Abhishek Mishra Rahul Jogi Ram Upadhyay Ravi Shah Tahjib Patel Probatives Group PGP/SS/ISBE-A/2010-12 (SB: 3)
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Acknowledgement
We take the opportunity, while presenting this project report and to express our deep gratitude to all those who afford their valuable help and time to help us to complete the project successfully. Firstly, we would like to thank our honourable Prof. Pabitra Ranjan Chakravorty for giving us the opportunity to work on such a project. We got a chance to put all our classroom theories and practices for understanding the role of segmentation, targeting and positioning and various other concepts. Service marketing is an important subject as it deals with the marketing principles and methods for services. And we express our immense pleasure in studying the subject. Here, we would like to thank IIPM for giving us the opportunity to study this wonderful subject We would also like to convey our sincere most gratitude to Prof. Kaushik Das who has given his views and opinions about our topic. We highly appreciate the efforts put in by them so that we can cover our topic in the most optimistic manner.
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We would also like to thank all the respondents for sparing their precious time in filling up the questionnaires and also giving us their valuable feedback about our topic of the project. Finally, we would like to thank all the members of the Probative group for their constant support and valuable inputs. Thank you everyone. This would not have been possible without you people.
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Table of contents
Declaration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 01
Acknowledgement . . . . . . . . . . . . . . . . . . . . . . . . . . . .02
Preface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 05
Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Objective
This Project report, broadly, has been designed to familiarize with the characteristics of services in periodically magazine and their stp., their implications on design and delivery, and highlighting the role of marketing, human resources and operations for sustainable competitive advantage for stp of magazine and their strategy for business in India. This report is not a pure description of a stp of magazine but its for all print media sector, but involves critical evaluation and/or identification of key issues. This report uses the concepts evolved during the course, uses them where appropriate. This report tries to address the following.
The objectives of the project study are as follows:To do a service delivery study & analysis of magazine in India. To analyze the customers need, and want. To do a study and analysis of service positioning by magazine in the competitive market, study customer satisfaction, study and analyze human resource management. To study and evaluate the service processes design and the performance measurement and management.
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To study and evaluate the customer value provided by periodically magazine. To identify and evaluate the key issues in the service delivery. To evaluate the reasons for the existence of service delivery gap. To use and apply the concepts of Service Marketing to analyze and minimize the service delivery gap by doing Gap Analysis. To analyze and evaluate the financial implications of improving the services.
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Introduction:Print Media in India is more than a century old and a well-established industry. The print industry mainly comprises of newspaper and magazine publishing. Book publishing is smaller but significant in terms of revenue. Even though it's a mature industry, new magazines are being launched every year. India has been one of the fastest growing world economies since the past three years. Robust consumption and rising income levels have helped the growth of print media. New titles that focus on niche topics continue to launch in the market. The revenue sources for a magazine are subscription, single copy sales and advertisement. Approximately 73 percent of revenue comes from advertising and 27 percent from circulation.
Challenging Times:The magazine industry is going through a tough phase in India just like in other countries. Newspapers have added supplements to their main issue and infringed on the content covered by magazines earlier. Television channels have launched in different genres that didn't exist a few years back. And with the increased penetration and adoption of the Internet in the country, more people are now consuming news and stories on different topics on the web and mobile. There is still a demand for high quality print content and magazines need to deliver on that need to avoid losing market share to other mediums. In addition, they also need to explore and distribute their content on the web and mobile platforms to give choice to their subscribers to consume content from anywhere and at any time. India has 49,000 publications, but annual revenues total just $1.1 billion. Most lack technology, marketing, and capital to grow which has resulted in a handful of publications dominating the market with the Times of India Group being the market leader. Distribution is critical for a magazine since it has to be readily available and marketed to consumers. Big publications have strong distribution network set up.
Retail: magazines are available in retail outlets for sale. The retailer gets a commission on the sale price. Subscription: publisher signs up subscribers directly or through partners and delivers the issues in mail.
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Selective Distribution: Special sponsored copies are distributed in airplanes and hotels.
With the growth coming from Tier-2 and Tier-3 cities, magazines have to expand their distribution channel aggressively in those locations and localize content where needed. The print industry in India is highly fragmented due to the large number of local languages. Regional language publications own 46 percent of the market share, Hindi language publications cover 44 percent and the remaining 10 percent is served by English publications. The primary penetration of English language magazines currently is in metros and urban centres though the growth is widening to smaller cities as the education and income levels increase among the middle class. With the opening up of Foreign Direct Investment (FDI) policy, several international publishers are aggressively entering the market and this trend is expected to continue.
