Marketing Impact on Traditional Products in Karnataka A Case Study on

Costal Karnataka
Introduction of Marketing
Marketing, more than any other business activities deals with customers. Although there are a
number of detailed definitions of marketing perhaps the simplest definition of marketing is managing
profitable customer relationship.
We can distinguish between a social and a managerial definition for marketing. According to a social
definition, marketing is a societal process by which individuals and groups obtain what they need and want
through creating, offering, and exchanging products and services of value freely with others. As a
managerial definition, marketing has often been described as the art of selling products. But Peter
Drucker, a leading management theorist, says that the aim of marketing is to make selling superfluous. The
aim of marketing is to know and understand the customer so well that the product or service fits him and
sells itself. Marketing is the management process that identifies, anticipates and satisfies customer
requirements profitably.
Introduction of promotion
It is not enough for a business to have good products sold at attractive prices. To generate sales and profits,
the benefits of products have to be communicated to customers. In marketing, this is commonly known as
"promotion".
Introduction social groups
A social group is a collection of people who interact with each other and share similar characteristics and a
sense of unity. A social category is a collection of people who do not interact but who share similar
characteristics.
A social group exhibits some degree of social cohesion and is more than a simple collection or
aggregate of individuals, such as people waiting at a bus stop, or people waiting in a line. Characteristics
shared by members of a group may include interests, values, representations, ethnic or social background,
and kinship ties. Kinship ties being a social bond based on common ancestry, marriage, or adoption. In a
similar vein, some researchers consider the defining characteristic of a group as social interaction.
Meaning of nomad
It is a member of a community of people who live in different locations, moving from one place to
another. Among the various ways Nomads relate to their environment, one can distinguish the hunter-

gatherer, the pastoral nomad owning livestock, or the "modern" peripatetic nomad. As of 1995, there were an
estimated 3040 million nomads in the world.
Nomadic hunting and gathering, following seasonally available wild plants and game, is by far the
oldest human subsistence method. Pastoralists raise herds, driving them, and/or moving with them, in
patterns that normally avoid depleting pastures beyond their ability to recover.
Nomadism is also a lifestyle adapted to infertile regions such as steppe, tundra, or ice and sand,
where mobility is the most efficient strategy for exploiting scarce resources.
Sometimes also described as "nomadic" are the various itinerant populations who move about in
densely populated areas living not on natural resources, but by offering services (craft or trade) to the
resident population. These groups are known as "peripatetic nomads".
A nomad is a person with no settled home, who moves from place to place as a way of obtaining
food, finding pasture for livestock, or otherwise making a living. The word nomad comes from a Greek
word that means one who wanders for pasture. Most nomadic groups follow a fixed annual or seasonal
pattern of movements and settlements. Nomadic peoples traditionally travel by animal or canoe or on foot.
Today, some nomads travel by motor vehicle. Most nomads live in tents or other portable shelters.
Introduction of traditional/nomadic products
The nomadic groups in Turkey make and sell cradles, deal in animals, and play music. The men of
the sedentary groups work in towns as scavengers and hangmen; elsewhere they are fishermen, smiths,
basket makers, and singers; their women dance at feasts and tell fortunes. Abdal men played music and
made sieves, brooms, and wooden spoons for a living. The Tahtac traditionally worked as lumberers; with
increased sedentarization, however, they have taken to agriculture and horticulture.
Meaning of Marketing
Marketing is the methodology of communicating the value of a product or service to customers, for
the purpose of selling that product or service.
Marketing techniques include choosing target markets through market analysis and market
segmentation, as well as understanding consumer behavior and advertising a product's value to the customer.
From a societal point of view, marketing is the link between a society's material requirements and
itseconomic patterns of response. Marketing satisfies these needs and wants through exchange processes and
building long-term relationships. Marketing blends art and applied science (such as behavioural sciences)
and makes use of information technology.

