1. Attitudinal Segmentation – Survey Method

2. Whom to Interview.
In a survey of finding segments of customers who are travelers / tourists
to Europe, it is not appropriate to count only those who have been to
Europe, because that accounts for a small percentage. You have to
talk to potential travelers
Frame of reference for questioning
When you are questioning customers on vacations do you take (a) overall
experience of vacations (b) last vacation
Find different ways of segmentation
For example : Vacation to Europe, segment on (a) Favourability towards
Europe (b) Segmenting on Income brackets © segmenting customers
based on desires sought on their last vacation
In a study on 1750 interviews for vacationing the following segments were
Uncovered – (1) visit friends and relatives segments (2) good for family sight-
Seeing (3) outdoor vacationeer (4) resort vacationeer (5) foreign vacationeer

3. Shell’s Customer Segmentation study Methodology
* Statistically identified 10 distinct “Clusters” of customers with different needs/ attitudes
Surveyed 5000 respondents in 6 markets.
Questions included
* Behavior patterns
* Desired Features
* Frustrations
* Brand Ratings
* Psychographics
* Demographics
Studied Survey results from each cluster
Developed name and personality for each cluster
Source: Wharton School

4. Shell Customers Target Segments and Characteristics
Relationship shoppers 13%
Comfort Zoners 15%
Low octane communicators 7%
Sentimentalist 13%
Safety firsters 6%
Hands-on individualists
12%
Value minded Planners 6%
Simplicity seekers
11%
Struggling survivors 9%
Premium speedsters
13%
Source: Wharton School

5. Segments selected Premium speedsters
Personality : Internally driven, Competitive
Mentality
Gas Purchasing : Fast pumps, quick access
In a word: Power minded
Simplicity Seekers
Personality: Overburdened, Frustrated, Loyal to others, caring, sensitive. Hard to motivate.
Gas Purchasing:
Reactive. Want things that make buying gas easy. Major brand= product reassurance.
In a Word…”Overwhelmed”
Safety Firsters
Personality: Confident, Self-assured, Responsible
Control oriented, well prepared.
Gas purchasing: want cleanliness, comfort, Efficiency, safety
In a word….”Safety Minded”
Source: Wharton School

6. Brand Identities Considered
Quick & Easy
(Premium speedsters, simplicity seekers, safety firsters)
Friendliest Service
(Relationship Shoppers,
Comfort Zoners)
One stop convenience
(Value minded planners,
struggling survivors)
Best Gasoline
performance
(Hand’s on individuals,
premium speedsters)
Community support
(Comfort Zoners)
Lowest Price
(Low octane commuters,
Sentimentalists)
Source: Wharton School

7. Market Targeting

8. Single Segment Concentration
Zodiac concentrating on executive and professionals
Selective Specialization – may be or may not be
Synergy among the segments selected
HLL in Soaps
Product specialization - Specialized product to
several segments – TVS makes scooters of all
ranges to several socio-economic classes
Market Targeting
Market specialization – Serving many needs of
a single customer group. Financial services to
NRIs
Full Market Coverage - General Motors,

9. What is Positioning

10. To some it means the segmentation decision (economy and premium segments).
To others it is an image question (Casual, sporty wear – Benetton)
To still others it means selecting which product features to emphasize – (flavor
or foaminess of toothpastes)
Positioning a brand is obtaining mind-space of the consumer for the brand with
Respect to competition
Positioning is the act of designing the company’s offering and image to occupy
a distinctive place in the mind of the target market so as to maximize the
Potential benefit to the firm. The result of positioning is the successful creation
Of a customer focused value proposition
e.g. – Colgate Total – Multi-benefit toothpaste as a one product solution for
people with tooth problems
As against Colgate Dental Cream – Core Identity for strong, white teeth meaning
a toothpaste to maintain healthy teeth.

