Pillars of marketing

1. PILLARS OF MARKETING – STPD Strategies
Marketing Management
V.S.Ramaswamy and S. Namakumari

2. S
E
G
M
E
N
T
A
T
I
O
N
T
A
R
G
E
T
I
N
G
P
O
S
I
T
I
O
N
I
N
G
PILLARS OF MARKETING
D
I
F
F
E
R
E
N
T
I
A
T
I
O
N

3. Formulation of Marketing Strategy consists of four steps STPD
(b) Targeting
(a) Segmentation
Serves as a prelude to target market selection. It brings to fore the various possibilities lying
in a heterogeneous market
The target market that is arrived through segmentation shows to whom the unit intends to
sell the product
Process by which a market is divided into distinct subsets of customers with similar needs
and characteristics that lead them to respond in similar ways to a particular product offering
and marketing programme
Requires evaluating the relative attractiveness of various segments in terms of 1.
market potential 2. growth rate 3. competitive intensity
Positioning shows how ---using what uniqueness the unit intends to sell the product
Entails designing product offerings and marketing programmes that collectively establish an
enduring competitive advantage in the target market by creating a unique image or position
in the consumers mind
(c) Positioning
(d) Differentiation
Positioning shows how ---using what uniqueness the unit intends to sell the product
Works on the principle that a firm can make its offer distinctive from all competing offers and
win through distinctiveness

4. Targeting attractive market segments
The need for market segmentation
and target marketing
Defining market segments
Choosing attractive market
segments
Different targeting strategies
STRATEGIC
CHALLENGES

5. (a) Segmentation

6. •Market segmentation is the process of dividing a market into Market segmentation is the process of dividing a market into
sub-sets of consumers with common needs or characteristicssub-sets of consumers with common needs or characteristics
•Since most companies have limited resources, few companies Since most companies have limited resources, few companies
can pursue all of the market segments identifiedcan pursue all of the market segments identified
What is market segmentation ?

Why segment the market ?

•Facilitates right choice of Target properly
•Facilitates effective tapping of the chosen market

•Makes the marketing effort more efficient and economic

•
Helps identify less satisfied segments and concentrate
on them

7. PREMISES OF MARKET SEGMENTATION
IDENTIFICATION OF CUSTOMERS IN TERMS OF
SOME IMOPORTANT CRITERIA
A
EACH MARKET SEGMENT CAN BE MEASURED
AND EVALUATED IN TERMS OF MARKET
ATTRACTIVENESS
B
ISOLATE THE SELECTED MARKET SEGMENTC

8. NEED FOR
MARKET
SEGMENTATION
It identifies opportunities
for new product
development
It helps in the design of
marketing programmes
It improves the strategic
allocation of marketing
resources

9. Bases for segmentation
Buying Behaviour
Psychographics
Socio-culturalsDemographics
Geographics
MARKET
SEGMENTATION

10. Geographic
Segmentation
National
Markets
Global
Markets
Factors
Region

State


District

Urban


Rural
Continent

Country


Region
Climatic Zone
As long as there are clearly identifiable differences between one region
and the other, with implications to marketing, geographic segmentation
will be useful

11. Geographic Descriptors
METROS
SMALL TOWNS
RURAL AREAS
Hence segmenting markets on the basis of
geographic locations as
..... sales potential

….. growth rates
…..
customer needs

….. cultures

….. service needs

….. competitive structures
Different locations vary in

12. Demographic
Segmentation
Race

Religion

Community

Language


Age
Gender
Marital
Status
Family size
Occupation
Income

Purchasing capacity
Educational level
Social status

13. Demographic Descriptors
Age Nike’s clothes for children
Gender
Advertising and events directed towards
women
Advertising magazines targeting the rich
Products for working women
Travel, books, magazines, etc
Birthdays, anniversaries, weddings
Income
Occupation
Education
Events
Household
lifecycle
Each stage differs in spending pattern

14. Socio-cultural Segmentation
Culture
Social factors
Brings its own pattern
of social
conduct
Which influences consumer
behaviour
Manifests in the form of
Symbols, heroes/icons, rituals
and values
Social groups of varying types exert
influence on the consumers
A buyer is a member of several groups
both formal and informal
Reference Groups : Intimate groups,
Secondary groups, Opinion leaders,
Social class

