Transcription Doc Marketing Strategy Video 1

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Video 1

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Speaker: Kavea Chavali

By now, you know why marketing is crucial for a business. Designing an effective marketing

strategy is important. It helps a company identify its target consumers and position its products in

their minds accordingly.

But how is a marketing strategy developed? What are its key components? And what is the

function of each of these elements? Let’s try to answer these questions now.

You now know that consumers are scattered, and all of them have different tastes and

preferences. They also differ in their wants and buying attitudes. So, with such varying factors,

how does a company decide whom their product is directed towards?

By segmenting their market, companies can divide large, heterogeneous markets into smaller,

homogeneous segments whose needs can be efficiently met. This process of dividing the market

into smaller consumer groups is called segmentation.

Now, not all segments will have the same demand. Once a company has segmented its market, it

has to choose whether or not to cater to the needs of one or many such groups. This decision is

taken through a process called Targeting.

Ideally, a segment should be targeted if it is desirable, has the potential to grow and aligns with

the company’s resources. After segmentation and targeting, the final step in the STP Framework is

product positioning.

Kotler defines a product’s position as ‘the complex set of perceptions, impressions and feelings

that consumers have for the product compared with competing products’.

Transcription Doc

Marketing Strategy


Video 2

Now, the STP Framework of a company demands continuous reiteration. A company will stay

ahead of its competitors only if it redesigns its STP strategies over time.

Let’s look at the example of Bata. Most of us have grown up hearing about the footwear brand. In

the last decade, it acquired the tag of being a brand catering to the older generation. Bata

realised that this needed to change.

To attract the younger generation in the country, Bata launched ads with young and dynamic

celebrities. The brand also extended its distribution channels by opening exclusive outlets for

brands such as Hush Puppies and Power, both of which command a good value in the market.

Bata also entered the online market by selling its products on Amazon, Myntra and Flipkart. What

was the result of this?

Bata was successful in changing its image of being a brand that caters to the older generation to

one catering to the young and stylish generation.

Speaker: Dhaval Doshi

So, who decides the value of a product? You're right, the customers. Customers play a critical role

in the success or failure of your product. For your product to attract customers, first you need to

decide who your customers will be.

If the person you are selling your product to is not interested in buying, all the efforts you're

putting into the marketing will obviously go to waste. So, the target audience selection is a crucial

element of your marketing plan.

Speaker: Abhishek

Let us take the example of the brand Cinthol. It was a soap that was portrayed using a traditional

masculine image. If you look at Cinthol's earlier ads such as the body confidence campaign that

was launched in the 1980s.

In that campaign, the ad featured famous Bollywood actor Vinod Khanna who depicted freshness

and confidence. The next ad featured cricketer Imran Khan and this associated Cinthol with

masculinity and freshness.


If you look at the Cinthol packaging, it was a block-shaped soap and did not focus on other

aspects such as beauty, fragrance, etc. The ad for this soap only highlighted its freshness,

machismo and confidence.

Soon there were other competitors such as Lux who focused on beauty and fragrance. And,

Cinthol changed its positioning and tried to become family-centric. It released a new line-based

variant of its soap which it still promoted freshness.

It changed its packaging to make the soap look more attractive to families. The ads then showed

the whole family using the same soap with the tagline, Tan Taaza. However, this didn't work out

well for Cinthol.

In 2013, it launched a new campaign that focused on attracting the youth. The new tagline, Alive

is Awesome, aim to attract not just men or families, but was more youth-centric in its focus. The

brand also revamped its products and changed the packaging to make it look more alive and

awesome.

So, what do you think changed in the different strategy used by Cinthol? The main difference in all

its marketing strategies was the target audience for the soap, which kept changing.

Initially synthol targeted young men like Karthik. Then it changed its strategy and promoted it as

a family soap. Pooja and her family started using Cinthol during its initial promotions of Tan

Taaza, and then, shifted to using Lux.

Now since the family centric approach didn't work well, Cinthol with its new campaign, Alive is

Awesome, is targeting the youth of India. So, it is necessary to keep reinventing your brand to

adapt to changing customer needs. Deciding on your target consumers is essential for any

product.

How is this process carried out? Let us see that in this session. The first step we follow in knowing

who our target customers are is to segment the available market into different parts based on

various criteria.

Now before we learn how to do this, you need to know what a segment is. A segment is a group

of people who have similar likes and dislikes in their product choices. Market segments are

considered to respond in a predictable way to a marketing plan or a strategy.

Segmentation is the process of dividing the market into groups of people with similar interests

such that they have similar needs and react in a predictable manner to the devised marketing

plan. So, how should you do segmentation?


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Segmentation should ideally begin with understanding your customer needs and then coming up

with different customer segments. Once this has been done, a few of these segments can be

identified and targeted based on how will their needs match with your value proposition.

You must have realized that segmentation is necessary for customer-oriented marketing and it

eventually leads to higher sales and profit.

Speaker: Abhishek

Let us now learn the different bases of segmentation on which we divide the market. Broadly,

There are four main bases of segmentation namely geographic, demographic, psychographic, and

behavioural segmentation.

First is geographic segmentation. Here, the basis for dividing the market is different geographical

units such as nations, states, regions, cities, or neighbourhoods.