The Opportunity:There's little doubt about India's market potential. According to a national survey, 248 million literate adults still don't read any publication. Readership of newspapers and magazines is up 15% since 1998 to 180 million. It's a reflection of a younger, more educated population, especially in smaller cities. Now that the doors to foreign investors in print media have been thrown open, one can expect activity to pick up in this sector. Companies such as Pearson, Haymarket, Time India, News Corp., and Dow Jones have eyed India's big, English-reading market. ICICI Ventures, which holds stakes in three media companies, is quite bullish about the industry's prospects. Trade books offer the best openings, since a higher FDI has been permitted in them. Britain's Haymarket Publishing Group already has ties to Auto car India, with 80,000 subscribers. Haymarket doesn't own a stake, but helps with research and management. Now, it can invest, provide funds to print more copies, market more strongly and use Auto car as a platform to bring its other brands. Bombay's Tata Infomedia, a $30 million publisher of yellow pages and trade magazines, also has already started to solicit business with foreign companies. The Tata Group sold the Indian edition of Reader's Digest magazine, making it the first publishing property offered for sale since the government had scrapped the ban on foreign investment in the print media. As expected, there have been various anti-FDI lobbies, which are strongly voicing protests against foreign investment in Indian Print Media. Their major contention is
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that foreign forces might begin dominating the content of Indian publications, which is detrimental to national interests. An extreme view given by a former Indian Prime Minister is that powered by their immense finances and goaded by an ambition to control the emerging Indian market, the foreign monopolies will impose their own agenda of ultimately controlling Indian politics. But there is more than meets the eye. The English-language media, fearing competition from players with deeper pockets, has been resisting this move by the Government. And from a marketing point of view, the English press reaches the most lucrative segment of society - the 300-million-strong middle class. International players are seen as a threat to market share. The opening up of the print media sector to foreign investment is a bold decision by the Government, considering the unwillingness of so many past Governments to do the same. It is a policy decision that could have a very positive impact on the sector, provided the Indian publications generate enough interest and exhibit their true potential to the overseas investors. It could enrich the quality of the magazines and other publications.
Recent Developments:
There were several niche titles that were launched in 2008 and 2009. A slew of foreign players launched their India editions.
The most notable magazine launched was Forbes India in May 2009 by Network18 and Forbes Media. RPG Group's 'Open', a weekly magazine aimed at evolved Indian readers who are well informed, well travelled and identify themselves as global citizens. It is available in 12 cities. Pathfinder Publishing's maiden title Career 360, a monthly publication focusing on career advice. Technology Review, a technology magazine launched in India jointly by MIT's Technology Review magazine and CyberMedia India Ltd. Hearst Corporation's Harper's Bazaar, a fashion and beauty magazine in partnership with India Today.
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The re-launch of Delhi Press' The Caravann, a fortnightly magazine that covers politics, culture, arts and literature. Images Group's FNL and Salon and Living etc., an Indian edition of international homes magazine. Gill India Communications' What Women Want, a woman's magazine for women aged between 20 and 45 years and 'Lifestyle Living', a lifestyle magazine dedicated to those with a creative lifestyle. The trend for foreign magazines to launch their India edition is expected to continue in 2010 as well, with BBC's Lonely Planet magazine having launched recently.
Newspapers and publications have reduced the number of pages to cut print and production cost. Magazines have discontinued supplements, which were earlier distributed free of cost with the main product.
Foreign Investment in Indian Print Media - Role of Government:The process of economic liberalization in India, which began more than a decade ago, has taken another significant step by opening up the print media sector. With the UPA Government scoring an emphatic win in the LokSabha elections, the media industry got an open-minded Information & Broadcast Minister in Ambika Soni who has sent positive signals to the industry. Earlier in 2009, the Government gave its nod to an increase in Foreign Direct Investment (FDI) in facsimile editions of foreign newspapers. The Government also announced customs duty exemption on newsprint. In December 2008, the Indian Government unveiled a set of guidelines to allow Indian editions of foreign news and current affairs magazines 26 per cent FDI as long as all key executives and editorial staff are Indian. The Ministry of Information & Broadcasting has for the first time given approval for the publication of the facsimile edition of foreign newspapers by allowing The Wall Street Journal and The Wall Street Journal Asia in India. Wall Street Journal India Publishing Pvt Ltd, a wholly owned subsidiary of Dow Jones and Company Inc, would bring out these newspapers. The government has announced customs duty exemption on newsprint for the newspaper and magazine publishing industry. These concessions were
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announced in February 2009 in view of the economic slowdown and the high newsprint cost which spiralled close to 25%.
The ad revenue sources are national, local, classified, pre-printed (inserts) and advertorials. The CPM rate for magazines is lower than television and the audience is more targeted.