15. Cultural Descriptors
Religion
Language
Education
Upbringing
Income
Occupation
Location of
residence
Social Descriptors
Development son the global socio-cultural scene
--- The Techno Intoxication of consumer communities
--- Spread of consumerist culture and Americanization
--- Pace of life gets even more rapid
--- The new iGen and New Tweens
--- The advent of the next society

16. Psychographic
Segmentation
Lifestyle

Attitude

Self-concept

Value
system


Based on
Facilitates grouping of
consumers in such a manner
that the group shares a
common buying behaviour


e.g. Coffee Cafes thrive on Lifestyle segments
Certain cars are sold on lifestyle segment

17. Psychographic Descriptors
Attitude
--- Timid
--- Outgoing
--- Aggressive
--- Traditional
--- Modern
Lifestyle

18. Buyer
Behaviour
Segmentation
… Usage status
… Benefits sought from the product
… Volume of purchase/degree of use
… Purchase occasion
… Buyers attitude towards the product
… Their loyalty to the brand

19. Usage based segmentation
Currently users

of the brand
Currently users

of competitors
brands
Currently non-
users of the
category as such
Sustain them and make them use more of the
brand
To succeed here , he should be able to
convince those users about the superiority of
the brand
The marketer would attract this segment
towards its brand

20. Benefit segmentation
Segmenting market on the basis of benefits expected by the consumer
Marketer provide value in the form of benefits
Helps the marketer identify segments that are presently less satisfied and
are experiencing a big gap between the benefit sought and benefit
available
E.g.
“Calorie watchers” and “health seekers”
PEPSI : Diet Pepsi
Horlicks : Diet Horlicks
Mother Dairy : Low calorie ice cream
Bread : Whole wheat/Brown bread

21. BENEFIT SEGMENTATION
TOOTH PASTE
GENERAL BENEFITS THAT CONSUMERS
SEEK ARE CLEANLINESS AND HYGENE
IN ALL SEGMENTS.
FLUORIDE HERBALCOSMETIC
Protection Against Foul
Smell, Modernity &
Cosmetic Value
COLGATE
CLOSE-UP
PRUDENT
Family Health, Extra
Protection For
Children
COLGATE FLUORIDE
CIBACA FLUORIDE
Family Health and
Welfare. Traditionally
Good For Health
NEEM
DABUR
VAJRADANTI

22. PERCIEVED BENEFITS
MOTOR CYCLE
BRANDS
PERCIEVED BENEFITS
ENFIELD STURDY VEHICLEFOR OUR ROAD CONDITIONS, GOOD
FOR LONG RIDES AND HIGH RESALE VALUE
HERO-HONDA FUEL EFFICIENT, HIGH PICK UP AND STYLISH
KAWASAKI
BAJAJ
HIGH PICK UP SLEEK MODEL
SCOOTER
BRANDS
PERCIEVED BENEFITS
BAJAJ CHETAK FUEL EFFICIENT, LONG LIFE , HIGH RESALE VALUE
KINETIC HONDA ELECTRONIC IGNITION, EASY TO RIDE, TROUBLE FREE

23. Volume segmentation
Quantity of purchase --- actual or potential is the base for volume segmentation
… Bulk buyers
… Small-scale buyer
… Regular buyers
… One-time buyers
Purchase occasion segmentation
… Regular buyers
… Occasion based buyers
Attitude towards the product segmentation
… Enthusiastic
… Indifferent
… Negative
Loyalty to the brand
Extent of brand loyalty on the part of consumers
could be a segmentation base under buying
behaviour

24. Behavioral Descriptors
Consumer

needs
Benefits

sought
Choice
criteria
Toothpaste
….. Fresh breath
….. Sparkling white teeth
….. Ayurvedic
Washing machines
….. Front loading
….. Top loading
….. Automatic
….. Semi-
automatic

25. Consumer

needs
Organizational
markets
Product performance in
different situations
Computers
….. On time delivery
….. Credit terms
….. Economy
….. Spare parts
….. Availability
….. Training
Industrial Products

26. Product

related
Behavioral Descriptors
Product
usage
Loyalty
Purchase
predisposition
Purchase
influence
Heavy users
Key
accounts
Patronage of a
particular product
Loyal
customers
Knowledgeable
non users
Likely to
become
future
users
Wife
Husband - wife
Children
Friends
Doctors
Children‘s
products
drugs ,etc.