For instance, newspapers are published and distributed to different cities and even in different

languages to cater to different sets of customers. Or take the example of fast food joint

McDonald's, in response to different preferences in different countries, it serves the McAloo tikki in

India, the McArabia in the Middle East and Banana pie in Brazil. Additionally, it serves beer in its

German outlets, but not in its US outlets.

If you consider Kartik, Pooja and Sanjeev, all of them are from Mumbai. So, when geographic

segmentation is done, they would fall into the same segment.

Second is demographic segmentation. Here, the markets are divided into segments based on

variables such as age, gender, family, income, occupation, education, religion and ethnicity.

On the basis of age, Kartik is 25, Pooja is 39, and Sanjeev is 52. So, they would belong to

different segments when segmented with respect to age. They would belong to different

segments even in income-based segmentation.

Kartik is an engineer who had just started running, so he would earn a basic salary which is now

not too low or too high. Pooja also belongs to a middle-class household and Sanjeev who lives in

a luxurious lifestyle also belongs to different segments.

Consider the online furniture company Pepperfry. It uses age and life-stage as a basis for forming

segments with possible segments including unmarried adults, married adults with no kids, married

with young kids, married adults with grown- up kids and so on.


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Demographic segmentation is very powerful because the consumer needs, wants and uses rates

often very closely with demographic variables.

Third is psychographic segmentation. Here, the basis of segmentation is the lifestyle and

personality traits of consumers. Lifestyle and personality traits are strong drivers of consumer

preference and needs.

Two people may have same demographic. They may belong, both be male, and of the same

income and age group, from the same city, share a school and university, and yet, they may differ

in their personality. One of them could be an extrovert who is willing to try new things while the

other may be shy and unwilling to try new things.

Take the case of Harley-Davidson bikes. Kartik has friends with amazing bikes, loves freedom, and

always wanted to own a large, heavy motorcycle and would love to own a Harley-Davidson of his

own. Harley-Davidson segments the market for motorcycle based on such personality traits of

customers in the marketplace.

On the other hand, Mercedes-Benz would segment the market based on the people living a

luxurious lifestyle. Sanjeev would fall under this base of segmentation.

Fourth is behavioural segmentation. Here, the buyers are divided into groups based on usage

occasions, usage rate, loyalty status, buyer readiness and attitude.

For instance, you can form segments of non-users, ex-users, potential users, firsttime users and

regular users of a product.

Let's look at the example of Hallmark, the company that sells greeting cards for all occasions. The

primary target segment for Hallmark is people buying cards for different occasions. Usage

occasions are also often correlated with consumer needs and buying behaviour.


As we have talked about, customer loyalty and usage pattern analysis are some of the most

effective ways of carrying out behaviour-based segmentations. Let's look at how Apple and

Microsoft utilised behaviour-based segmentation.

Speaker: Salma Nisar


Both companies are clear on delivering value to the various segments of consumers from personal

home users including students, to professional users including gamers and graphic designers.

Both are at varying ends of the spectrum and you can see the segmentation in action when you

visit the company stores. On the basis of usage, they've come up with products ranging from a

very advanced high-power machine for professional users such as the Surface Pro or the MacBook

Pro to a basic Apple Air or Windows 10S.

It's evident that the companies have analysed the segments of the market, considered the usage

behaviour of the potential target audience, and then come up with these different types of

products.

Speaker: Abhishek

Let us now talk about the fifth type of segmentation, that is the benefit based segmentation. To

understand this, let us look at an example. Let's think about McDonald's again. As we have seen

before, the needs of different kinds of customers are well understood by McDonald's based on the

market research.

Using the results of this market research, McDonald's caters to Pooja's children by offering them

different things such as happy meals, toys, merchandise, and even the image of the clown.

It also caters to Sanjeev who might be in a rush and needs quick service such as a drive-thru. In

fact, Sanjeev feels that the drive-thru is one of the McDonald's best features. Every time he runs

late for work, he orders food at the McDonald's drive-thru and saves a huge amount of time.

McDonald's also cater to people like Kartik who prefer budget friendly places to eat at. Kartik also

loves to hang out at McDonald's with his friends over the weekend. Hence, McDonald's meets the

functional needs of its customers by providing quick services, cheap food and convenience.

At the same time, it caters to the underlying hedonic needs of its different segments of

consumers. Benefit based segmentation, often the most challenging to do.

It involves the difficulty of identifying the right customers, identifying their needs, which are not

evident or observable in any way. It requires uncovering these underlying needs and

understanding them so that customers can be provided with the value proposition that is

customized based on this hidden need.

If benefit based segmentation can be done, it makes it possible to create the closest match

between your value proposition and needs of your customers. If this match between the value

proposition and customer needs is strong, it makes it easier to execute your marketing strategy.


Speaker: Abhishek

One factor which you need to consider while choosing your base is the relevance of the base for

your target segment. We have talked about the different bases of segmentation such as

demographic, geographic, psychographic, and behavioural and benefit based.

But, while choosing your base, you need to ensure that it is relevant to your product or service.

You also need to decide why this selected base is relevant for a certain category and why it might

not be relevant for another category.