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Ad Industry Amount ($ Million)
Magazine Radio OOH Internet Total 573 425 538 238 8,098
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The Week Auto Car Outlook Business Woman's Era Business India Champak Outlook Traveller Business World Digit Society Frontline
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Society & Women Femina India Today Plus Woman's Era Verve Online Desh Videsh Teens Today India Line Little India Overseas India Magazine South Asian Life
Entertainment Filmfare G Magazine Screen Chitralekha Music Today - India Today Publication Deccan Chronicle - Cinema News Bollywood Online
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Planet Bollywood Gossip Bollywood News Daily Stardust
Sports Sport Star ESPN Cricket Info Khel Diamond Cricket Today
Fashion Vogue (UK) Cosmopolitan Cosmo Girl Fashion Planet Glamour Harper's Baza
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Capital Market (Stock Market) Business Today Business Standard Economic Times Financial Express Commercenet India Trade India India Vibes Online Sourcing Hardware Business India Outlook Business
Computer & Electronics PC Quest Electronics For You Dataquest PC World Popular Science Popular Mechanics Computer World
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Cyber India Online Informatics Silicon India Voice & Data
Travel & Leisure Budget Travel Discover India Magazine Gourmet Travel Outlook Traveler Travel Plus Wanderlust Lonely Planet Conde Nast Traveller
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Competition Success Review Wisdom
Fashion & Lifestyle i-D Another Magazine M Magazine Vogue Dazed and Confused View Point
Average Issue Readership (AIR) Analysis (2008 vs. 2009):The Average issue readership numbers have been on a decline due to increased competition from free content on the Internet and Mobile platforms.
India Today is the highest read English magazine in the county with an AIR of 1,955,000, which is an 8.7 percent decline in its readership.
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Readers Digest has seen a 2.1 percent drop in its AIR and is now at 1,327,000. General Knowledge Today has dropped by 8.5 percent, and is now at 1,121,000. Competition Success Review has an AIR of 766,00 and has seen a 3.5 percent drop.
Outlook with an AIR of 533,000 has seen a 7 percent drop. Filmfare is the new entrant in the top ten lists with an AIR of 490,000. Wisdom has seen a 4.6% drop with an AIR of 455,000.
Stardust has slipped down the list with an 11.4 percent decrease. The current AIR is at 388,000.
Diamond Cricket today has an AIR of 378,000, which is a 5.5 percent decline.
Competition Refresher has increased by 37.3% and its AIR is now at 335,000.
The Week has dropped by 4.2 percent and the AIR is 322,000. Femina has dropped by 4 percent and now has an AIR of 309,000. Business Today has dropped by 12 percent in its AIR down to 287,000.
Health & Nutrition has an AIR of 250,000, which is a 11.3 percent decline. The Sportstar has seen 14.8 percent drop in its AIR and now stands at 242,000. AIR.
Business India stands at 222,000, which is a 7.5 percent decline in its
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Womans Era has seen an AIR of 200,000, which is a 4.8 percent decline.
Auto Car had a 13.1 percent growth to an AIR of 199,000. Champak has seen a 4 percent decrease with an AIR of 193,000. Business India has an AIR of 166,000, which is a decline of 18.6 percent. Business World has an AIR of 165,000. Outlook Traveller has seen an AIR of 146,000. Digit has seen a 5.8 percent decline. Society has seen a growth of 1.7 percent. Frontline has seen a 20.8 percent decline.
Tinkle Amar Chitrakatha is one of the few who have seen a 0.9 percent growth.
Femina Girl saw a growth of 6.2 percent. Auto India like many others has seen a 18.7 percent decline in its AIR.
P C Quest and Outlook Money have both seen a decline of 17.4 percent and 24.3 percent respectively. Business and Economy has seen a 6.5 percent growth with an AIR of 82,000. Inside Outside has seen a 17.3 percent while Cosmopolitan has seen a 61.4 percent growth.
Overdrive has dropped by 23.7 percent.
The Telegraph in Schools has grown by 72.5 percent with an AIR of 69,000.
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New Woman has seen a drop of 9.2 percent while Magic Pot has an AIR of 58,000.
Time has seen a growth of 3.6 percent.
Cine Blitz has dropped by 5.7 percent while Elle and Savvy have grown by 29.7 percent and 13 percent respectively.
