MAA OMWATI COLLEGE HASSANPUR,

PALWAL, HASSANPUR

EXAMINATION NOTES

CLASS: M.COM 3rd SEM

SUBJECT: FUNDAMENTAL OF
MARKETING
 UNIT 1

MARKETING

The core function of marketing is to recognise customer needs and desires and find the best
strategies to meet those expectations and desires in such a way as to generate revenue and profit
for an enterprise.
For example, ready-to-use dosa batter – it is an instance of marketing where convenience in
cooking was identified as a consumer desire. Marketers grabbed this opportunity to package and
distribute processed dosa batter that satisfies market desire, simplifies modern urban life and
earns revenue for the company.

*Nature of Marketing

In popular conception, marketing, the term is used interchangeably with promotion. However,
marketing is a lot more than just endorsing your product or services. The nature of marketing
defines the various purposes it serves in a lifetime. It includes the following elements –

1. It is a Process of Communication
Marketing is the process of communicating with consumers and stakeholders with the objective
of earning profit, maintaining customer relationships, and managing stakeholder expectations. It
also directs the flow of services and products to the end-user.

2. Marketing is a Managerial Function

The particular marketing approach of an organisation is influenced by the management policy. It

is the management policy that dictates the kind of marketing campaigns to run and sets its
tonality.
3. Marketing is a Social Process

Marketing to the end consumer plays a crucial social role. Through different marketing channels,
the consumer is introduced to a standard of living. To create an optimised marketing strategy,
you must have a thorough idea about the consumer‘s changing needs and expenditure patterns.

4. Marketing is a Philosophy

It is the key guiding principle that defines the commercial operations of a company or
organisation. As a policy, marketing requires you to establish certain ground rules on the kind of
messaging and the overall ideology of a brand.

5. Marketing is a Legal Process

In its essence, marketing is an elaborate legal process through which the ownership of a product
is transferred to the consumer. It is the way an enterprise discovers and identifies the needs of the
market and transforms them into marketable products and services.

6. It is an Economic Function
Marketing, at its roots, is an economical function. Through different marketing strategies, the
consumer is encouraged to take economic action. This action is transactional in nature and
underpins the availing or procuring a product/service in exchange for money.

7. Objectives: Consumer Satisfaction & Profit Making

After all, marketing is an objective-driven action that requires a methodical approach. The
ultimate goal of marketing is to satisfy consumer needs and expectations and by this means
generate profit for an organisation.

*Scopes of Marketing

The scope of marketing involves both science and an art that needs a dynamic approach to solve
real-world problems and crises in society. In modern business, the marketing department uses
key strategies to guide a product from conceptualisation, development, and execution to
promotion and distribution.

1. Study of Consumer Behaviour

The first and foremost role of marketing professionals is to be familiar with the expectations and
expenditure patterns of the consumer in general. A thorough understanding of what they like to
purchase? When do they do that? How much expense they are prepared to make for a novel item,
what is their usual budget for the category of your product and so on.

It helps to determine the time and approach for your product launches. It lies in the nature of
marketing management to gauge your consumer behaviour and strategize accordingly.

2. Identify Their Wants and Requirements

To ensure a streamlined product launch and satisfy the user demand, marketers first need to
identify the pain points of the audience. A strategic approach to marketing requires a complete
understanding of the consumer lifestyle. Only this allows you to place a product or service that
amplifies or complements their life.

3. Planning & Product Development

In this phase, the idea of the product is conceptualised. With the ideation of the product, it lies in
the scope of marketing channels to determine the correct branding strategy that addresses
consumer demands and desires.

4. Pricing and Policy Determination

Marketing professionals may leverage various factors in the product development cycle to
identify the correct pricing. It takes into consideration existing competition in the market and the
expenditure pattern of the target audience. The strategy should help marketers determine
attractive packaging and prices that encourage buyers.

5. Distribution

Identifying the proper distribution channel for the product is vital to optimise your ROI. To
ensure the desired amount of sales, the distribution line must ensure wider target group outreach
at the minimum cost.

6. Promotion

In this step, marketers can use a mix of online and offline marketing channels to promote the
product or service. Based on the type of product/service, and its target group – a particular
marketing channel might be more suitable than others.
7. Consumer Satisfaction

Every product or service is created and distributed in the market with the end goal of satisfying
the user‘s demand or making their life easier. Therefore, after market distribution, it is essential
to get feedback from the clients on how the product is being received. Depending on the kind of
response, a future iteration of the same product or service can be improved to target the
maximum number of potential customers.

8. Marketing Control

It befalls the marketing department to ensure that the strategies implemented are able to produce
the desired amount of results. After the product distribution and launch, marketers perform an in-
depth audit to determine the utility of the approach and optimise it accordingly.

*Importance of Marketing

Marketing is directed at consumer satisfaction. In its natural form, marketing operations fulfil the
needs of the market to help an enterprise earn profits and boost its sales. Here is a thorough
breakdown of the various significance of marketing:

1. Creates Awareness

The scope of marketing enables an enterprise to run campaigns that generate awareness in the
market about a product or a service. This is also the preliminary step of marketing and helps lay
the groundwork during product launch.

2. Guides Buyer’s Journey

Marketing campaigns allow an enterprise or organisation to guide the consumer – offering

knowledge and the relevant guidance that ultimately leads to purchase.
Let us take 3D printers as an example. When a company sells 3D printers, it may produce
customised web blogs, articles and videos that educate and inform people. Different genres of
web based content work as marketing tools that illustrate the benefits of 3D printers and create
the necessary knowledge crucial to operate one
.
3. Builds Brand Identity

One of the crucial ways that marketing helps a business is by building a unique identity. It takes
creativity of thought and expression to crack an exclusive message that works for your company.
So, it falls upon the marketing department to conjure up a distinctive message that fosters better
communication between the company and the target audience. And thereby establishing a brand
identity that creates a unique position among the competition.

4. Boosts Sales

By adopting a robust marketing channel, businesses can adopt a continuous messaging model. It
may include targeted advertisements or Search Engine Marketing (SEM) to get maximum
visibility to the target group of audience. And thereby increase the sales of your products.

5. Helps Scale Up the Business

Marketing is a powerful tool for when you want to take your business to the next level. Whether
you are targeting a new demographic of audience or trying to offer a variety of services – let
your existing reputation guide your new journey.
It reduces the obstacles of capturing a new market or penetrating a segment different from your
core products and services. Thus, utilising marketing tools effectively can help you avert
multiple roadblocks to a flourishing business.

RELATIONSHIP MARKETING

Relationship Marketing is a strategy of Customer Relationship Management (CRM) that

emphasizes customer retention, satisfaction, and lifetime customer value. Its purpose is to market
to current customers versus new customer acquisition through sales and advertising.

INTEGRATED MARKETING

Integrated marketing is an approach that uses different forms of media, called channels, to tell a
story or convey an idea. An integrated marketing campaign might start with a TV ad featuring a
memorable character. For example, you might see a popular new donut flavor in a commercial, then
drive past the donut shop to see posters of the donut.

INTERNAL MARKETING

Internal marketing means promoting the company's objectives, culture, products, and services to
internal staff and stakeholders. For this reason, it is also called employee marketing.

PERFORMANCE MARKETING

Performance marketing aims to solve this tension by focusing on the part of marketing
that performs in a measurable way. The term, first introduced in the mid-1990s shortly
after internet marketing, was a stroke of branding genius by marketing companies. If they have the
choice, why would a business owner invest in anything other than marketing that performs?
Performance marketing is a results-driven approach to digital marketing, where advertisers pay
only when specific actions or outcomes are achieved. These actions can include clicks, leads,
sales, or other desired customer behaviors. Performance marketing relies on various channels,
such as affiliate marketing, pay-per-click (PPC) advertising, social media advertising, and search engine
marketing.

VALUE-DELIVERY
Value-Delivery involves everything necessary to ensure every paying customer is a happy
customer: order processing, inventory management, delivery/fulfillment, troubleshooting,
customer support, etc. Without Value-Delivery, you don‘t have a business.

For example, when a consumer purchases a laptop, value delivery may entail giving them free software
updates and longer warranties. A business strategy that consistently works to provide its existing
and potential customers extra value frequently benefits from more income, faster growth, and
better loyalty.

VALUE CHAINS
Value chains are an integral part of strategic planning for many businesses today. A value chain
refers to the full lifecycle of a product or process, including material sourcing, production,
consumption and disposal/recycling processes.

CORE COMPETENCIES
Core competencies are the resources and capabilities that comprise the strategic advantages of a
business. A modern management theory argues that a business must define, cultivate, and
exploit its core competencies in order to succeed against the competition.

 Core competencies are the defining characteristics that make a business or an individual
stand out from the competition.
 Identifying and exploiting core competencies is seen as important for a new business
making its mark or an established company trying to stay competitive.
 A company's people, physical assets, patents, brand equity, and capital can all make a
contribution to a company's core competencies.
 The idea of core competencies was first proposed in the 1990s as a new way to judge
business managers compared to how they were judged in the 1980s.
 Examples of companies that have core competencies that have allowed them to remain
successful for decades include McDonald's, Apple, and Walmart.

STRATEGIC MARKETING PLANNING

Strategic marketing planning is the process of writing and following a plan to reach a specific
marketing goal. Companies may develop strategic marketing plans to increase revenue and
profits, achieve greater visibility, discourage competitors or improve their appearance through a
total rebranding. Management and operations teams work together to identify the goal, outline
the steps, assign tasks and measure the success of the effort. They may revise their steps over
time, but they begin with a research-backed, practical plan in place.

CORPORATE STRATEGIC PLANNING

Corporate Strategic Planning is a companywide approach at the business unit and corporate level
for developing strategic plans to achieve a longer-term vision. The process includes defining the
corporate strategic goals and intentions at the top and cascading them through each level of the
organization.

Strategic planning is important for companies because it provides direction for their future
growth and financial stability. A corporate strategy is one element of strategic planning that
helps organizations define their long-term goals, such as revenue growth or expansion. If you
work in business development, you may want to learn about the key components of a corporate
strategy to help you establish realistic and achievable goals for your organization. In this article,
we define this strategy, explain its importance and list four corporate strategy components to
help you create or refine business goals.

A corporate strategy can help businesses establish and meet their goals to achieve long-term
success. When clearly defined, this strategy can have benefits for many companies of all sizes.

*Importance of strategic Planning

1. Create strategic direction: This type of strategy can help leaders establish high-level
objectives for the organization, which can create a strategic direction for the company's
development and growth.

2. Adapt to changes: By continually updating this strategy, a company can adapt to changes and
refine its strategic goals to reflect new challenges or opportunities.

3. Increase profitability: This strategy can help companies make decisions about resources and
funding to minimize potential risks and maximize their return on investments, which can
increase their profitability.

4. Motivate employees: Sharing the organization's corporate strategy with employees can
provide them with direction and purpose in their roles, which can motivate them to help a
company achieve its goals.