Meaning of promotion
Promotions refer to the entire set of activities, which communicate the product, brand or service to the user.
The idea is to make people aware, attract and induce to buy the product, in preference over others.
Meaning of Social Groups:
Two or more persons in interaction constitute a social group. It has common aim. In its strict sense,
group is a collection of people interacting together in an orderly way on the basis of shared expectations
about each others behaviour. As a result of this interaction, the members of a group, feel a common sense of
belonging.
Meaning of traditional/nomadic products
Like every other nomadic culture, Mongolian culture is well-known for its hospitality. Upon guests
arrival, traditional offerings and treats are served - dairy products in the summer time, and meat in the
winter. Traditionally a Mongolian, even during his absence, in order to allow any passer-by to rest and enjoy
the treats which are left on the table for visitors.
Mongolians traditionally lead a pastoral, nomadic lifestyle. Because of the climate and short growing
season, animal husbandry defines the nomadic lifestyle, with agriculture playing a secondary role. Nomads
raise five types of animals - goats, sheep, cattle (including yaks), camels and horses - that provide meat,
dairy products, transportation, and wool. Of these animals, the horse holds the highest position in Mongolian
tales and legends.
As one of the only remaining horse-based cultures left in the world, Mongolians greatly cherish their
horses. Outside the capital, the horse is still the main mode of transportation and children begin riding as
soon as they can sit up. Nomads are extremely proud of their riding skills and horse racing is a favorite
pastime. Believing the race to be a test of the animal's and not the rider's ability, young children are often the
jockeys. The most prestigious tests of these superb animals are the horse races at the Naadam Festival,
Mongolia 's national games, which takes place each July. Families will travel for days to be able to
participate or just attend this grand event.
Nomadic families follow a seasonal routine, moving the herds to new grazing land based on the time
of year, rather than one of aimless wandering. Historically, each clan had various chosen grazing grounds
that were used exclusively by the same clan year after year. This tradition carries on today and families
return to the same locations at the same time each year, for example, traveling at the end of each winter from
a specific sheltered valley to a particular grazing area on the steppes.
Daily responsibilities are divided evenly among family members and no one person's work is
considered more important than another's. Traditionally, men take care of the horses arid, the herds and
make saddles, harnesses, and weapons. In addition, they hunt to supplement the traditional diet of dairy

products. Women also milk cows, goats and mares (the national drink is airag - fermented mare's milk).
Despite their enterprise, however, Mongolians are not self-sufficient. Since ancient times, they have traded
with surrounding civilizations far grain, rice, tea, silk, cotton and etc. Women's responsibilities include
cooking, taking care of the children and making clothing.
Definition of marketing
According to American Marketing Association (2004) - "Marketing is an organisational function and set of
processes for creating, communicating and delivering value to customers and for managing relationships in a
way that benefits both the organisation and the stakeholder."
AMA (1960) - "Marketing is the performance of business activities that direct the flow of goods and
services from producer to consumer or user."
According to Eldridge (1970) - "Marketing is the combination of activities designed to produce profit
through ascertaining, creating, stimulating, and satisfying the needs and/or wants of a selected segment of
the market."
According to Kotler (2000) - "A societal process by which individuals and groups obtain what they need and
want through creating, offering, and freely exchanging products and services of value with others."
Definition of Promotion
Promotion - Promotion represents the different methods of communication that are used by marketer to
inform target audience about the product. promotion includes - advertising, personal selling, public relation,
and sales promotion.
It refers to raising customer awareness of a product or brand, generating sales, and creating brand loyalty.
Promotion is also found in the specification of five promotional mix or promotional plan. These elements
are personal selling, advertising, sales promotion, direct marketing, and publicity.
Definition of social groups
According to Sociology guide.com a social group is, "A group of two or more people who interact with one
another and who recognize themselves as a distinct social unit". Further, social groups play an important role
in daily life.
According to Green, A group is an aggregate of individuals which persist in time, which has one or more
interests and activities in common and which is organised.
According to Maclver and Page Any collection of human beings who are brought into social relationship
with one another. Social relationships involve some degree of reciprocity and mutual awareness among the
members of the group.

