Marketing goes beyond just promoting a product.

It encompasses the full process of

understanding consumer needs, crafting valuable products, and building long-term
relationships. For smartphone companies, effective marketing helps brands connect with users,
respond to changing preferences, and ultimately drive growth.

Importance of Marketing

● Connecting with Consumers: Marketing helps brands understand what users need,
such as better battery life, camera quality, or data security in smartphones. By
responding to these needs, companies can develop products that align with consumer
expectations.
● Building Brand Loyalty: Consistent marketing builds brand loyalty, crucial for customer
retention in a highly competitive market. For instance, Apple has a strong brand identity
that creates loyal customers who are likely to upgrade to the latest model.
● Driving Growth: Marketing boosts visibility and attracts customers, increasing a
company's reach and sales. When Samsung introduces a new Galaxy model, its
promotional campaigns are designed to captivate both existing customers and new
buyers.
● Agility: Marketing enables companies to adapt to market shifts. For instance, during the
pandemic, smartphone brands focused on online shopping experiences and offered
discounts to boost sales during challenging times.

Scope of Marketing

● Market Research: Studying consumer behavior, technology trends, and competitors.

Before launching a new model, a smartphone company might research what features
are most in demand.
● Product Development: Creating products that meet user demands, such as foldable
screens or enhanced night-mode photography.
● Pricing Strategies: Setting prices that attract different market segments, like budget
models, mid-range devices, and premium phones.
● Promotion: Using digital ads, influencer marketing, and launch events to increase brand
awareness. For example, OnePlus engages with tech influencers on social media to
promote new releases.
 ● Distribution: Ensuring product availability through e-commerce and retail channels to
maximize customer reach.

Core Marketing Concepts

1. Needs, Wants, and Demands

● Needs: Essential requirements (e.g., connectivity, productivity).

● Wants: Personal preferences shaped by culture (e.g., desire for a high-end phone with
an advanced camera).
● Demands: Wants backed by the willingness and ability to purchase. For example,
consumers who can afford flagship phones seek advanced technology and are willing to
pay a premium for it.

2. Market Offering

This includes the smartphone itself, bundled services, and any after-sale support.
Brands differentiate their offerings with unique features, like Google’s Pixel phones
known for computational photography.

3. Value and Satisfaction

Value is the perceived benefit of a product versus its cost. Satisfaction occurs when the
product meets or exceeds expectations. A user who buys a phone with a highly rated
camera expects excellent photos; if this is achieved, they’re satisfied.

4. Exchange and Transactions

Marketing facilitates transactions by making it easy for consumers to purchase products.

For instance, when a customer buys a smartphone through an e-commerce site, they
exchange money for the value provided by the device.

5. Customer Relationships

Building strong customer relationships ensures loyalty. Many brands offer perks like
trade-in programs, discounts, and exclusive offers to retain customers over time.

Company Orientations Toward the Marketplace

1. Production Orientation: Focuses on high efficiency and low production costs. For
instance, brands like Xiaomi emphasize affordable pricing by prioritizing cost-effective
production.
 2. Product Orientation: Prioritizes quality and innovation. Apple’s focus on design,
materials, and technology exemplifies a product-oriented approach.

3. Sales Orientation: Focuses on aggressive sales tactics, often seen with high discounts
and limited-time offers.

4. Market Orientation: Emphasizes understanding and meeting customer needs.

Samsung, for example, offers a variety of smartphone models at different price points,
catering to different consumer segments.

5. Societal Orientation: Considers societal impact. Many brands, such as Fairphone,

design eco-friendly phones with sustainable sourcing and a focus on reducing electronic
waste.

Analyzing the Marketing Environment

To develop effective strategies, smartphone companies must analyze external factors impacting
their ability to reach customers. This involves understanding both macro and
micro-environmental components.

● Components of the Environment: The environment can be divided into the

macro-environment and micro-environment.