DIVISIONAL STRATEGY
A divisional strategy, or business strategy, means defining the specific goals and activities of
particular business units. While a company may have an overall strategy of how they want to
operate, the divisional strategy focuses on each division or department. Leaders often create
business strategies that contribute to the company's goals.

*How does a divisional strategy work?

Divisional strategies are one of the three main strategies many companies define. The other two
are:

1.Corporate strategy: A corporate strategy is how a company plans for revenue growth, lower
cost and efficient operations. This often requires market analysis and current business
performance to decide what risks a company might take to succeed.

2. Functional strategy: A functional strategy is often one that mid-level managers might decide
for each department. People define these by understanding the overall corporate and business
strategies and deciding how best to achieve any goals.

*Benefits of a divisional strategy

1.Custom strategies

One benefit of creating this type of strategy is that you create goals and perform research for
specific areas of the business. Rather than a broad, corporate strategy, people within specific
divisions can adjust their strategies based on their needs. For example, a corporate strategy might
be to reduce operational spending, while the department-level strategy for a sales department
might be to automate more emails and calls.

2. Competitive advantages

As market research is essential in defining a strategy for a division, this can provide a company
with a competitive advantage. You might learn what your top competitors do and the results they
achieve, showing you how you might improve your own products and services. You might
perform a SWOT analysis by analyzing your strengths and weaknesses along with external
threats and opportunities.

3. Process improvement

Division strategies can help improve your processes, as these often include goals for team
members to reach. For example, business strategies often include ways to reduce spending,
increase revenue or improve market standings. With these, team members can evaluate their
current processes and understand what they might change to reach the goals.

4. Improved culture
Having a clear divisional strategy can help improve company culture. As employees can share
and understand what their roles are and how they can help the company achieve larger goals,
they might feel more motivated to perform better. Similarly, a clear vision, mission and
departmental values can ensure each team member contributes and behaves appropriately.

*Components of an Effective Divisional Strategy

Each effective business strategy has several components:

1. Mission: As with overall companies, specific divisions might include a mission statement.
These can be a few sentences and identify the ideal accomplishments and the reasons for
pursuing these.

2. Values: A value statement can also be several sentences that express what is important to a
division. This might mean how a division might work, what leadership believes in and the
expected behavior of team members.

3. Vision: A division's vision means describing how you expect the particular business unit to
look in the future. This might mean expected revenue, market positioning or reputation that can
inspire employees to pursue the vision.

4. Budget: As strategies often include cost reduction and revenue goals, creating a budget can
help guide the strategy. You might indicate a specific budget or resource allocation to ensure
managers know how to spend the money when executing their tasks.

5. Goals: More than just describing the mission or vision, you can write a few sentences on what
specific and measurable goals you have. These can include budget figures, revenue targets or
operational goals with ways to measure the success of each.

BUSINESS UNIT LEVEL STRATEGY

By definition, a business unit (also referred to as a division or major functional area) is a part
of an organization that represents a specific line of business and is part of a firm‘s value
chain of activities including operations, accounting, human resources, marketing, sales, and
supply-chain functions. Business units and functional areas help a company organize itself
internally. For example, a company may have several strategic business units that each sell
different products or provide distinct services. As fully functional segments of a company,
business units typically have their own strategic direction and vision.

When it comes to strategy, each business unit has a role to play in the company‘s grand plans
and enterprise strategy. Each line of business or sector must align with and contribute value
to the primary corporate business strategy. In order to optimize results, strategy needs to be
part of everyone‘s responsibilities. As such, each business unit must develop its own
business-unit strategy framework that will define how it will fulfill its part of the primary
corporate strategy and make a distinct, value-added contribution to the organization‘s long-
term success.

*Strategy Level Types

There are three major strategy level types:

1. Corporate-Level Strategy: Concerned with the overall scope and direction of an

organization across its various businesses. This includes diversification and vertical
integration.

2. Business-Level Strategy: Focuses on competing successfully in individual markets or

industries. This involves being an industry leader or differentiating a brand.

3. Functional-Level Strategy: Deals with optimizing specific departments or functions to

support business-level strategy. This level of strategy can include areas like extensive
advertising, brand management, and global distribution.

*Importance of Business-Level Strategy

Business-level strategy is important as it defines how a company competes in a specific
market, which influences its competitive position and success. It helps differentiate the
company from competitors, attract customers, and achieve a sustainable advantage.
 UNIT 2
MARKETING ENVIRONMENT

A company's marketing environment includes every element that may affect its ability to connect
with its customers. This can include internal elements such as resources, equipment and a
company's corporate structure. It can also include external components like existing customers,
delivery platforms and top competitors. Both internal and external conditions can affect how a
customer responds to a business and determine how a business might grow .Some benefits of
understanding your marketing environment include:

Assisting you in understanding the company's competitors and the market

Supporting you in identifying your current and potential customers

Helping you determine future marketing plans

Aiding you in assessing current trends

*Types of marketing environments

 Internal marketing environment

Marketing professionals work with the resources, company values, systems and processes that
exist within a company. These influence the tasks that a company's marketing and advertising
teams complete and how effectively they can create campaigns and content to be competitive in
a market.

 External microenvironment: An external microenvironment covers the relationships

outside of the company. A company's external contacts may include customers, suppliers
or other outside agencies.
  External macro environment: The term macro environment refers to the market or field
in which a company performs. While macro factors may affect the entire industry, they
rarely have a direct impact on a specific company.

*Marketing Environment impact on marketing decisions

There are two elements within the external marketing environment; micro and macro. These
environmental factors are beyond the control of marketers but they still influence the decisions
made when creating a strategic marketing plan.

*Micro Environment Factors

 Suppliers: Suppliers can control the success of the organisation when they hold power.
The supplier holds the power when they are the only or the largest supplier of their
goods; the buyer is not vital to the supplier‘s business; the supplier‘s product is a core
part of the buyer‘s finished product and/or business. Imagine they are the link in the value
delivery processes and what impact this may have.

 Resellers: If the organization‘s product or service is taken to market by third-party

resellers or market intermediaries such as retailers, wholesalers, etc. then the marketing
success is impacted by those third-party resellers. For example, if a retail seller is a
reputable name then this reputation can be leveraged in the marketing of the product.
They are the link between the organization and the customer, so are important due to
factors such as promotion and distribution.

 Customers: Who the customers are (B2B or B2C, local or international, etc.) and their
reasons for buying the product will play a large role in how the organization approaches
the marketing of its products and services to them. It is also important to note the stability
of demand and how this can impact the outcomes of any marketing efforts.

 The competition: Those who sell the same or similar products and services as the
organization is the market competition, and the way they sell needs to be taken into
account. In reality, every organization that sells something similar is classed as
competition. What impact do their prices and product differentiation have? How can the
organization leverage this to reap better results and get ahead of the competition?

 The general public: The organization has a duty to be a good corporate citizen. Any
actions the company takes must be considered from the angle of the general public and
how they are affected. The public has the power to help the organization reach its goals;
just as they can also prevent the organization from achieving them. The opinion of the
public can play a key part in the success of any marketing efforts.
Macro Environment Factors:
 Economic factors: The economic environment can impact both the organization‘s
production and the consumer‘s decision-making process. These can include interest rates,
recession, demand and supply for example.

 Natural/physical forces: The Earth‘s renewal of its natural resources such as forests,
agricultural products, marine products, etc. must be taken into account. There are also
natural non-renewable resources such as oil, coal, minerals, etc. that may also impact the
organization‘s production. In the broader picture, these can be linked to climate change,
pollution and new law and regulations that regulate the environment.

 Technological factors: The skills and knowledge applied to the production, and the
technology and materials needed for the production of products and services can also
impact the smooth running of the business and must be considered. Automation,
connectivity, speed and performance are all necessary considerations.

 Political and legal forces: Sound marketing decisions should always take into account
political and/or legal developments relating to the organization and its markets.

 Social and cultural forces: marketing must consider changing in culture and society
when creating successful marketing activities. These include aspects such as
demographics, consumer attitudes, buying patterns, changes in population and
employment patterns as well as changes in living standards.

MARKET SEGMENTATION AND TARGETING

Market segmentation and targeting refer to the process of identifying a company‘s potential
customers, choosing the customers to pursue, and creating value for the targeted customers. It is
achieved through the segmentation, targeting, and positioning (STP) process.

*STP (Segmentation, Targeting, and Positioning) PROCESS

Segmentation is the first step in the process. It groups customers with similar needs together and
then determines the characteristics of those customers. For example, an automotive company can
split customers into two categories: price-sensitive and price-insensitive. The price-sensitive
category may be characterized as one with less disposable income.

The second step is targeting, in which the company selects the segment of customers they will
focus on. Companies will determine this base on the attractiveness of the segment. Attractiveness
depends on the size, profitability, intensity of competition, and ability of the firm to serve the
customers in the segment.

The last step is positioning or creating a value proposition for the company that will appeal to
the selected customer segment. After creating value, companies communicate the value to
consumers through the design, distribution, and advertisement of the product. For example, the
automotive company can create value for price-sensitive customers by marketing their cars as
fuel-efficient and reliable.

BUYER BEHAVIOR
Buyer behavior refers to the decision and acts people undertake to buy products or services for
individual or group use. It‘s synonymous with the term ―consumer buying behavior,‖ which
often applies to individual customers in contrast to businesses.
Buyer behavior is the driving force behind any marketing process. Understanding why and how
people decide to purchase this or that product or why they are so loyal to one particular brand is
the number one task for companies that strive for improving their business model and acquiring
more customers.

*Types of Buyer Behavior

1. Complex buying behavior

This type is also called extensive. The customer is highly involved in the buying process and
thorough research before the purchase due to the high degree of economic or psychological risk.
Examples of this type of buying behavior include purchasing expensive goods or services such as
a house, a car, an education course, etc.

2. Dissonance-reducing buying behavior

Like complex buying behavior, this type presupposes lots of involvement in the buying process
due to the high price or infrequent purchase. People find it difficult to choose between brands
and are afraid they might regret their choice afterward (hence the word ‗dissonance‘).
As a rule, they buy goods without much research based on convenience or available budget. An
example of dissonance-reducing buying behavior may be purchasing a waffle maker. In this
case, a customer won‘t think much about which model to use, chousing between a few brands
available.

3. Habitual buying behavior

This type of consumer buying behavior is characterized by low involvement in a purchase

decision. A client sees no significant difference among brands and buys habitual goods over a
long period. An example of habitual buying behavior is purchasing everyday products.

4. Variety seeking behavior

In this case, a customer switches among brands for the sake of variety or curiosity, not
dissatisfaction, demonstrating a low level of involvement. For example, they may buy soap
without putting much thought into it. Next time, they will choose another brand to change the
scent.
CONSUMER DECISION-MAKING PROCESS

The consumer decision making process is the process by which consumers become aware of and
identify their needs; collect information on how to best solve these needs; evaluate alternative
available options; make a purchasing decision; and evaluate their purchase.

Stage 1: Need recognition

The first stage in the consumer decision-making process for a consumer is to figure out what
they need. The most important thing that leads someone to buy a product or service is their need
for it. All buying decisions are based on what people need.