Thus, a social group consists of such members as have reciprocal relations. The members are bound by a
sense of unity. Their interest is common, behaviour is similar. They are bound by the common consciousness
of interaction. Viewed in this way, a family, a village, a nation, a political party or a trade union is a social
group.
In short, a group means a group of associated members, reciprocally interacting on one another. Viewed in
this way, all old men between fifty and sixty or men belonging to a particular income level are regarded as
aggregates or quasi-groups. They may become groups when they are in interaction with one another and
have a common purpose. People belonging to a particular income level may constitute a social group when
they consider themselves to be a distinct unit with special interest.
Definition of traditional/nomadic products
The nomadic pastoralism was a result of the Neolithic revolution. During the revolution, humans began
domesticating animals and plants for food and started forming cities. Nomadism generally has existed in
symbiosis with such settled cultures trading animal products (meat, hides, wool, cheeses and other animal
products) for manufactured items not produced by the nomadic herders. Henri Fleisch tentatively suggested
the Shepherd Neolithic industry of Lebanon may date to the Epipaleolithic and that it may have been used
by one of the first cultures ofnomadic shepherds in the Beqaa valley. Andrew Sherratt demonstrates that
"early farming populations used livestock mainly for meat, and that other applications were explored as
agriculturalists adapted to new conditions, especially in the semiarid zone."
Scope of Marketing
1. Study of Consumer Wants and Needs - Goods are produced to satisfy consumer wants. Therefore study is
done to identify consumer needs and wants. These needs and wants motivates consumer to purchase.
2. Study of Consumer behavior - Marketers performs study of consumer behaviour. Analysis of buyer
behaviour helps marketer in market segmentation and targeting.
3. Production planning and development - Product planning and development starts with the generation of
product idea and ends with the product development and commercialisation. Product planning includes
everything from branding and packaging to product line expansion and contraction.
4. Pricing Policies - Marketer has to determine pricing policies for their products. Pricing policies differs
form product to product. It depends on the level of competition, product life cycle, marketing goals and
objectives, etc.
5. Distribution - Study of distribution channel is important in marketing. For maximum sales and profit
goods are required to be distributed to the maximum consumers at minimum cost.

6. Promotion- Promotion includes personal selling, sales promotion, and advertising. Right promotion mix is
crucial in accomplishment of marketing goals.
7. Consumer Satisfaction-The product or service offered must satisfy consumer. Consumer satisfaction is the
major objective of marketing.
8. Marketing Control-Marketing audit is done to control the marketing activities.
Scope of nomadic products
A nomad is a person with no settled home, who moves from place to place as a way of obtaining
food, finding pasture for livestock, or otherwise making a living. The word nomad comes from a Greek
word that means one who wanders for pasture. Most nomadic groups follow a fixed annual or seasonal
pattern of movements and settlements. Nomadic peoples traditionally travel by animal or canoe or on foot.
Today, some nomads travel by motor vehicle. Most nomads live in tents or other portable shelters.
Nomads keep moving for different reasons. Nomadic foragers move in search of game, edible plants,
and water. The Australian Aborigines, Negritos of Southeast Asia, and San of Africa, for example,
traditionally move from camp to camp to hunt and to gather wild plants. Some tribes of the Americas
followed this way of life. Pastoral nomads make their living raising livestock, such as camels, cattle, goats,
horses, sheep, or yaks. These nomads travel to find more camels, goats, and sheep through the deserts of
Arabia and northern Africa. The Fulani and their cattle travel through the grasslands of Niger in western
Africa. Some nomadic peoples, especially herders, may also move to raid settled communities or avoid
enemies. Nomadic craftworkers and merchants travel to find and serve customers. They include the Lohar
blacksmiths of India, theRomani (Gypsy) traders, and the Irish Travellers.
Most nomads travel in groups of families called bands or tribes. These groups are based on kinship
and marriage ties or on formal agreements of cooperation. A council of adult males makes most of the
decisions, though some tribes have chiefs.
In the case of Mongolian nomads, a family moves couple of times a year. They definitely move for
the summer and winter. The winter location is usually located near mountains in a valley and most families
already have their fixed winter locations. The winter locations have shelter for the animals and are not used
by other families while they are out. In the summer they move to a more open area that the animals can
graze. Also most nomads usually move in the same region and don't travel very far to a totally different
region. Because they usually circle around a large area, a community gets formed and the other families
generally know where the other ones are. Also they don't have the resources to move from one province to
another unless they are moving out of the area permanently. A family can move on its own or with others
and if it moves alone, they are usually couple of kilometers from each other. In modern day there is no tribal
leader among Mongolian nomads since there are no tribes and the people make decisions among their family
members, although they consult with the elders on usual matters. The geographical closeness of families are

