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50 Marketing Concepts Every Marketer Should Know
Over the last two and half years we, at Marketing FAQ have published hundreds of articles about various marketing concepts, how to guides, marketing and brand lists, brand stories, creative ads, marketing and advertising news, etc. Given below is a selection some of the important marketing concepts that we have written about.
Some of these marketing concepts are quite common and well understood, while some, not so. On this page, the concepts are only explained in brief. If you want more detailed explanation with examples, follow the link provided in the each of the concept names.
Concepts of Various Forms of Marketing
Ambush Marketing is a kind of marketing strategy where a brand tries to take advantage of a major event (especially sporting event), by trying to associate itself with the event without becoming the official sponsor. According to Macmillan English Dictionary, “Ambush Marketing is a marketing strategy in which a competing brand connects itself with a major sports event without paying sponsorship fee.”
The term “Marketing Mix” is also known as the 4Ps of Marketing. This is a tool for making Marketing decisions. All decisions fall broadly into 4 major categories – Product, Price, Place and Promotion. This concept was used during the early stages of the evolution of marketing. The newer concept, which resulted because of the rise of service industry, does not have 4Ps, but it has 7Ps (People, Process and Physical Evidence), providing a comprehensive categorization of Marketing decisions which a marketer would have to take.
An adapted marketing mix is an international marketing strategy of adjusting each of the marketing mix elements to suit each international target market.
Marketers, due to glaring differences in cultural backgrounds, spending power, product preferences and needs and wants of the consumers, adapt their product, prices, channels, and promotion strategies to suit the conumers’ requirement in each country. This might mean higher costs, but marketers bear such additional costs in hope of gaining a bigger market share and return.
Permission marketing is a term popularized by Seth Godin through his bestselling book,Permission Marketing: Turning Stranger into friends, and friends into customers (New York, Simon & Schuster). It is all about obtaining permission from customers before sending them any kind of marketing communication. As a concept it is directly opposite to “interruption marketing” where the customers are bombarded with marketing messages whether they want them or not.
Sensory marketing (also known as sensory branding) is a type of marketing that uses the power of the human senses to appeal to the target audience at an emotional level. A multi sensory marketing or brand experience generates emotions and feelings that create a stronger and more relevant perception of a brand in the consumers mind.
Drip Marketing is a marketing communication strategy that uses a series of pre defined communication messages (or “drips”) sent over an extended period, at regular intervals. The idea is to insinuate a promotional message gently and steadily into the minds of target audiences, instead of bulldozing it through an ad blitzkrieg. This technique is particularly useful when the marketing budget is low and the continuity of communication is required.
According to the International Dictionary of Marketing (Daniel Yadin, Kogan Page, UK, 2002), Horizontal Marketing is “Collaboration among companies working on the same markets. In setting up a combined manufacturing, marketing and sales operations, they can bring more power to the market, offer better prices and better services that either of the individual companies working alone. The term may also apply to individual companies within the same organization, seeking savings, economies of scale and other mutual benefits achieved from collaboration.”
Demarketing is the exact opposite of marketing. Demarketing involves efforts which try to discourage (not completely nullify) the demand for a product. Demarketing might be employed when the marketer is not able to either supply in large quantities or in cases where the marketer does not want to supply to a particular region because of high distribution costs.
Guerilla marketing has come a long way since the term was first coined by Jay Conrad Levinson in 1984. What started as an inexpensive way for small companies to reach the public has grown into a rampantly employed strategy for companies such as Nike, IKEA, Kit-Kat and many more. The possibilities are endless for those looking to get their name out there in creative ways, and for those willing to take some risks, the rewards are aplenty.
Before becoming the advertorial institution that it is today, guerilla marketing began as a low-cost marketing strategy that relied on creativity rather than a large budget. In the 80s, smaller companies without the proper funds would use graffiti, stickers, posters and flash mobs to promote a specific product or an idea. Today, companies of any size use guerilla marketing as a way to reach out to the public through branded, viral content courtesy of social media circles and YouTube.