Finding out what the customer needs is the first move to evaluating the Consumer Decision
Making Process. Finding out what needs and wants the target market has can help with many
marketing decisions.

Stage 2: Searching and gathering information

People are usually skeptical when they have to choose between options. So they need all the
facts before they spend their money. After figuring out their need, the potential consumer moves
on to the second stage: searching for and gathering information.

The buyer considers all the benefits and drawbacks of the purchase at this stage of their decision-
making process. Because of changing styles and online shopping sites, consumers know much
more about what they want to buy and can make better choices.

Consumers can get information from many different places, like books, magazines, the Internet,
and reviews of products by other people. It‘s important to make a purchase decision, so the
consumer shouldn‘t be in a hurry when learning about the products and brands on the market.

 Commercial Information Sources: Important types include digital media, newsletters,

TV ads, salespeople, and public displays.
 Previous Purchase Experiences: It is consumers‘ past experiences with using a product.
 Personal Contacts: This is a very reliable source of information and impacts the
consumer‘s mind the most. Consumers usually talk to their friends, family, coworkers,
and acquaintances about their needs and interests in different products and then use their
advice to decide what to buy.

Stage 3: Considering the alternatives

The third stage in the consumer decision-making process is to carefully look at all the
alternatives and substitutes on the market. Once consumers know what they need and where to
get it, they will start looking for the best deals or options.

At this stage, the consumer compares options based on price, product quality, quantity, value-
added features, or other essential factors. Before choosing the product that best meets your
needs, look at customer reviews and compare prices for the alternatives.

After finding helpful information, the consumer chooses the best product on the market based on
their taste, style, income, or preference.

Stage 4: Buying the product or service

After going through the above stages, the customer decides what to buy and where to buy it. The
consumer makes a smart choice to buy a product based on his needs and wants after he has
looked at all the facts.

Needs and wants are often sparked by marketing campaigns, recommendations from friends and
family, or sometimes by both.

Stage 5: Post-purchase evaluation

In the last stage of the consumer decision-making process, the consumer evaluates or analyzes
the product they bought. They look at how helpful the product is, how satisfied they are with it,
and how much it is worth to meet their needs.

If consumers know that the product they bought was worth what they paid for and met their
expectations, they will stick with that product.

CUSTOMER SATISFACTION
Customer satisfaction is the evaluation of how well a company‘s products or services meet or
exceed the expectations of its customers. This assessment considers aspects such as quality,
service, and overall experience. The comprehension and enhancement of customer satisfaction is
essential in retaining customers and promoting loyalty.

*Customer Satisfaction Importance

Customer satisfaction is essential for the success of any business. When customers are satisfied,
they are more likely to become repeat customers, leading to improved customer retention.
Furthermore, satisfied customers are more likely to share positive experiences with others, which
can attract new customers. Additionally, satisfied customers are more likely to provide valuable
feedback, allowing businesses to make necessary improvements and effectively meet the needs
of their customers.

*How to Measure Customer Satisfaction

In order to effectively build and maintain customer satisfaction, it is crucial to have a way to
measure it. This section will discuss various methods for measuring customer satisfaction,
including customer surveys, Net Promoter Score (NPS), and analyzing customer complaints and
feedback. By understanding how to measure customer satisfaction, businesses can gain valuable
insights and make informed decisions to improve overall customer experience.

1. Customer Surveys
Determine survey objectives: Define the purpose and specific insights you want to gather related
to customer surveys.

Choose the right survey method: Select between online surveys, phone interviews, or in-person
questionnaires based on your target audience for customer surveys.

Create effective survey questions: Craft clear, relevant, and unbiased questions to obtain accurate
and actionable feedback from customer surveys.

Ensure respondent anonymity: Assure participants that their responses will remain confidential
to encourage honest feedback in customer surveys.

Analyze and act on results: Interpret the data, identify trends, and implement improvements
based on the feedback received from customer surveys.

2. Net Promoter Score

Net Promoter Score (NPS) is a metric used to measure customer loyalty and satisfaction based
on the question ‗How likely are you to recommend our product/service to a friend or colleague?‘

Calculate NPS by subtracting the percentage of detractors from promoters, ranging from -100 to
100.

Interpret NPS scores: Promoters (9-10) are loyal enthusiasts, passives (7-8) are satisfied but
unenthusiastic, and detractors (0-6) are unhappy customers.

Utilize NPS feedback to improve customer experience, identify areas for growth, and enhance
customer retention strategies.

3. Customer Complaints and Feedback

Customer complaints and feedback are essential for business growth. Actively seek and
address customer complaints to improve products, services, and overall customer experience.
Use feedback to identify areas for enhancement and to show customers that their opinions are
valued.

CUSTOMER VALUE
Customer value refers to the perceived benefits a customer receives from a product or service in
relation to its cost. It takes into account factors such as quality, price, convenience, and overall
experience, which influence customer preferences and loyalty.

For example, a local bakery‘s dedication to consistent quality, friendly service, and reasonable
prices has resulted in high customer value. Even with the emergence of new bakeries, customers
have remained loyal due to the exceptional value they receive from this bakery.

*How to Create Customer Value?

As a business owner, it is crucial to understand the importance of creating customer value in
order to build long-lasting relationships with your clientele. This section will discuss the
essential steps to creating customer value, including understanding your customers‘ needs and
wants, providing high-quality products and services, offering competitive pricing, and
personalizing the customer experience. By following these strategies, you can increase customer
satisfaction, value, and retention for your business.

1. Understand Your Customers’ Needs and Wants

Conduct surveys and interviews to gather direct feedback on customer preferences and better
understand their needs and wants.

Analyze purchasing patterns and customer interactions to identify specific needs and preferences.

Utilize social media and online analytics to gain insight into customer sentiments and current
trends.

2. Provide High-Quality Products and Services

Invest in high-grade raw materials and components to ensure the production of top-quality
products.

Implement strict quality control measures during all stages of production.

Train and empower staff to consistently deliver exceptional service.

Solicit and act on customer feedback to continuously improve the quality of products and
services.
3. Offer Competitive Pricing
Conduct Market Analysis: Research competitors‘ pricing strategies and assess the value
proposition of your products or services.

Cost Optimization: Identify areas where costs can be minimized without compromising quality
to offer competitive prices.

Value-based Pricing: Align pricing with the perceived value by customers, emphasizing benefits
over cost.

Promotional Offers: Use targeted promotions and discounts to attract price-sensitive customers
while still maintaining the value of your offerings.

4. Personalize the Customer Experience

Utilize customer data to better understand their preferences and behavior.

Offer personalized product recommendations and promotions to cater to individual needs.

Implement personalized communication through targeted emails or messages to engage with

customers on a more personal level.

Create tailored experiences based on past interactions and feedback to enhance the customer
experience.

CUSTOMER RETENTION/LOYALTY
Customer retention is the process of implementing strategies and activities to maintain the
engagement of existing customers and encourage them to continue doing business with a
company. The goal is to establish long-term relationships with customers, promoting brand
loyalty and ensuring repeat business. This can be achieved through exceptional customer service,
personalized experiences, and consistently providing value.

Some suggestions for improving customer retention include:

Implementing loyalty programs

Offering exclusive deals to returning customers

Gathering feedback to continuously enhance customer satisfaction

*Improvement in Customer Retention/loyalty

In today‘s competitive market, building customer satisfaction, value, and retention is crucial for
the success of any business. One key aspect of this is improving customer retention, which
involves keeping customers coming back for more. In this section, we will discuss four effective
strategies to improve customer retention: providing excellent customer service, rewarding loyal
customers, continuously improving products and services, and maintaining open communication
with customers. By implementing these tactics, businesses can increase customer satisfaction and
loyalty, leading to long-term success and growth.

1. Provide Excellent Customer Service

Train staff to actively listen and empathize with customers.

Respond promptly to inquiries and concerns.

Personalize interactions to make customers feel valued.

Implement a reliable feedback system to address customer issues effectively.

Fostering strong customer relationships and loyalty is crucial for providing excellent customer
service. This involves proactive communication, swift issue resolution, and a customer-centric
approach.

2. Reward Loyal Customers

Implement a loyalty program offering exclusive discounts and rewards for repeat purchases.

Provide early access to new products or services to show appreciation for their loyalty.

Offer personalized gifts or special perks based on their purchasing history and preferences.

3. Continuously Improve Products and Services

Regular Feedback: Continuously gather feedback from customers through surveys, reviews, and
direct communication to improve products and services.

Market Research: Stay updated with market trends, competitors, and new technologies to
enhance products and services.

Employee Training: Invest in training programs to ensure employees have the skills and
knowledge to deliver improved services and continuously improve products and services.

Innovation: Encourage creativity and innovation within the organization to develop new and
enhanced products and services and continuously improve products and services.

4. Communicate with Customers

Utilize various communication channels such as email, phone, social media, and in-person
interactions to effectively communicate with customers.
Ensure prompt and clear responses to customer inquiries and concerns to maintain good
communication.

Seek feedback from customers through surveys, reviews, and suggestion boxes to better
understand their needs and preferences.

Provide proactive updates on new products, services, and promotions to keep customers
informed and engaged.

*Common Challenges in Building Customer Satisfaction, Value, and

Retention
In the competitive world of business, building customer satisfaction, value, and
retention is crucial for long-term success. However, many companies face common challenges in
achieving these goals. In this section, we will discuss the roadblocks that businesses often
encounter when trying to build customer satisfaction, value, and retention. These include a lack
of understanding of customer needs, poor product or service quality, ineffective communication
with customers, and failure to adapt to changing customer expectations. By addressing these
challenges, companies can pave the way for a loyal and satisfied customer base.

1. Lack of Understanding of Customer Needs

Conduct market research to gain a comprehensive understanding of customer preferences and
pain points.

Utilize surveys and feedback tools to collect valuable customer insights.

Invest in customer relationship management systems to track interactions and preferences in

order to better serve customers.

Train employees to actively listen and comprehend customer needs in order to provide
exceptional service.

Understanding and fulfilling customer needs is crucial for delivering value and fostering loyalty.
This requires proactive efforts in market research, feedback collection, and employee training to
address any lack of understanding of customer needs.

2. Poor Product or Service Quality

Inadequate quality of products or services can result in dissatisfied customers, negative reviews,
and decreased loyalty. It is essential to promptly address any quality issues by implementing
strict quality control measures, gathering customer feedback, and consistently improving the
quality of products or services.
3. Ineffective Communication with Customers
Use a variety of communication channels, including email, phone, and social media, to
effectively reach customers.

Ensure that information is clear and concise to prevent confusion or misunderstandings.

Listen attentively to customer feedback and promptly address any communication issues that
may arise.

Provide training and education to staff to improve their communication skills and maintain
consistent messaging.

4. Failure to Adapt to Changing Customer Expectations

Stay updated with market trends and customer preferences to avoid failure to adapt to changing
customer expectations.

Regularly gather and analyze customer feedback and behavior to stay in tune with their needs.