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BOOM:India in 2005 allowed 100 percent foreign investment in non-news publications, keeping the cap for news at 26 percent. Early investments included Independent News and Media's 26 percent stake in newspaper publisher Dainik Jagran, Pearson Plc's 14 percent in Business Standard newspaper, Henderson Ventures' investment in HT Media and BBC Worldwide magazine venture with Bennett, Coleman & Co. More recently, private equity firm Blackstone Group put $150 million in regional publisher Ushodaya Enterprises, Warburg Pincus moved $33 million into the Dainik Group and DE Shaw invested $39 million in Amar Ujala Publications, according to research firm Venture Intelligence. News Corp, which has a content alliance for The Wall Journal with HT Media's business daily, is keen on more launches. Pearson, which has sold its Business Standard stake, is reported to be in talks for a new venture. "There's huge investor interest in the growth potential, because the segment is still quite under-penetrated," said Atul Phadnis, chief executive of consultancy Media e2e. Local firms are also seizing the opportunity: Business Standard and Bennett, Coleman's Economic Times have launched Hindi and Gujarati-language editions of their financial dailies. Deccan Chronicle Holdings has launched a business daily to compete with five others, and new regional-language and city papers are hitting the stands nearly every day. The boom in advertising revenue is not limited just to print. As new media grows and controls are eased in television, these will attract greater investments and advertising revenues. Specialist publications have a better chance of scoring with advertisers and readers in the increasing clutter, Phadnis said. "Niche publications are almost immediately profitable: Advertising more than makes up for lower subscriptions, and there are easy synergies with other verticals, like radio or Internet."
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GLUT:But it's not all good news. The large number of players jostling in the market place could lead to a drop off in advertising revenues in the coming years, analysts say. "One of the worries is that publishers are taking ad revenues for granted," Phadnis said. "Everyone thinks it will keep rising, but as early as 2009 we are going to see a glut in inventory in TV, print and the Internet because of so many players. We will see intense price competition, and smaller firms may be forced out," he said. Investors are also chasing only a handful of large media firms, he said, nudging up already high valuations: Deccan Chronicle shares trade at 10.3 times forecast earnings, while Jagran Prakashan trades at 19.3 times and Mid-Day Multimedia quotes at 19.7 times forecast earnings. Rising newsprint prices are also bumping up production costs. Still, Conde Nast expects Vogue will break even in its first or second year of operation compared to an average break-even period of five or six years in more mature markets, said Alex Kuruvilla, managing director in India, referring to Europe and the United States. "We are optimistic and bullish," he said of the potential. "But also cautious: In this market, you have to be smart." Attracting the attention of vendors who hawk magazines at traffic lights and getting space on shelves in overcrowded newsstands across Mumbai is not easy for new entrants. "I am already running out of space," said K.B. Singh, pointing to a low wooden bench on a busy sidewalk piled high with dozens of glossy magazines and newspapers. "Where will I put the new ones?"
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marketing strategies, most people spontaneously think about the 4P (Product, Price, Place, Promotion) maybe extended by three more Ps for marketing services (People, Processes, Physical Evidence). Market segmentation and the identification of target markets, however, are an important element of each marketing strategy. They are the basis for determining any particular marketing mix. Basic steps in marketing strategy are as follows:-
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Market segmentation is resorted to for achieving certain practical purpose. For example, it has to be useful in developing and implementing effective and practical marketing programmes. For this to happen, the segments arrived at must meet certain criteria such:a. Identifiable: The differentiating attributes of the segments must be
distribution channels.
required to target them. A very small segment may not serve commercial exploitation.
d. Profitable: - There is no use in locating segments that are sizeable but not
profitable.
frequent changes.
capabilities.
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Segmentation is the basis for developing targeted and effective marketing plans. Furthermore, analysis of market segments enables decisions about intensity of marketing activities in particular segments. A segment-orientated marketing approach generally offers a range of advantages for both, businesses and customers.
1.
Segmentation helps the marketers to distinguish one customer group from another within a given market and thereby enables him to decide which segment should form his target market.
2.
Higher Profits: -
It is often difficult to increase prices for the whole market. Nevertheless, it is possible to develop premium segments in which customers accept a higher price level. Such segments could be distinguished from the mass market by features like additional services, exclusive points of sale, product variations and the like. A typical segment-based price variation is by region. The generally higher price level in big cities is evidence for this. When differentiating prices by segments, organizations have to take care that there is no chance for cannibalization between high-priced products with high margins and budget offers in different segments. This risk is the higher, the less distinguished the segments are.
3. Facilitates tapping of the market, adapting the offer to the target:Segmentation also enables the marketer to crystallize the needs of target buyers. It also helps him to generate an accurate prediction of the likely responses from each segment of the target buyer. Moreover, when buyers are handled after careful segmentation, the responses for each segment will be homogeneous. This in turn, will help the marketer develop marketing offer/programmers that most suited to each groups. He can achieve specialization that is required in product, distribution, promotion and pricing for matching the particular customer group and develop offers and appeals for the segmented group.
