:

1. Internal records: The data collected in the form of database about the daily operations of
the companies that produce medicines (under study), and includes the necessary data
records to obtain information regarding the scale of activity and the current performance
in sales, cost, inventory and cash flow.... etc.

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 2. Marketing intelligence: is the means by which management can keep in contact with new
knowledge of competitors emerging conditions.
3. Market Research: Is the process of collecting and analyzing of data for the purposes of
identifying and resolving problems related to companies marketing services and marketing
opportunities, it's a planned and managed activity on a scientific basis to ensure efficiency
in dealing with those problems and opportunities. Marketing information system is
designed properly to solve many information problems facing the administration, like the
wrong kind information, in the wrong location, at the wrong time, and the insufficient
correct type of information, in the correct location, at the right time. Marketing information
system can support managers in their marketing decision making by providing them with
internal linking and operational integration between departments or sections.

4.2.2 Conducting Marketing Research

Marketing research (also called consumer research) is a form of business research. The field of
marketing research as a statistical science was pioneered by Arthur Nielsen with the founding of
the ACNielsen Company in 1923. Marketing research is a systematic and objective study of
problems pertaining to the marketing of goods and services. It is applicable to any area of
marketing.

Research is the only tool an organization has to keep in contact with its external operating
environment.

Authors have defined Marketing Research in many ways:

 Kotler (1999) defines marketing research as: systematic problem analysis, model-building
and fact-finding for the purpose of improved decision-making and control in the marketing
of goods and services‘.
 The American Marketing Association (AMA, 1961) defines it as: the systematic gathering,
recording and analyzing of data relating to the marketing of goods and services‘.
 Green and Tull have defined marketing research as the systematic and objective search for
and analysis of information relevant to the identification and solution of any problem in
the field of marketing.

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 The aim of marketing is to satisfy the needs of the consumer. Marketing research helps in
achieving this. Marketing research is a systematic and logical way of assessing ways of satisfying
customer needs. According to all the above definitions, Marketing Research starts by stating the
problem or the issue to be investigated; indicate what kind of information is required to resolve
the problem; identify where and how to get it; specify the methodology for analyzing the research
findings; sum up the research findings and then suggest the best solution for marketing decision
making.

4.2.2.1 Marketing Research Methods

Methodologically, marketing research uses two types of research designs, namely:

I. Qualitative marketing research:

This is generally used for exploratory purposes. The data collected is qualitative and focuses on
people‘s opinions and attitudes towards a product or service. The respondents are generally few in
number and the findings cannot be generalised to the whole population. No statistical methods are
generally applied.

In a previous article, we have been presenting the concept of quantitative research and its
usefulness in the business environment. Below we are going to describe qualitative research and
how we can apply it in real situations. Generally speaking, Qualitative market research helps us in
finding out the perceptions of our target audience, as well as to forecast the behavior that the
audience will exhibit when we try to implement our marketing objective. Originated in social
and behavioral sciences such as sociology, anthropology and psychology, qualitative
research mainly includes in-depth interviews with either individuals or groups, diary and journal
exercises as well as in-context or participant observations.

a. Participant observation

Qualitative research at its most simple can take the form of observation. In observation, the
researcher simply observes the research matter. This method is frequently used when the
researcher wants to examine a subject in its natural environment or study naturally occurring

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behaviors. In this method, as with other forms of qualitative research, the researcher has to be very
careful to not introduce personal bias into his observations.

b. In-depth interviews –

In some cases, qualitative market research may be conducted through interviews, such as listening
to someone recount something that happened in the past, such as a wartime experience or
other event. When qualitative research takes the form of an interview, the interviewer asks open-
ended questions and simply records what the participant says.

c. Focus groups –

To reduce the risk of researcher bias, a qualitative research method called “focus group” is
sometimes used. In a focus group, several people are interviewed at once to gain their opinions on
a subject or item. This method could be used to find out what people think about a product or an
advertisement. A risk in this method of interviewing is that bias will be introduced into the group
through the choice of group members.