Adapt products, services, and communication strategies based on changing customer

expectations to ensure customer satisfaction.

Invest in technology to enhance customer experience and meet evolving needs, preventing
failure to adapt to changing customer expectations.
 UNIT 3

ORGANIZATIONAL BUYING

Also known as business-to-business (B2B) buying, refers to the process by which organizations
and businesses purchase goods, services, or raw materials to support their operations. It involves
purchasing decisions made on behalf of the organization rather than for personal use.
Importance of Organizational Buying
Organizational buying is an important digital marketing term because it refers to the purchasing
decisions made by businesses and organizations.
Unlike individual consumers, organizational buyers consider different factors in their decision-
making process, such as the need for large quantities, long-term contracts, and negotiated
pricing.
Recognizing and understanding organizational buying allows digital marketers to tailor their
strategies, messaging, and product offerings to better meet the specific needs of these customers.
By focusing on the unique requirements and motivations of organizational buyers, marketers can
develop more targeted campaigns, establish trust, and foster lasting relationships with key
business clients, ultimately driving growth and profitability for their own organization.

*Steps In Organizational Buying Process

STEP 1:- Problem/Need Recognition

Organization Buyer always Start with the problem recognition with identification of demand for
a particular product in the market.
It can be a need of buying more inventory like printer, bench or to solve a particular problem like
under production by buying more machine.
Unlike Consumer need Recognization is not always a complex it can be routine work. Problem
Recognization is not always for solving a problem it can also be to grab an opportunity in the
market.
In this organization see and identify the problem of their end customers and also their
consumption pattern.
Example:- Suppose you own 10 food courts in your city and you sell burger over there and you
find that more consumer is asking for sandwiches. Now you have identified the problem and a
new opportunity. Now you need to find a vendor to buy and sell sandwiches. So once you
recognized your need its time to go to the next step.

STEP 2:- Product Specification

This Stage Involve Clearly Understanding the problem in hand and laying down all the general
characteristics of the product or service that might solve the given problem.
For any organization, it is necessary to estimate the exact quantity and the period in which
Product need to be delivered.
Example:- Now as in the previous Step we identified that our customers are being shifted from
burger to Sandwiches.

Now we need to estimate How much Quantity of Product say packets of sandwiches, Type of
sandwiches and when do we need them.
Now we find that we need 500 packs of sandwich bread every day on a regular basis in the
morning at 8:00 Am. Now its time to move to our Next Step.

STEP 3:- Product and vendor Search

Its time to find the required product and the list of all the vendors available. Now as you know
the product specification now organizational buyer will try to find various suppliers that can
solve the problem and also qualify to be suitable suppliers.
Organizations need to collect a lot of information from various resources such as Company Files,
Current supplier detail, Records, directories, Connections, Websites, Word of mouth in order to
get a list of suppliers.
Example:- Now we know which type of bread do we need and how much we need and when do
we need.
In this step, we will look at the ous option of Product and their vendors, wholesaler, distributor,
available in our area in order to make a list of them
Now we had used our contacts searched web and made a list of all product and suppliers that are
available in our city.

STEP 4:- Product and Vendor Evaluation

In this step as we searched and made a list of all the available vendors and alternatives available
to us its time to evaluate all those alternatives.
In this step, we will be evaluating all the available products and their vendors in order to select
the most appropriate among them.
We will evaluate all the vendor available to us on various parameter and basis such as:-
Product quality,Price,warranty,credit availability,reliability,value Analysis,cost analysis
Capability of Supplier,Reputation of Supplier,After-sale Service
The supplier will also be evaluated on the basis whether or not they can supply the requires
quantity of products and their after-sale service
Example:- Now we have got the list of all the suppliers available to us Its time to evaluate them
and their products as well
Let‘s suppose They have two types of bread for making sandwiches and there are 20 suppliers in
your area who can supply you the required products
First, you need to decide the product in our case its bread that which type of bread you want to
use.
Once you are done with bread Its Time to evaluate all the supplier based on their bread quality,
price and whether they will be able to supply the required quantity on time or not.
Once you evaluated all the supplies its time to move to the step.

STEP 5:- Outlet Selection and Purchase

In the last step, we had evaluated all the suppliers and Products available to us.
This step involves the selection of the final product and the supplier based on the information
gathered during the Evaluation Process.
In this step, we will finally select our vendor.

Example:- In the last step as we had evaluated all the supplier and product available to us. Now
its time to finally choose one who fits our need and makes the final purchase or we can say
palace our order for loaves of bread.

STEP 6:- Post Purchase Evaluation

Finally, we are at our last step of organization buying Process
This step involves the evaluation of the performance of the supplier by the organization.
The major part of the post-purchase evaluation is the service of the supplier, quality of the
product delivered, delivery on time, customer response, After-sale service by the supplier, etc.
The motive of the step is to minimize the dissatisfaction and to encourage customers to tell us
our mistakes to make improvements.
Example;- In the last step we had placed the order for the bread. In this step, we will evaluate our
decision of making a purchase.
Its time to evaluate how supplier responds to our quarries, quality of bread delivered, time of
delivery, Behaviour of supplier and whether your organization is satisfied with the purchase does
purchase fulfill the organization objective or not.

*Participants in Business Buying Process

1. Initiator:
 Being the first rung of the ladder, an initiator is someone who circles up the need of a particular
service or the product. The question is: to what extent is this product affecting our companies
and combating the deprivation? Here, an initiator is accountable for providing a rational answer.

2. Influencers:

It has been observed that influencers can stand on different levels while voicing down their
opinions regarding a certain product. Such a group of people will influence others regarding the
product that should be purchased along with their ideal locations within the city.

3. Deciders:

These people are given full freedom upon purchasing or ignoring the decision to purchase the
products at the markets. Their criteria for evaluating the products depend on their prices and
value for money.

4.Approvers:

These people help deciders in persuading the product they are looking for at the market. Such
people are authorized to do so.

5. Buyers:

These people make the actual purchases from the business while keeping prices and quality in
mind.

THE PURCHASING AND PROCUREMENT PROCESS

Stage One: Need Identification

In Stage One, Need Identification, the procurement process begins with the identificati on of
a purchasing need.

 Identify your organization‘s purchasing needs

 Determine whether the State Purchasing Act applies (review exemptions in the Georgia
Procurement Manual)
 Analyze existing sources of supply, including mandatory statewide contracts, state entity
contracts and statutory sources
 Assess available sourcing options, such as piggyback purchases, cooperatives or open
market sources
 Determine whether a competitive solicitation is required for purchases of $25,000 or more
 Collaborate with the State Purchasing Division‘s Agency Sourcing team for complex, high-
risk or high-dollar purchases
 Review special approvals or restrictions, such as trading in used equipment
 Stage Two: Pre-Solicitation
Stage Two, the Pre-Solicitation Stage, addresses several steps procurement professionals
complete before preparing the solicitation

 Identify high-level scope, stakeholders, and critical business requirements

 Conduct an analysis of available goods, services and suppliers, and market and budget
constraints
 Estimate expected contract award value or purchases for the fiscal year
 Identify the best sourcing method
 Determine if within your entity‘s delegated purchasing authority and collaborate with the
State Purchasing Division‘s Agency Sourcing Team as appropriate.

Stage Three: Solicitation Preparation

In Stage three, Solicitation Preparation, procurement professionals prepare for the
competitive solicitation process, working in conjunction with cross-functional and
evaluation

 Identify the appropriate solicitation type.

 Finalize the scope of work and develop the solicitation requirements, including solicitation
questions.
 Prepare cost line items or cost worksheet.
 Develop the evaluation criteria and award methodology.
 Select the appropriate contract template in consultation with your legal team.

Stage Four: Solicitation Process

Stage Four, the Solicitation Process, includes public advertisement of the solicitation and all
events occurring while the solicitation is open for competitive bidding, and important
information for suppliers interested in submitting responses to solicitations.

Key steps performed by our State Purchasing Division (SPD) team, procurement
professionals and suppliers, as described in the Georgia Procurement Manual, include the
following:

State Actions:

 Publicly advertise solicitations

 Manage communications
 Revise or cancel solicitations as needed
 Receive supplier responses
 Close the solicitation

Supplier Actions:
 Access and review solicitations
 Prepare and submit responses

Stage Five: Evaluation Process

Once the solicitation closes, Stage Five, the Evaluation Process begins. Evaluation methods
vary based on the solicitation type as well as the specific language of the solicitation.

Supplier Actions:

 Responding to requests for clarifications, if any.

 Participating in demonstrations or oral presentations, if any.
 Participating in negotiations, if any.
 Participating in contract discussions, if any.

State Actions:

 Managing the evaluation process.

 Verifying suppliers‘ eligibility for contract award.
 Soliciting additional information from suppliers as needed.
 Conducting negotiations as appropriate.
 Finalizing contract discussions.

Stage Six: Award Process

Stage six, the Award Process, begins once all evaluation activities are completed and the
state entity is ready to publicly announce the results.

Supplier Actions:

 Reviewing state entity‘s public notice of solicitation results.

 Participating in protest or supplier debriefing processes as applicable.
 Receiving contract award as applicable.

State Actions:

 Providing public notice of solicitation results and intent to make contract award.
 Support release of solicitation records in response to open records requests, if any.
 Participating in protest or supplier debriefing processes as applicable.
 Issuing contract award or purchase order.

Stage Seven: Contract Process

Stage Seven, the Contract Process, begins once the state entity has finalized contract award.

B2B CUSTOMER RELATIONSHIP

B2B customer relationship refers to a company using services or programs from another business
to meet their goals or manage operations. For example, a business offers a video and chat
software program, which companies use for departments to communicate. Therefore, the
customer business is now a part of the provider business clientele. B2B customer relationships
can be important for both the business providing the product or service and the business
receiving it. Examples of B2B customer relationships are:

Automobile part manufacturers and car companies

Management software companies and businesses

Cyber security firms and businesses

Technology component manufacturers and cell phone companies

Benefits B2B Customer Relationship

B2B companies can build foundations and maintain trust with customers to develop strong
customer relationships that benefit everyone. Some of these benefits might include:

Personal benefits
Having a personal B2B relationship can help build longevity, expand your customer base and
increase revenue. For example, if a provider company has a positive personal relationship with
their customer company, and that customer expands their business, it might increase the chances
of the provider gaining the new business over competitors. Creating personal connections with
your customers can show your commitment and dedication to the success of their business.

Financial benefits
Financial benefits are also possible with B2B customer relationships and might lead to customers
willing to pay more for a product or service because of the positive customer relationship they
will receive. Another financial benefit of well-managed customer relationships may include
increased business opportunities and efficiency because there may be more opportunities for
effective planning to meet each customer's individualized needs.

Knowledge-based benefits
A major component of managing customer relationships is understanding the challenges
customers may face and working to address their needs. For example, if a customer company
that makes kids' toys has a shortage of material and is looking for another supplier, the provider
may refer them to a trustworthy client to help with their issue. This can show that the company
has a knowledge of the market and connections. This can also help B2B companies ideate and
generate innovative ideas for current and potential customers.