For example, if you're talking about a product like a motorcycle or a scooter, what could be the

relevant base? It might be age or gender, i.e., demographic.

You cannot choose our base to the place or area that is geographic. If you choose a geographic

base, then Karthik, Pooja and Sanjeev all fall under our segment. but, not all of them would be

interested in buying a motorcycle. You need to make sure that the base you choose is relevant to

your product.

Also, you need to know that you cannot cater to every segment and you need to choose your

segments very carefully.

Sometimes, while segmenting you might have segmented way too much and the resulting

potential market is very small. This again leads to the loss of profits for the company. This is

called counter segmenting.

You need to make sure that there is a balance in this segmentation and that you end up with a

good market. There are different criteria to evaluate the segments you choose.

Once you have chosen your segment, how do you know that you have chosen the right segment

and whether it is feasible? This is where the MAADS criteria is used to evaluate your

segmentation. MAADS is an acronym that stands for measurable, accessible, actionable,

differentiable and substantial.

Let us take a few minutes and try to understand this framework in detail. You can think about

breaking your customers into multiple segments based on different dimensions. But you need to

ensure that these segments are measurable.

In other words, you should be able to estimate the size of the segment, or size of the market in

each segment. You should also ensure your segmentation is based on customer segments that are

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accessible. In other words, you should be able to think of ways to reach and serve your

customers.

Thirdly, your segments must be actionable. In other words, the segments should be designed in

such a way that you can actually use a plan to act on this segmentation strategy and

communicate in different ways with these segments.

Let us think of an example. Let us say, you plan to segment people on the basis of kind of food

that they like, the spicy food at one extreme and bland food at the other extreme.

This might be difficult to act upon since it's difficult to rea someone who likes spicy food versus

someone who likes bland food.

On the other hand, if you had a segmentation strategy based on educational status, that kind of

segmentation might be more actionable because you could think of ways to execute your

marketing strategy for different segments based on their educational status.

The next thing to ensure about segmentation is that these segments are differentiable. In other

words, you want them to respond differently to different marketing stimuli. If that was not the

case, these segments would not be feasible because they would all respond similarly to your

marketing stimuli.

In other words, you wouldn't really have different segments. Finally, you want these segments to

be large enough so it makes sense to work with them. So, you need to check if your segments are

substantial, you must ensure that they are going to be profitable.

For instance, say, you are selling luxury watches and your segment is based on income, and you

pick a particular segment that's based on really high income, say, about tens of millions of dollars

in India.

Now, there are certainly people like Sanjeev in India would have an income at this level. However,

this segment may be too small for you to get any meaningful sales for your segmentation strategy

to be profitable. Even if you cater to this segment successfully.

Speaker: Abhishek

Let us now look at an example where we can use the MAADS criteria to evaluate our segments.

The Future Group, a large established group in India, has different segments that it uses for its

marketing strategy.


Its two brands are Big Bazaar and Foodhall. These two brands cater to very different segments.

Foodhall is meant for customers like Sanjeev, who are looking for gourmet foods, which is

typically the urban elite demographic.

Big Bazaar is meant for segment that is looking for affordable groceries and it's typically meant for

mass consumer demographic. Pooja always goes to Big Bazaar to shop for the groceries for her

household.

So, let's evaluate whether the segmentation strategy used in segmenting Big Bazaar and Foodhall

are feasible based on MAADS framework that we just outlined. Are they measurable? Yes. Both

the customers and segments here are measurable.

We could think about using data to measure the size of consumers in the segment, that caters

about Foodhall and also of the consumers in the segment that cares about the Big Bazaar brand.

Are they accessible? Yes. Both the segments are accessible. We could think of reaching both these

segments in different ways using different kinds of retail stores. For example, Pooja lives in a

colony where all the families have similar economic background as her.

The nearest Big Bazaar is 5 minutes away and almost all of them buy their groceries there. It

caters to almost all their household needs, is easy on the pocket and it's close by.

We could put in retail stores for the Big Bazaar brand in neighbourhoods like this where there are

average incomes and the socioeconomic background of consumers ensure that they prefer the Big

Bazaar brand.

We can also think about putting stores or locations in areas where there might be groups of

consumers or segments of consumers who might care more about the Foodhall brand.

Are these two actions actionable? Yes, we can think of ways in which we can execute our

marketing strategy and reach either of the customers interested in these brands.

Big Bazaar is more of a mass market brand. We have seen how it advertises itself as, Saste Se Bhi

Sasta, to attract its chosen segment. We could also think about designing the packaging of its

product, pricing, communication and distribution that might appeal to the consumers who are in

this segment that cares about the Big Bazaar brand.

Similarly, we could think about presentation, pricing, distribution and communication that would

appeal to the consumers that care about the Foodhall brand. So far, both these segments, we

have actionable marketing strategies.


Video 7

Are these two segments differentiable? If you think about it, the customers in each of these two

segments are probably going to respond very differently to the different marketing stimuli that

they received. For example, Foodhall advertisers imported organic or gourmet products which

would attract consumers like Sanjeev's family.