Ex: Focus groups, In-depth interviews, and observation

II. Quantitative marketing research

This is generally used to draw conclusions for a specific problem. It tests a specific hypothesis and
uses random sampling techniques so as to infer from the sample to the population. It involves a
large number of respondents and analysis is carried out using statistical techniques. Ex: Surveys,
Questionnaires and observations.

a. Questionnaire:

A Quantitative Research Tool: Questionnaire is a popularly used method of collecting primary

data, particularly when a researcher wants to carry out a comprehensive investigation of a
phenomenon or a variable (Creswell, 2007). It is mostly adopted by both experienced and novice
researchers who work either independently or dependently under the sponsorship of a firm, an
organization, a state, etc. The researchers send the questionnaire to enlisted respondents and ask

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the respondents to fill the questionnaire and send back to the researchers overtime. It can be sent
through different media, such as mail, email, or through other means.

b. Observation:

Much like questionnaire, the observation is another tool that is used for the collection of primary
data. The observation is an organized, persistent, orderly tool of investigation which the
researchers use to ensure taking notes of impact, interaction, experience or anything else as it
occurs. The observation is a proper method of data collection only when the researcher wants to
study the connection between members of a group, know the diet of a large group, investigate the
task performed by staff members, or to learn a group’s or an individual’s behaviour (Kumar, 2011).
Besides, if the respondents are not ready to cooperate, it is the best of all methods to use the
observation method.

c. Survey Research:

It is a quantitative method whereby a researcher poses some set of predetermined questions to an

entire group, or sample, of individuals. Survey research is an especially useful approach when a
researcher aims to describe or explain features of a very large group or groups. This method may
also be used as a way of quickly gaining some general details about one’s population of interest to
help prepare for a more focused, in-depth study using time-intensive methods such as in-depth
interviews or field research. In this case, a survey may help a researcher identify specific
individuals or locations from which to collect additional data.

4.3 Demand forecasting

Demand forecasting is an amalgamation of two words; the first one is known as demand, and
another one is forecasting. The meaning of demand is the outside requirements of a manufactured
product or a useful service. In general aspects, forecasting usually means making an approximation
in the present for an event that would be occurring in the future.
All the companies use these predictions to format their approach to marketing and sales. It
contributes hugely towards increasing their profit margins. Here, we are stepping forward to
elaborate on demand forecasting, its features and its usefulness. Moreover, we will also see its
applications.

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4.3.1 Definition of Demand Forecasting
Demand forecasting is a technique that is used for the estimation of what can be the demand for
the upcoming product or services in the future. It is based upon the real-time analysis of demand
which was there in the past for that particular product or service in the market present today.
Demand forecasting must be done by a scientific approach and facts, events which are related to
the forecasting must be considered.
Hence, in simple words, if someone asks what demand forecasting is, we can answer that after
fetching information about different aspects of the market and demand which is dependent on the
past, an attempt might be made to analyze the future demand.

This whole concept of analyzing and approximations are collectively called demand forecasting.
In order to understand it more clearly, we can consider the following equation so that we can
understand the concept of demand forecasting more easily. For example, if we sold 100,150, 200
units of product Z in January, February, and March respectively, now we can approximately say
that there will be a demand for 150 units of product Z in April. However, there is also a clause that
the condition of the market should remain the same.

4.3.2 Methods of Demand Forecasting

There are two main methods of demand forecasting: 1) Based on Economy and 2) Based on the
period.
1. Based on Economy
There is a total of three methods of demand forecasting based on the economy:

 Macro-level Forecasting: It generally deals with the economic environment which is

related to the economy as calculated by the Index of Industrial Production(IIP), national
income and general level of employment, etc.

 Industry-level Forecasting: Industry-level forecasting usually deals with the demand

issued for the industry’s products as a whole. We can consider the example where there is
a demand for cement in India, Demand for clothes in India, etc.

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  Firm-level Forecasting: It is a major type of demand forecasting. Firm-level forecasting
means that we need to forecast the demand for a specific firm’s product. We can consider
the following examples as Demand for Birla cement, Demand for Raymond clothes, etc.

2. Based on the Time

Forecasting based on time may be either short-term forecasting or long-term forecasting.

 Short-term Forecasting: It generally covers a short period which depends upon the nature
of the industry. It is done generally for six months or can be less than one year. Short-term
forecasting is apt for making tactical decisions.

 Long-term Forecasting: Long-term forecasts are generally for a longer period. It can be
from two to five years or more. It gives data for major strategic decisions of the company.
We can consider the example of the expansion of plant capacity or on opening a new unit
of business, etc.
4.2.3 Steps Used in Demand Forecasting

The process of demand forecasting can be divided into five simple steps:

 Setting an Objective: The first step involves clearly deciding on the purpose of the
analysis. That is, the manufacturers define their goals that are achievable through the
analysis and compatible with their needs.

 Determining the Time Period: In this step, the manufacturer decides whether the analysis
will be carried out for a short or long duration of time. Many forecasts run for a long
duration as they offer more and consistent data.