Steps to help Effectively and Efficiently manage B2B Customer Relationships

1. Consider customer relationship management (CRM) technologies
CRM technologies can help businesses streamline the management of their customer
relationships, and can help optimize B2B customer communications. For example, a company
might select a CRM technology system to help boost communication via email or automated
short message services (SMS), in order to increase customer interactions. This can provide data
that may show how often their communication is being reviewed and if there's been further
action.

2. Collect feedback regularly

Collecting feedback from customers regularly can be beneficial for B2B customer relationship
management to identify spaces or places for operational improvement. Developing and
implementing anonymous surveys can help collect customer feedback. When developing
surveys, it's important to consider these questions:

What are you interested in getting feedback about?

How might you word questions in unbiased ways while still receiving the information you seek?

Considering questions like these may increase the chances of receiving beneficial feedback in
anonymous surveys. Gathered information or data can then identify if there are specific needs
customers have that your product or service is not addressing and provide pathways for
improvements.

3. Improve customer experiences

B2B companies can use learned information about customers' needs to develop user journey
maps, which can show the customer's process using a company's product or service to
accomplish a goal. These journey maps can then help identify where customers might face
challenges and provide B2B companies with direction for improving customer experiences.
Companies may find solutions in brainstorming or use the design thinking process to guide user
experience (UX) improvements, which can increase the positivity of customer relationships.
Potential improvements may include:

Added solutions

Simplified navigation
Personalized features

Increased support

4. Implement target marketing campaigns

B2B companies can use their knowledge of customer needs or goals to target their marketing
campaigns and provide customers with the information that might be most relevant to them. For
example, if a group of customers shares a goal of increasing efficiency, marketing campaigns
may target them with strategies and information about how to use the company's product or
service to help achieve higher efficiency. This example can be relevant for any common need or
goal between customers. B2B companies can implement target marketing campaigns through a
variety of communications, including:

Email or mail

Social media

Advertisements

B2B companies using target marketing might implement drip campaigns to provide customers
with pieces of information over time and keep them engaged. These campaigns may be pre-
written, implemented when relevant and updated as necessary.

5. Monitor and stay connected with customers

Monitoring customer satisfaction and success can help your company understand what customers
really want and need. You can use business analytics tools and techniques, like software, to keep
track of how well your company is doing with current clients. Detailed information from
discussions between account managers and customers may also help monitor their satisfaction
and success.

COMPETITIVE FORCES
Competitive forces are the factors and variables that threaten a company's profitability and
prevent its growth. They are generally grouped into two categories: Direct forces that determine
how low the floor can go for price competition.

They are generally grouped into two categories:

Direct forces that determine how low the floor can go for price competition. They include:

Intensity of direct competition measured by number of competitors, degree of product

standardization, amount of excess production capacity
Customer negotiating power, which is influenced by customer expectations towards product
quality and price

Indirect forces that place a ceiling on a market‘s prices and profits. They include:

The threat of indirect competition—the availability of products that offer similar performance

The possibility of new entrants into the marketplace

Supplier pressure—where demand for inputs is high, suppliers can raise their prices

Regulatory pressure—laws and regulations affecting customer and supplier behaviour and the
availability of substitute products and services

COMPETITOR ANALYSIS
A competitor analysis, also referred to as a competitive analysis, is the process of identifying
competitors in your industry and researching their different marketing strategies. You can use
this information as a point of comparison to identify your company‘s strengths and weaknesses
relative to each competitor.

You can do a competitor analysis at a high level, or you can dive into one specific aspect of your
competitors‘ businesses. This article will focus on how to conduct a general competitive
analysis, but you‘ll want to tailor this process to match the needs and goals of your business.

Importance of Customer Analyzing

1. Identify your business’s strengths and weaknesses
By studying how your competitors are perceived, you can draw conclusions about your own
brand‘s strengths and weaknesses. Knowing your company‘s strengths can inform
your positioning in the market, or the image of your product or service that you want members of
your target audience to have in their minds. It‘s essential to clearly communicate to potential
customers why your product or service is the best choice of all those available.

Being aware of your company‘s weaknesses is just as important in helping your business grow.
Understanding where you fall short of your customers‘ expectations can help you identify areas
where you may want to invest time and resources.

You might learn that customers prefer your competitors‘ customer service, for example. Study
your competition to find out what they‘re doing right, and see what you can apply to your
business.

2. Understand your market

While identifying competitors, you may find companies that you didn‘t know about or that you
didn‘t consider part of your competition before. Knowing who your competitors are is the first
step to surpassing them.

Conducting a thorough assessment of what your competitors offer may also help you identify
areas where your market is underserved. If you find gaps between what your competitors offer
and what customers want, you can make the first move and expand your own offerings to satisfy
those unmet customer needs.

3. Spot industry trends

Studying the competition can also help you see which way the industry as a whole is moving.
However, you should never do something just because your competitors are doing it. Copying
the competition without really considering your own place in the market rarely, if ever, leads to
success .If you see your competitors doing something that you‘re not, don‘t rush to replicate their
offering. Instead, evaluate what your customers‘ needs are and how you can create value for
them. It‘s often better to zag when everyone else zigs.

4. Set benchmarks for future growth

When doing a competitor analysis, you should include companies that are both larger and
smaller than your own. Studying well-established businesses in your industry can give you a
model of what success looks like and a reference point against which to compare your future
growth. On the other hand, researching new entrants into your industry tells you what companies
may threaten your market share in the future.

COMPETITIVE STRATEGIES
Competitive strategies are strategies that allow an organization to gain and, for as long as
possible, sustain a competitive advantage or to prevent competitors from maintaining their
competitive advantage.

*Types of competitive strategy

1. Cost leadership strategy

A cost leadership strategy keeps prices for products and services lower than competitors to
encourage customers to purchase the lower-priced products to save money. Businesses use a cost
leadership strategy in industries with high price elasticity, such as energy and transportation.
This strategy is most effective for companies that can produce a large volume of products for low
costs. These businesses often have large-scale production methods, high-capacity utilization and
various distribution channels with which to work.
Example: Archibald Products is an online retailer of various household goods and uses a cost
leadership strategy to maintain lower shipping costs for their customers and competitive
production costs. The company purchases large quantities of the products it sells so that it can
distribute them quickly to customers. It also keeps its overhead costs low by training a few
employees to handle every step of the distribution process so that it can order large quantities and
compete with other online retailers.

2. Differentiation leadership strategy

Businesses may use the differentiation leadership strategy to differentiate their products from
competitors by emphasizing specific features of their products. This strategy might involve the
design or function of a product. A company that's been in operation for a while may use this
strategy to show that an original offering is better than newer products. Alternatively, a newer
company may use this strategy to show that a new invention is more beneficial than existing
offerings. The goal is to appeal to more customers through unique features and quality while
keeping competitors from obtaining a larger market share for products

.Example: Lowdo is a search engine that uses a product differentiation strategy to appeal to
certain customers through its products and services. For Lowdo searches to be successful, it uses
tailored, personalized search filtering based on its customers' needs. This allows the company to
keep its customers loyal and prevent them from using other search engines.

3. Cost focus strategy

The cost focus strategy is similar to the cost leadership strategy, but the cost focus strategy
involves catering to a specific market. This strategy still involves trying to offer the lowest price,
but it attempts to target a unique market segment with specific preferences and needs. When a
company implements a cost focus strategy, it can establish brand awareness more easily within a
specific geographic market.

Example: Wrando is a clothing store that uses a cost focus strategy to generate sales by
advertising to working parents with young children. It sells affordable clothing for parents and
young children. The company experiences success because it lowers its costs by purchasing
clothing items from manufacturers in large quantities and outsourcing its distribution process so
that it can keep all its employees dedicated to serving customers at its stores. Parents can shop
for themselves and their children in one location, and they can access affordable clothing that
other department stores in the area may sell for higher prices.

4. Differentiation focus strategy

The differentiation focus strategy is similar to the differentiation leadership strategy in that both
attempt to highlight unique product attributes and features. The difference between them is that
while the differentiation leadership strategy may involve appealing to a broader market, the
differentiation focus strategy involves appealing to a specific market segment. This strategy
typically doesn't prioritize the price of a company's offerings, as it attempts to highlight how a
company's offerings are unique compared to those of its competitors.

Example: Windy Skies Resorts is an island resort that has hotels, swimming pools and adventure
activities like zip lines. It decides to implement the differentiation focus strategy by advertising
how it serves adult couples without children. This advertising strategy helps it distinguish itself
from other resorts in the area that cater to large families. At Windy Skies Resorts, adult couples
can enjoy their stays and make friends with other couples. They can enjoy their vacations
without having to worry about a loud, noisy environment disrupting their relaxation.

BALANCING CUSTOMER & COMPETITOR ORIENTATIONS

Whether a company is the market leader, challenger, follower, or nicher, it must watch its
competitors closely and find the competitive marketing strategy that positions it most effectively.
And it must continually adapt its strategies to the fast-changing competitive environment. This
question now arises: Can the company spend too much time and energy tracking competitors,
damaging its customer orientation? The answer is yes. A company can become so competitor
centered that it loses its even more important focus on maintaining profitable customer
relationships.

In practice today, companies have to be market-centered; being able to watch their competitors
while developing strong relationships with their customers and delivering better value than their
competitors.
A product oriented company is one that pays little attention to the competitors and customers,
but focused solely on the development of product.

A competitor-centered company has its efforts focused on tracking competitors‘ moves and
market shares while deriving strategies to counter them. Though this enables the company to be
always on the watch for one‘s own weaknesses and others‘ actions, the company may end up
being too reactive and may compromise itself in terms of innovation ability.

A customer-centered company on the other hand is more focused on customer developments

when designing its marketing strategies and delivering superior value to its target customers.
This is done through paying attention to the evolution of customer needs and deciding which
customer groups and emerging needs are most important to serve.
 UNIT 4
BRAND EQUITY
Brand equity is the value premium that a company generates from a product with a recognizable
name, when compared to a generic equivalent.

Companies can build their brand equity with their products by making those products
memorable, easily recognizable, and superior in quality and reliability. Mass marketing
campaigns also help to create and strengthen brand equity.

When a company has positive brand equity, customers willingly pay a high price for its
products, even though they could get the same thing from a competitor for less. Customers, in
effect, pay a price premium to do business with a firm they know and admire.

Because the company with brand equity does not incur a higher expense than its competitors to
produce the product and bring it to market, the difference in price goes to their margin. The
firm's brand equity enables it to make a bigger profit on each sale.

Examples of Brand Equity

A general example of the importance of brand equity is when a company wants to expand
its product line. If the brand's equity is positive, the likelihood that customers might buy its new
product increases. Customers associate the new product with an existing, successful brand.

For example, if Campbell's releases a new soup, the company is likely to keep it under the same
brand name rather than inventing a new one. The positive feelings and trust that generations of
customers already have for the Campbell Soup Company (established in 1869) and its products
make a new product more enticing compared to a soup associated with an unfamiliar brand
name.