27. General Behaviour

Behavioral Descriptors
Lifestyle Social class

Reflected by
Activities
Interests
Opinions
Includes
Helps to infer what types of
products & services appeal to
particular groups and how to
communicate with individuals in
the group
Status groups based on
Income
Education
Occupation
Helps to infer certain behaviour
concerning a given product

28. Behavioral Descriptors
Organizational/Firm
Purchasing Structure Buying Situation
Centralized
Purchasing
Decentralized
Purchasing
Global basis
Cost saving
Minimum risk
Product quality
Quick delivery Less
cost conscious
1. Straight rebuy: routine
situation
2. Modefied rebuy: change
in some element
3. New buying situation:
requires considerable
situation & evaluation of
alternative suppliers

29. Realities of the market place which necessitate market segmentation
First
Second
…. Population growth has slowed down
…. More product markets are maturing
…. More intense competition
…. Firms seek growth via market share/brand
extension
…. Expanding disposable income
…. Higher educational levels
…. Greater awareness
…. Sophisticated needs, tastes & lifestyles
Third
New technology such as computer aided designs has enabled
many firms to mass customize many products
…. Different models of cars on the same production line
Fourth
Easier to implement sharply focused marketing programmes
by more sharply targeting their own services
….. Magazines, TV channels

30. HOW ARE MARKET SEGMENTS DEFINED
Demographic
Descriptors
Geographic
Descriptors
Geodemographic
Descriptors
Behavioral Descriptors
Segmentation Criteria

31. CHOOSING
ATTRACTIVE
MARKET
SEGMENTS
(The NIKE Case)

32. CHOOSING ATTRACTIVE MARKET SEGMENTS
STEP 1
Select market
attraction
& Competitive –position
factors
Market attract-
iveness factors
… Consumer needs & behaviour
… Market or market segment
growth size
… Macro trends..favourable ?
… Opportunity for competitive
advantage
… Firm and competitor capabilities
& resources
… Attractiveness of industry in
which to compete
Competitive –
position factors

33. STEP 2
Weigh each
factor
Assign numerical weight to each factor
indicate its relative importance in the overall
assessment…. (NIKE)
Weight Rating
(0 – 10
scale
Total
MARKET ATTRACTIVENESS FACTORS
Customer needs & behaviour .5 10 5.0
Segment size & growth rate .3 7 2.1
Macro trends .2 8 1.6
TOTAL: 1.0 8.7
COMPETITIVE- POSITION FACTORS
Opportunity for competitive advantage .6 7 4.2
Capabilities & resources .2 5 1.0
Industry attractiveness .2 7 1.4
TOTAL 1.0 6.6

34. STEP 3
Rate
segments on each
factor; Plot results
on matrices
Collect qualitative & quantitative data
( through marketing research) to objectively
assess each of the criteria identified in step 1… (
NIKE )

Market
Attractiveness
High
( 8 –
10)
Moderate
( 4 – 7)
Low
( 0 – 3)
Company’s Competitive Position
High
( 8 –
10)
Moderate
( 4 – 7)
Low
( 0 – 3)
.

35. STEP 4
Project future position of each segment

Determine how market’s attractiveness is likely to change over the
next 3 to 5 years by assessing
…. Shifts in consumer needs & behavior
…. Entry or exit of competitors
…. Changes in their strategies
…. Changes product/process technology
…. Shifts in economic climate
…. Impact of social political trends
…. Shifts in bargaining power of customers

36. MARKET SEGMENT FOR CARS
A / Entry level/Budget segment
B / Compact segment
C / Family/Mid segment
D / Premium/Executive Sedan segment
E / Super luxury segment

37. CAR SEGMENT ATION BASED ON LIFESTYLE
CORSA ..”The Achtung Baby”
In “C” Segment GM tapped the lifestyle oriented Indians – the rich,
successful, young and sophisticated termed “Yuppie Indians” who were
keen to make a statement bout their position. It built a lifestyle oriented
image for CORSA
FORD IKON ..”The Josh Machine Baby”
In “C” Segment FORD targeted the “Yuppie Indians” and classified it as
the “Young at heart” segment and incorporated a number of attributes
that would appeal to this segment . It was a car with best of looks and
good vehicle dynamics