● Macro Environment: Broad forces affecting the industry, including:

○ Demographic Factors: Trends like urbanization or an aging population may

affect smartphone features; for example, larger screens and accessibility options
for older users.
○ Economic Factors: Consumer purchasing power influences demand. In
economic downturns, budget and mid-range smartphones typically see higher
demand.
○ Natural/Environmental Forces: Growing awareness of environmental impact
has led to an increase in sustainable smartphone models or recyclable
packaging.
○ Technological Factors: Rapid advancements impact product development and
user expectations. Foldable screens and 5G are recent innovations impacting the
industry.
○ Political and Legal Factors: Trade restrictions, tariffs, and data privacy laws
influence where and how smartphones can be sold.
 ○ Cultural and Social Trends: Social factors like the “right to repair” movement
influence brand strategies as customers seek products they can easily repair.

● Micro Environment: Involves factors closer to the company that directly impact its
ability to serve customers. These include:

○ Customers: Understanding customer preferences helps shape product features.

For example, younger users prioritize camera quality, while professionals may
focus on performance.
○ Competitors: Constantly analyzing competitors is essential. When Apple
introduces a new iPhone, competitors like Samsung and Google often respond
with unique features or new launches.
○ Suppliers: Reliable suppliers are key, especially for securing high-quality
components such as processors and displays.
○ Intermediaries: Retailers, e-commerce platforms, and carriers help distribute
phones to consumers. Smartphone brands partner with these intermediaries to
reach a broader audience.
○ Publics: Different publics, such as media and consumer groups, influence a
company’s reputation. If a smartphone brand faces criticism over data privacy
issues, it can impact public trust.

Real-Life Example: Smartphone Industry

Let’s look at how a brand like Apple navigates these concepts.

● Market Research revealed demand for larger screens, better cameras, and privacy
features, leading Apple to develop products like the iPhone 14 Pro with these attributes.
● Product Development focuses on innovation, from the latest camera technology to
privacy-focused features.
● Promotion involves high-profile product launches and social media campaigns, where
Apple showcases new features to build excitement.
● Pricing positions iPhones as premium products, yet Apple also offers trade-in programs
to make upgrades more affordable.

Market Segmentation, Targeting & Positioning (STP)

The STP process—Segmentation, Targeting, and Positioning—helps companies create tailored
marketing strategies to serve specific customer groups effectively. By breaking down a diverse
market into smaller, more manageable segments, businesses can understand their audience
better, focus on the most promising groups, and position their offerings effectively.

Levels/Bases for Segmenting Markets

To effectively divide the market, businesses use various segmentation bases. These are criteria
used to create customer groups with shared characteristics, making them more receptive to
tailored marketing efforts.

1. Geographic Segmentation: Divides the market based on location—such as countries,

regions, cities, or neighborhoods. Example: Clothing brands often adapt collections
based on climate differences, offering warmer clothing in colder regions.

2. Demographic Segmentation: Uses variables such as age, gender, income, education,

occupation, and family size.

● Age and Life-Cycle Stage: Brands often create products based on age group,
like baby products for infants, or smartphones for Gen Z.
● Gender: Some products, like fragrances, are marketed specifically for men or
women.
● Income: Car manufacturers often have different models targeting various income
brackets, from budget to luxury vehicles.
● Education & Occupation: Publishing companies may produce educational
content for students and professionals separately.

3. Psychographic Segmentation: Divides the market based on lifestyle, personality traits,

social class, and values.

● Lifestyle: Fitness brands like Nike target an active, health-conscious audience

by focusing on promoting an active lifestyle.
● Personality: Some brands target customers based on personality traits; for
example, Jeep targets adventure-seekers who value ruggedness and durability.
 ● Social Class: Luxury brands like Gucci and Rolex cater to consumers who
identify with a higher social status.

4. Behavioral Segmentation: Groups customers based on their behavior, knowledge, and

attitude toward products.