* Brand Equity Importance

Brand equity is important for increased customer loyalty, which can translate to repeated and
increasing sales despite higher-priced products or services. Brand equity is also important
because it supports higher perceived value, greater customer satisfaction, and a more stable
customer base. Simply put, consumers are more likely to choose a brand that they know and
trust.

*Elements of Brand Equity

The elements of brand equity include:

1. Brand awareness: The extent to which consumers are familiar with and recognize a
brand.
 2. Brand loyalty: The degree to which consumers consistently choose a specific brand over
others.
3. Brand image: The perception of attributes that consumers have of a brand, such as
quality, reliability, and uniqueness.
4. Brand associations: The emotional or psychological associations that consumers connect
with a brand, such as feelings of trust, reliability, or nostalgia.
5. Brand value: The perceived benefits and overall value that consumers attribute to a
brand.

*Factors Affect Brand Equity

Several factors can affect brand equity. One is the quality of products or services. Consumers
are more likely to have a positive perception of a brand if it consistently provides high-quality
products or services. Consistent marketing and branding efforts are also important. These can
help build and maintain a positive brand image. Customer experiences also matter. Positive
experiences can lead to increased loyalty and positive brand associations. Brand reputation is
also important, as consumers are more likely to choose a brand they perceive as trustworthy and
reliable. Competition can also impact a brand's equity, as consumers may have multiple options
to choose from. Finally, changes in consumer preferences or trends can affect a brand's equity,
as consumers may shift towards different brands or products.

*Brand Equity's Effect on Profit Margins

The importance of brand equity's potential to boost profits and increase profit margins is
demonstrated by the effort that certain companies make to support the high quality of their
products.

1. Higher Prices

When customers attach a level of quality or prestige to a brand, they perceive that brand's
products as being worth more than products made by competitors. Thus, they are willing to pay
more for them. In effect, the market bears higher prices for brands that have high levels of brand
equity.

Yet, the cost of manufacturing a polo shirt and bringing it to market is not higher, at least to a
significant degree, for an established company such as Lacoste than it is for a less reputable
brand.

However, because its customers are willing to pay more, it can charge a higher price for that
shirt, with the difference going to profit. Therefore, positive brand equity can increase profit
margin per customer.

2. Higher Sales Volume

Brand equity has a direct effect on sales volume because consumers gravitate toward products
that either have great reputations themselves or come from companies with great reputations (or
both). For example, when Apple releases a new product, customers line up around the block to
buy it even though it is usually priced higher than similar products from competitors.
One of the primary reasons why Apple's products sell in such large numbers is that the company
has amassed a staggering amount of positive brand equity. Because a certain percentage of a
company's costs to sell products is fixed, higher sales volumes translate to greater profit
margins.

3. Customer Retention

Customer retention is the third area in which brand equity affects profit margins. Returning to
the Apple example, most of the company's customers own not just one Apple product, but
several. Plus, they eagerly anticipate new releases.

Apple's customer base is fiercely loyal, sometimes bordering on evangelical. The company
enjoys high customer retention, another result of its brand equity. By retaining existing
customers, Apple increases profit margins by lowering the amount it has to spend
on marketing to achieve the same sales volume. It costs less to retain an existing customer than
to acquire a new one.

MANAGING BRAND EQUITY

Brand management is a function of marketing that uses techniques to increase the perceived
value of a product line or brand over time. Effective brand management enables the price of
products to go up and builds loyal customers through positive brand associations and images or
a strong awareness of the brand.

Developing a strategic plan to maintain brand equity or gain brand value requires a
comprehensive understanding of the brand, its target market, and the company's overall vision.

Brand equity models are designed to establish the way in which brand value is created for a
brand. Each of the brand equity models offers a deep insight into the brand value concept and the
ways to evaluate it. Brand equity models are used to design marketing strategies at various
stages.

*Types of Brand Equity Models

1. Aaker Model
David Aaker has defined brand equity in his Aaker Model. He defines brand equity as a group of
assets and liabilities that can be directly associated with the brand and that which adds value to
the product.
Aaker model consists of 5 components:

Brand Loyalty
This explains the level of loyalty that a customer shows toward a brand
Brand Awareness
This is the extent to which the brand is popular in the market
Perceived Quality
The image of a product and its quality in the eyes of the customers
Brand Associations
The level of recognition that a brand has in its product category
Proprietary Assets
The number of patents, intellectual property rights, trademarks, etc. that a brand owns.
These components of the Aaker model help to influence the customer‘s choice. A customer will
be willing to associate with a brand that offers higher quality and satisfaction.

2. Keller’s Model
Kevin Keller has made a signification contribution to the branding theory and has rolled out the
concept of customer-based brand equity. Keller defines a brand as an effect that emerges out of a
favorable association with a brand.

Who are you?

The first step is to create awareness about the brand and build a strong identity. When people
have not heard or seen a product, it is difficult to sell the product.
It is important to know your customers and what they expect from a brand. When you start
building a brand identity, it becomes easier to catch the attention of the consumers.
You should ensure that your brand stands out, and customers are aware of your brand can
recognize your brand.

What are you?

The next step is to communicate to the users about what your brand means and what does it do.
You should explain the performance of your product, which means that your brand should be
reliable, should offer good service, it should be durable, should have service effectiveness, good
style, and design, and reasonable price.
It is important to explain how your brand is able to meet the needs of the customers and connect
with them on a social and psychological level. This can be done using a variety of marketing
strategies such as direct promotion, sharing customer experiences, or using social proof.

What do I think about you?

In this stage, the brand response is obtained. The brand response can be either a feeling or a
judgment about a product. Consumers always have a feeling or judgments about a product.
When a product meets the expectations of users, it evokes a positive feeling about your brand. A
product has to be attractive, satisfy the needs of the consumers and should be unique when
compared to the competitor products.

What is the association with you?

In this step, the relationship between the brand and the customer is strengthened. The brand
response that came from the earlier stage is now converted into an intense and emotional bond
between the brand and the customer. This is the final stage and the most difficult to achieve.
When the customer is in a good relationship with the brand, they often make repeated purchases
and become loyal customers.
These steps in Keller‘s brand equity model provide direction to build and measure brand equity.
3. Brand Asset Valuator (BAV) Model

BAV is a brand equity model that gives the brand equity value of many brands and helps to
compare brand equity across many brands.
As per the BAV model, collecting consumer insights will help to improve brand health and the
future of a brand.

The four key components of brand equity are:

Differentiation
This is the extent to which the brand is different from another brand. A brand should be unique
and stand apart from its competitors.

Relevance
This is a measure of how relevant your brand is for consumers. It is important to know if your
brand is relevant to consumers in terms of its cost, needs, and convenience.

Esteem
This is a measure of how well a brand is perceived and respected for its quality and performance.
This depicts the response of the consumers to the growing popularity of the brand or the decline
of the brand.

Knowledge
This measures the level of understanding of the consumers relating to identifying the brand.
Knowledge can be built by brand-building exercises.

The BAV model tries to ascertain how the differentiation, relevance, esteem, and knowledge are
related to each other for the determination of the brand strength.

4. Brandz Model

Brandz model was developed by the marketing research consultants Millward Brown and
WPP. BRANDZ is a tool that is used to diagnose and predict brand equity. In this model, data is
collected with the help of interviews and publicly available data. Consumers of different brands
are asked questions about the brand that they know.
This model is developed based on five steps that are in sequential order. Each step in this model
is a continuity of the previous steps and should be conducted in the same order.

Presence
Do I know about it?
This is a stage of building familiarity with the product based on past trials and brand promise.

Relevance
Does it offer me something?
Once people know about a product, the next step is the question of relevance. Does the product
offer what they want? Is the product relevant to consumer needs?

Performance
Can it deliver?
When the product is found to be relevant to consumers, the next step is to check if the product
delivers what it promises. Is the product performing as expected or as promised?

Advantages
Does it offer something better than others?
Once the product is known to deliver what it has promised, the next step is to check if the
product has any special bonding or preference over all the other similar products in the market.

Bonding
Nothing else beats it.
This is the last step, where the product has proved to be excellent and has built a strong bond
with the user. This will eliminate all other competing products as the customer is now
emotionally and psychologically bonded with the product and is not ready to compromise with
any other product.

Importance of Brand Equity Models

With the evolving marketing strategies, the most common factor was that customers became the
center of all strategies. Companies soon realized that the customer is the king, and they can
flourish only when the customer is happy. The customer can be made happy by offering unique
and quality products that in turn, build a strong brand. When customers are able to identify the
brand, they start connections and slowly build a strong bond with better-performing products. All
this comes under brand building exercise, which ultimately increases brand equity for the
company.
Brand equity models have been designed and prepared by various researchers to study and
understand consumer behavior. Brand equity models have proved to be a tool that helps in the
diagnosis and to predict the strength of a brand.
In today‘s world of the internet, there is a huge amount of data that is available about consumers.
But not many know how to convert the data into information that can be used to understand
consumers and their needs. The brand equity model helps to know the most important
components of consumer behavior and also helps to eliminate unnecessary noise from the data.
Ultimately the focus of every brand equity model is to increase the brand equity of an
organization.

MEASURING BRAND EQUITY

Here are 7 ways to evaluate brand equity, including some examples of metrics you can use to
collect operational and experience data:
 1. Brand evaluation

One way of measuring brand equity is by trying to understand the total value of the brand as a
separate monetary asset, which can be included on a business‘s balance sheet. This metric shows
the worth of the brand, reflecting the brand‘s contribution to the company‘s success.

How can we measure a brand‘s financial value? There are differing schools of thought on this,
where results produce divergent estimates of brand value or agreement on the direction of
change, differing from one year to the next.

It‘s worth considering the value in terms of:

 Cost-value to create and build the brand - this could include budget spend on advertising,
trademarking or licensing.
 Market-value of what it‘s worth when put into the market to sell, when looking at similar
companies and brands
 Income-value of what it brought into the company, or how much the company saved by growing
the brand.

2. Brand strength

Brand strength, or the power of the brand, can be measured by emotional data - the differential
value the brand has acquired in someone‘s mind, as a result of multiple interactions over time.

Equity is almost synonymous with ‗attitudinal strength‘ or ‗strength in the mind‘ and is a proxy
measure for the relative consumer demand for the brand.

You can capture this data using consumer surveys, and a series of evaluative questions that
assess the relative preference, or ‗wantability‘ the consumer has for the brand.

Review these common models for establishing brand strength:

 Millward Brown‘s MDF framework

 Ipsos‘ Brand Value Creator (BVC)
 TNS‘ Conversion Model (CM)

3. Brand awareness

Brand awareness is how well your brand is known by your target customers, the market and by
key stakeholders.
 Since brand awareness is an emotional-based metric, it can be measured with questions asking
about:

 A customer‘s future intent to buy.

 A customer‘s current brand awareness now and over time
 The purchase history of target customers
 How much ‗conversation share‘ there is - A measure of the customer‘s time that is passed
speaking about your brand in everyday conversations.