11. Jack Trout issues on Positioning

12. Embrace the obvious position possible in the market or granted by the
market. Positioning should be in line with the perception of consumers’
mind not against it
Coke: ‘The Real Thing’ is fine; it is the original cola
Coke: Always Coca-Cola may not be fine as half the market is Pepsi
Many positioning ideas are founded on how company estimates the future
Samsung – Challenging Limits – Looks alright
Avis: We are No.2. We try harder
Be Simple: Volvo – Drive Safely
Positioning is long term. Do not be driven by the stock market

13. Kotler et.al on Positioning

14. Steps to a Positioning Strategy

15. Determine Target Market
Laptop for the business professional
Determine category membership of the brand under consideration
Hewlett Packard dv1000 is a sophisticated business laptop
Identify the competition
Sony, Toshiba

16. 4. Establish the Category Points of Parity to fulfill the necessary conditions
of category membership
there are three main ways to convey a brand’s category membership
- announcing category benefits
centrino mobile technology
- comparing to exemplars on par with HP’s excellence in instrumentation
- relying on the product descriptor
HP Pavillion dv1000 is an entry level business
laptop

17. 5. Establish the Competitive Points of Parity to establish the equivalence of
Product benefits, attributes, values with respect to competition
HP’s manufacturing quality is no way behind Sony or Toshiba. It is
backed by decades of manufacturing electronic systems

18. 6. Establish the Points of Difference if any to take a differentiated position
If no POD exists then the brand takes a head on position or a me-too
position
HP has an excellent service network in India as compared to Toshiba.
HP is not as expensive as Sony
7. Write out the Positioning Statement
To the young urban professional (target market) our product – HP
Pavilion dv 1000 is a rugged system with all the necessary features of a state-
Of-art business computer and is offered as a value for money laptop with
Excellent service backup.

19. Important considerations in choosing Points of Difference (PODs)
(1) PODs are desirable by the customer
- Relevant and important to the customer – e.g. price of HP
Laptop
- Distinctiveness – Service backup is not a common feature
of all foreign made laptops in India
- Believable – HP has been in the electronic business for
decades

20. (2) PODs are deliverable to the customer
- Feasibility – HP has the required organization to make the
service deliverable and the required technology
to offer a value for money product
- Communicability
- HPs products are not known as very expensive
- Sustainable
- HP has the required R&D to continue making
state-of –art upgrades
In this case PODs are anchored at the benefit level, sometimes they could be
Anchored at the attribute or value level

21. Handling Conflicting POPs and PODs
Sometimes attributes and benefits are negatively correlated or move in the opposite
Direction. Ideally consumers want to maximize their benefit package.
Examples of such cases are
(1) Low Price vs High Quality
(2) Taste vs Low Calories
(3) Nutritious vs Good Tasting.

22. Methods to overcome such situations
- Go for straddle positioning – do both simultaneously. BMW designed
its car for both luxury and performance
- Present the communication messages for each attribute / benefit
Separately
- Leverage equity of another entity e.g. Intel Inside
- Redefine the relationship – Teach customers that the relation between
attributes is redefined and now stands positive e.g. Apple is user friendly
and not regarded as powerful. Apple came up with an ad campaign that
had the tag – ‘Power to be your best’, teaching customers that they used it
because it was user friendly and having used it successfully it was powerful.

23. Differentiation
It is the process of adding a set of meaningful and valued differences to
Distinguish a company’s offering from competitor offerings
A difference will be stronger if it satisfies one or more of the following criteria
1. Important - Infrastructure investment of business school
2. Distinctive , but not necessarily superior - Bajaj scooter
3. Superior - Product superiority of Gillette
4. Preemptive - cannot be easily copied - Zilog Processor
5. Affordable - Personal Computer of Acer
6. Profitable - MTR’s food products

24. Dimensions on which differentiation can be achieved by firms
1. Product / Services
2. Personnel
3. Channel
4. Image

25. Product / Services
- Product / Service Quality
performance based – BMW
conformance quality – CMM in software
physical signs and cues – Tata Indica
- Form - Satchets
- Features – Cameras
- Durability – Volvo
- Reliability – Maytag
- Repairability – Maruti
- Style – Benetton
- Design – Designer wear
Services
- Ordering ease – home delivery pizzas
- Installation – Mobile
- Customer Training – GE Medical Systems
- Customer Consulting - Saree selling
- Maintenance and repair – Premium apartments in the city.

