Basics Fundas of Marketing
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Transcript of Basics Fundas of Marketing
Submitted to: Ms. Karon Shaiva
Submitted by: Sunny Pawar – A010
PT MBA(SE) - III
School of Business Management
NMIMS (2014-15)
14/08/2014 1
Q.1. Levels of Product
• Core Product – What is the core benefit your product
offers? The core product is not the tangible, physical product. You can’t
touch it. That’s because the core product is the benefit of the product
that makes it valuable to you.
• Basic/Tangible Product – The tangible product is the actual,
physical product. You can get some use out of it.
• Expected Product –The expected product is the product the
customers expect it to be
• Augmented Product – The augmented product is the non-physical
part of the product. This meets the customer’s desires beyond his
expectations. It usually consists of lots of added value, for which you may
pay a premium.
• Potential Product – The potential product is the futuristic aspect of
the product i.e. how the product can be ideally with further add-ons and
technological or other improvements . The possible evolutions that can be
made to make the product a distinguished offer14/08/2014 2
In a midday meal (Annakshetra) project
of Akshaypatra for kids in municipal
school in rural areas of south India
these can be:
• Core Product :Hunger
• Basic: Edible and Sufficient Khichdi
• Expected: Tasty
• Augmented: Nutritious
• Potential: Khichdi + Buttermilk 14/08/2014 3
Product levels in social sector
Core (Hunger)
Basic (edible and sufficient khichdi)
Expected (Tasty)
Augmented (Nutritious)
Potential (khichdi + buttermilk)
14/08/2014 4
Q.2. a) Porter's Five Forces analysis Industry Focus
• While a Porter's Five Forces analysis focuses specifically on the
industry in which a company operates and a SWOT analysis focuses
primarily on the company itself, both analyses actually focus closely
on the industry.
• In a SWOT analysis, the strengths and weaknesses of a company are
analyzed relative to the entire industry, while the threats and
opportunities originate primarily within the industry.
• The industry focus of both of these tools helps managers concentrate
on the most relevant environment when considering strategic
planning initiatives.
• Porter's Five Force model can be used in a scenario where you want
have more micro level Planning.
• It gives you a detailed insight vertically and horizontally in a value
system. Be it be a Production, Marketing or Finance.
• SWOT is more of assessing a Scenario at a Macro Level which can
give a bird's eye view of a situation or scenario.
14/08/2014 5
Intensity of rivalry
within the industry
KEF, YuvaP, Pratham
Threats from Substitute product-(MCGM,
Unorganized Job Sector)
Bargaining power of Buyers
(Customers)-Trained Youth &
Corporate Companies, Placement Agencies
Threats of new entrants-School for
Dropout, New NGO’S, 2% CSR, Direct
Placement by Corporate
Bargaining power of
Suppliers-CBOS’s, NGO,
Youth And Parents,
Corporate
Porter's Five Forces analysis - Kotak Education Foundation
14/08/2014 6
Q.2. a) SWOT Analysis
• Opposition is an inevitable part of change and one that can
significantly impact our community development initiatives
•A SWOT analysis guides us to identify the positives and negatives
inside our organization (S-W) and outside of it, in the external
environment (O-T).
• Developing a full awareness of our situation can help with both
strategic planning and decision-making.
• The SWOT method (which is sometimes called TOWS) was
originally developed for business and industry, but it is equally
useful in the work of community health and development,
education, etc.
• SWOT is more of assessing a Scenario at a Macro Level which
can give a bird's eye view of a situation or scenario.
14/08/2014 7
STRENGHTS:
•Self funded
• NGO networking: Snehasagar,
Minim Charitable Foundation,
MuktiSadan Foundation
• Networking with MCGM & other
govt. agencies such as MAVIM,
ICDS, Virar Vasai
Mahanagarpalika, etc.
•USP :Rs. 300/- for rigorous 3
month training and 100% job
placement to dropouts from B.P.L.
Category.
• Good rapport with community &
primary stakeholders through
CBO’s such as Triratna Prerana
Mandal
• MBA students internship for 2
months every from ITM college
Kharghar work as volunteer
Weakness:
• Lack of Training and
Development for staff
• No impact assessment
• No update of curriculum
• More emphasis is on
quantity and not the quality
of the training provided
• Top down approach in
decision making
• Poor human resource
management leading to high
Attrition rate.