Buzz marketing, or viral marketing, or viral advertising refers to the use of existing social networks among people to create awareness about a brand. Earlier, in the absence of internet and social networking websites, word of mouth, was used to create buzz. Technology and internet have changed the way advertisers create buzz.
In the current context of internet and social media, viral marketing refers to the use of self replicating processes, to create awareness. This is achieved by way of video clips, flash content, images, text, ebooks, or software. The message spreads similar to a virus in a computer network, requiring little to no effort from the originator, to pass is on to others.
Embedded Marketing, or Product Placement, is a form of advertising, where branded goods are placed in a medium usually devoid of any ads. These include movies, music videos, televison shows, sports, or even news programs. The product placement is often not disclosed at the time when the same is featured.
Direct marketing is a sales technique whereby the seller contacts the customers directly, without any channel intervention. The common methods of direct marketing are telephone sales, solicited or unsolicited mails, catalogues, leaflets, brochures, and coupons.
Direct marketing is successful in situations where other conventional advertising channels do not aid in targeting the right group of customers. Direct marketing also involves the creation, and maintenance of a large database of information about prospective clients. These databases may also be sold or shared among other direct marketing companies.
Inbound marketing, as the name suggests, is a technique of making customers move towards you, instead of you moving towards them. This is an efficient method of generating good leads for business, than the old method of reaching out to a large number of cold leads, and trying to figure out who will pass through the funnel.
Inbound marketing will ensure that the message that you are trying to convey, will reach receptive ears, which are looking for it, rather than random people, who have no intention to act on the said message. Common inbound marketing techniques are blogging, interaction over social media, search engine optimization, and webinars.
Surrogate advertising, uses the advertisement of a brand or product, to convey a message which is related to another brand or product. This is done due to various reasons. Primary reason is to circumvent the ban on advertising for a particular type of product(s). For example advertising for alcoholic beverages and cigarettes are banned in India. However, Such brands advertise through other products like mineral water or music. Surrogate advertising may also be used in cases where the use of a product is linked to a service. In such cases, the service is advertised widely, and the service provider uses only the product in question.
Above the line (or ATL) communication is just the opposite of below the line communication. It is advertising through the typical mass media channels like television, print, outdoor, cinema, etc.
ATL communication is conventional and impersonal in nature. It does not address individual needs or seeks to induce the audience to take any action. It’s primary objective is awareness and brand building.
Another way of looking at ATL communication as opposed to BTL communication is whether the advertising agency will make any commission from the marketing activity. ATL communication involves releasing ads in the mass media and thus involves commission for the agency involved, whereas BTL communication activities don’t involve any media spend and thus no commission for the agency.
Below-the-line (or BTL) communication generally refers to marketing/sales communications that do not use mass media channels. BLT is niche focused and can be used both for brand building and for sales promotion. BTL communication allows the marketer to engage the target audience in a more personal manner than mass media, thereby tailoring the communication message to their needs.
BTL communication can involve any kind of non-mass media communication and sales promotion tactics like price discounts, point of sale displays, product sampling, discounts and incentives to channel partners, corporate events, direct marketing, etc.
BTL communication strategy is beneficial for sales promotion and for brands which have limited reach thereby allowing them to have more engagement with their audience.
Shock advertising, or Shockvertising, is a type of advertising, that deliberately startles, or offends the audience, with its daring content. Shock advertising employs bold graphic imagery, and blunt slogans.
Marketers use shockvertising when the backfire is lesser than the gain. If the audience act negatively, the marketer will end up losing goodwill. At the same time marketers try to make shockvertising meaningful. If the ad is too abstract, the customers may not get the intended message, which is critical in creating recall in the minds of the audience after the initial shock.
In the current scenario of advertising on the internet, along with advertising in other media like TV, Newspapers and outdoor, a consumer is exposed to hundreds of advertisements every day. This ranges from the boring radio jingle, or the virtually invisible newspaper ad, which we constantly ignore, or the un-missable TV ads, at the beginning of which, we switch channels.
We are becoming increasingly numb to conventional advertising approaches. So in such a scenario, how does the advertiser catch the attention of the viewers/consumers? The answer lies in disruption. Disruptive advertising refers to the use of ideas that are inspiring, refreshing, or daring ideas that defy rules.