38. MARUTI S X 4
MARUTI’s lifestyle pitch :
Pure power, Pure muscle, Pure adrenaline, Pure style, Pure man. The new
S X 4 - the man amongst the cars -- is here
S X 4 – MEN ARE BACK
MARUTI ALTO VX
In “B” Segment Maruti built lifestyle imagery around ALTO. Its themes
were ;
“It is the hottest thing” and “ALTO for the couple”

39. TARGETING STRATEGIES

40. Market targetingMarket targeting
•Is selecting one or more of the segments identified for the Is selecting one or more of the segments identified for the
company to pursuecompany to pursue
•A target market is a group of people or organizations for which A target market is a group of people or organizations for which
a company designs, implements, and maintains a marketing a company designs, implements, and maintains a marketing
mix intended to meet the needs of the group resulting in mix intended to meet the needs of the group resulting in
mutually beneficial and satisfying exchangesmutually beneficial and satisfying exchanges

41. Steps in choosing the target marketSteps in choosing the target market
Illustration of Bath SoapsIllustration of Bath Soaps
Step-1
Quick analysis : of the bath soap market will reveal two
broad segments:
i)The premium segment
ii)The popular segment
The firm has to decide which segment to enter. It has to
evaluate the segments, assess their compatibility with the
firms ambition, resource and capabilities
Step-2
Evaluating the two segments:
i)Is it sizeable
ii)Is it growing
iii)Is it profitable
iv)Is it accessible
v)Is it compatible with the firms ambitions, resources and
capabilities

42. PATTERNS OF TARGET MARKET SELECTIONPATTERNS OF TARGET MARKET SELECTION
Single Segment
Concentration
Selective
specialization
… Number of segments
… Each objectively attractive
and
appropriate
… Each promises to be a
money
maker
… Advantage of diversifying the risk
… Concentrated marketing
…Strong
knowledge of the segment’s
needs
… Achieves strong
market presence
… Enjoys operating economies through
specialization in production, distribution,
promotion
Small Car
Market
Sports Car
Market
Radio
Broadcasting

43. PATTERNS OF TARGET MARKET SELECTIONPATTERNS OF TARGET MARKET SELECTION
Product
specialization
Market
specialization
The firm makes a product that sells to
all the segments
e.g.
… University
… Government

… Commercial laboratories
The firm makes variations of the same
product for different consumer groups
Microscopes
Products
required by
university
laboratories
The firm concentrates on serving
many needs of a particular customer
group
The firm gains a strong reputation in
serving this customer group and
becomes a channel for additional
products the customer group can use

44. Full Market Coverage
The firm attempts to serve all customer groups
with all the products that they might need
IBM
(Computers)
General Motors
(Vehicle Market)
Coca-Cola
(Drink Market)
Undifferentiated
marketing
Differentiated
marketing
Large firms can cover a whole market in two
broad ways

45. Undifferentiated marketing
The firm ignores segment differences and goes after the
whole market with one offer
It designs a product and marketing programme that will
appeal to the broadest number of buyers
The firm ignores segment differences and goes after the
whole market with one offer
It relies on mass distribution and mass advertising
It aims to endow the product with a superior image in
people’s mind
The narrow product line keeps down costs of:
R & D
Advertising
Production
Inventory
Transportation
Marketing
Research
Product
Management

46. Differentiated marketing
Firm operates in different market segments and designs
different products for each segment
General Motors produces cars for;
Purse
Purpose
Personality
IBM offers many hardware and software packages for
different segments in the computer market

47. Targeting failuresTargeting failures
Levi’s
It had defined its target market as college students in the age
group of 15 to 25 years
Levi’s had assumed that a sizeable group of this description
would be able to afford the price tag of Rs. 999 to Rs.2,295
willing to buy the jeans at those prices
The number of consumers who could afford the price tag
was far less then they had assumed
Levi’s failed to define correctly what constituted its target
market and what constituted its size.

48. Targeting failuresTargeting failures
Reebok
Reebok entered India, aiming at the segment with
Rs.5,00,000 plus annual income that was generally referred
to as high end segment of the Indian footwear market with
the price tag between Rs.1300 to Rs.6,500. Volumes were not
forthcoming.
Reebok shifted to the next lower segment and introduced its
new range CLASSIC, at a comparatively more affordable
price of Rs.900 per pair. Sales picked up.