14/08/2014 8
Opportunity:
• Increasing no of dropout
in Mumbai- Rich
demographic resource.
• Foreign direct
investment in retail
industry will provide
further job opportunities
to fresher & trainees
• Strategic CSR tie-ups
with MNCs and Hotel
Industry.
Threat:
• Competition for new
entrants such as
Rustomjee Construction
ltd.
• PRATHAM- Residential
training
• MCGM thinking to
introduce new project for
dropout youths
•School for dropout youth
getting direct jobs from
Corporate
• Innovation in Vocational
training
•Policy change e.g. NSDC
withdrawing its support.
14/08/2014 9
Internal vs External
Forces and facts beyond one’s control
include:
• Future trends - in your field (Is
research finding new treatments?) or
the culture (Do current movies
highlight your cause?)
• The economy - local, national, or
international
• Funding sources - foundations,
donors, legislatures
• Demographics - changes in the age,
race, gender, culture of those you
serve or in your area
• The physical environment (Is your
building in a growing part of town? Is
the bus company cutting routes?)
• Legislation (Do new legal
requirements/ policies make your job
harder...or easier?)
• Local, national or international
events
Internal factors include one’s resources and experiences such as :
• Human resources - staff, volunteers, board members, target population
• Physical resources - your location, building, equipment (Does your building have a prime location? Does it need renovations?)
• Financial resources - grants, funding agencies, other sources of income
• Activities and processes - programs you run, systems you employ
• Past Experiences & Expertise - building blocks for learning and success, your reputation in the community.
14/08/2014 10
Levels of Market Segmentation
A market segment is a
classification of potential
customers by one or more
characteristics, in order to
identify groups of
customers, which have
similar needs and demand
similar products and/or
services concerning the
recognized qualities of these
products.
14/08/2014 13
• In case of mass marketing, the seller does mass production, mass
distribution and mass promotion for the product. The single product then
caters to all the buyers in the population.
• Mass marketing thus creates the largest potential market leading to lower
costs and thereby lowering prices and higher margins, but it also creates
difficulty of reach and makes it real difficult as well as expensive to reach all
audience.
• Because of this reason, sellers are turning towards micro-marketing
which happens at one of the following four levels:
1. Segment marketing – targeting a group of customers having a similar
set of needs and wants.
2. Niche (Tiny) marketing – targeting a narrowly defined customer group
who seek a distinctive set of benefits.
3. Local marketing – targeting a local group of customers
4. Individual marketing – This is ultimate level of segmentation where
segmentation boils down to segments of one.
http://geekyfry.com/management/marketing/segmentation-levels-
variables/
Segmentation Levels
14/08/2014 14
TYPE OF FIRM SEGMENTATION BASE POSSIBLE MARKET SEGMENTS
1. Banking Demographic segmentation Young couples, young families, older families, pre-retirement, retired
2. Mobile phone carriers
Benefit segmentation Highly social, work-oriented, safety contact, status symbol
3. Frozen foodmanufacturers
A broad mix is used here:
• Demographic segmentation
• Psychographic segmentation
• Behavioral segmentation
Single households, diet-conscious, family dining, parties, budget-conscious, variety seekers
4. Toothpaste Benefit segmentation Teeth whitening, sensitive teeth, fresh breath, cavity protection, tartar control
5. Restaurant Behavioral segmentation Regulars, special occasion, business lunch, quick spot
14/08/2014 17
Concentrated (Niche/Tiny)
marketing
Merit base Educational scholarship for M.Phil/Ph.D programs in
USA
Segment Remote Rural Villages Of South India
Target
Group
Post Graduate Girls (With Distinction)
From Low Income Groups
Positioning Coveted scholarship by an India
corporate to deserving Indian
candidates
14/08/2014 19
Differentiated (segmented)
Marketing
Microfinance Products
Segment Rural Markets and Tier II cities
Target
Group
Women from Low Income Groups,
SHG’s, JLG’s, etc.
PositioningCustomized loans for your unique
needs with tailor-made payment
options to match the income patters
of the community 14/08/2014 20
Undifferentiated (Mass) marketing-
One common standardized product
for all Kotak Education Foundation’s Vocational
training program
Segment Slums & Chawls of Mumbai
Target
Group
Dropouts/ unemployed youth (18-25
years) from Low income group.