It stands for Defining Advertising Goals for Measured Advertising Results. This is a concept used in advertising and marketing planning and was developed by Russell Colley in his research papers and his book, in 1961. The main idea of the concept is that it “all commercial communications that weigh on the ultimate objective of a sale must carry a prospect through four levels of understanding.” The prospect here is the customer and the four levels that a prospective customer must pass through are: awareness, comprehension, conviction and action.
In his 1957 book, The Hidden Persuaders (Longman Green, London), Vance Packard, suggest a theory that a particular advertising technique could persuade consumers to buy anything, without them even knowing that they were being influenced. This technique came to be known as subliminal advertising. It comprised of inserting a single still image frame, containing a promotional message into a film being used for cinema or television ads. The promotional message would apparently be harmless, but would actually contain a “hidden persuader” (generally, of sexual in nature) that would be picked up by our subconscious brain and would make us like the product and eventually buy it. And this whole time we would not even be aware of the real reason why we liked that particular brand or product.
Contextual advertising, is a type of targeted advertising, for advertisements appearing on websites, and other platforms such as mobile apps, syndication feeds etc. The advertisements are displayed by the ad provider, by means of scanning the host website’s content, and selecting ads which match keywords found in the content of the website.
For example if the visitor is viewing website about automobiles, then ads related to automobiles will be displayed on the site. This is done by scanning the website’s content, and reading keywords (which will be related to automobiles), and displaying ads like automobile insurance, or cars. If the site is related to holidays or travel, the visitor is likely to see ads related to flight deals
According to David Aaker, an expert in the field of Brand Equity measurement and management and the author of the famous book, Managing Brand Equity, “Brand equity is a set of assets (and liabilities) linked to a brand’s name and symbol that adds to (or subtracts from) the value provided by a product or service to a firm and/or that firm’s customers.” In simpler terms Brand equity is the value of a brand, as an asset. It is the value that accrues to a product as compared to the value that would not accrue to the same product if it didn’t have that particular brand name.
Customer equity is the lifetime value of a company’s customers. Customer equity focuses more on the bottom line financial value gained from customers.
Brand Extension is a marketing strategy according to which, a well known brand uses the same brand name to enter into a totally unrelated product category. It is done primarily to leverage on the existing brand equity. Some marketers argue that since building a brand is costly affair, once you have built a brand you should leverage its value by using the same brand name to other new categories as well. For example, Virgin, which was initially a record label, entered into other line of business like aviation, game stores, video stores, telecom, etc. Godrej, which was initially a brand which signified locks and cupboards, later on entered into whole new product categories like refrigerators, furniture and real estate.
Brand property constitutes all the images, sounds, slogans, colors and other physical elements that carry a brand’s perception over various ad campaigns, mediums and/or product design and packaging. All these elements, even individually, are powerful enough to signify a brand. For example, Microsoft’s operating system has a unique sound that you will always associate with MS whenever you hear it. And Apple products have a milky white colour that makes them unique. Nike’s swoosh is enough to assure you that that the sports shoe you are buying must be genuine.
If a brand is a collection of perceptions in the mind of the consumer, then brand positioning is “creating, maintaining and developing a unique perception (or speciality) about a brand in the mind of the consumer.” In the modern world (where supply and choice far outweighs demand) positioning is the crux of the branding process. Successful (or unsuccessful) positioning can make (or break) a brand. For example, Mercedes stands for “luxury and class”, while BMW stands for “power and performance” reflected in their slogan “the ultimate driving machine.” Coca Cola is positioned as “the real cola” or the “classic cola” while Pepsi positioned itself as a cola for “the generation next” to create differentiation with Coke. While 7 Up, which was a late entrant to the market, and couldn’t really compete with the other two, positioned itself as the “uncola” providing an alternative to people who don’t like cola.
Brand personality is the identity of a brand. It is the maintenance of all the qualities and attributes by which a brand is known by the audience. Creating a successful brand personality follows a successful brand positioning. It is the badge by which your customers recognize your brand.