usually for mutual support. Pastoral nomad societies usually don't have large population. One such society,
the Mongols, gave rise to the largest land empire in history. The Mongols originally consisted of loosely
organized nomadic tribes in Mongolia, Manchuria, and Siberia. In the late 12th century, Genghis Khanunited
them and other nomadic tribes to found Mongol Empire, which eventually stretched the length of Asia.
The nomadic way of life has become increasingly rare. Many governments dislike nomads because it
is difficult to control their movement and to obtain taxes from them. Many countries have converted pastures
into cropland and forced nomadic peoples into permanent settlements.
Importance of Promotion and social groups and Social promotion
Importance of Promotion
Communication plays an important role in marketing. Communication perform the function of informing the
target customer about the nature and type of the firm's product and services, their unique benefits, uses and
features as well as the price and place at which these products can be purchased. The nature of marketing
communication is persuasive since it aims at influencing the consumer behaviour in favour of the firm's
offering. These persuasive communications are commonly called "Promotion". In the context of marketing
promotion refers to the applied communication used by marketers to exchange persuasive messages and
information between the firm and its various prospective customers and general public.
Marketing communication is the essential element of the promotion function of marketing. Effective
marketing depends on effective management of its promotion function. Effective promotion comes through
effective communication. Success of products like hot-shot camera, Maggie 2 minute noodles, Khaitan fans,
and UTI's ULIP scheme are purely depend on the promotion function played by the respective marketing
firms. There are products which are failed due to the lack of effective promotion.
With the growing competition in the market place as well as the customers becoming better informed and
more choosy, it is important now that marketing communications of the right kind only are made to the right
group of target buyers. Giving below the purpose of Promotion:
Communicating information
The job of marketing is to identify consumer wants and then satisfy these wants with the right kind of
products, at the right place and at the right price. The purpose of promotion in the marketing function is to
convey to customers about the features of the product and how it will satisfy consumer wants or any other
relevant information needed by consumers to affect sales. For example, if a refrigerator manufacturer is
planning to offer off-season discount, it is essential to communicate to potential customers about the extent
of discount, period during which discount is available, name of the stores where it is available etc. If all
such information is not communicated to potential customers, lowering of prices will not be beneficial to

either the consumer or the manufacturer. Promotion is, thus, an essential part of the marketing function as it
is essentially communication.
Promotion is persuasive Communication: In any free enterprise system where firms develop and offer a wide
range of new and better products, there are full of messages and distractions of all sorts. Consumer often
have to select the products from among a wise range of competing products. As consumers do not have time
and energy to compare the competing products physically, they turn to advertisements for product
information. The present business environment being highly competitive, each firm wants the customers to
buy its brand. Thus, persuasion is another goal of promotion. In other words, promotion is persuasive
communication.
Promotion serves as a reminder: Consider a customer who regularly buys Colgate Toothpaste or Lux Soap.
Do marketers of Colgate Toothpaste or Lux Soap advertise to appeal to such customers. The answer is yes,
because even the most loyal customers must be reminded that t product has served them well over the years
and about the features that make the product attractive.

This is more so in an environment where

competitors consistently attempt to attract the customers of competing brands with their own informative
and persuasive message. Thus, in addition to informing and persuading, another important purpose of
promotion is reminding customers. This is why even when the manufactures of well established products
like Colgate, Lux, Surf, Nescafe, Lifebuoy etc. also advertise quite extensively to sustain customers
preference for these products.
Social promotion is the practice of promoting students to the next grade level even when they have not
learned the material they were taught or achieved expected learning standards. Social promotion is often
contrasted with retention, the practice of holding students back and making them repeat a grade when they
fail to meet academic expectations, or strategies such as proficiency-based learning, which may require
students to demonstrate they have achieved academic expectations before they are promoted to the next
grade level.
Generally speaking, the practice is called social promotion because non-academic factors and
considerations, including societal pressures and expectations, influence promotion decisions. For example,
educators and parents may not want to separate a young student from his or her friends or peer group, a
school or community may not want a top athlete to lose his or her eligibility to play sports, or schools may
not want to experience the consequences and public embarrassment that may result if significant numbers of
students are held back. Considerations about the socialization of studentshow they will learn to interact
productively with peers and navigate social situations and expectationsalso influence promotion decisions,
particularly during the elementary grades. For example, educators may not want to damage a students selfesteem or put him or her at greater risk of suffering from the social, emotional, behavioral, and
psychological problems often associated with grade retention. In these cases, promoting students, even
though they did not meet academic expectations, is perceived to be in the best interests of the student. In a