Positioning Skill Building + Placements. Starting
salary of Rs. 6,500/- per month after
successful completion of the 3 month
training 14/08/2014 21
Q.4. a) Value Chain (Vertical Linkage)
Analysis
“ Gaining and sustaining a competitive advantage
requires that a firm understand the entire value
delivery system, not just the portion of the value
chain in which it participates. Suppliers and
customers and suppliers’ suppliers and customers’
customers have profit margins that are important to
identify in understanding a firm’s
cost/differentiation positioning, because the end-
use customers ultimately pay for all the profit
margins along the entire value chain.”
- Shank and Govindarajan (1993)
14/08/2014 22
The existing supply chain of AMUL
• The distribution network
Amul products are available in over 500,000 retail outlets across India through its network of 3,500 distributors.
There are 47 depots with dry and cold warehouses to buffer inventory of the entire range of products.
• Gujarat Cooperative Milk Marketing Federation (GCMMF) transacts on an advance demand draft basis from its wholesale dealers instead of the cheque system adopted by other FMCG companies.
• This practice is consistent with GCMMF’s philosophy of maintaining cash transactions throughout the supply chain and it also minimizes dumping.
• Wholesale dealers carry inventory that is just adequate to take care of the transit time from the branch warehouse to their premises. This just in time inventory strategy improves dealer’s ROI. All the branches of GCMMF are engaged in route scheduling and have dedicated vehicle operations.
14/08/2014 24
The existing supply chain of AMUL
• Largest Cold Chain: AMUL has the largest cold chain network inIndia (18000 refrigerators) as compared to any other company. Thechemical components of milk are water, SNF and solids. It is aperishable product so it has to be consumed within 24 hours. Inorder to avoid wastage AMUL converts the milk into SNF (Solids notfats) and milk solids by evaporating the water, which comprises of60-70% of the milk contents.
• Customers: India is still in the evolutionary stage with tremendouspotential for high value products such as variants of milk. Thedistribution network is quite reasonable with access to metros aswell as rural areas.
• Suppliers: A majority of suppliers are small or marginal farmerswho are illiterate, poor and with liquidity problems. Farmers nowhave better access to information relating to markets, technologyand best practices in the dairy industry through net enabled kiosksin the villages and also improved bargaining power Indeed, in noother agriculture commodity does the farmer control the entire valuechain, from procurement to processing to marketing. In the dairysector, the Gujarati farmer is a link and value adder.
14/08/2014 25
The existing supply chain of AMUL
• Third party logistics service: There are ample deficiencies in the current infrastructure and the outbound logistics is taken care by GCMMF coordinating with distributors. It also connects with unions for product mix, product allocations and in developing production plans. The key lies in matching supply and demand as the demand outstrips supply by a big margin.
• Interlocking control: The objective of interlocking mechanism is to ensure that the interest of the farmer is always kept at the top of the agenda through representatives who constitute the Boards of different entities that compromise the supply chain. Professional managers and farmers work together as a team to strengthen the cooperative.
• Coordination agency: Objective of such an agency is to ensure the milk produced by the farmer is sold in the market either as milk or as value added product. With the creation of GCMMF (Amul), competition among co-operatives was eliminated while they could band together and take on the private sector.
GCMMF has ensured remunerative returns to the farmers whileproviding consumers with quality products under the brand nameAmul.
14/08/2014 26
FORM UTILITY: Enhancing the marketability of a product by changing
its physical characteristics. For example, boxed detergent can be
produced in liquid form, which may be more advantageous for certain
consumer requirements.
TIME UTILITY: Enhancing a product's marketability by making it
available at a convenient time. For example, a daily newspaper home
delivered so that the customer has it available immediately when he/she
awakes for the day.
PLACE UTILITY: Where the product or service is made available. For
example, if it is a retail establishment, people should be provided with
easy access. Mail order companies make it easy for customers to shop
whenever they want and then have their purchases delivered to them.