49. Targeting failuresTargeting failures
Pierre
Cardin
It misconstrued the well to do among the Indian middle class
as its target
The brand image strongly associated with exclusive apparel
the targeting became totally faulty. It was a super luxury
apparel brand
The middle class dare not look at a gown that costs Rs.2000
plus, the super affluent found the price too low for their
status
The very idea of a classy French Label at affordable prices –
was a contradiction in terms, a contradiction with the brands
perceived luxury position

50. POSITIONING STRATEGIES

51. PositioningPositioning
Is developing a distinct image for the product or service inIs developing a distinct image for the product or service in
the mind of the consumer, an image that will differentiate thethe mind of the consumer, an image that will differentiate the
offering from competing ones and squarely communicate tooffering from competing ones and squarely communicate to
consumers that the particular product or service will fulfillconsumers that the particular product or service will fulfill
their needs better than competing brands their needs better than competing brands
5151

52. Positioning-principlesPositioning-principles
•1) Communicating the benefits that the product will provide 1) Communicating the benefits that the product will provide
rather than the product’s features (consumers do not buy drill rather than the product’s features (consumers do not buy drill
bits-they buy ways to make holes)bits-they buy ways to make holes)
•2) Because there are many similar products in any market 2) Because there are many similar products in any market
place, an effective positioning strategy must develop and place, an effective positioning strategy must develop and
communicate a ‘unique selling propositiocommunicate a ‘unique selling proposition’n’
•3) Most new products introduced by marketers( new flavors, 3) Most new products introduced by marketers( new flavors,
sizes) fail to capture a significant market share and are sizes) fail to capture a significant market share and are
discontinued because they are perceived by consumers as ’me discontinued because they are perceived by consumers as ’me
too’ products lacking a unique image or benefit too’ products lacking a unique image or benefit

53. MARKET POSITIONING
AFTER IDENTIFYING
THE TARGET MARKET
THE MARKETER POSITIONS
THE PRODUCT/SERVICE IN
THE TARGET CONSUMERS
MIND
BY CREATING AN IMAGE IN
THE CONSUMERS MIND OF
THE PRODUCT/SERVICE
SINCE CONSUMERS USE
IMAGES WHILE PURCHASING
A PRODUCT/SERVICE
BRANDS HAVE A POWERFUL
INFLUENCE ON CONSUMERS’
MINDS
THE MARKETER GENERALLY
USES ADVERTISING TO BUILD
A BRAND/CORPORATE IMAGE
ADVERTISING IS USED TO
MOULD AND REINFORCE
THE BRAND CORPORATE
IMAGE

54. POSITIONING STRATEGIES
HEALTH
DRINK
MARKET
COMPLAN
COMPLETE PLANNED
FOOD
HORLICS
“THE GREAT
NOURISHER” WITH
EXTRA CALCIUM
BOURNVITA
“HEALTH STRENGTH &
ENERGY” CONTAINS
PROTEINS, VITAMINS
MINERALS CARBOHYDRATES
BOOST ENERGY AH ENERGY
VIVA
“DOUBLE ACTION DRINK ”

55. Sl.
No
POSITIONING
STRATEGY
DEFINITION ADVERTISING CLAIMS
1. POSITIONING
CUSTOMER
BENEFITS
IT ASSOCIATES A
BRAND/PRODUCT WITH
CUSTOMER BENEFITS
THE STRATEGY IS
MORE COMMON IN ALL
THE PROIDUCT
CATAGORIES.
ADVERTISING CLAIMS A
BENE FIT
2 POSITIONING BY
PRICE, QUALITY
A PRODUCT OR
SERVICE IS
HIGHLIGHTED IN
TERMS OF SERVICE,
FEATURES OR
PERFORMANCE – A
HIGHER PRICE TO
COMMUNICATE THAT
THEY PROVIDE
QUALITY
ADVERTISING CLAIMS
VALUE FOR MONEY
APPROACH TO POSITIONING STRATEGIES

56. APPROACH TO POSITIONING STRATEGIES
3 POSITIONING BY
APPLICATION
ASSOCIATING THE
PRODUCT OR SERVICE
WITH A USE OR
APPLICATION
ADVERTISING
CLAIMS THE USE OR
APPLICATION OR
SERVICE
4. POSITIONING BY
PRODUCT USER
ASSOCIATING THE OR
SERVICE WITH A USER
OR CLASS OF USERS
ADVERTISING
CLAIMS THAT CINE
STRARS OR SPORTS
STARS ARE USING
THE PRODUCT

