Professor Gurudas Nulkar, Head of Department of Marketing, Symbiosis, Pune conducted a workshop on ‘Essentials of Marketing’ in association with NEN and Yi at SJCE Mysuru on 9th April 2016. This was a day long workshop for Startups and students.
What is your business?
All the answers were product/ service oriented.
Entrepreneurs fall in love with their products. We should always start with the customer. What is the solution we bring to the customer. We shouldn’t define our businesses narrowly.
What is the difference between sales and marketing?
Selling has the needs of the seller on top, that is to convert the product/service to cash as fast as possible. There is a product focus. Sales is a verb.
Marketing on the other hand focusses in the needs of the buyer. There is customer focus. Marketing is a noun, not a verb.
Sales talks, while marketing listens.
Start with the customer, not with the idea/product/service.
Toyota R&D guys spend 100 days a year at the sales point, just observing what the customer asks. What does the husband ask? What does the wife ask? What do the kids ask? What do the grand parents ask?
Listen to the voice of your customer.
All businesses are looking for a sustainable competitive advantage which makes them profitable. One cannot just be competing on features/cost/price.
Choose your customers. You need to decide, whom you are gonna serve. After you have identified the target segment, understand them better, understand their buying behaviors, choose the positioning, capture that value in your product, and then go about customer acquisition.
In sales we need to understand the channel motivations, promotions at the point of sale, marketplace competition, ways to gain marketshare, sale, customer loyalty.
Marketing addresses why should they buy.
Sales addresses how they should buy.
Customers are irrational.
The venture capitalists are not interested in your ideas. They are interested to know, which market segment you are targeting, is it big enough, and can you successfully execute what you are setting out to do.
Who is accountable to the customer?
Everyone in an organization is. Marketing is like an operating system which runs in the background.
What is the recipe for success?
There is none.
What is the recipe for failure?
Please all. You are guaranteed failure.
The value to a customer has two components:
Product needs, Non-product needs.
Marketing is about more value, not less prices.
CCDVPT Creating, communicating, delivering and presenting value to the targeted customer is the whole essence of Marketing.
Case study of Reva and Tata ace.
Tata ace was a result of an extensive two year field research. It started with the customer.
Reva was an economical electric vehicle. But the customer first want a car which can seat 4 people comfortably. That is the reason why Toyota Prius was a success.
Show customers the value. Eg: Eureka Forbes.
Stop making products, start making customer value.
Gurudas has great affinity towards cartoons by Randy Glasbergen.
Always start by choosing your customers.
Understanding customers is more important than understanding technology.
There was a case study on a 8mm hole, drill bits and drilling machine. Plan how you would market to a retail customer, a carpenter, a purchase manager at a big company, a shop owner. For the same drilling machine and drill bits, the requirements would be different for each of these customer segments. For example a retail customer needs just a bit and a wireless drilling machine. A carpenter looks for packs of twelve with channel promotion. A big purchase manager looks at quality certificates and reputation of the company. A shop owner needs just the two-three fast moving items with decent margins, which he can quickly convert to cash.
In the factory we make cosmetics, in the store we sell hope. – Charles Revson, Revlon.
The world buys what it needs, not what you are making. Target and then go after that segment. Get great insights into that segment. Then take product decisions based on the needs of that segment.
There is a huge battle for shelf space.
Start with a niche, satisfy that segment, then replicate that success in another segment. The mass market needs a lot of standardization and cash reserves.
Segmenting can be done on the following basis:
The last two segmenting methods are the toughest and that is where companies need to invest money, by buying market data.
Finally we need to be in a position to see the customer as a person, create the ideal persona.
How do consumers value your product?
Every customer does a mental calculation, if your product is worth it.
There are three benefits which a customer expects:
Core benefits, defines the basic product
Expected benefits, defines differentiation
Augmented benefits, defines advantages
Value comes from benefits.
Value and benefits are not the same.
Track the Job, Gain and Pain to product and services, gain creators and Pain relievers respectively for each target segment.
Case study of how Indian Airlines was the most dominant player, and continuously someone came and redefined the market. Today, Indigo has the best in time record and majority of the primetime slots.
Value to a customer is changing. Look for the value which has not been met by the dominant player in the market. Don’t imitate your competitors. Don’t start with the product, start with the customers.
Value = Sum of (Benefits – Price + Brand Equity)
Brand equity is different for different people. If you have used a product from a company, with a good ownership experience, you are more likely to trust a different product from the same brand.
Also value depends what is funding your purchase, your salary or your savings.
The best way to conduct market research is to do focus groups. We can get great insights by this exercise. We can also use social media for disguised market research, by posing open ended questions. We can also get a market research firm to do text mining.
We can start with a hypothesis, validate it, fine tune the hypothesis and arrive at better understanding.
Case study of quickr/olx.
Price and cost.
Both are not same. Customers decide based on lifetime cost assessment. Every benefit is not a value. Identify which attributes the customer values and reinforce them.
Price is a manifestation of scarcity.
Most of the huge brands are design and marketing firms, like Nike. They hardly make anything themselves.
The customer decision making process:
Need recognition -> search -> alternate evaluation -> choice -> post purchase evaluation.
The key challenge for any marketer is to get the consumer from the first step to the last. It can be done through experience, imagination/self assessment, gauging market reputation, by observing others.
Kudos to NEN, Gurudas, Yi Mysuru, SJCE and all participants.