26. Personnel
- Trained personnel should exhibit the following
- Competence – Repair engineers of process plants
- Courtesy - Front line staff in premium hotels
- Credibility – Premium hospital doctors
- Reliability – Parallel computers
- Responsiveness and Communication – Beauty Consultants

27. Channel
- Coverage – HLL
- Expertise – Avon
- Performance - Caterpillar
Image
- Differentiate Identity – Mysore Sandal Gold vs Dove
- Differentiate Logo, colors, slogans, events and sponsorships – Coca-Cola

28. Products, New Product
Development Process, Branding

29. Illustrative Product decisions
Corporate product portfolio including mergers and acquisition decisions and
changing portfolio
SBU product portfolio including design of new product development process and
product deletion decision
Product line positioning, width and depth of product line, product modification
d. Brand positioning
Factors affecting product decisions
- the consumer
- the competitors
- the environmental factors
- firm’s own objectives and resources

30. Understanding Products

31. Product
A product is anything (bundle of benefits) that can be offered to a market
to satisfy a want or need. An offering consists of the product features /
Quality, service mix/quality, value based price. Products include - physical
goods (automobiles), services (musical concert), persons (electoral candidate),
Experiences (air journey), events (cricket match), tourist places (Kashmir),
Properties (Leela Penta Hotel), organizations(hospitals), information(trade
Shows) and ideas(family planning)

32. Analysing the Five Product Levels – Indica Automobile
CUSTOMER VALUE HIERARCHY
Analysing the Five Product Levels – Indica Automobile
Core benefit - Transport
Basic Product - 4 wheel closed car
Expected product - good performance - all specs
in the ad in small letters
Augmented product - wants beyond
expectations - best after sales service even
though not required
Potential product - possible evolution
for the car of tomorrow

33. Classification of products
durability, tangibility basis
durables, nondurables/consumables, services
use basis
consumer, industrial, military, government

34. Industrial goods raw materials and parts
natural and manufactured raw material, components, subassemblies/modules, semi-knocked down kits
capital items
Installations - buildings and plant
Equipment - portable factory equipment and office equipment
turnkey projects
supplies / consumables and business services
operating supplies (paper, lubricants); maintenance/repair items (paint) and maintenance / repair service(Copier repair), business advisory services (legal, management
consulting, advertising)

35. Consumer Goods Classification
Convenience goods - staples (soaps), impulse (gum)
emergency (umbrellas)
Shopping goods - homogenous (fans, food mixers -
price significant), heterogenous (textiles, furniture
- non price issues also signficant)
Specialty goods - goods with unique characteristics or
brand identification - cars, cameras
Unsought goods - Special selling effort reqd
- encyclopedias, life insurance .

36. Product Hierarchy
Need Family: Personal Transport
Product Family: Automobiles
Product Class: 4 wheelers
Product Line: Passenger cars
Product Type: Mid size car
Brand: Maruti
Item: Esteem AX

37. P&G Product-Mix vs Product line
PRODUCT SYSTEM – PC +PRINTER+ OPERATING SYSTEM + APPLICATION S/W + MOUSE
P&G Product-Mix vs Product line
Crest comes in two
formulations and
three sizes and
so has a depth of six
Product Line
length for Bar soaps
Deodorants
Detergents
Product mix
width - partial
Bar
Soap
Ivory
Camay
Lava
Kirk’s
Zest
Safeguard
Coast
Oil of Olay
Product Line
length for Toothpaste
Tooth
paste
Coffee
Gleem
Crest
P& G’s product lines are consistent(closely related
to each other) in distribution

38. Major elements of managing products
Product Life Cycle
Product Portfolio Analysis
Objectives of Product Portfolio Analysis
Product Line Management

39. Product Life Cycle

40. Making the PLC Operational / Issues to Look at PLC
Unit of Analysis – Product Class, Product Form, Product Line…..
What is the relevant market to which the PLC applies
Relevant Product Market + Relevant Geographic Market
3. What is likely lifecycle pattern to emerge
- fad, fashion, style, cycle-recycle, staple
Identifying the product’s stage in the PLC Model
Unit of measurement of PLC – unit sales, rupee value
Develop PLC on weekly, monthly, quarterly or annual data