To successfully maintain the personality of their brands smart brand managers go to the extent of creating a “profile” of their brand as if the brand were a real person and then test and measure all attributes against actual customer response and if there is any mismatch in what the customer perceives and what the brand should be perceived, he sets out to correct it with a proper communication strategy.
An umbrella branding strategy, is a marketing practice that involves selling many related products under a single brand name. Unlike individual product branding, which uses different brand names for different products, umbrella branding uses a single brand name, and in some cases logo, for different products.
Umbrella branding involves creating huge brand equity for a single brand, and thereafter leveraging that over multiple products. Umbrella branding is also known as family branding. It is very common to find umbrella branding in FMCG products.
Brand architecture is the structure of of brands within an organisation, that specifies the type, number, purpose, and relationship of the brands within an organisation’s protfolio. It is vital for every organisation to have a stong brand architecture, as brand strategy depends a lot on the architecture of brands. Brand architecture answers many of a businesses questions like
- What is the role of a Corporate Brand?
- How many brands does the business need?
- What are the options? New Products? sub brands? extenstion?
Brand architecture should define the leagues of brands within an organisation and the relationship between these brands among themselves, and also with the corporate brand, under which they exist.
Brand Image is the total personality of the brand. It is the set of perceptions that the customers have in mind about a particular brand. It signifies what the brand currently stands for, how it is viewed by the customers. The brand’s image really determines its position in the market, regardless of what the technical details may be.
Brand identity, is how a company presents the brand to the market, how it wants its customers to view its brand. The identity of a brand that a company wants to portray may not be the image that the customers have in their mind about the brand.
In market research, we often hear the use of the terms recall, aided recall and unaided recall. These terms are all a subset of Brand recall. Brand recall is the extent to which a brand name is recalled by the respondent, or the audience, as being part of a brand, product or a service.
Commonly, it is regarded that high level of unaided recall is beneficial for the brand. This is because unaided recall is nothing but the first brand name which comes to the mind of the respondent. It is often known as top of the mind recall.
Simply put, using two or more brand to create a new product or brand is called co-branding. In a co-branding arrangement individual brands complement each other and help each other achieve their aims. Also, there should be proper synchronization between the individual brands and the new brand, otherwise the ingredient brands run the risk of diluting their existing brand image. An example for co-branding would be Nike and Apple bringing music and sports together by developing the Sports Kit, a wireless system that allows shoes to talk to an iPod.
Rebranding is an exercise in image makeover. It is about changing certain elements of the brand to reposition it in the market. But before understanding rebranding in more detail, let us first understand the role of branding itself.
Rebranding occurs when manufacturers or marketers change a significant element of their brand’s composite identity. Such elements could be the colors, logo, brand name, brand message, brand slogan or punch line, etc. Besides these elements, most rebranding exercises also include a change in the marketing strategy and advertising theme of the product. The intention is to reposition the brand and the company in the market and recreate their image in the eyes of the consumers, investors, competitors, and all other major stakeholders. Rebranding is almost as expensive and time consuming a process as branding, if not more. Therefore, the decision to rebrand a product or a company is taken after considering a lot of significant factors and after concretely establishing and rationalizing the necessity of recreating or reinventing the brand.
White Labelling refers to the practice of marketing a product by a company, the manufacturer of which is a different company. White labelling is used in a variety of industries including food, technology, and also banking and finance.
White labelling is widely used by supermarkets and hypermarkets, who offer products under their own name. It is also known as private labels. Such supermarkets, usually use another company to manufacture the products, which they sell under their own name. The practice is also followed in finance industry where small banks may ask larger banks to handle their credit card operations for a fee.
Personal branding revolves around the image and activities of a person, taking into consideration a particular set of personality and individual parameters. The central purpose of personal branding is marketing oneself, one’s works, and one’s career as a brand in order to garner support from the public in general or particular group(s) thereof, and attract economic investment from people who may be interested in the commercial aspect of such a brand. Yes, the commercial aspect. Believe me, in this day and age, you can dig out a commercial aspect of just about anything! Moving forward, an individual can add that extra zing to his/her enterprise, craft, or field of academic or professional expertise by marketing themselves to differentiate them from the rest of the crowd.