On the other hand, Big Bazaar customers might be more price conscious and may respond to

offers to buy in bulk or other kinds of loyalty discounts or promotions. Let's think about

substantial. Are these segments substantial in terms of profitability? Yes. We might be able to find

that the segment that Foodhall caters to is large enough that it will be profitable. Now, this might

be a smaller segment than the segment that cares about the Big Bazaar, but it could still be

profitable.

Big Bazaar might be a larger segment, and that would be also be profitable. It could also be the

case that the margins are higher for the segments that care about Foodhall, than the segment

that cares about Big Bazaar.

Therefore, although they might have different relatives in these two segments, profitability might

be very similar irrespective of their sizes.

Here, the segmentation does not make sense in terms of being substantial. So, now you know

what MAADS is a group criteria to evaluate if your segmentation strategy makes sense or not.

Speaker: Abhishek

You would have chosen your segment and it could be satisfying the MAADS criteria. But, another

thing that you must take into consideration is the time and the resources your company has at its

disposal to segment the decided base.

This could be done with the help of a 2 x2 matrix with the dimensions, observable and

unobservable, and general and product-specific. This is the classification of the bases.

For example, consider our bases demographic, psychographic, or benefit based. Demographic

segmentation such as gender or age would be a general and observable base. This kind of

segmentation would require the least time and the resources to be carried out.

Psychographic would be unobservable so the company would need to have sufficient time to

perform a psychographic segmentation. Again, there are bases which can be specific to the

product or general in nature. If you consider behavioural segmentation, it is product-specific and

observable.


Accordingly, the time and resources needed would change. When you have a lot of time and

resources at your disposal, then you can do detailed segmentation and go for a product-specific

unobservable base.

Benefit based segmentation is the hardest to segment. This would come under product-specific

and unobservable. Therefore, the time and the resources required would be very high. Using this

metrics, we can check if a base for segmentation is general or product-specific, and observable or

unobservable.

Then according to the matrix and the time and resources you can put in, you can choose your

bases of segmentation. For example, think about an educational company such as Byju's, which

has an app for school children to learn maths and science.

When the company was starting out and had limited time and resources, it might have used

general observable factors such as cities and the income-level of parents. Once it grew and had

more resources and time, it could look at specific unobservable segments using behavioural bases

such as the amount of time, different students spend on particular chapter videos.

Often just choosing one best cannot give you your entire desired market. For this, you would have

to consider multi-factor segmentation.

Take for example, Revolution Plus Size store. Pranay and Nisha, the founders of these stores,

identified the requirement for plus size western clothes for Indian women with above average

body sizes. They did not do just one base, but multiple bases.

Geographically, they target Indian women living in cities. Demographically, they targeted women

of a certain age. Psychographically, they consider women with preference in lifestyle and wearing

western dresses. So, based on all these inferences, they form their final segment.

As you can infer, it is not always necessary that you choose segment in just one base. There can

be more than one way for segmentation based on the product you are dealing with.


We have understood what the different bases of segmentation are, how to choose the relevant

base, how to evaluate the feasibility of the base and the multi-factor segmentation.

Now, after dividing the market into segments, what will be our next step? Now we would want to

target the segment we have chosen. That's exactly what our segment is all about.



While segmentation involves dividing the market into various segments, targeting involves

evaluating these segments and deciding how many and which ones to target. Segmenting and

targeting answers the question of who is our customer.

Targeting is necessary for companies because depending on the resources available to a

company, if it focuses on one or more segments which are more likely to be interested in buying

the product rather than the overall market, the possibility of getting better returns is higher.

Take the case of any car retailing company, it may identify many potential segments in the

marketplace. There might be people like Sanjeev who are looking for a family sized luxury car.

Another segment may consist of young professionals like Kartik who are single and looking for a

flashy sports car. And finally, there may be a third segment like that of Pooja's family who are

looking for an affordable but effective family car. But how would the company decide its target

market? Let's see how this is done.

Speaker: Abhishek

The decision making of which segments to target depends on three important factors: the

attractiveness of your segment, the ability to influence your consumer, and the company

objectives and resources.

Let's talk about the first one, attractiveness of your segment. While considering this factor you

should ask, is this segment attractive enough for me? The segment may not be big, but is it big

enough for me to get attracted to it?

As you saw while evaluating using MAADS criteria, your segment needs to be sizeable but how

large a segment it should be for it to be attracted to your particular organization depends on

many factors.

For example, the segment chosen by Pranay and Nisha is not big. They just targeted plus sized

women in India of a certain age. When compared to the whole apparel market, this is just a small

chunk. But they realize that there was an unmet demand for plus sized western clothes for

women in India. Thus, they found this segment attractive enough to target.

Ability to influence the customer in that segment. Again, when you choose your segment before

you target it, you need to check as a company if you can influence your customers to buy your

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products. Revolution stores realize that there was an unmet demand for plus sized western

clothes for Indian women of a certain age.

But they were not sure how much these women would prefer wearing western clothes. They

wanted to test their market segment. So, initially the company founders Pranay and Nisha made

some 1000 garments and held an exhibition for them.

This exhibition turned out to be a huge success and made over 1 lakh rupees over a single

weekend. Customers ended up going home demanding to buy the leftovers. Seeing this demand,

Nisha and Pranay decided to go ahead with its chosen market segment.