Key methodologies to use include:

 Focus groups, research panels or customer brand perception surveys

 Sales data
 Customer feedback routes like using social media reviews and mentions
 Website search volumes on your brand

4. Brand relevance

This is connected to customer satisfaction, but focuses on whether your customers agree that the
brand provides unique value. This can increase your brand equity level as the brand is perceived
to be more valuable and relevant to a target market or to fulfill a specific purpose.

Some ways you can measure this include:

 Customer satisfaction (CSAT) surveys can help you understand your customer‘s satisfaction
levels with your company‘s brands, products, services, or experiences.
 A Net Promoter Score (NPS) can provide insight on the customer‘s emotional connection to a
brand, which is a key driver for increasing brand loyalty.
 Using a survey-based statistical technique called Conjoint Analysis to reveal key consumer
decision-making processes and the value customers place on a brand‘s features.

5. Output metrics

You can determine brand equity through outputs like email marketing or social media messaging
about the brand.

It relates to ROI operational data that tells you if your effort (e.g. number of communications
out) was worth the investment. Email marketing won‘t singularly determine your brand equity,
but it will improve your brand awareness and perception, and as awareness grows, revenue
should improve too.
 This information can be gained from sales transactions about promoted brand products. The
pricing power, or the brand‘s ability to command a premium without losing business to a
competitor is often associated with ―brand equity‖ in consumer and service markets.

Other methodologies for investigating outputs are:

 Analysis of variance testing (ANOVA) to understand how different groups respond to variations
to a brand‘s messaging or development version
 Cost-comparison of pricing valuations
 Customer responses back to communication call to actions - for example, signing up to an email
list, joining a loyalty program

6. Financial data

You can understand a product or services‘ brand equity by looking at the financial results and
sales performance of the business.

Historical data is necessary to assess brand performance, like the market share, profitability,
revenue, price, growth rate, cost to retain customers, cost to acquire new customers and branding
investment.

Also, don‘t neglect some key indicators of good brand equity, which should all be increasing if
you‘re on the right path:

 The value of a customer over their lifetime

 The price premium in comparison with your competition
 The revenue growth rate

7. Competitive Metrics

If your competitors are doing badly, or if they are giving you a run for your money and creating
great marketing campaigns, their activities will have an impact on your brand.

You can see how your brand equity performs within a competitive market, but in particular, you
can conduct Competitor analysis to evaluate your competitors‘ strengths and weaknesses, how
their brand compares to yours.

If their brands are performing well, you‘ll see variances in:

 Your acquisition rate against their rates

 Your dominance position in the market - including sales, social media engagement and following
 Revenue generated through certain channels that are being used by other competitors

DEVISING A BRANDING STRATEGY

While devising a branding strategy, a firm may choose to pick existing brand elements
common to other products or line of business or may choose to completely pick up new and
distinctive brand elements. At times, firms use a combination of both.

The firm has 3 choices while devising a branding strategy:

1. Develop new brand elements for new product

2. Apply some of its existing brand elements
3. Use a combination for existing and new brand elements

Devising a Branding Strategy # 1: Creating a Sub-Brand

While devising a branding strategy, marketers might choose to create altogether a new brand for
the product. At the same time, marketers may combine the new brand with an already established
brand. This helps build a quick association of the new brand and also helps the new brand to en-
cash the equity built by an already established existing brand. The existing brand which gives
birth to the Sub-Brand is the Parent Brand.
E.g. Hershey‘s Kisses Candy. Here Kisses Candy in itself is as good as a new brand but has
associations with an already established existing brand in Hershey‘s.

Devising a Branding Strategy # 2: Brand Extension

When the firm uses an established brand to introduce a new product, the strategy is referred to
as Brand Extension.
Brand Extension falls into two categories – Line extension OR Category extension. The
existing brand which gives birth to the Line OR Category Extension is the Parent Brand.

a) Line Extension
Line extension refers to the parent brand covering a new product within the same product
category. The new product in this can be a new flavour, a new colour or even a new size packet.
Importantly, the new product should be in the same product category.

E.g. Nestle Maggi original product has seen many line extensions. The new products added to
the line fall into the same product category and fulfil the same need of the customer with some
variations.
 b) Category Extension
When the parent brand is used to enter a new product category altogether, it is referred to as
a Category Extension.

Example: Victorinox is well known for its high-quality swiss army knives. However, the
company has used the same brand to enter into different categories like Watches, Cutlery,
Fragrances, Travel Gear, Pens, etc-

Similarly, brands like Honda, BMW are in both 4 and 2 wheeler mobility business and carry the
same brand in both the categories.

A Brand Line refers to a range of the original and all variants of the product.

A set of all Brand Lines is referred to as the Brand Mix (or Brand Assortment) offered by the
company. The brand mix/brand assortment comes into picture primarily because of catering to
needs to various channel partners. e.g. Pepsico makes an entire range for the B2B channel priced
at a premium.

Devising a Branding Strategy # 3 – A Licensed Product

A product whose brand name has been licensed to other manufacturers to make the product. In
this case, the owner of the brand gets paid a licence fee for using the brand. In turn, the brand
owner decides some minimum quality criteria to be met to sell products under his brand
name. E.g. Jeep sells license to manufacture apparels, to strollers. The product quality should be
as per their standard and they should communicate the Jeep philosophy of ‗Life Without Limits‘.
In such cases the Licensing revenue because a metric to track of the parent brand.

CUSTOMER EQUITY

Customer Equity is defined as the total of the discounted lifetime values of the organization's
customer. In short, more loyal the customers, higher is the customer equity. There are three
drivers of customer equity namely: Value equity, Brand Equity, and Relationship equity.

Brand positioning is the process of positioning your brand in the mind of your customers. More
than a tagline or a fancy logo, brand positioning is the strategy used to set your business apart
from the rest.

5 Tactics to Increase Customer Equity

1. Show your clients that you appreciate them.
2. Be more convenient than your competitors.
3. Be ready to solve problems.
4. Provide customers with unique value propositions.
5. Ensure to provide the best quality.

Why is brand positioning important?

Brand positioning allows a company to differentiate itself from competitors. This differentiation
helps a business increase brand awareness, communicate value, and justify pricing — all
impacting its bottom line.

How to Create a Brand Positioning Strategy

1. Determine your current brand positioning.

2. Create a brand essence chart.
3. Identify your competitors.
4. Conduct competitor research.
5. Identify your unique value proposition.
6. Build a brand positioning framework.
7. Create your positioning statement.
8. Evaluate whether your positioning works.
9. Establish an emotional connection with prospects and customers.
10. Reinforce your brand's differentiating qualities during the sales process.
11. Create value.
12. Ensure that customer-facing employees embody your brand.

1. Determine your current brand positioning.

Are you marketing your product or service as just another item on the market, or are you
marketing it as something distinctive? Your current brand positioning gives you important
insight into where to go next. You'll need to understand your current position to further analyze
your competition.

2. Create a brand essence chart.

Once you‘ve determined where your brand stands within the market, it‘s time to get into the
nitty-gritty of what your brand means to customers. A brand essence chart can help organize
these ideas so that they‘re clear and concise. You‘ll also be able to use this chart for copywriting
and design inspiration.

Attributes: Think of these as features. For a physical product, this might be a little easier to
brainstorm than SaaS or a technology product.

Benefits: What does the customer get to experience as a result of the attributes of your product
or service?
 Personality: These adjectives describe characteristics of your brand. Don‘t be afraid to take out
a thesaurus for this part, either. Personalities can and should be nuanced in order to distinguish
your brand from the competition.

Source of Authority and Support: What is the foundation of your brand? It might be a long-
standing history of expertise in the industry, awards, and recognition by regulatory agencies in
your vertical, scientific research, or even unwavering customer support in the form of reviews
and testimonials.

What It Says About You (The Customer): Based on the elements we‘ve discussed thus far,
what does your brand say about your ideal customer? Use inspiration from the personality
section to help you complete this section.

How It Makes You (The Customer) Feel: What are some words or phrases your ideal customer
might use to describe how they feel when they interact with your brand? This section of the
brand essence chart will help you find a niche angle for your brand messaging.

Positioning/Brand Essence: Finally, you‘ll tie all of these elements together to create a simple
statement that describes what the customer should take away from your brand.

3. Identify your competitors.

After analyzing yourself, it's important to analyze your competition by performing competitor
analysis. Why? You need to see who you're up against to conduct competitor research. That
research will help you decide what you can do better in your strategy to gain an edge.

There are different methods for determining your competition, including:

 Conducting market research: I recommend asking your sales team what competitors come up
during the sales process, or do a quick search using a market keyword and see which companies
are listed.
 Use customer feedback: Ask your customers which businesses or products they were
considering before choosing yours.
 Use social media: Quora offers a platform where consumers can ask questions about products
and services. Search these forums to discover competitors in your niche. I‘d also recommend
looking on Reddit for Subreddits related to your business or niche to learn more about what your
target audience might be looking for.

4. Conduct competitor research.

Wessel says, ―From my experience, it is critical to really challenge yourself on how your
capabilities or features compare to both competitors and alternatives.‖

So, once you've determined who your competitors are, it's time to conduct in-depth competitor
research. You'll need to analyze how your competition is positioning their brand in order to
compete. At its simplest, your research should include:
 What products or services your competitors offer
 What their strengths and weaknesses are
 What marketing strategies they're using successfully
 What their position is in the current market

You work at your business, so it‘s normal to assume that you‘re proud of what you offer. So,
when it comes to making sure your competitor analysis is as impartial as possible, Wessel
says, ―Seeking an outside perspective can be invaluable in overcoming internal biases.‖

5. Identify your unique value proposition

Building a unique brand is all about identifying what makes you different and what works best
for your business. Chmielewska suggests, "Start by defining what 'effective' really means for
your brand — and then build its image based on that."

After you conduct your competitor research, I imagine you‘ll start to see patterns in that some
businesses have the same strengths and weaknesses. As you compare your product or service to
theirs, you might find one of their weaknesses is your strength.

This is what makes your brand unique — and it's the perfect starting point for positioning your
brand in the market. Take note of your unique offerings as you compare, and dive deep to
identify what you do better than anyone else.

6. Create your positioning statement.

It's time to take what you've learned and create a brand positioning statement. A positioning
statement briefly describes your brand‘s unique offer and explains how it meets your customer's
needs.

I know it sounds similar to a value proposition, but it‘s different in that it focuses on your
differentiator, and your positioning statement focuses on the primary benefits you offer your
customer and why they would need your product or service.

Wessel says, ―By understanding the customer‘s ‗job-to-be-done‘, you ensure the messaging stays
focused on their point of view and their desired outcomes. The stronger aligned your positioning
is to helping customers get their job done better, faster, and/or cheaper, the stronger your brand
position will resonate with your target market.‖

I recommend crafting your positioning statement after creating your value proposition because it
will help you determine what to focus on. Here are four guiding questions to guide you through
your process:

 Who is your target customer?