BRAND UTILITY:“The term brand utility describes a method of linking a brand to a cause or a mission. Brand utility therefore consists of showing and demonstrating the use of a brand. This ‘use’ is often social. The message brand utility communicates can replace or complement the classic persuasive advertising discourse on a product’s performance. The line of brand utility is often developed through a signature catchphrase or slogan. Some examples of brand utility practices: EDF - people connecting people / Nike -maximizing human potential through its signature "Just do It".”http://www.spotter.com/en/content/what-earth-%E2%80%98brand-utility%E2%80%99
14/08/2014 28
• FORM UTILITY: Customized sanitary napkins manufactured
by an SHG after understanding the specific requirement of each
& every women.
• PLACE UTILITY: Sanitary napkins are made easily available
and accessible at a place where women meet for usual
discussions & meetings.
• TIME UTILITY: Sanitary napkins are home delivered so that
women have it available immediately when they need it.
• Quality/ BRAND UTILITY: Several women still preferring
superior quality sanitary napkins provided by well known
brands such as Whisper, Carefree, etc. as against sanitary
napkins provided by NGOs through SHG’s i.e. trusting the
brand name of private companies.
Example: Sanitary napkins
14/08/2014 29
14/08/2014 31
Q.4. b) Value vs. Satisfaction
Its means the customers’ evaluation (perceived value) of the difference
between all the benefits and all the costs of the product. For example: I
consider MicroMax phone as Value For Money to me as compared to the
expensive Samsung
CUSTOMER VALUE
Customer Satisfaction (Absolute)
• Its the match between customer expectations of the product and the product’s actual performance.
• “It is a person’s feelings of pleasure or disappointment resulting from comparing a product’s perceived performance in relation to his or her expectations”
• Its the desired marketing tool : Loyalty, retention, acceptance of new offers, word of mouth advertising and all these result to repeat buys
www.berlysitumorang.blogspot.com
14/08/2014 32
Q.5. C.E. vs. S.E.
• The primary difference between the business and the socialentrepreneurs is the purpose for setting up the venture. Whilethe business entrepreneurs' efforts focus on building a businessand earning profits, the social entrepreneurs' purpose is tocreate social change.
• A business entrepreneur may create changes in the society, but that is not the primary purpose of starting the venture. Similarly, a social entrepreneur may generate profits, but for him/her that is not the primary reason for starting the venture.
• Another key difference between the social and the businessentrepreneur is in the meaning of wealth creation. For thebusiness entrepreneur, 'wealth' is same as profits. For the socialentrepreneur, however, wealth also encompassescreation/sustenance of the social and environmental capital.Therefore, to be viable, a social entrepreneurship venture mustshow a positive Social and/or Environmental ROI.
14/08/2014 34
C.E. vs. S.E.Perceptions of Value
• For the business entrepreneur, value lies in the profit the entrepreneur and
investors expect to reap as the product establishes itself in a market that
can afford to purchase it. The business entrepreneur is accountable to
shareholders and other investors for generating these profits. To the social
entrepreneur, there's also value in profits, as profits are necessary to support
the cause. That said, value for the social entrepreneur lies in the social
benefit to a community or transformation of a community that lacks the
resources to fulfill its own needs.
Measure of Profitability
• The ventures of business entrepreneurs are always designed to turn profits
that benefit stakeholders, such as shareholders or private investors. Social
entrepreneurs also may engage in for-profit activities. However, they often
structure their organizations as nonprofits, or they donate their profits to the
causes they support. NIKA Water, for example, is a for-profit company that
sells bottled water. According to "Entrepreneur," 100 percent of the
company's profits support clean-water projects in Uganda, Kenya, Sri Lanka
and Nicaragua.
14/08/2014 35
Current Trend?
Towards convergence. . .
14/08/2014 37
SOURCE: http://www.4lenses.org/setypology/print
It’s Not a Compromise !
True social enterprise companies compete purely on the basis of quality, price
and delivery. They may have nonprofit status in the eyes of other people but
when you meet the management team you will be engaging with experienced
business managers that have worked in the "for profit” world of corporate
organizations successfully creating shareholder value. Now they have new
shareholders and instead of just creating profits they have a dual role of also
creating social value by investing in people.
http://www.adgshred.com/blog/bid/245203/Paper-Shredding-Social-Enterprise
Social enterprises could have organized as non-profits and relied on government
funding. Instead, they chose to demonstrate they can do well while doing good.
Providing clear regulations to include social enterprises is a necessary step
14/08/2014 38