 Selecting a Demand Forecasting Method: In the next step, the manufacturer decides
along with the analysts which method will give the best results.

 Collection of Data: In the penultimate step, the data is collected according to the
preconceived attributes for the analysis.

 Evaluation of Data: In the last step, the collected data is evaluated to obtain conclusions
for the forecast.

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 CHAPTER FIVE: MARKETING STRATEGIES

5.1 Defining Marketing Strategy

Marketing strategy defined by David Aaker is the process that can allow an organization
concentrate its resources on the optimal opportunities with the goals of increasing sales and
achieving a sustainable competitive advantage. Marketing strategy includes all basic and long term
activities in the field of marketing that deals with the analysis of the strategic initial situation of a
company and the formulation, evaluation and selection of market oriented strategies and therefore
contribute to the goals of the company.

5.1.2 Market Segmentation

Market consist of buyers and buyers differ in one or many ways. They may differ in their wants,
resources, location, buying attitude and buying practices. Through market segmentation,
companies divide large heterogeneous market into smaller segments that can be reached more
efficiently and effectively with products and services that match their unique needs. Companies
today recognized that they cannot appeal to all buyers in the market place at the same time. Buyers
are too numerous, widely scattered and value in their needs and buying practices.

5.1.3 Targeting and Positioning

a. Target Marketing

It involves breaking the market into segments and concentrating your marketing efforts on one or
few key segments. It can be key to a small business success and beauty of target marketing is that
it makes the promotion, pricing and distribution of products and services easier and more cost
effective. It provides a focus to all your marketing activities.

b. Positioning
Once a company has decided which segment of the market it will enter, it must decide what
position the consumers have of the product. Positioning therefore is the place a product occupies
in a consumer’s mind with relative to competitive products.

Positioning involves in planting the brands unique benefits and differentiation in customer’s mind.
A product position is the complex set up perception, impression, and feelings that consumers have
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for a product compared with competitor’s products. Thus, positioning brings actual differentiation
ie. differentiating the company’s marketing offer so that it will give consumers more value than
competitors offers. To give points of differentiation, marketers must think through the customer’s
entire experience with the company products or services.

5.2 Brand Equity

Any discussion on Brand Equity has to first begin by understanding what a brand is. The American
Marketing Association defines brand as ―a name, term, sign, symbol, or design, or a combination
of them intended to identify the goods and services of one seller or group of sellers to differentiate
them from those of competition‖. Sokolowski (1989) – ―at its root a brand is a mark of distinction
that differentiates one thing from another: at one level, it is a material act; on the other, a
philosophic process. A product is something that offers a functional benefit (e.g., a toothpaste, a
life insurance policy, or a car). A brand is a name, symbol, design, or mark that enhances the value
of a product beyond its functional purpose (Farquhar, 1989). Aaker (1992) qualifies this definition
by saying that ―a brand thus signals to the customer the source of the product, and protects both
the customer and the producer from competitors who would attempt to provide products that
appear to be identical‖.

Jones (1998) calls it ―as a product that provides functional benefits, plus added values that some
consumers value enough to buy‖ Keller (2003) defines brand as ―a product, but one that adds
other dimensions that differentiate it in some way from other products designed to satisfy the same
need‖ and Kapferer (1992) brings in the idea of profitable business by defining brand as ―a strong
idea that is supported by a profitable economic equation Doyle (2001) views brands as something
that ―simplify the choice process by confirming the functional or emotional associations of the
brand. Increasingly, it is the emotional or experience associations that a successful brand promises
that create the consumer value.

Kotler (2009) summarizes ―at the heart of a successful brand is a great product or service, backed
by careful planning, a great deal of long-term commitment, and creatively designed and executed
marketing. A strong brand commands intense consumer loyalty.‖ Brand, thus, is product endowed
with differentiation, emotional or functional, and supported by a profitable business model

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Brand Equity Definition The Marketing Science Institute defines it as ‖The set of associations and
behavior on the part of a brand's customers, channel members and parent corporation that permits
the brand to earn greater volume or greater margins than it could without the brand name. Farquhar
(1989) in, what is now, one of the most referenced papers on brand equity defined it as the ―added
value with which a given brand endows a product. Aaker (1992) defines it ―as a set of brand
assets and liabilities linked to a brand, its name and symbol that add to or subtract from the value
provided by a product or service to a firm and/or to that firm‘s customers. For assets or liabilities
to underlie brand equity they must be linked to the name and/or symbol of the brand. If the brand‘s
name or symbol should change, some or all of the assets or liabilities could be affected and even
lost, although some might be shifted to a new name and symbol.