word, social promotion may result from a wide variety of educational, cultural, and socioeconomic causes
far too many to extensively catalogue here.
Importance of Social Groups
According to Sociology guide.com a social group is, "A group of two or more people who interact with one
another and who recognize themselves as a distinct social unit". Further, social groups play an important role
in daily life.
1.Belonging
Social groups fulfill one of the basic psychological needs for survival, belonging. Feeling needed and
wanted psychological motivates a person to stride forward and stay mentally healthy. An example of
belonging is found in Maslow's psychological hierarchy of needs.
2.Friendship
A social group is not always made up of friends, however, friendships may form within a group. Spending a
lot of time with people builds relationships and friendships. All members of a group have at least one thing
in common otherwise the group wouldn't form.
3. Communication
Social groups is a form of communication amongst friends or peers. Communication plays an essential and
vital role in life. Communication has many forms and is used on a daily basis in one form or another. Again,
it is not mentally healthy to be alone all the time as it often leads to inverted personality traits and
depression.
3. Family
Social groups do not just consist of friends. Families are also a form of social groups. Families play a vital
role by teaching other family members acceptable behavior and beliefs to live by.
4. Support
Social groups act as a great support system when needed. Groups can identify and unify to help solve
another members problems or anguish. A good example of a support group is any addiction rehabilitation
program.
5. Society
In society social groups exist for many reasons. Take protesters for example; they unite to express personal
beliefs towards an opposing group or force. The purpose of the protest is to accomplish a unified goal.
Accomplishing goals resonates in all occupations.

Kinds of Markets
Local markets : Where customers are a short distance from suppliers
Common for the sale of fresh and locally-sourced products and the delivery of locally-supplied services. The
car boot sale is a great example of a local product market. The use of local services (e.g. franchise
operations, hairdressers) is another good example. Your local high street or retail park is another example,
where consumer goods are sold to people who tend to live pretty close.
Businesses operating in local markets enjoy several advantages. They are physically closer to their
customers, so are better placed to understand local cultural issues and traditions. It is also easier to develop
relationships with local customers, to engage in market research and to respond quickly to changes in the
market.
The main downside to operating in local markets is that the market size may be relatively small.
National markets : A market where customers are spread throughout the country or over a large area.
National markets are very common in the UK. Here, the same product or service is offered to customers who
are spread around the country. A business may have several (or many) locations in the country in order to
reach those customers.
One way to illustrate this is to think of businesses that seem to be everywhere as you travel round the UK.
For example, youll see BT phone vans, BSkyB satellite dishes, Tescos, McDonalds and Subway branches in
just about every town and city in the UK. These businesses are operating in national markets e.g. the
markets for telephones, television, groceries and fast food. However, you will notice from the examples
given that businesses which are national in terms of the scope of their operations are definitely not small
businesses!
Another way to think of a national market is in terms of the total sales of a product or service across the
country. For example, the total demand for greetings cards, jams or loft conversions. A start-up or small
business can be focused on a national market, although it is likely that it will have a very small share of the
market.
Physical markets
A physical market brings buyers and sellers together in the same location. Weve already mentioned car boot
sales and markets in town centres. Farmers markets are another good example.electronic markets
A much larger number of markets are now electronic. Businesses find their customers using a variety of
electronic media, including the Internet, mobile telephony, digital television and via email. Transactions are
completed electronically with the delivery method depending on the nature of the product sold.

Physical consumer markets

food retail markets: farmers' markets, agricultural markets, fish markets and wet markets

retail marketplaces: public markets, market squares, bazaars, souqs, night markets,shopping centers

and shopping malls

big-box stores: supermarkets, hypermarkets and discount stores

ad hoc auction markets: process of buying and selling goods or services by offering them up for bid,

taking bids, and then selling the item to the highest bidder

used goods markets such as flea markets

temporary markets such as fairs

Physical business markets

physical wholesale markets: sale of goods or merchandise to retailers; to industrial, commercial,

institutional, or other professional business users or to other wholesalers and related subordinated services

markets for intermediate goods used in production of other goods and services

labor markets: where people sell their labour to businesses in exchange for a wage

ad hoc auction markets: process of buying and selling goods or services by offering them up for bid,

taking bids, and then selling the item to the highest bidder

temporary markets such as trade fairs

Non-physical markets

media markets (broadcast market): is a region where the population can receive the same (or similar)

television and radio station offerings, and may also include other types of media including newspapers and
Internet content