Now, when Harley-Davidson chooses target segment of young sporty men, it does this because it

knows that as a company, it can influence many youngsters like Kartik with its stylish look, its

features and with the feel that they get when they own its bikes.

The third factor is company objectives and resources. Another important factor to take into

consideration is whether your company has the required resources to cater to the chosen

segment.

If you think about the earlier example of Revolution stores, they did not have the resources to

cater to a large audience. They had limited resources, and that is how they decided to get it with

a limited audience based on their ability rather than pursuing every segment.

Despite knowing that the overall apparel market is a bigger and better market, they did not

pursue it. They chose their segment of plus sized women in India to make clothes for. After

deciding which segments to target by considering these three factors, you need to decide on your

targeting strategy.

Speaker: Abhishek

There are 3 generic targeting strategies. First is mass marketing strategy, second is segmented

strategy and third is niche marketing strategy. Let us explore each of these in detail.

The first is a mass marketing strategy. Consider Ford Motors, when its founder Henry Ford

introduced the iconic Model T car. He offered it in just one colour, black. The car was mass

produced in black for several years and offered to everyone in the marketplace regardless of their

demographics, psychographic, geography or usage pattern.


Its target market included all Kartik, Pooja and Sanjeev. In a mass marketing strategy, the whole

population is treated as a single market and the same approach is used to reach everyone in the

market. Companies offering mass market commodities such as petrol, potatoes, mill, gas, etc.,

usually practise this strategy.

The second target marketing strategy is a segmented strategy. Here, the population is divided

into several segments and different approaches are used to reach 2 or more of these segments.

Most car companies such as General Motors, Hyundai, Toyota, and Maruti in India now offer cars

specifically designed to cater to many different segments of customers, varying from high-income

families to low-income individuals.

So, Pooja for example, comes under the target segment for the Toyota Etios and Sanjeev comes

under the target segment for Toyota Fortuner


Pandora, an international Danish jewellery manufacturer and retailer founded in 1982, is a good

example of a company that has differentiated targeting. It has a strategy that delivers value to its

various customer segments, which it arrived at by looking at the benefit, behavioural and

demographic segmentation.

It identified the different customers were looking at different attributes in the products. Therefore,

there was no one fits all in terms of the end product for customers.

One market segment was working women, i.e., the segment that always looks for aspirational and

sophisticated jewellery regardless of whether the price is a little steep. On the other hand, there

was a teenage segment that was looking for trending jewellery but was much more price

sensitive.

In order to address these two different market segments, it launched two different products

successfully. Sophisticated designer jewellery for female professionals and Disney-themed

jewellery for the teenagers. In this way, the same brand catered to the varying needs of its

audience.

Speaker: Abhishek

The third target marketing strategy is a niche strategy, and niche is a segment in which you have

the ability to charge people a premium price as you are providing them something exclusive.

Here, the population is divided into several segments, but the company develops one specific

approach, especially for the one market segment only.


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That was a very informative segment where we learned how to target our chosen segment. But

what is next in line in our course of action. Isn't it very evident, we need to put our product out

there for our chosen customers? This is called positioning. The next segment will give us more

insights into this.


Till now, we discussed which customers you will cater to. The next logical question once you have

decided on your customers is why should they buy your product? This is the very question

positioning answers.

Speaker: Abhishek

What do you understand from the term position or rather where did you hear this term most

often? That's right. Position is most commonly used to present your rank in class. It determines

how good you are compared to your whole class.

Similarly, the positioning of your product implies where it will stand in the mind of customers with

respect to other competitors in the market. Positioning is the process of occupying a meaningful

and distinctive space in the minds of your target customers relative to the competition.

This is where a concept called unique value proposition needs to be utilized. A unique value

proposition is defined as a clear statement that describes the benefit of your offer, how you solve

your customer needs, and what distinguishes you from the competition.

You need to position your product with a unique value proposition such that your target

customers will buy from you and not from your competitor.

Speaker: Khurram Hamid


Video 11

To give you another example of why a positioning strategy is important, let's look at IBM. IBM

does not sell computers anymore. Once known for selling mainframe computers and having built

the largest end-consumer PC business, it has now completely overhauled its business strategy,

and therefore its market position.

So, what does IBM sell now? Well, it sells B2B software solutions and consultancy services. It

completely pivoted away from computers in terms of its positioning. One reason for this was

because computers were being commoditized, hence there was no unique value proposition for

the consumer when it came to IBM's products.

As a result, IBM started emphasizing on IT solutions and services. In fact, it opened a division

called Watson that comes up with solutions based on artificial intelligence. So, it was now an

innovation consultancy.

In fact, IBM is no longer a consumer facing company. It now caters to B2B customers such as

government institutions, retail giants, oil companies, etc.

Speaker: Abhishek

Take the case of Ola Cabs. It targets busy urban professionals. Kartik prefers Ola because of its

convenience and the relative luxury of cabs over public transport. In his fast-paced life, time is

precious. So, he wants a reliable and fast way to travel to work.

Now the value proposition of Ola Cabs might include benefits such as accessibility, availability,

reliability, speed of booking.

However, in order to differentiate itself from the competition, as competition might also offer

similar benefits, Ola company needs to focus on those benefits that are distinctive in nature and

occupy a key space in consumer's mind relative to its competitors.