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4. Stimulating Innovation: An undifferentiated marketing strategy that targets at all customers in the total market necessarily reduces customers preferences to the smallest common basis. Segmentations provide information about smaller units in the total market that share particular needs. Only the identification of these needs enables a planned development of new or improved products that better meet the wishes of these customer groups. If a product meets and exceeds a customers expectations by adding superior value, the customers normally is willing to pay a higher price for that product. Thus, profit margins and profitability of the innovating organizations increase.
5.
Makes the marketing effort more efficient and economic: Segmentation ensures that the marketing effort is concentrated on well defined and carefully chosen segments. After all, the resources of any firm are limited and no firm can normally afford to attack and tap the entire market without any delimitation whatsoever. It would benefit the firm if the efforts were concentrated on segments that are more profitable and productive ones. Segmentation also helps the marketer assess as to what extend existing offer from competitors match the needs of different customer segments. The marketer can thus identify the relatively less satisfied segments and succeed by concentrating on them and satisfying their needs.
6.
Benefits the customer as well: Segmentation brings benefits not only to the marketer, but to the customer as well. When segmentation attains higher levels of sophistication and perfection, customers and companies can conveniently settle down with each other, as at such a stage, they can safely rely on each others discrimination. The firm can anticipate the wants of the customers and the customers can anticipate the capabilities of the firm.
7.
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Customers change their preferences and patterns of behavior over time. Organizations that serve different segments along a customers life cycle can guide their customers from stage to stage by always offering them a special solution for their particular needs. For example, many car manufacturers offer a product range that caters for the needs of all phases of a customer life cycle: first car for early teens, fun-car for young professionals, family car for young families, etc. Skin care cosmetics brands often offer special series for babies, teens, normal skin, and elder skin.
8.
Targeted communication: It is necessary to communicate in a segment-specific way even if product features and brand identity are identical in all market segments. Such a targeted communications allows stressing those criteria that are most relevant for each particular segment (e.g. price vs. reliability vs. prestige).
9.
Higher market Shares: In contrast to an undifferentiated marketing strategy, segmentation supports the development of niche strategies. Thus marketing activities can be targeted at highly attractive market segments in the beginning. Market leadership in selected segments improves the competitive position of the whole organization in its relationship with suppliers, channel partners and customers. It strengthens the brand and ensures profitability. On that basis, organizations have better chances to increase their market shares in the overall market.
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MARKET TARGETING
INTRODUCTION: - There was a time when finding the best customers was like
throwing darts in the dark. Target marketing changed all that...Today's savvy marketers know that finding their best prospects and customers hinges on well thought out targeted marketing strategies.
Defining a target market requires market segmentation, the process of pulling apart the entire market as a whole and separating it into manageable, disparate units based on demographics. Target market is a business term meaning the market segment to which a particular good or service is marketed. It is mainly defined by age, gender, geography, socio-economic grouping, or any other combination of demographics. It is generally studied and mapped by an organization through lists and reports containing demographic information that may have an effect on the marketing of key products or services.
concentrating your marketing efforts on one or a few key segments. Target marketing can be the key to a small businesss success. The beauty of target marketing is that it makes the promotion, pricing and distribution of your products and/or services easier and more cost-effective. Target marketing provides a focus to all of your marketing activities. Market targeting simply means choosing ones target market. It needs to be clarified at the onset that marketing targeting is not synonymous with market segmentation. Segmentation is actually the prelude to target market selection. One has to carry out several tasks beside segmentation before choosing the target market. Through segmentation, a firm divides the market into many segments. But all these segments need not form its target market. Target market signifies only those segments that it wants to adopt as its market. A selection is thus involved in it. In choosing target market, a firm basically carries out an evaluation of the various segments and selects those segments that are most appropriate to it. As we know that the segments must be relevant, accessible, sizable and profitable. The evaluation of the different segments has to be actually based on these criteria and only on the basis of such an evaluation should the target segments be selected.
PROCESS OF CHOOSING THE TARGET MARKET:The process of choosing the target Market are:-
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Choosing the target market is related to, but not synonymous with, market segmentation. Segmentation is the means or the tool; choosing the target market is the purpose. Segmentation can also be viewed as the prelude to target market selection. Choosing the target market usually follows multi-level segmentation using different bases. Choosing the target market involves several other tasks in addition to segmentation. Looking at each segment as a distinct marketing opportunity. Evaluating the worth of each segment (sales/profit potential). Evaluating whether the segment is: Distinguishable. Measurable. Sizable. Accessible. Growing. Profitable. Compatible with the firms resources. Examining whether it is better to choose the whole market, or the only a few segment, and deciding which ones should be chosen. Looking for segments, which are relatively less satisfied by the current offers in the market from competing brands. Checking out if the firm has the differential advantage / distinctive capability for serving the selected segments. Evaluating the firms resources and checking whether it is possible to put in the marketing programmes required for capturing the spotted segments with those resources. Finally selecting those segments that are most appropriate for the firm.