 What's your product or service category?
 What's the greatest benefit of your product or service?
 What's the proof of that benefit?
8. Evaluate whether your positioning statement works.

Taking the time to position your brand to appeal to a certain customer is just the beginning. Once
your positioning statement is created, it's time to test, experiment, and gather feedback from your
customers on whether or not your positioning achieves its go

9. Establish an emotional connection with prospects and customers.

Connecting with your prospects on a human level before going in for the hard sell builds trust
and helps your prospect have a more positive experience with your company's brand.

For example, at the beginning of the sales process, reps should take ample time to learn about
your prospects and what problem they are looking to solve by using your product.

10. Reinforce your brand's differentiating qualities during the sales process.

With a strong brand position, the differentiating properties of your company's offering should be
easy to understand and refer to. Make sure your prospects understand what makes your brand
unique throughout the sales process.

You probably already know what your key differentiators are, but you can always refer back to
your competitor analysis to iron in the key points to call out during your sales process.

11. Create value.

I know you know this, but it‘s worth repeating: your main goal should be to help your prospect
solve a problem or overcome a challenge they are experiencing. Ideally, your company's offering
is part of the solution.

12. Ensure that customer-facing employees embody your brand.

Customer-facing employees are your company's most valuable ambassadors. Prospects should
receive an experience that embodies the core values of your company and aligns with the
company's brand. For example, if your company takes a light, fun approach to branding, you
should incorporate this language into your sales conversations. Having an overly serious or stiff
tone would not be authentic to your company's brand.

DEVELOPING AND COMMUNICATING A POSITIONING

STRATEGY
Positioning Strategy

A positioning strategy is like the way a brand wants to be known and remembered by its
customers. It‘s about telling people why a product or company is better or different from others.
Just like when you meet new people, you want them to remember something unique about you.
Companies want their customers to remember something special about their products or services.

To do this, companies think about what makes them special, who their products are for, and why
people should choose them over other options. Then, they create a plan to talk about these things
in a way that makes customers like and trust them.

This helps the company stand out in a crowded marketplace and attract the right customers who
will love what it offers. So, a positioning strategy is like a brand‘s way of introducing itself and
making a good impression on customers.

Positioning your brand effectively in the market is essential for standing out and attracting your
target audience. Here‘s a step-by-step guide to help you develop a compelling positioning
strategy:

Step 1: Identify your goal

Begin by clarifying your goal for creating a positioning strategy. What do you want to achieve?
Your goal could be to increase market share, target a new customer segment, or rebrand your
business. Having a clear objective will guide your strategy.

Step 2: Study your competitors

In-depth competitor analysis is crucial. Identify your competitors and study their positioning in
the market. Understand how they communicate their unique value propositions and what sets
them apart. This will help you find opportunities to differentiate your brand.

Step 3: Create a perceptual map

A perceptual map is a visual representation of how consumers perceive brands in your industry.
It helps you understand where your brand stands relative to competitors in terms of key attributes
or factors. Plot your brand and your competitors on the map to identify gaps and opportunities
for positioning.

Step 4: Make a timeline

Develop a timeline that outlines the key milestones and deadlines for implementing your
positioning strategy. This timeline should include tasks such as market research, branding
updates, content creation, and promotional campaigns. A well-structured timeline keeps your
strategy on track.

Step 5: Find your niche

Identify a niche or specific market segment that aligns with your brand‘s strengths and unique
offerings. By focusing on a niche, you can become an expert in that area and connect more
deeply with your target audience.

By following these steps, you can create a positioning strategy that helps your brand stand out,
resonate with your audience, and achieve your business objectives. Remember that positioning is
an ongoing process that may evolve over time to adapt to changing market dynamics and
customer preferences.

Strategic positioning best practice

Positioning strategy is a critical component of marketing and branding. Here are some best
practices to help you develop and implement an effective strategy:

 Understand your target audience

In-depth knowledge of your target audience is essential. Create detailed buyer personas to
identify their needs, preferences, and pain points. Tailor your positioning to address these aspects
effectively.

 Analyze competitors

Conduct thorough competitor research to understand their positioning strategies. Identify gaps in
the market where your brand can excel. Your positioning should aim to fill these gaps and offer
something unique.

 Create a unique value proposition (UVP)

Your UVP is a concise statement that communicates your brand‘s unique benefits and values to
customers. It should clearly articulate why your brand is the best choice. Make sure your UVP is
compelling and easy to understand.

 Consistency across channels

Maintain a consistent brand image and messaging across all channels, including your website,
social media, advertising, and customer interactions. Consistency builds trust and reinforces your
positioning in the minds of customers.

 Focus on customer benefits

Instead of just listing features, emphasize the benefits your products or services offer to
customers. How will using your brand improve their lives or solve their problems? Connect
emotionally with your audience.
  Segment your market

If your target audience is diverse, consider segmenting it into smaller, more specific groups. This
allows you to tailor your positioning for each segment, making it more relevant.

 Test and refine

Don‘t be afraid to test different positioning strategies or messages with your audience. Conduct
surveys and A/B tests and gather feedback to refine your approach based on what resonates best.

DIFFERENCIATION STRATEGIES
Differentiation strategy is nothing but an approach that pushes organizations to develop a unique
product or service compared to their competitors.

This strategy's primary goal is to gain a competitive edge and earn greater reputation in the target
market. The business must know its strengths, weaknesses, and customer needs to accomplish
this.

Several corporate giants would want to get ahead of you. Thus, knowing the underlying needs of
your target audience is the key to developing a unique product or service.

*Benefits of Differentiation Strategy

Implementing a differentiation strategy for business growth comes with many benefits. Let‘s
take a look at them in detail:

1. Reduction in Price Competition

Following a differentiation strategy helps companies to lower their price commission in the
industry. Suppose a firm provides a quality product, their competitors will struggle to succeed
even after dropping their prices. When people receive quality products, they don‘t mind paying
higher prices.

2. Product Uniqueness

As said, product differentiation is the most popular type of differentiation strategy. When a
company opts for this strategy, they achieve tremendous success because their competitors
cannot deliver the same quality. That makes these companies one of a kind in the industry.

3. Increased Profit Margins

 If a company aims for a competitive advantage in the industry because of its high-quality
product, it can set higher price points. Thus, resulting in increased profit margin, and the
company can earn higher revenue with minimum sales.

4. Customer Loyalty

When you satisfy your customers with their desired product, you can earn brand loyalty.
Differentiation is a market strategy, and you must remain empathetic towards your customer to
create a product they require.

5. Minimum or No Substitutes

Implementing a differentiation strategy helps in creating products with no or minimum

substitutes. For example, your company has made a product with unique features. The customers
will have to choose your product unless a competitor delivers the same product at a similar or
lower price.

*How to Differentiate Your Business?

Suppose a company wants to try out a differentiation strategy for business growth with a unique
Idea.

What are the options available? In general, there are two ways to select a differentiation strategy,
they are:

 Broad differentiation strategy

 Focused differentiation strategy

*What is a Broad Differentiation Strategy?

When a company wants to target a wide range of customers, it will adopt a broad differentiation
strategy.

This implies that the company intends to cover a large market with similar needs and develop
similar products. They would also upgrade an existing product but with enhanced features.

For example, A cement industry will offer its product to a broad market with a brand name. The
company will target distributors, whole-sellers, and retailers. They assure their cement can
withstand the earthquake or natural hazards. That makes it different from other brands.
 *What is a Focused Differentiation Strategy?
If the former strategy is not applicable for some companies, they can opt for a focused
differentiation strategy. A firm choosing this strategy targets a specific/niche segment of the
market. They can target one or more market segments at the same time. But, they will have to
produce custom products for different markets.

Coca-Cola is a perfect example of this differentiation strategy. For instance, they offer diet cola,
canned, and bottled drinks. Thus, serving three different markets at the same time.

*Types of Differentiation Strategy

Other than the two strategies mentioned, there are more specific types of differentiation
strategies you must know. They are as follows:

 Product Differentiation
 Service Differentiation
 Distribution/Channel Differentiation
 Relationship Differentiation
 Image Differentiation
 Price Differentiation

1. Product Differentiation

Product differentiation is the most evident and noticeable type of differentiation strategy.
Customers tend to differentiate a product by its physical appearance.

Organizations use this strategy to make their product design unique. A few common ways to
differentiate a product are:

 Unique product features

 Product performance
 Product efficacy
 Consumer opinion
This strategy is popular in B2C markets. Companies target their products to the end-users. But, it
is also prominent in the B2B market.

Let‘s take Coca-Cola, for example. They have established a brand name and have created a
beverage with a unique taste. Despite having so many other cola beverages in the market, one
can easily differentiate the taste of coca-cola.

2. Service Differentiation
In simple words, service differentiation means creating an unusual way to serve customers.

Every company's motto is "serve the customer." So what makes this one unusual? But customer
service has evolved drastically. People want you to present impeccable service with no wait time.

There are many factors involved in servicing your customers like order processing, customer
service method, etc.

McDonald’s is the perfect example of service differentiation. Setting aside a few exceptions,
they serve the same way in every outlet of theirs. Their service differentiation is ―consistent
quality.‖ Whether you are in New York or Bangalore, the taste and presentation of food remain
the same. For instance, their french fries will have the same amount of salt, size and be served
fresh everywhere.

3. Distribution Differentiation

This is a strategy for companies to differentiate themselves from a group of competitors.

Companies can create a personal distribution channel and manufacture products to make them
available to dealers, distributors, and retailers using this strategy.

A company that focuses on distribution differentiation must concentrate on the supply chain as
well. This helps in maintaining standardized distribution channels to create a competitive
advantage.

Let‘s understand this strategy by taking Amazon as an example. Amazon has evolved
drastically, and it is because of its distribution differentiation. They don‘t have an offline store,
so they provide 1-day delivery with their own courier service. With this, Amazon has become
one of the valuable companies.

4. Relationship Differentiation

Companies creating excellent customer relationships is the best way to differentiate themselves
from their competitors. Using a relationship differentiation strategy, companies can build a good
relationship with sales representatives, employees, and technical representatives.

Vantage Circle is an employee benefits platform and work towards employee rewards and
recognition. This is a perfect example of relationship differentiation because they work
towards employee engagement.

5. Image Differentiation

Image differentiation is a combination of multiple differentiation strategies.

It simply means to innovate a reputed brand image. A company must master all departments such
as product quality, customer service, and product performance to build a different and unique
brand image.

Example: Google, the world-famous search engine website, is the perfect example of image
differentiation. Its rebranding enhances the user and advertiser experience as a whole.

6. Price Differentiation

Price differentiation strategy, price discrimination, refers to charging different prices for the
same product. Companies use this strategic planning skill to target broader markets. But, they
adjust their prices as per the customers‘ price preference.

This is a great way to penetrate deeper into the market and boost company revenues.

We can consider Amazon if we were to understand this strategy with an example. The biggest
online retail industry readjusts the product prices according to their competitors and the buyers‘
purchasing ability. Amazon does not have a retail store; hence they win the price war easily.

*--------------------------------------------------*