And so, Ola may decide to position itself as the fastest and the most reliable way to book cabs.

This is its unique value proposition.


In the year 2000, BRE bank, a member of Commerzbank Group, one of the largest Polish

conglomerates relaunched itself as mBank, the first internet bank in Poland.


This move was mainly because its ability to introduce new products, improve its client experience

and effectively cross sell other products, was being constrained by the conventional system of

banking.

However, mBank soon face new pressures in the online banking market as the popularity of

internet banking grew and a slew of online offerings were brought in by its competitors such as

Bank Millennium.

So, in order to secure the position as an online banking leader and improve the capabilities of its

digital disruption channels, mBank had to position itself as the internet first bank i.e., as being

superior to competitors that had internet banking more as an addon.

It wanted to be seen as a next generation online bank that revolutionized digital disruption in

banking leveraging its early mover advantage.

So, the positioning statement that could be formulated for mBank keeping the components in

mind could be, for next generation customers, mBank is the best in online retail banking category

as it has a responsive design, modern interface, and a mobile ready platform.

mBank also has a legacy for being innovative always and for being on the forefront of making

customer engagement delightful.


Now along with your product's unique value proposition, you need to decide how your product

offers similarities with your competitors products features. This is called the point of parity. Let's

look at how a few well-known products have utilized this point of parity in the right way and

wrong way.

Speaker: Abhishek

Consider Fogg. It had points of parity in common with other perfumes in terms of the size of the

container or the pleasant and attractive fragrance.

The company also advertised the product as a perfume whose fragrance lasts all day long and

keeps you fresh. These attributes are required for consumers to recognize Fogg as a perfume

brand.

Just highlighting the factors of difference can cause a product to lose its credibility in its given

industry. So, there needs to be a balance between the points of difference and the points of

parity. To illustrate this, let's consider the example of the antiseptic brands Dettol and Savlon.


Video 12

Pooja's family initially used Dettol as an antiseptic. Then they tried to use Savlon. Savlon did not

provide a stinging and burning effect like Dettol did, but it was effective. But, Pooja was not

convinced about Savlon's ability to heal as there was no stinging effect involved.

So, she and her family shifted back to using Dettol. As you can see, Dettol had already created a

notion in people's mind that if an antiseptic creates a burning sensation that it means it is

working. So, a point of parity in antiseptics according to consumer was that all of them cause a

stinging sensation.

Savlon did not include this main point of parity that an antiseptic needed to have. This led to the

brand not performing on par with Dettol in spite of it being an at-par product.

Speaker: Abhishek

Now, you position your product for your target audience, including the points of parity and

differences using a perceptual map. What is a perceptual map? A perceptual map is a powerful

tool that helps marketing managers design and implement the three stages of STP, that is the

entire marketing plan.

Specifically, perceptual map visually represent customers’ mental image of how competing

products are positioned in the marketplace. As such, the health managers identify and represent,

and evaluate and choose segments to target. They also help them decide how to position their

products.

Take the example of car market. Several decades of market research have shown that when

customers think about cars, they do so along two dimensions. Theoretically, a perceptual map can

have any number of axis. However, the best maps typically have 2 because it's easy to visualize,

an X-axis and a Y-axis.

The X-axis goes from left to right, and the Y-axis goes from bottom to top. Car shoppers typically

think about cars along a utilitarian dimension about price and quality, or an aesthetic or emotional

dimension on the utilitarian, hectic dimension. You have high-end luxury cars at one end, and

low-end utility cars at the other end. On the emotional dimension, you have family cars at one

end and a sportscar at the other end. Now you can represent different segments in this space.

For instance, people who like high-end but sporty cars would be in the top-right quadrant.

Sanjeev who likes high-end family cars would be in the top-left. Kartik who likes low-end, but

sporty cars would be in the bottom-right and so on.


Video 13

You can identify how competitors' products are positioned according to consumers and then you

can use all this information on the map to decide which segments to target. This will help you

position your products using the 4 Ps.

We'll learn more about the 4 Ps in later sessions. So, while framing a perceptual map, mainly you

should do three things. First, you should identify your product’s key attributes. These are the

features based on which you will plot the perceptual map for your product.

After identifying the attributes, the next step is to plot the perceptual map and place already

existing competitors on it. You will then gain an understanding of where there is a reason that has

not yet been explored.

You then decide on your competitive strategy, that is whether you will compete head on with an

already established brand with a unique value proposition, or whether you will tap into an

unexplored market and stand out among your competitors. You also need to decide on your

points of parity and points of difference with respect to your competitors.

Speaker: Abhishek

Now, let's see how this is done step-wise, when you want to launch a new beer in the market. To

begin with, you need to know how existing beers are positioned as well as how you should

position your beer in the market.

In order to do this, you can look at 2 very simple and fundamental attributes. As an individual

beer drinker, you might already know that there are two important aspects to the drink. One of

them is the strength, the other is the price.

Let's look at the first spec, the strength of the beer. The strength of a beer can be understood by

conducting a simple survey of end-users to find out what the strength is on a scale of 0 to 10. Is it

extremely light or is it extremely strong or is it somewhere in between?