Keller defines it as the ―differential effect that brand knowledge has on consumer response to the
marketing of that brand‖. Kotler (2009) refers to it as ‗the added value endowed on products and
services. It may be reflected in the way consumers think, feel, and act with respect to the brand, as
well as the prices, market share, and profitability the brand commands for the firm‘.

Brand equity exists in the hearts and minds of those in the market place, Consumer brand equity
is only part of the whole: there are other customers along the chain, the sellers have brand equity
and so do outside influencers. It is important to realize that brand equity is the intangible asset
created by marketing endeavor (Ambler, 1997).

5.2.1 Brand Equity Dimensions

After an extensive literature survey 11 key brand equity dimensions have been identified. They are
listed below – the listing is based on the number of referenced work found in the literature survey
done.

a. Quality

Aaker‘s (1991) defines Quality as ―consumer‘s perception of the overall quality or superiority of
a product or service with respect to its intended purpose, relative to alternatives. Quality from a
consumer‘s perspective is referred to as ‘perceived quality‘. Quality, in the customer‘s context, is
not technical but perceptions about the products, tangible and intangible, that the consumer
observes. Perceived quality can be defined as the customer‘s perception of the overall quality or
superiority of a product or service with respect to its intended purpose, relative to alternatives.

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Perceived quality is, first, a perception by customers. It thus differs from several related concepts,
such as: actual or objective quality, product-based quality and manufacturing quality. Perceived
quality is an intangible, overall feeling about a brand.

However, it usually will be based on underlying dimensions which include characteristics of the
products to which the brand is attached such as reliability and performance. To understand
perceived quality, the identification and measurement of the underlying dimensions will be useful,
but the perceived quality itself is a summary, global construct (Aaker, 1992). Perceived quality
has been shown to be associated with price premiums, price elasticities, brand usage, and,
remarkably, stock return. Further, it is highly associated with other key brand equity measures,
including specific functional benefit variables. Thus, perceived quality provides a surrogate
variable for other more specific elements of brand equity (Aaker, 1996).

b. Associations

A brand association is anything ―linked‖ in memory to a brand. The association not only exists
but has a level of strength. A link to a brand will be stronger when it is based on many experiences
or exposures to communications, rather than a few. It will also be stronger when it is supported by
a network of other links. It is formed as a result of the consumer‘s brand belief, which can be
created by the marketer, formed by the consumer himself through direct experience with the
product, and/or formed by the consumer through inferences based on existing associations. Product
attributes, intangibles, customer benefits, use/application, user/customer, celebrity/person, life-
style/personality, product class, competitors & Country/geographic area are the various
associations.

The combination of tangible and intangible attributes creates a brand identity, that is ―a unique
set of brand associations that the brand strategist aspires to create or maintain,‖ which drives brand
associations. Therefore, the identity of the specific brand may impact brand associations and
ultimately brand equity.

c. Loyalty

Brand loyalty is a measure of the attachment that a customer has to a brand (Aaker, 1991) - It
reflects how likely a customer will be to switch to another brand, especially when that brand makes
a change, either in price or in product features. It is often the core of a brand‘s equity because if

49
customers are indifferent to the brand and, in fact, buy with respect to features, price, and
convenience with little concern to the brand name, there is likely little equity. As brand loyalty
increases, the vulnerability of the customer base to competitive action is reduced.

It is one indicator of brand equity which is demonstrably linked to future profits, since brand
loyalty directly translates into future sales. Brand loyalty comes from use experience but could be
influenced by the other major dimensions of brand equity - awareness, associations, and perceived
quality. However, it is not always explained by these three factors. In many instances it occurs
quite independent of them and, in others, the nature of relationship is unclear.

d. Awareness

Brand awareness is the ability of a potential buyer to recognize or recall that a brand is a member
of a certain product category. A link between product class and brand is involved. Brand awareness
involves a continuum ranging from an uncertain feeling that the brand is recognized, to a belief
that it is only on in the product class. This continuum can be represented by three very different
levels of brand awareness. The role of brand awareness in brand equity will depend upon the
context and upon which level of awareness is achieved.

