MM SESSION-4, 5 & 6

TATA ACE CASE

• Assessing the Need

• Choosing the Value

• Creating and Designing the Value

• Communicating the Value

• Delivering the Value

• Sustaining the Value

DISCUSS

1. Is Tata Motors a Marketing Oriented company?

2. How did Environmental factors (Macro & Micro) affect the company’s business negatively and positively

3. Opportunity & Threat Analysis: which opportunity should be exploitedand in what order?

4. Strength & Weakness Analysis: identify and order the same

5. What Consumer Behavior nuances are evident in this case or howunderstanding of CB has contributed to success of Tata ACE?

6. Which of the Marketing-Mix elements have been most importantcontributor to success of Tata ACE – in order of importance?

7. Discuss the Segmentation process of Tata ACE?

8. How did the New Product idea for Tata ACE got conceived and taken forward toa successful launch?

9. Why did Tata ACE became a big success whereas Tata Nano failed to takeoff?

Think further to develop perspectives

ANALYSING THEMARKETING ENVIRONMENT

Marketing Environment

MICRO ENVIRONMENT MACRO ENVIRONMENT

Suppliers

Company

Marketing Intermediaries

Customers

Competitors

Public

Economic

Politic

al Social

Techn

olo

gical

Legal

En

viro

nm

enta

l

CoreMarketing

System

Marketing EnvironmentMICRO ENVIRONMENT

Suppliers

Supplies Resources (Inputs)(RM, PM, Labour, Fuel,Electricity, Advertising, Training,Market Research)

Company

Top ManagementMarketing & SalesFinanceR&DLegalPurchasingManufacturingDistribution

Marketing Intermediaries

Middle MenPhysical Distribution FirmsMarketing Services AgenciesFinancial Services

Customers

Consumer MarketsIndustrial MarketsResellers MarketsGovernment & Non-profit MarketsInternational Markets

Marketing EnvironmentMICRO ENVIRONMENT

Competitors

Industry Competition(Eating, Cinema, Exercise)

Generic Competition(Chocolates, Chips, Drinks)

Form Competition(Aerated, Fruit juice, Beverages)

Brand Competition(Coke, Pepsi, Thumbs Up)

Public

Financial PublicsMedia PublicsGovernment PublicsActivist PublicsGeneral PublicInternal Public

Marketing EnvironmentMACRO ENVIRONMENT

Forces and megatrends that shape opportunities and pose threats to the company…and will influence and determine the Company Strategies

Political

Laws, Legislation & RegulationProtect CompaniesProtect ConsumersProtect the interest of SocietiesEnforcement AgenciesPublic Interest GroupsTrade, Tariff and Quotas

What goods and services to provideWhat extent to subsidize industry

Economic

Changes in Income / Disposable IncomeChanging consumer spending patternRate of Saving and Spending Interest RatesTaxationEconomic GrowthInflationExchange Rate

Marketing EnvironmentMACRO ENVIRONMENT

Social

Cultural Values of Society(People’s views of;Themselves, Others,Organisation, Society,Nature)LifestylesAttitudesTraditionBeliefsTastesBehaviour Ethnic GroupsDemographics

Technological

Rapidly changing technologyUnlimited innovational opportunitiesHigh R&D spendIncremental v/s radical improvementsTechnology regulation

Can impact (Threats as well as Opportunities):

Products & ServicesBusiness ProcessesRaw materials

Forces and megatrends that shape opportunities and pose threats to the company…and will influence and determine the Company Strategies

Marketing EnvironmentMACRO ENVIRONMENT

Legal

Consumer LawCompetition LawEmployment LawHealth and Safety LegislationPatent protection

Environmental

Natural ForcesShortage of Raw MaterialIncreased cost of EnergyIncreased levels of PollutionGreen PeaceRole of Govt. in Environment Protection

Forces and megatrends that shape opportunities and pose threats to the company…and will influence and determine the Company Strategies

Overview of the Marketing System

MacroEnvironment

CompanyMktg. Strategy

CompetitorMktg. Startegy

Product

Price

Place

Promotion

BuyerBehavior

IndustrySales

MarketShare

Comp.Sales

Comp.Profits

Comp.Costs

BUILDING THEMARKETING INFORMATION SYSTEM

Three Reasons

From Local to National to Global Marketing

From Buyer Needs to Buyer Wants

From Price to Non-price Competition

“Marketing Information System (MIS) consists of People, Equipment and Procedures to Gather, Sort, Analyze, Evaluate and Distribute Needed, Timely and Accurate Information to Marketing

Decision Makers”

MIS Definition

MIS System

MarketingManagers

MarketingEnvironment

Analysis

Planning

Implementation

Control

TargetMarkets

MarketingChannels

Competitors

Public

MacroEnvironment

AssessingInformation

Needs

DistributingInformation

InternalRecords

MarketingDecisionSupportSystem

MarketingIntelligence

MarketingResearch

M A R K E T I N G I N F O R M A T I O N S Y S T E M

Developing Information

Marketing Decisions and Communications

Internal Records (Results Data)

Order-Billing-Despatch System

Sales Force Automation System

Marketing Intelligence (Happenings Data)

General Exposure or Undirected Viewing

Directed Exposure or Conditioned Viewing

Informal Search or Unstructured Effort

Formal Search or Structured Effort

Marketing Research (Focused Studies)

Marketing Decision Support System (Tools for Data Analysis)