Internet markets (electronic commerce): trading in products or services using computer networks,

such as the Internet

artificial markets created by regulation to exchange rights for derivatives that have been designed to

ameliorateexternalities, such as pollution permits (see carbon trading)

Kinds of Products
There are different types of products and they too act as a family tree and have their branches and are
classified under different sections on the basis of their features. Different types of products category are:

The differentiated product The differentiated product enjoys a distinction from other similar
products/brands in the market. The differential claimed may be real, with a real distinction on ingredient,
quality, utility, or service, or it may be psychological brought about through subtle sales appeals.
The customised product - Customer specific requirements are taken into account while developing the
product. Commonly practised in the industrial product marketing, where the manufacturer and the user are
in direct contact and the product gets customised to the requirements of the customer.
The augmented product The augmented product is the result of voluntary improvements brought about by
the manufacturer in order to enhance the value of the product, which are neither suggested by the customer
nor expected by them. The marketer on his own augments the product, by adding an extra facility or an extra
feature to the product.
The potential product The potential product is tomorrows product carrying with it all the improvements
and finesse possible under the given technological, economic and competitive condition. There are no limits
to the potential product. Only the technological and economic resources of the firm set the limit.
PROMOTIONS PROCESS MODEL
A model is presented at the beginning of the chapter which is a useful framework for analyzing how
promotion fits into an organizations marketing program. The model consists of four components:

The organizations marketing strategy and analysis

The target marketing process

Marketing planning program development (which includes the promotional decisions)

The target market

The first part of the chapter is devoted to examining the four components of this model and the role
advertising and promotion play in each. As noted in the text, it is important to note that a firms promotional
program is directed not only to the final buyer but also to channel or trade members who distribute its
products/services to the ultimate customer. The role of promotion is discussed for building and maintaining
demand not only in the consumer market, but among the trade as well.
II.

MARKETING STRATEGY AND ANALYSIS

The marketing process actually begins with the development of a marketing strategy whereby the company
determines the product or services area and particular markets in which it wants to compete. A strategic
marketing plan usually evolves from an organizations overall corporate strategy and serves as a guide for
specific marketing programs and policies. The development of a marketing strategy is based on a situation
analysis from which a firm develops an understanding of the market, the opportunities it offers, the
competition and various segments or target markets the company may wish to pursue.

Steps in the Development of a Marketing Strategy

A.

Opportunity Analysisa careful analysis of the marketplace should lead to alternative market
opportunities or areas where the company feels there are favorable demand trends, where customer
needs and/or wants are not being satisfied and where it could compete effectively. Market
opportunities are usually identified by examining demand trends in various market segments. The
discussion can focus on how market opportunities are identified and recent examples of companies
finding and exploiting them. Diversity Perspective 2-1 discusses the growth of the Hispanic market
which could be an interesting point of departure for a discussion about the opportunity created by
new and growing segments.

B.

Competitive Analysisin developing marketing strategies and programs a company must analyze
the competition its products or services face in the marketplace. Competition can range from direct
brand competition to other products and services that satisfy consumers needs and/or compete for
their dollars. Competitors marketing programs have a major impact on a firms marketing strategy
and must be carefully analyzed and monitored. Various aspects of advertising and promotion such as
promotional spending, media and creative strategy, and sales promotion are often directly affected by
competitors.
An important aspect of marketing strategy development is the search for an advantage over the
competition. A competitive advantage refers to something unique or special a firm does or
possesses that gives it an edge over competitors. Competitive advantage can be achieved in a variety
of ways, including having quality products that are differentiated from the competition and command
premium prices, providing superior customer service, having the lowest production costs or
dominating channels of distribution. Competitive advantage can also be achieved through having
excellent advertising and promotion that creates and maintains product/service differentiation and
brand equity. You might want to discuss how many companies have used advertising to achieve
brand equity. It is also important to note the concerns of many advertising and marketing people that
reductions in media advertising and increased spending in trade promotions may lead to losses in
brand equity and competitive advantage.

C.

Target Market Selectionafter evaluating marketing opportunities for products/services in various

markets, a company selects one or more as a target market for which it will develop a marketing
program(s). This target market becomes the focus of the companys marketing efforts. Selection of
the target market is not only a very important part of a firms marketing strategy, but also has
implications for advertising and promotional strategy and tactics.

III.