41. Empirical Generalization: Always (Almost) Looks Like a Bass Curve

42. Color TV Forecast 1966 Industry Built Capacity For Peak in
14 million units
Peak in
1968

43. An Empirical Generalization

44. Another Example 35 mm Projectors

45. Another Example: Overhead Projectors

46. Capture Law- DRAMS Norton and Bass: Management Science (1987) Sloan Management Review (1992)

47. Capture Law-Mainframes-Beautiful!

48. Generations of PC’s

49. Effects of Different Prices

50. Product Portfolio Analysis

51. Objectives of Product Portfolio Analysis
Resource allocation among products and markets
portfolio analysis of competitors leads to a refined
understanding of competitive strategy by action –
reaction steps
Assess the marketing effort for each product to direct it
in the product portfolio from one place to another

52. Boston Consulting Group- Growth share matrix.K E T G O W H
High
STARS
PROBLEM
CHILD
CASH COW
DOG
Low
High
Low
RELATIVE MARKET SHARE

53. Shell International directional policy matrix
Prospects for sectors profitability
Unattractive
Average
Attractive
Company’s
Competitive
Capabilities
Weak
Disinvest
Phased withdrawal custodial
Double or quit
Phased withdrawal
Custodial
Growth
Try harder
Strong
Cash generation
Growth leader
leader
Competitive capabilities- Market position
- Production Capability
- Product R &D

54. Mc Kinsey/GE Business Array
Industry attractiveness – Size, Market Growth, Pricing, Mkt. Diversity
Competitive Structure, Industry Profitability
Business strength
- Size
- Growth
- Share
- Position
- Profitability
- Margins
- Tech.
Position
- Image
- People
High
Medium
Low
Investment and growth
(G)
Selectivity/
Earnings
Harvest

55. Product performance matrix
Company sales
Decline
Stable
Growth
Industry sales
Profitability
MKT share
Below target
Target
Above Target
Above
target
Dominant
average
Marginal
marginal

56. Product Line analysis
Product Line Management
Product line length management

57. Study sales and profits of each item in line, to see
Which to build, maintain, harvest, divest. Do ABC
Analysis on sales / profits
Core products – Basic Computers – low margins
Staples – CPUs, Memory chips – higher margins
Specialties – digital movie equipment – still higher
margin
Convenience items – monitors, printers –high volume
high margin
Manage each of the above four types of products differently
Product Line Analysis
Market Profile: Examine how the line is positioned against
Competing lines. Understanding corresponding competing
Products between your line and competitor’s line. Understand
Gaps in product line and understand market segements

58. Product Line Length Management
Product line objectives would be to induce both up selling and cross selling
High Market share seeking firms will have longer product lines. High
profitability seeking firms will have shorter lines of important /
more profit product items.

59. Product line length Management
Line stretching
Upward – Maruti – 800, Omni, Esteem, Baleno, Toyota - Lexus
Downward – Surf – Wheel
Two way - Rural Transport Vehicle – Ambassador – Mitsubishi Lancer
(Hindustan Motors)
Texas Instruments in Hand Calculator
Line Filling (each item should produce a just noticeable difference)
TVS TVS Scooty --- TVS SUZUKI Mobike
Line Featuring: (oft promoted brand in line)
Lux in Soaps for HLL
Line modernization – Intel in Microprocessors
Line Pruning – First Ruf & Tuf ready to stitch kits. Later Ruf & Tuf Jeans

60. Developing New Products
Firm end
New Product Development Process
Consumer end
Consumer Adoption Process

61. New Product Development Process
Make or Buy Decision
Issues to New Product Development
Steps to New Product development Process
Factors for success of new product launches
New Product Strategies - Reactive and Proactive
Some reasons for new product failures

62. Make or Buy Decision
Considerations
1. Timing Considerations
2. Superiority of ‘Buy’ technology
3. Cost considerations
4. Management, Legal and Market feasibility