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Target marketing tailors a marketing mix for one or more segments identified by market segmentation. Target marketing contrasts with mass marketing, which offers a single product to the entire market. Two important factors to consider when selecting a target market segment are the attractiveness of the segment and the fit between the segment and the firm's objectives, resources, and capabilities. capabilities
The following are some examples of aspects that should be considered when evaluating the attractiveness of a market segment:
Size of the segment (number of customers and/or number of units). Growth rate of the segment. Competition in the segment. Brand loyalty of existing customers in the segment. Attainable market share given promotional budget and competitors' expenditures. Required market share to break even. Sales potential for the firm in the segment. Expected profit margins in the segment. Market research and analysis is instrumental in obtaining this information. For example, buyer intentions, sales force estimates, test marketing, and statistical demand analysis are useful for determining sales potential. The impact of applicable micro-environmental and macro-environmental variables on the market segment should be considered.
Note that larger segments are not necessarily the most profitable to target since they likely will have more competition. It may be more profitable to serve one or more smaller segments that have little competition. On the other hand, if the firm can develop a competitive advantage, for example, via patent protection, it may find it profitable to pursue a larger market segment.
Market segments also should be evaluated according to how they fit the firm's objectives, resources, and capabilities. Some aspects of fit include:
Whether the firm can offer superior value to the customers in the segment The impact of serving the segment on the firm's image
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Access to distribution channels required to serve the segment The firm's resources vs. capital investment required to serve the segment The better the firm's fit to a market segment and the more attractive the market segment, the greater the profit potential to the firm.
There are several different target-market strategies that may be followed. Targeting strategies usually can be categorized as one of the following: Single-segment strategy - Also known as a concentrated strategy. One market segment (not the entire market) is served with one marketing mix. A single-segment approach often is the strategy of choice for smaller companies with limited resources. Selective specialization- This is a multiple-segment strategy, also known as a differentiated strategy. Different marketing mixes are offered to different segments. The product itself may or may not be different - in many cases only the promotional message or distribution channels vary. Product specialization- The firm specializes in a particular product and tailors it to different market segments. Market specialization- The firm specializes in serving a particular market segment and offers that segment an array of different products. Full market coverage - The firm attempts to serve the entire market. This coverage can be achieved by means of either a mass market strategy in which a single undifferentiated marketing mix is offered to the entire market, or by a differentiated strategy in which a separate marketing mix is offered to each segment
The following diagrams show examples of the five market selection patterns given three market segments S1, S2, and S3, and three products P1, P2, and P3.
Single Segment
Selective Specialization
Product Specialization
Market Specialization
Full Coverage
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S1 S2 S3 P1 P2 P3 S1 S2 S3 P1 P2 P3 S1 S2 S3 P1 P2 P3 S1 S2 S3 P1 P2 P3 S1 S2 S3
A firm that is seeking to enter a market and grow should first target the most attractive segment that matches its capabilities. Once it gains a foothold, it can expand by pursuing a product specialization strategy, tailoring the product for different segments, or by pursuing a market Specialization strategy and offering new products to its existing market segment. Choosing the target market is a part of marketing strategy formulation, the other two parts being positioning and marketing mix formulation. Without right targeting, the firm cannot formulate an effective strategy. It is through careful segmentation and targeting that firm pick up right group of consumers. Also, it is through this process that the firm gain vital knowledge about the need and buying behavior of the consumer in each segment and the differences between one segment and the other. And, it is by using this knowledge that the firm develops marketing programmes that match the specific requirement of different segments. In other words, segmentation and targeting help the firm not only the characteristics of each of the segments but also the distinctive excellence that is required for catering to the specific needs of the consumers in each of them. Another strategy whose use is increasing is individual marketing, in which the marketing mix is tailored on an individual consumer basis. While in the past impractical, individual marketing is becoming more viable thanks to advances in technology.