57. APPROACH TO POSITIONING STRATEGIES
5.POSITION BY
PRODUCT CLASS
ASSOCIATING THE
PRODUCT OR SERVICE
IN A PARTICULAR
PRODUCT CLASS
ADVERTISING CLAIMS
WORLD CLASS
PRODUCTS
6.POSITIONING BY
CULTURAL
SYMBOLS
ASSOCIATING
CULTURAL SYMBOLS
WITH THE PRODUCT OR
SERVICE TYO
DIFFERENTIATE FROM
COMPETITORS
ADVERTISING CLAIMS AS
ROYAL
7.POSITIONING BY
COMPETITOR
ASSOCIATING WITH
COMPETITOR
PRODUCT BRAND BY
COMPARISION
ADVERTISING CLAIMS
COMPARES WITH
COMPETITORS BRANDS

58. DETERMINING THE COMPETITIVE POSITIONING
STRATEGY
STEP-I
IDENTIFY THE STRATEGIC GROUP
COMPETING IN THE MARKET
STEP-II
UNDERSTAND THE PERCEPTION OF
COMPETITIVE BRANDS OF STRATEGIC
GROUP
STEP III
DETERMINE CUSTOMER’ NEEDS AND
ASPIRATIONS
STEP- IV
DEVELOP TWO OR MORE POSITIONING
STRATEGIES AND SELECT THE BEST
ONE FOR ADVERTISING CAMPAIGN
STEP- V PERCEPTUAL MAPPING

59. Personal soap
Family soap
Luxurious
Value for
money
.
Cinthol.
Liril
Lux
.
Camay.
.
Evita
Le Sancy
Moti
Rexona
.
.
.
Perceptual Map of Eight Leading Brands of Toilet Soaps

60. PERCEPTUAL MAP FOR SOFT DRINKS
COLA
NON COLA
DIET NON DIET
DIET PEPSI
TAP
FRESCA
DIET 7-UP
SPRITE
7 UP
COCA-COLA
PEPSI

61. MARUTI’S STP FOR ZEN
Segmentation
& Targeting
Executive class in the cities as a distinct
segment among passenger car buyers
This group formed the core of the compact car
segment
It was owner driven segment, mostly
It looked for driving comfort much better than
what was provided by Maruti 800

62. MARUTI’S STP FOR ZEN
Positioning
Maruti positioned Zen as “an executive car for
city drive”
The offer
It tried to provide in the car what this segment
looked for– mainly a good driving positioning
lending to smooth driving and a good pick up to
acceleration
An example of effective STP
Maruti ensured that the three STP steps connected rightly and that the
offer marched the STP Strategy . It ensured that the value proposition too
matched the STP and the offer actually offered on the value proposition
and the communication conveyed the adequately

63. HUNDAI’S STP FOR SANTRO
Segmentation
& Targeting
Hundai proceeded with its STP Strategy more or
less in the same way as Maruti did
Hundai found that the executive group within the
compact segment, was a good target to aim at
It also found that the segment matched its own
capabilities and ambitions

64. HUNDAI’S STP FOR SANTRO
Positioning
Hundai positioned Santro as a “safe high proof ,
executive car for city drive with revvy engine
The offer
Hundai saw to it that its offer not only matched
the Zen, but delivered better than Zen on certain
vital parameters
…Upgraded technology
… Superior power and fuel efficiency
… More modern design High roof (the tall
boy) … Higher ground clearance
… More spacious interiors
… The safest car in its category
An example of effective STP
The STP had smoothly led to the value proposition and the offer delivered
on the value proposition. The buyers did perceive it as a good city car as
its torque was nicely matched to the speeds envisaged on city drives. The
good revvy nature of the engine contributed to superior performance

65. (d) Differentiation

66. DIFFERENTIATION STRATEGIES

67. PRODUCT
DIFFERENTIATION
STRATEGY FOR
SHAPING DEMAND IN
THEIR FAVOUR
RETAINING CUSTOMERS
THROUGH ADVERTISING & SALES PROMOTION
OFFERING DIFFERENT VERSIONS OF THE SAME PRODUCT
PRODUCT DIFFERENTIATION

68. DIFFERENTIATION – ORIENTED STRATEGY
Differentiation – Oriented Strategy with Emphasis on
Product
Differentiation – Oriented Strategy with Emphasis on
Distribution
Differentiation – Oriented Strategy with Emphasis on
Promotion