Brand Awareness is related to the strength of the brand node or trace in memory, as reflected by
consumers' ability to identify the brand under different conditions. In particular, brand name
awareness relates to the likelihood that a brand name will come to mind and the ease with which
it does so. Brand awareness consists of brand recognition and brand recall performance. Brand
recognition relates to consumers' ability to confirm prior exposure to the brand when given the
brand as a cue. In other words, brand recognition requires that consumers correctly discriminate
the brand as having been seen or heard previously. Brand recall relates to consumers' ability to
retrieve the brand when given the product category, the needs fulfilled by the category, or some
other type of probe as a cue.

e. Image

A brand image is a set of associations, usually organized in some meaningful way (Aaker, 1992).
Brand image refers to the set of associations linked to the brand that consumers hold in memory.
Brand image is defined here as perceptions about a brand as reflected by the brand associations
held in consumer memory. Brand associations are the other informational nodes linked to the brand

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node in memory and contain the meaning of the brand for consumers. The favorability, strength,
and uniqueness of brand associations are the dimensions distinguishing brand knowledge that play
an important role in determining the differential response that makes up brand equity, especially
in high involvement decision settings.

Brand Image is on the receiver‘s side. Image research focuses on the way in which certain groups
perceive a product, a brand, a politician, a company or a country. The image refers to the way in
which these groups decode all of the signals emanating from products, services and
communication covered by the brand.

f. Personality

Brand personality is defined as the - set of human characteristics associated with a brand.‖
Perceptions of brand personality traits can be formed and influenced by any direct or indirect
contact that the consumer has with the brand. In addition to personality characteristics, researchers
argue that brand personality includes demographic characteristics such as gender. Perceptions of
brand personality traits can be formed and influenced by any direct or indirect contact that the
consumer has with the brand.

Brand personality reflects how people feel about a brand as a result of what they think that the
brand is or does, the manner by which the brand is marketed, and so on. Brands may also take on
values. Brand personality is often related to the descriptive usage imagery but also involves much
richer, more contextual information.

g. Attitude

Brand attitude is what the consumers think that the brand thinks about them. In research only
‘Brand Image‘ is considered whereas ‘Brand Attitude‘ also plays an important role in building
brand equity. Brand Attitude strength is conceptualized as the positivity or negativity (valence) of
an attitude is weighted by the confidence or certainty with which it is held.

Park (2010) developed a two factor model which were brand-self connection and prominence
which indicates brand attachment better than a one factor model. On testing whether brand
attachment significantly predicts brand purchase share with a model in which attachment was again

51
represented by brand prominence and brand-self connection as second-order factors, the results
showed that brand attachment was a strong predictor of brand purchase share.

h. Trust

Corporate trustworthiness is defined as the extent to which a company is seen as motivated to be

honest, dependable, and sensitive to customer needs (Kotler, 2009). One research has
demonstrated that trust is crucially dependent on something that can best be termed intimacy.
Intimacy is the "brand's attitude" which locks trust into the relationship. The degree of intimacy
depends on the brand's success in creating a personal link with the individual consumer, of
acknowledging that the individual is more than just a statistic or a client code. Intimacy means
showing that the brand knows the individual consume. A corporate brand that does not act as if it
knows who its customers are will not earn their trust, regardless of its credibility and reliability .

i. Satisfaction

Satisfaction is a person‘s feelings of pleasure or disappointment that result from comparing a

product‘s perceived performance (or outcome) to their expectations (Kotler, 2009). Customer
satisfaction only results when the customer perceives him or herself and needs as playing a central
role in all this activity. The customer wants to see all the aggressive energy as a response to and
support of his or her needs. The customer wants some sign that the corporation has listened to its
customers—and responded appropriately.

j. Esteem

Esteem is a measure of favorable opinion that people have for companies and brands, they know.
Esteem, the extent to which consumers like a brand and hold it in high regard, it relates to how
well a brand fulfills its implied or overtly stated consumer promise and is influenced by perceptions
of quality, derived from consumers' experiences with the brand.

k. Attachment

As a construct that describes the strength of the bond connecting the consumer with the brand,
attachment is critical because it should affect behavior that foster brand profitability and customer
lifetime value. Brand Attachment is defined as strength of the cognitive and emotional bond
connecting the brand with the self or the strength of the bond connecting the brand with the self.

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5.3 Crafting Brand Positioning.

Positioning is the art of designing the company’s offering and image to occupy a distinctive place
in the minds of the target market. A business or marketing statement that summarizes why a
consumer should buy a product or use a service. Positioning is the most important stage in the
asset management strategy of the trademark. Carefully considered positions provide development
directions for the new products, market expansion, communication, pricing, selection of
distribution channels. The brand positioning is a process of creating its own image, distinctive
properties, positive associations and values in consumers’ mind in order to create a sustainable
trademark image and ensure consumers’ attachment to this trademark.

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