Once you have done this survey, you will know that the bitterness of the beer and the scale at

which it stands, this will give you a parameter to compare the same vis-a-vis the price of the beer

on a perceptual map and figure out where the brand is positioned on it.

Of course, there are other attributes as well, but this is one way to go about the process. Let's

look at the second attribute of the beer, the price. On the basis of the price, an individual

consumer will either treat the brand as a premium brand or as a budget brand.


In fact, very often this is the basis of the distribution strategy and the marketing strategy as well.

Let's now move on to step two, that is placing existing competitors on the perceptual map. In

order to understand how beer brands and the beer market are positioned, let's look at some

examples.

On this map, you can see that beers are perceived as strong and premium, and they are

represented in different quadrants. Similarly, beers that are perceived by consumers as strong and

easy on the pocket are represented in the second quadrant.

Now take a look at how these brands are plotted in different quadrants and how they're

positioned in the market. Sanjeev's favourite brand is Heineken. Heineken is a premium brand. It

is priced quite high and is available at some of the most happening pubs and clubs of the city.

Its retail price is also quite high. Moreover, if you look at the strength of this beer, it is between

medium and high. So, Heineken falls into the first quadrant on the perceptual map.

Kartik's favourite Budweiser is high in terms of strength. However, if you look at the price, it is

actually a budget product. Therefore, it falls into the second quadrant.

Fosters is a brand that is light. It falls into the premium category when it comes to pricing, and

therefore it falls into the fourth quadrant. Finally, Kingfisher is a high-strength beer, that is

extremely bitter. However, it is very budget and pocket friendly, and therefore, it falls into the

budget category of pricing.

Also, if you look at positioning of the perceptual map, Kingfisher is in this second quadrant and it

dominates the market. So, you have now understood how brands are positioned on a perceptual

map. But, how does a marketer utilize this perceptual map when he or she goes to market with a

new product?

For instance, let's say, you want to launch a new beer in the market. If you look at these

quadrants, and identify the gap that you can fill, you will clearly see that the third quadrant is

completely empty. Does this mean that there's an opportunity there? Maybe.

Therefore, you can position your product to segment 3. You can achieve a point of parity with

Kingfisher or Budweiser by being budget friendly, and you can maintain a point of difference by

providing a combination of budget friendly and light beer.

A lot of brands like Kingfisher and Budweiser have come up with this light version of their beers in

order to cater to this segment. This might be an interesting way to understand how using a

perceptual map can help you develop a strategy to go to market with a new product.



Video 14

We have understood how to choose our customers and how to position our product so that they

get attracted to it. Now we need a good marketing plan to implement the positioning of the

products. This is where the concept of 4 Ps is used.

Speaker: Pulkit Gupta

So, let's look at an interesting example to understand market segmentation, targeting and

positioning. And the example that we are going to talk about is that of Sunfeast's noodle brand,

which is a Sunfeast Yippee.

So, essentially, it's a brand owned by ITC and it, of course, competes against some of the other

established brands like Maggie from Nestle, Top Ramen, etc.

So, this brand was essentially launched in late 2010, so December, 2010, early 2011. And before

we talk about the brand specifically, let's try to understand the noodle market back in 2010. So

again, it's a market that's one of the largest, fourth or fifth largest market in the world when it

comes to instant noodles.

It's a market that is dominated by Nestle's Maggie, commanding close to 70-75% of the market

share. Some of the other brands were, of course, Bambino, we had WaiWai, which is a Nepalese

brand. Then there is Nissan's Top Ramen which is again, a Japanese owned brand.

And of course, if you think from a strategy point of view, it looks a little odd that ITC were to take

on a brand as large as Maggie in the Indian market. But it did so, and it has done that successfully

over the last 9 to 10 years now.

And so, let's look at some of the numbers for Yippee in the initial years post launch, which kind of

shows how Yippee was able to gain traction in the Indian noodle market.

So, essentially in 2010, when Yippee launched, of course it had less than a percent of the market,

0.7% of the market. But over the next 5 years, Yippee was able to grow from a 0.7% to 3.4%,

5.3%, 8.3%. And in 2014, Yippee commanded close to 11% of the market.

As of now, Yippee commands close to 22- 25% of the market. So, essentially in the last 10 years,

the brand has grown from nothing to 25% of the market. And this is a market that has been

dominated by Nestle's Maggie for the last 25-30 years.


So, that's essentially the instant noodle market in India meant Nestle's Maggie, right? And right

now, Yippee is a 1000 crore plus brand.

So, essentially this is exactly why this is such an interesting case study when it comes to

marketing, when it comes to understanding the consumer and creating a product and, a

communication and positioning strategy that is in line with what the consumer wants.

So, one of the first steps in the marketing process is of course segmentation, identifying what are

the different consumer segments in the market. When you talk of the instant noodle market,

essentially there are 3 larger segments.

One of course is the kids’ segment, which is essentially 6 to 15 years of age. And this segment

would essentially view the instant noodle product as a treat. So, essentially you will just come

back from the school and your mother would prepare a bowl of an instant noodle.

And typically, this won't be an everyday meal for them. This would be, say, a once a week or once

a month indulgence which their mother could afford to them. So that's the kids category. The kids

consumer segment.