69. Differentiation – Oriented Strategy
with Emphasis on Product

70. DIFFERENTIATION ORIENTED STRATEGIES WITH EMPHASIS ON
PRODUCT
Product
Attributes
Functionality
Packaging Convenience


Service
Experience

71. DIFFERENTIATION ORIENTED STRATEGIES WITH EMPHASIS ON
Functionality (Microsoft)
Microsoft is synonymous with computer operating systems. It commands
70 % of the revenue generated world wide simply because of its product
design and functionality
The ongoing windows family commenced with Windows 98, moved on to
Windows 2000, Windows XP and now to Windows Vista
Every new version carried substantial improvements/new features and
gave vastly improved feature to the computer user
Windows Vista carried:
Windows Defender & Firewall Instant Search Internet Explorer 7
Aero Desktop Experience Windows Flip 3D Live Thumbernails
Mobility Centre for Laptops tablet PC Support Meeting Space
Media Centre Extenders Fax & Scan

72. Packaging Convenience :
Firms capture new segments with Chotta Size
DIFFERENTIATION ORIENTED STRATEGIES WITH EMPHASIS ON
A bite of Cadburys at Rs.1
One dose of Nescafe at Rs.2
One spoon of Sunsilk at Rs.0.75
Chotta Coke at Rs.5
Chota Cooklite (200 ml) – Godrej at Rs.13
Strategic objective
--- Enhance the market penetration by capturing new segments
--- Ramp up volumes
--- Play a combination of differentiation and price
oriented strategy
COKE increased its customer base from 16 crores to 24 crores between
2003 and 2005; Sachets constitute more than 70 % of the total sales of
the shampoo industry

73. Service---- Kingfisher Airlines
DIFFERENTIATION ORIENTED STRATEGIES WITH EMPHASIS ON
Kingfisher differentiates itself on service. Some of the special services on
which Kingfisher bases its claim to uniqueness is highlighted below:
SERVICE AT THE AIRPORT
SERVICE ON BOARD
SERVICE ON REACHING THE DESTINATION

74. AT THE AIRPORT
Valet
assistance
Available from the time you reach the airport till the time
you check-in and on arrival at the destination airports
Check-in
Delay
handling
Roving

agents
.. Multiple check-in counters

.. Presence of efficient staff
Translates into
..less waiting time at
counters
.. on time
departures
… Efforts are made to minimize the inconvenience
… Refreshments are offered in case the delay
is more than one hour
… Meals are offered in case of
longer delays
Trained roving agents take care of check-in so that
passengers need not wait at the check-in counter a

75. ON BOARD EXPERIENCE
In-flight
entertainment
Guests have the option of Live TV, Fun TV, 10
Audio Channels, with choices appealing to each
segments experience
Meal options
… Guests have the choice of opting for
vegetarian or non vegetarian meals
… Menus are
designed considering the guest feedback and are
frequently changed
World class
crew
The crew undergoes rigorous training in safety,
first aid, service delivery and personality
development before they are cleared to take on
the role of hosts on board

76. ON REACHING THE DESTINATION
Baggage
delivery
… Endeavour the checked-in baggage with the
passenger immediately on arrival at the
destination
… Their representatives are available at the
arrival lounge should their assistance be needed
on account of bulky baggage
Delayed/missed
baggage
In a situation of misrouted baggage, effort is
made to locate and deliver the baggage as soon
as possible and deliver is made at the airlines
expense

77. Experience– The New Generation Coffee Cafes
DIFFERENTIATION ORIENTED STRATEGIES WITH EMPHASIS ON
The two main elements of the strategy adopted by the Coffee Cafes are:

(i) They choose the lifestyle oriented, well to do, urban consumers as
their target, with youth/students as the dominant part.