Miscellaneaous Marketing Concepts
Blue ocean strategy is a business strategy for saturating markets. It is a strategy for overcoming competition in a unique way.
The propounders of the blue ocean strategy are professors W. Chan Kim and Renee Mauborgne, faculty and co-directors of the INSEAD Blue Ocean Strategy Institute. They co-authored a book, Blue Ocean Strategy, in 2005. The central idea of this book and the strategy is to tap uncharted markets, the ‘blue oceans’ in the book, instead of spending time, resources, and efforts to outsmart competitors in established markets. Kim and Mauborgne assimilated ideas and concepts for this book and its namesake strategy after studying almost a hundred and fifty marketing and competition strategies that have existed over three hundred years and are spread across thirty different industries.
Mass customization is a manufacturing and marketing technique that makes it possible to mold a commodity or service such that it meets very specific needs of an individual consumer unit but is available at the price of a mass-produced commercial item. This phenomenon is made possible by technologies like lean production, product modularization, computerized production methods, etc. Mass customization, to be successful, needs to fulfill two objectives.
First, a manufacturer must identify the opportunities for customization and spend time, money, and efforts for investigating all aspects of such opportunities in order to understand how to leverage them to create value for the customer. Such value must involve smooth, swift, and pocket-friendly transactions for the consumers as well as the manufacturer.
The second objective is for the manufacturer to work out and set up a manageable cost structure and cost level irrespective that can be sustained even when the complexity of the manufacturing process increases as a result of trying to match mass prices and volumes with tailor-made outputs.
Square inch analysis is a method used by direct marketers to determine the relative profitability of products displayed in mail order/direct marketing catalogs. Once this analysis is done it becomes easier for direct marketers to assign positions to each product, corresponding to their performance, to get the optimum results from their direct marketing campaigns.
Catalog spaces isn’t free and direct marketers need to determine which products are paying more for their space and which are paying less. After the square inch analysis is done, high paying products can be allocated premium positions and low paying ones can be moved down the order, or even eliminated from the list.
In today’s age of too much clutter, it is not enough to have a good product, everyone has one. It is also not practically possible to differentiate your product too much. Consequently it left to high end service to generate extra sales for businesses.
In this context, the moment of truth or service encounter is of paramount importance. It can make or break a company.
A moment of truth is basically an instance wherein a customer and a company/service provider come into contact in such a way that the customers either forms and opinion or changes his existing opinion about the company/service provider.
In 2011, Google launched a website and released an ebook that talked about how people’s buying decisions are changing drastically and how people are seeking (and getting) more and more information about products and brand before they actually encounter the brand physically in a store or the place where the service is delivered. Google called this pre-first-encounter phase as the Zero Moment of Truth or simply ZMOT.
Couple of years down the line, ZMOT is now a concept understood and appreciated much better and adopted much better than the previous years. We have all seen and experienced the power of search engine recommendations, social media suggestions, product reviews or peer endorsements, all of which are part of the strategy to win the ZMOT.
The product life cycle happens in four different stages
Introduction: It is a stage when the product is totally new to the market. The stress is not on immediate profits, but on creating awareness about the product. A price skimming strategy is employed. The product has no, or very few competitors.
Growth: Competitors are attracted into the market. They begin offering similar products. Product becomes more profitable. The stress is on advertising and brand building. Market share starts stabilising.
Maturity: The survivors of the earlier stages tend to stay longest in this stage. Sales grow at declining rates. Producers leave the market because of poor margins. Sales promotion and price wars are rampant and find prominant part in this stage.
Decline: This stage marks the downturn of the market. Sales grow negatively. Many products are withdrawn from the market. Profits are ensured by cost cutting and reduced marketing spend.
Line Extension (or product extension) is a marketing strategy according to which the scope of the product a brand represents is increased i.e. when you are adding varieties or variations or flavors of the same branded product, you are basically doing line extension. Like brand extension, line extension is also done to leverage on the brand equity by targeting a bigger chunk of the user base. When Coke introduced Diet Coke to target the diet conscious people, they did line extension. When Amazon, started selling various other products other than books, they also did line extension.