THE TARGET MARKETING PROCESS

The concept of target marketing is introduced, noting that there are four distinct steps involved in this
processidentifying target markets with unfulfilled needs, market segmentation, selecting a target market,

and positioning through marketing strategies. From this point, the chapter will go on to discuss in detail the
processes required in each step.
A.

Identifying MarketsTarget marketing involves the identification of the needs and wants of specific
groups of people (or segments), selection of one or more of these groups as targets, and the
development of marketing strategies aimed at each. This approach has found increased applicability
for a number of reasons.

the diversity of consumers needs

increasing use of segmentation by competitors

more managers are trained in segmentation

The instructor should note that this process leads to a more homogeneous grouping of potential
customers, which allows the marketer to develop more precise strategies designed to reach them.
B.

Market SegmentationOnce the marketer has identified who it is that is to be targeted; these
potential customers are grouped based on the fact that they have similar needs and/or behaviors that
are likely to cause them to respond similarly to marketing actions. This breaking up of the market is
referred to as the market segmentation process. This process includes five distinct steps:

Finding a way to group consumers according to their needs

Finding a way to group the marketing actionsusually the products offeredavailable to the
organization

C.

Developing a market-product grid to relate the market segments to the firm's products or actions

Selecting the target segments toward which the firm directs its marketing actions; and

Taking these actions.

A number of bases for segmentation are available to the marketer including the following: (Figure 24 will be helpful here.)

Geographicthe market is divided into geographic units with alternative marketing strategies
targeted to each

Demographicdivision involves demographic variables such as age, sex, family size, income,
education and social class among others

Psychographicmarkets are divided based on the personalities and/or lifestyles of consumers.

(The instructor should note that lifestyles have become a commonly employed segmentation
strategy.) Programs such as VALS and PRIZM are commonly employed by marketers for this
purpose.

Behavioristicthis form of segmentation divides consumers into groups according to their

usage, loyalties or buying responses to a product. These characteristics are then usually combined
with one of the previously mentioned bases to develop segment profiles.

Benefitsspecific benefits offered by a product or service may also constitute a basis for
segmentation. In many instances a variety of benefits may be derived for the same product
among different groups. (For example, the instructor might ask students to suggest benefits to be
derived from the purchase of a watch, noting that at certain times of the year these benefits will
change based on the recipient of the watch!)

D.

The Process of Segmenting a MarketThis section concludes by reminding the student that market
segmentation is indeed a process that develops over time and is a critical part of the situation
analysis.

E.

Selecting a Target MarketHaving conducted the segmentation analysis, the marketer will be faced
with two subsequent decisions:
1. Determining how many segments to enter
2. Determining which segments offer the most potential. The first of these decisions may lead the
marketer to three potential strategies:

Undifferentiated marketing would involve the decision to ignore the segment differences
and develop one product for the entire market. It should be noted that few firms pursue this
strategy today.

Differentiated marketing involves the decision to compete in a number of segments,

developing different marketing strategies for each.

Concentrated marketing takes place when a firm decides to concentrate its efforts on one
specific segment in an attempt to capture a large share of that market. (The example of
Maxwell Business Systems provided in the book will illustrate this point well.)

F.

Marketing Positioningpositioning has been defined as "the art and science of fitting the product or
service to one or more segments of the broad market in such a way as to set it meaningfully apart
from the competition."
1. Approaches to Positioningthis section discusses the approaches to positioning as well as a
number of strategies for developing a position. Several distinct positioning strategies are offered
including:
a. positioning by product attribute/benefitsetting a product apart by stressing a specific
characteristic or benefit offered.
b. positioning by price/qualityin this strategy price/quality characteristics are stressed. For
example, some products set themselves apart by assuming a very high price/quality
association, while others become "price products."

c. Positioning by use or applicationhow a product is to be used may in itself lead to a

positioning strategy. The shoe industry example offered in the text, and products such as Arm
and Hammer baking soda and Black & Decker have capitalized on this strategy.
d. positioning by product classthe Amtrak example provided in the text in reflects this
strategy in which the product is positioned against others that, while not exactly the same,
provide the same class of benefits. The current pork campaign ("The other white meat") is
another example that might be cited.
e. positioning by product userin this strategy the product is positioned at a particular group
of users. The Viagra example (Exhibit 2-10) demonstrates this strategy in practice.
f. positioning by competitorin many cases the competition may be used to define the
positioning strategy. Companies can position their products to set themselves apart from the
competition, show superiority, etc.
g. positioning by cultural symbolthe koala of Quantas Airlines, Buster Brown, the Jolly
Green Giant and Chicken of the Seas mermaid are all examples of cultural icons.
h. repositioningdeclining sales or changes in market conditions may lead a firm to reposition.
Companies such as Sears, Montgomery Ward (Focus), and J.C. Penney are a few of the
examples of companies that have attempted (both successfully and unsuccessfully) to assume a
new position in the market.
2. Determining the Positioning Strategyas noted in the text, the development of a positioning
strategy involves six distinct steps:

IV.