(ii) They make coffee an experience and provide special “experience” to
the chosen segment

(iii) The customers of these cafes do not see the coffee as a product or
beverage, but as an experience

(iv) The integrate the ambience of the place with the coffee experience
Café Coffee Day Barista Coffee
Costa Coffee Barnie’s Coffee
Starbucks

78. Differentiating the experience in many innovative ways
They give the youths/students an impression that something is always
happening in the coffee joints and they should be apart of it
Play music of their choice
For those focused on coffee proper, the innovation comes through
product
The cafes nuance the coffee experience suiting the climate

79. Differentiation – Oriented Strategy
with Emphasis on Distribution

80. Differentiation – Oriented Strategy with Emphasis on Distribution
ITC’s e-Choupal
ITC’s e-Choupal is a village internet Kiosk serving 3 purposes
---- Provides information to farmers on crops/weather/prices
---- Sells a variety of products to them
---- Buys various farm products from them for ITC’s use
ITC developed the e-Choupal model to tackle the distribution challenge
and prohibitive distribution costs arising out of
---- fragmented farms
---- weak infrastructure
---- involvement of numerous intermediaries
By utilizing the scope of IT, e-Choupal linked the firm directly with the
ultimate buyer virtually eliminating wasteful intermediation and multiple
handling and reducing transaction costs significantly

81. E-Choupal managed
by Local farmers
(Village
Sanchalaks)
Sanchalak aggregates
the demand for
various products
E-mails the order to
ITC
Items are picked up by
the Sanchalak at the
ITC warehouse hub
and supplied to the
consumers
Or it is delivered to the
villagers by the local
middleman (Samyojak)
co-opted by ITC
The Sanchalak
collects cash payment
and remits it to ITC

82. Differentiation – Oriented Strategy
with Emphasis on Promotion

83. L’OREAL
L’OREAL :
The worlds biggest company in cosmetics also
selling Maybelline cosmetics, Garnier
Shampoos, Lancome perfumes
PROMOTION
STRATEGY
… The L’Oreal range has premium position and
is marketed through high power advertising
… Garnier is promoted using celebrity
advertising
… Aishwarya Rai has been the Brand
Ambassador
… The campaigns are aired during prime time on
channels like Zee and Star
… The ads/message do not list out any product
attributes; instead splashing the beautiful hair
the celebrity film star just says “Because you are
worth it”

84. DINESH SUITINGS
PROMOTION
STRATEGY
… The differentiation is built around ‘prestige’
and high power advertising
… In its advertising campaign, an aura is built
around the brand by using Sunil Gavaskar as the
model.
… The brand and the prestige of the models are
nicely combined in the ads.
… The punch line reads; “Dinesh suitings…. the
world in your stride”
DINESH
SUITINGS
Dinesh is not marketed on any utility or price
plank

85. REID & TAYLOR
… Reid & Taylor also uses the ‘Prestige’
approach for differentiation, with even more
telling effect
… Here James Bond is the prestige endorser
… The ad message links the prestige of Bond
and the brand
--- Reid & Taylor…. The legend of a cloth
--- James Bond …. The legend of a man
--- Luxury Suitings….. Bond with the best
The suiting is a legend like the endorser, not a
piece of cloth
PROMOTION
STRATEGY
REID &
TAYLOR
In the same product category of suitings

86. COCA-COLA
… The company has carried out a sustained high
budget promotion effort over the decades
… Top rung film stars and sportsmen were
consistently used inn its campaigns run through all
possible media – TV, print, outdoors and events – to
sustain the image built around the brand and keep it
contemporary
… Coke was positioned as a welcome image rather
than a drink
-- Coca-Cola makes good things better
--- Things go better with coke
--- It’s the real thing
Coke is presented more as a sensation than a product
PROMOTION
STRATEGY
COCA-COLA
Provides a classic example of a differentiation
oriented marketing strategy. It has a great sway
on the minds of millions of consumers round the
globe

87. PEPSI
PEPSI
Like Coke, Pepsi gives maximum thrust to
promotion
… To counter the leader, new themes will figure
from time to time in the promotion campaigns
… Pepsi is heavily banking on celebrity
advertising and sponsorship of world sports
events as its major marketing weapon
… Pepsi cashes in on the cricket frenzy using the
cricketers and film stars to project their brand
image
Neither Coke nor Pepsi pitch on the properties of
their respective colas
PROMOTION
STRATEGY

88. NIKE
NIKE
PROMOTION
STRATEGY
… Kike has been projecting the image of a
winner and high performer by using sports stars
from Michael Jordan and John McEnroe in 1970s
till Roger Federrer today
… Nike and success go together. That is the
equation between the brand and whoever uses it
… You are made to feel that by wearing Nike, you
are in the league of those very special sports
personalities you admire
In addition to regular high budget ad campaigns,
Nike puts its logo, the swoosh on every possible
medium/vehicle--- MP3 players, watches, walkie
talkies, and even portable heart monitors
The marketing is built wholly around brand name
and promotion