The marketplace is a dynamic entity. Dynamic in multiple dimensions. One buyer is not necessarily similar to another. Consumers differ in their wants, age, gender, location, income, attitude, and education.
Market Segmentation helps the marketer to split the market consisting of varied buyers, into smaller segments, which consists of a uniform buyer group, that can be reached more efficiently with a specific communication method, or served with a specific product. In general marketers practice four major segmentation techniques – geographic segmentation, demographic segmentation, psychographic segmentation and behavioral segmentation.
Also known as ‘Channel of Distribution’ or ‘Distribution Channel”, a marketing channel is the path through which goods/services flow from one end to another(marketer to consumer), and monetary flow happens the other way around(consumer to marketer).
A marketing channel can be short, i.e. Manufacturer to Consumer, or a long chain, involving many intermediaries Manufacturer to wholesaler to a retailer, before reaching the final consumer. Each link in the chain recieves the product at one pricing point and forwards it to the next link at a higher pricing point making his margin.
Nothing in marketing is alien from other factors. There are several factors, or forces affecting managerial ability to conceptualise, build, convert and sustain positive relationships with target consumers. All such forces which affect marketing decisions are called marketing environment. There are generally four types of marketing environments – micro environment, macro environment, internal environment, external environment
A captive market is a market, where the consumers do not have many suppliers to choose from. Their only choice is to buy what is available or not to make any purchase at all. This is applicable to a market which experiences a monopoly or oligopoly.
Captive markets experience high prices and less choice. Classic examples of captive markets are food courts in malls, airports, or movie complexes.
Artificial obsolescence is a marketing and product strategy to make consumers buy more of a brand or product by regularly launching the next generation of the earlier product, thus making it obsolete. Why let competitors make us obsolete, such marketers argue (rightly so), why not we ourselves make us obsolete? And so the existing product is made unfashionable by replacing it with a better looking and/or more feature packed next generation product.
Gillette uses this strategy brilliantly to remain number one in the safety razor industry. So every few years there will be a higher version Gillette Mach available in the market, and Gillette will proudly ask its customers to switch to the newer.
Bait and switch is a customer deception tactic, in which the marketer advertises for a product at a very attractive price. This is done to lure the customers (the “bait”). Once the customer comes to the store/office, the marketer tries to persuade the customer into buying a higher priced product (the “switch”).
This is looked upon as an unethical marketing practice. Generally the marketer would tell the customer that the product advertised for is out of stock (even if it is available), and then suggest the costlier product.Bait and switch is widely found in retail sales, but it can happen in other forms of selling as wel
‘Banner Blindness’ is a phenomenon in web browsing, where visitors of a website do not view banner content. This can be a conscious or an unconscious occurrence.
The content on the banners may be external advertisements or any banner-like content elements which may include internal navigation(to other pages on the website), references etc. The banner is ignored by viewers irrespective of whether the content is relevant or irrelevant to the visitor.
The term was coined by Benway and Lane of Rice University, in the year 1988. Further studies have contradicted the popular web design ideology that says colourful, large, and flash oriented content are likely to get more views.
A loss leader pricing strategy is an aggressive pricing strategy, where the product is sold at cost, or less than cost, to attract customers. The product which uses such a pricing strategy, is termed as a loss leader.
This pricing strategy is employed by retailers selling a wide range of products. The retailer knows that the products earmarked as loss leaders won’t make any profit, but will act as anchors, or crowd pullers. The retailer will make for the loss of loss leader products on other products, where the profits are high.
In India, loss leader pricing has been practiced successfully by many retailers, especially Big Bazaar, which started the trend. Big Bazaar widely advertises best deals (often loss leaders) to pull huge crowds to its stores. Big bazaar’s sales have been newsmakers, with people queuing up hours in advance to lap up the deals. Other supermarkets, hypermarkets and specialty stores have followed suit in implementing such a strategy.