Identifying competitors

Assessing consumers' perceptions of competitors

Determining competitors' positions

Analyzing consumers' preferences

Making the positioning decision

Monitoring the decision

DEVELOPING THE MARKETING PROGRAM

The next stage of the marketing process involves combining the various elements of the marketing mix into
a cohesive and effective marketing program. This requires that all elements of the marketing mix be
combined effectively and that they be consistent with one another. It is important to stress that each element
of the marketing mix is multidimensional in nature and includes a number of decision areas. In discussing
the various elements of the marketing mix attention should be given to how each influences and interacts
with promotion.

A.

Product Decisionsan organization exists because it has some product, service, idea or cause to
offer customers. Discussion can focus on benefits or values offered by the product and the fact that
products and services satisfy not only functional but social and psychological needs as well. Product
decision areas of branding and packaging are particularly important from a promotional perspective
because of the role the brand name and package play in communicating attributes, information and
meaning to the consumer.
1. Brandingchoosing a brand name for a product is important from a promotional perspective
because brand names communicate attributes and meaning. One important role of advertising in
respect to branding strategies is creating and maintaining brand equity. Brand equity can be
thought of as an intangible asset of added value or goodwill that results from the favorable
image, impressions of differentiation, and/or the strength of consumer attachment to a company
name, brand name, or trademark.
2. Packaging the role and function of packaging has changed because of the self-service
emphasis of many stores and the fact that as many as two-thirds of all purchases made in the
supermarket are unplanned. The Listerine PocketPaks shown in Exhibit 2-23, are an excellent
example of how packaging can create new opportunitiessometimes for existing products.

B.

Price Decisionsthe price variable of the marketing mix refers to what the consumer must give up
in exchange for a product or service, Marketing managers must be concerned with establishing a
price level, developing pricing policies and monitoring consumers and competitors reactions to
price in the marketplace. Factors a firm must consider in determining price levels include:

costs

demand

competition

perceived value

Interesting findings from the PIMS project concerning the relationship between price, product
quality and advertising are discussed in the text.
C.

Distribution Channel Decisionsmarketing channels or the place element of the marketing mix
refers to the set of interdependent organizations involved in the process of making a product or
service available to customers. Differences in direct versus indirect channel arrangements should
be discussed. In discussing the latter, the importance of resellers in marketing and promotional
strategy should be introduced. The Internet has become a new channel for a number of companies,
and has had a demonstrable impact on the distribution system. Attention should be given to the need
to develop promotional programs for the trade or resellers to encourage them to stock and promote a
product.

D.

Developing Promotional Strategies: Push or Pull? When a promotional push strategy is used, the
goal is to persuade the trade to stock, merchandise and promote a companys products by
aggressively selling and promoting to resellers. This can be done by having the companys sales
representatives call on resellers and offering special programs such as promotional allowances and
cooperative advertising. Trade advertising in publications that serve the industry such as
Progressive Grocer or Drug Store News may also be used as part of a push strategy. When a
promotional pull strategy is used, the goal is to create demand among end users which will in turn
encourage retailers to carry a brand. Heavy spending on consumer advertising and sales promotion is
an important part of a pull strategy.

Recent trends in marketing

A market trend is a tendency of a financial market to move in a particular direction over time.[1] These
trends are classified as secular for long time frames, primary for medium time frames, and secondary for
short time frames.[2]Traders identify market trends using technical analysis, a framework which
characterizes market trends as predictable price tendencies within the market when price reaches support and
resistance levels, varying over time.

Primary Market: A primary trend has broad support throughout the entire market (most sectors) and

lasts for a year or more.

Secondary Market: Secondary trends are short-term changes in price direction within a primary

trend. The duration is a few weeks or a few months