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POSITIONING
INTRODUCTION: - Positioning is a concept in marketing which was first
popularized by Al Ries and Jack Trout in their bestseller book Positioning - a Positioning battle for your mind". According to them Positioning is what you do to mind of the mind prospect. They iterate that any brand is valued by the perception it carries in the prospect or customer's mind. Each brand has thus to be 'Positioned' in a particular class or segment. Example: Mercedes is positioned for luxury segment, Volvo is positioned for safety. The position of a product is the sum of those attributes normally ascribed to it by the consumers its standing, its quality, the type of people who use it, its strengths, its weaknesses, any other unusual or memorable characteristics it may possess, its price and the value it represents. Although there are different definitions of Positioning, probably the most common is: "A product's position is how potential buyers see the product", and is expressed relative to the position of competitors. Positioning is a platform for the brand. It facilitates the brand to get through to the mind of the target consumer. The position of the brand has thus to be carefully maintained and managed. Example: when Marlboro cut down its prices, its sales dropped immediately, as it began being associated with the generic segment. Watches like Rolex are positioned as luxury segment watches, thus they being one of the most expensive have become a symbol for accomplishment in life. If Rolex reduces its prices, it loses its perceived image and hence is in danger of losing its customers. This differs slightly from the context in which the term was first published in 1969 by Al Ries and Jack Trout in the paper "Positioning" is a game people play in todays me-too market place" in the publication Industrial Marketing, in which the case is made that the typical consumer is overwhelmed with unwanted advertising, and has a natural tendency to discard all information that does not immediately find a comfortable (and empty) slot in the consumers mind. It was then expanded into their ground-breaking first book, "Positioning: The Battle for Your Mind", in which they define Positioning as "an Positioning: Mind
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organized system for finding a window in the mind. It is based on the concept that communication can only take place at the right time and under the right circumstances."
Functional positions :-
Symbolic positions :-
Self-image enhancement. Ego identification. Belongingness and social meaningfulness. Affective fulfilment.
Experiential positions :-
Provide sensory stimulation. Provide cognitive stimulation. APPROACHES OF POSITIONING :The main positioning strategy is to either developing or reinforcing a particular image for the brand in the mind of the customer. The main approaches to positioning strategy are:-
Customer benefits approach. The price-quality approach. The use or application approach. The product user approach. The product class approach. The cultural symbol approach. The competitor approach.
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1.
Customer benefit approach: This is an important positioning strategy. It involves putting the brand above competitors, based on specific brand attributes and customer benefit. In the automobiles sector we can see many car manufacturer give emphasis on different technical aspects such as fuel efficiency, safety, engine performance, power windows etc. Generally marketers identify positioning in respect of product characteristics that have been ignored by the competitor. Often we can see that firms attempts to position their brands along with two or more characteristic simultaneously, this is done to give an extra edge to the product from its rival and also helps increase the Products life cycle: Thus a single product can solve many problem is the main theme behind the product. Example: Procter & Gambles Head & shoulder : shampoo functions as anti dandruff and anti hair fall shampoo. shampoo
Head & Shoulder positioned as both anti-dandruff & anti-hair fall shampoo
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2.
Price quality approach: Sometimes brands attempts to offer more in term of service, feature, quality, or performance. Manufacturer of such brands charge higher prices partly to cover the cost and partly to communicate the fact that they are of high quality. In fact in the same product category there are brands, through comparable in qualities, which appeal on the basis of price. For example brands like Rado and Timex use quality and price positioning technique respectively. Rado competes for quality and Timex competes for price. It is difficult to use both quality and price positioning together because there is a risk that high quality-low price positioning technique may infer the image of the product in the mind of the consumer.
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Timex luxury watch priced around Rs.1800 Example of price quality approach
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The product user approach:- In this approach, the brand identifies and
determines the target segement for which the product will be positioned. Many brand uses a model or a celebrity to position their product. The expectation are that a model or a celebrity is likely to influence the products image by reflecting their own image to it. For example:- Dabur Chyvanprash is positioned for all age groups.
5.
The product class approach:- This approach is use so that the brand is
associated with a particular product category. This is generally used when a category is too crowded. For example:- HLL has positioned Dove toilet soap as a cleansing cream product for young womwn with dry skin and its is positioned as a premium segment toilet soap.
6.
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Marlboro gives its cigarette brand a American cowboy image Example of cultural symbol approach
7.
economy.Example-Maruti 800, Tata Nano, Nirma detergent powder etc are Maruti positioned for the economy segment
2. Benefit:- Product positioned with some beneficial features. Example-Colgate Colgate
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member of the society, who always want to stay ahead in term of fashion and demands exclusive products only. Example Peter England, Van Heusen, Raymond etc. etc
its technological advancement and value added features. Example:Microsofts positioning of its recent operating system Windows Vista as the advanced operating system, Sony with various elecronic goods, LG etc
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POSITIONING PLANNING:-
Positions are described by variables and within parameters that are important to the customers. Common examples are price, supporting services, quality, reliability, and value for money. Often, customers position a product in relation to a brand or product that is especially visible to them. This could be the market leader or any other offer with a high media exposure and an above average marketing budget. Therefore, it is advisable to use in-depth market research to determine relevant parameters in order to understand how customers rate different products and marketing variables. The number of relevant parameters is normally low. Most often, they can be described with a two- or three-dimensional matrix. This tool to visually depict customers perceptions of a product and its position is called perceptual mapping.