The next consumer segment is essentially the young adult market or the teens market. So,

students residing in hostels. For this segment, essentially Maggie or any other noodle brand for

that matter, would essentially be a meal replacement. So, when they see a bowl of noodles, for

them it's mostly sort of to erase hunger. So, that's the second consumer segment.

The third consumer segment is the young working professionals and their sort of attitude towards

noodles would be somewhat similar to the segment two, which is the young adult consumer

segment where they see noodles as either a meal between meals or as a meal replacement. So,

those are the three larger consumer segments in the instant noodle market.

So, for the second and the third consumer segment, which is the young adult and the working

professional consumer segment, Maggie essentially was a meal replacement. And ITC realized

that the brand Maggie, was very, very strongly positioned in the minds of the consumer in these

two segments.

Maggie was a 2-minute noodle brand. So, essentially make it very quickly and consume it. Also,

the flavour, the product was very strongly positioned in the minds of the consumer. When you

think of yellow, when you think of noodles, you automatically come up with Maggie.

When you think of instant noodles, essentially you come up with Maggie. When you taste the

masala in some other meal, you will instantly recognize that this is the stereotypical Maggie

flavour. So, that's how they realize that Maggie was very, very strongly positioned in the minds of

consumer segments 2 and 3.


Video 15

ITC realized that there was an opportunity in the minds of the younger segment, which was kids

between the ages of 5 and 15. And for them, Maggie did not hold any sentimental value. Maggie

did not have that stronger brand positioning because of course, they weren't exposed to that

brand, like some of the younger adults were over the 90s and 2000s.

So, Yippee very quickly realized that there was a consumer segment that, in the minds of which

Yippee could very strongly position its brand. And that was essentially the genesis behind Yippee's

very kids-targeted positioning.

Speaker: Sabia Gulati

While a brand may have a holistic approach towards its target segment and target audience, of

course, that's how a brand probably launches or thinks about creating a strategy is identifying

who my target group is, which can be defined by, you know, demographics or age or some

elements of -psychographics.

But in my view, I think the brands need to have a more dynamic approach. It really cannot be

“I’m targeting everyone from the age of 15 to 30”, or “I'm going to target everyone who lives in a

certain city.” That doesn't really work.

You need to have a very different approach, and that will obviously then let you formulate your

communication strategy as well because while you've identified who you want to sell to, who do

you want to provide your services to, how and what are the touch points, will automatically kind

of force you to create sub-targets if you're looking at effective communication and effective sales

strategy.

So, it's important to be very dynamic in your approach. And also, one of the learnings that I've

had is that your target group can actually keep changing. It is not something that was there 15

years ago, is something that's going to stay with you for the next 15 years and it's going to stay

for the following 15 years.

It also keeps changing. Everything is dynamic, right? I mean people are getting exposed to so

many things and you know, the customer understands everything these days. They know what is

being marketed to them. They know what is it that they're probably seeing and what are they

actually experiencing.


I mean the customer is super smart. So, we need to be a little smarter than them and try to

create a more dynamic approach to the segmentation. Like I will quote a few examples, like with

M&S, we knew the age group that we are targeting.

We always thought that we are a brand that is going to go 25-30 plus and go up to the age of 55.

Now this was our target group for India, whereas in UK, it was always a 50 plus brand, a 45 plus

brand other than certain sub-brands that would existing within M&S, that could be targeted to a

younger audience. But that was a niche.

Now, that is the difference between UK and India, but even within India, we had a different target

group and different target segments in different cities. So, people that we were targeting in Delhi,

Bombay were very different from who we were targeting in cities like, you know, a Hyderabad or

a Raipur or a Pune.

So, that's very different, like Bombay and Pune. Absolutely close, very similar. But we had

completely different target groups and we had like different touch-points as well.

What is also now happening is when you are, it's not really only about demographics or about

psychographics, we also need to understand the affinity of the consumer. What are they relating

themselves to? And now with social media, we know that what are the interests of people.

So, while in M&S, we had an approach which was, you know, “okay, this is my target group

because this is a certain age bracket”, or “this is a certain economic section”, or “this is a certain

city or a geography”. Whereas in Madame Tussauds, we had a completely different approach.

We were not worried about the age. We were not worried about where the customer is coming

from. We were really, really worried about what the customer is relating to. Also, you know what,

let's go, let's go jump and deep dive into social media and see anybody who's liking #Bollywood.

Anybody who's liking #Madame Tussauds, is traveling to London frequently, is aware of these

things, is dancing on the latest songs, is very, very intrigued by personal interviews of celebrities,

is very intrigued or very interactive on social media or Twitter or somewhere with a particular

celebrity. That is my target group. That is the audience I'm going to, you know, I mean cater to,

because I could be 15 and young but may not be interested in an attraction, but I could be 40 but

very interested in what the celebrities around the world are doing. And you know, like, I'm not a

traveller, I want to see what I want. So, I think it's a need of the business. You need to identify

that. Are you selling an interest? Are you selling a product? Are you selling an experience? So,

based on what your product is, what your offering is, you really need to segment the market.


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Transcription Doc Marketing Strategy Video 1