Defining the Problem and

Research Objectives

Developing the

Research Plan

Collecting the

Information

Analyzing the

Information

Presenting the

Findings

Marketing Data

MarketingEvaluations

and Decisions

Statistical Bank Model Bank

Regression AnalysisCorrelation AnalysisFactor AnalysisDiscriminant AnalysisCluster AnalysisConjoint Analysis

Product Design ModelPricing ModelMedia-Mix ModelAdvtg. Budget Model

Marketing Decision Support System

CONSUMER BEHAVIORIN CONSUMER MARKET

Who constitutes the market? : OCCUPANTS

What does the market buy? : OBJECTS

Why does the market buy? : OBJECTIVES

Who participates in the buying? : ORGANISATIONS

How does the market buy? : OPERATIONS

When does the market buy? : OCCASIONS

Where does the market buy? : OUTLETS

The most important questions about any market: SEVEN O’s (7Os)

The STIMULUS-RESPONSE Model

STIMULI RESPONSE

Buyer’s Black Box

Marketing Environmental

4Ps PESTLE

Buyer Buyer DecisionCharacteristics Process

Cultural Problem Recognition

Social Information Search

Personal Evaluation of Alternatives

Psychological Purchase Decision

Post-Purchase Behavior

Buyer’s PurchaseDecisions

Product ChoiceBrand ChoiceDealer Choice

Purchase TimingPurchase Qty / Val

Buyer Characteristics

Culture

Subculture

Social Class

CULTURAL

ReferenceGroups

Family

Roles &Status

SOCIAL

Age & Life-Cycle Stage

Occupation

EconomicCircumstances

Life Style

Personality

PERSONAL

Motivation

Perception

Learning

Memory

PSYCHOLOGICAL

BU

YE

R

Cultural Factors

Culture: is the most fundamental determinant of a person’s wants and behavior

Subculture: more specific identification of behaviorNationality, Religion, Racial and Geographic

Social Class: homogenous, hierarchically ordered and share similar values, interestsand behaviorUpper, Middle, Working, Lower

Social Factors

Reference Groups: a group that has a direct or indirect influence on a person’s behaviorPrimary, Secondary, Aspirational (Opinion Leaders)

Family: most influential primary reference group shaping a buyer’s behaviorHusband, Wife, Children

Roles & Status: activities a person is expected to perform according to the personsaround him/her

Personal Factors

Age & Life-Cycle Stage: bachelor, newly married, middle age, retired, teenager, infant

Occupation: blue collar, white collar, doctor, engineer

Economic Circumstances: spendable income, borrowing power, attitude towardsSpending v/s saving

Lifestyle: pattern of living as expressed in the person’s activities, interests and opinions

Personality: a person’s distinguishing psychological characteristics

Psychological Factors

Motivation: Biogenic & PsychogenicA need becomes a motive when it is aroused to a sufficient level of intensity ORA motive (or Drive) is a need that is sufficiently pressing to drive the person to act.Satisfying the need relieves the felt tension.

Freud’s Theory of Motivation: The real psychological forces shaping people’s behaviorare largely unconscious.

Herzberg’s Theory of Motivation: Dissatisfiers & Satisfiers

Self-Actualization Need

(Self development & Realization)

Esteem Needs(Self-esteem, Recognition, Status)

Social Needs(Sense of belonging, Love)

Safety Needs(Security, Protection)

Physiological Needs(Hunger, Thirst)

Maslow's Theory of Motivation

Psychological Factors

Psychological Factors

PerceptionThe process by which an individual selects, organizes and interprets information tocreate a meaningful picture of the situation.(Sight, Hearing, Smell, Touch and Taste)

Three Perceptual Process

1. Selective Attention: Which stimuli people will note?(Marketers have to work hard to attract consumer attention)• Notice stimuli that relate to current need• Notice stimuli that they anticipate• Notice stimuli whose deviations are large from the normal

2. Selective Distortion: Tendency of people to twist information into personal meanings(Marketers have to work hard to create the right perception about their products & services)People interpret information in a way that will support rather than challenge their preconception

3. Selective Retention: People forget more and retain only information that support their beliefs(Marketers have to work hard to remain in their customers mind)Retain good points about their choice and forget good points about other alternatives

A motivated person is ready to act …

Learning

Learning describes changes in an individual’s behaviour arising from experience.(Interplay of Drives, Stimuli, Cues, Responses and Reinforcement)

Generalisation V/s Discrimination

Memory

STM: Temporary and limited repository of informationLTM: Permanent and essentially unlimited repository of information

Associative Network Memory Model : LTM as a set of Nodes (stored infos) & Links(connectors)“Marketers have to create Brand Associations”

(a) Memory encoding: How and where information gets into memory. The strength of resulting association depends on how much we think about it.

(a) Memory retrieval: the way information gets out of memory

1. Presence of other products produce interference to confuse new data2. Time between exposure to information and encoding produce only gradual decay3. Information is available in memory but not accessible for recall… cues can help!

The Buying Decision Process

ProblemRecognition

InformationSearch

Evaluation ofAlternatives

PurchaseDecision

Post PurchaseBehaviour

NeedInternalorExternal

• Heightened Attention• Active Information

PersonalCommercialPublicExperiential

Consumerformingjudgments

• Satisfy a need• Looks for benefits• Ability of attributesto deliver the benefits

Expectancy-Value-Modelis based on Beliefs & Attitude

What, Where, How much, When and Howto buy?

Positive attribute doesn’t negate negative attributesUses Rule of Thumb (Heuristics)

SatisfactionActionUse & Disposal

Merci