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Quality
Luxury Market
Premium Market
Mass Market
Economy
Price Normally, most suppliers in a market or in a market segment will be positioned along the diagonal. This diagonal is called the Value-Equivalence-Line (VEL), since value and price are balanced there.
In our example, product A is positioned unfavourably. It is too expensive for the mass market and its quality is not good enough for the premium segment. In general, there are the following strategies for repositioning; however, their feasibility will depend on the particular situation.
Change the relation of price and quality for the existing brand; e.g. product relaunch with improved characteristics. Change the relation of price and quality by introducing a new brand; e.g. introduction of clone under a cheap brand or a retailers own brand Alter believes about the brand; e.g. image campaign, creation of a hype Alter believes about competitive brands; e.g. comparing advertisements
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Alter customers rankings of important factors; e.g. focus on additional features and characteristics (example: car manufacturers focus on very different product characteristics in their commercials, for instance security, fuel consumption, image, luxury interior, fun) Introduction of new or neglected attributes; e.g. product re-launch with new features that are new for the whole market segment.
When planning such activities it is critical to think about possible reactions of competitors. A shift of a product into a more favourable position in the pricequality-map above the diagonal (e.g. into position B) will normally lead to in shift of market shares in favour of this product. Competitors could react with a reduction of general price level, thus moving the VEL to the left. Product B would lose its superior position. Moreover, it is advisable to keep in mind that customer and their individual preferences of a price-quality-combination are not distributed equally along the VEL. Neglecting the distribution of customers could lead to the following problems:
Positioning in a segment with very few potential customers (e.g. positioning in a middle-segment in a market where customers prefer either the budget-product or the premium product) Positioning in a too low or too high price-value-combination (segments a and b in our example). This product does not appeal to a large proportion of the market, since customers either expect a higher quality (a) or are not willing to pay that high price.
Dibb et al recommend the following steps for determining and implementing the positioning of a product. Although they focus on new product development, these steps are applicable to a re-launch with new features or for a repositioning of an existing product too.
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1. Define the segments in a particular market. 2. Decide which segments to target. 3. Understand what the target consumers expect and believe to be the most important considerations when deciding on the purchase. 4. Develop a product (or products) that cater specifically for these expectations. needs and
5. Evaluate the positioning and images, as perceived by the target customers, of competing products in the selected market segments. 6. Evaluate the market leaders position; leading brand that occupies a special position in the consumers mind (cadburys in chocolates); other brands have to (cadburys necessary relate themselves in some wayto the leaders position; they cannot ignore the position of the leader, nor wish it away. 7. Select an image that sets the product apart from the competing products, thus ensuring that the chosen image matches the aspirations of the target customers. 8. Inform target customers about the product (promotion).
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12 22 48 18
Businessman Student
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3 9 16 24
63 12 16 9
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Category Age Occupation Income level Time spend Language Types of Magazine Service Satisfaction Place for read Delivery time
Overview of Primary Research 48 32 42 39 63 43 39 42 37 25 to 45 Businessman 10000 to 40000 30 to 60 min English Economy and Business Strongly Agree Home Excellent
33 12 5 39 11
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33 12 5 39 11
17 37 6 26 14
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Focus Group Discussion:FGD 1: CONDUCTED MAGAZINE: BETWEEN SIX PEOPLE ABOUT BUSINESS
1. All agree with quality of content. 2. But disagree with service delivery.
3. Maximum people want supplements and would like get them with
FGD 2:
CONDUCTED BETWEEN SIX PEOPLE ABOUT ENTERTAINMENT & SOCIAL MAGAZINE: 1. HERE, THEY WANT MORE DETAILED CONTENT. 2. THEY are happy with the quality of service but would like more articles on specific cultures. They would also appreciate if they get some interactive media and gift vouchers with the magazine
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Personal Interviews:
At Central Mall
At Iscon Mall
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At Central Mall
At IIPM College
Conclusion: Most of the customers are dissatisfied with the quality of service and quality of content. So the companies have to focus on this aspect and to improve the quality with respect to the content and service so as to retain present customers and build up a trust-worthy organization.
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Enter in to strategic alliances with companies that have customer base similar to yours Outsource business Get read of underperforming employees Consider hiring a public relation firm Make sure that you are getting the most off your advertising expenses Ask for referrals Create incentives
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