● Occasion-Based: Companies may create campaigns for specific events, such

as holidays or special occasions. For instance, Hallmark targets holidays with
customized greeting cards.
● Benefit-Based: Segmenting based on the specific benefits consumers seek,
such as anti-aging properties in skincare products or fuel efficiency in cars.
● Usage Rate: Dividing customers into groups of heavy, medium, and light users.
Fast-food chains like McDonald’s offer loyalty rewards to frequent customers.
● Loyalty Status: Brands identify and cater to loyal customers through rewards or
exclusive offers. For instance, Starbucks offers exclusive benefits to loyal
customers through its loyalty program.

5. Firmographic Segmentation (B2B Markets): This segmentation is used in

business-to-business (B2B) marketing, dividing companies based on factors like
industry, company size, and location.

● Industry: Software companies offer different solutions for healthcare, finance,

and education sectors, catering to each industry’s specific needs.
● Company Size: Small businesses may need more affordable software
packages, while larger firms might need comprehensive enterprise solutions.
● Location: Some B2B firms may focus on providing localized solutions to
companies operating in specific regions.

Targeting

Once a business has identified potential market segments, it evaluates each segment to
determine its attractiveness and selects one or more segments to target.
 1. Evaluating Market Segments: A company considers the segment’s size, growth
potential, competition, and alignment with its objectives.

Targeting Strategies Examples

Mass Marketing: Also called undifferentiated Coca-Cola initially used mass marketing to
marketing, mass marketing ignores market sell its flagship drink to a broad audience.
segment differences and targets the entire They focused on appealing to as many
market with one offering. people as possible without significant
variation in the product.

Segment Marketing: The market is divided In the smartphone industry, companies like
into segments, and each segment is targeted Samsung offer different models targeting
with a specific marketing mix. Also called specific customer groups (e.g., Galaxy A
differentiated marketing. series for budget-conscious consumers and
Galaxy S series for high-end users).

Niche Marketing: This focuses on smaller, Tesla initially targeted a niche market of
more specialized market segments. Niche environmentally conscious luxury buyers
marketing involves targeting a narrow group before expanding to a wider audience.
of customers who have distinct needs. Also
called concentrated marketing.

Micromarketing: Involves tailoring products McDonald's offers unique menu items in

and marketing programs to suit the tastes of different countries to reflect local tastes, like
specific individuals or locations. Under Local the McAloo Tikki in India.
Marketing, companies customize offerings for
specific cities or regions.

Individual Marketing (One-to-One Amazon’s personalized product

Marketing): Tailors products and messages recommendations are a form of individual
to individual customers. marketing, showing each customer
recommendations based on their purchase
history.

Positioning

Positioning is the process of establishing a brand or product’s identity within the minds of the
target market, relative to competitors.

1. Developing a Positioning Strategy: A company identifies what sets it apart from

competitors and creates a value proposition to communicate that uniqueness. Example:
Volvo positions itself as a safe and reliable car brand, differentiating itself from
competitors by emphasizing safety features.
 2. Positioning Statements: A positioning statement is a concise description of the target
market, the brand’s unique value, and how it differs from competitors.
Example Positioning Statement: "For busy professionals who need reliable and fast
coffee on the go, Starbucks offers quality coffee with a variety of customizations and
rewards, unlike generic coffee shops."

3. Positioning Map: A positioning map visually displays consumer perceptions of

competing products on two dimensions, such as price vs. quality. Brands use these
maps to see how they’re positioned relative to competitors and identify potential gaps in
the market.

Real-life Example: The SUV Market

Let’s say an automaker is introducing a new SUV and wants to use the STP approach.

Segmentation Targeting Positioning

The automaker could use After evaluating, the company The automaker positions the
demographic segmentation might use differentiated luxury model as a premium,
by targeting families (age marketing by developing family-friendly SUV focused
group: 30-50) needing more different SUV models: a on comfort, while the
space. luxury version for affluent affordable model is
families and an affordable positioned as reliable and
Behavioral segmentation can version for budget-conscious value-driven. Through clear
also be applied by targeting families. messaging, it communicates
customers who value safety the unique benefits of each
features, such as parents or model to its respective target
adventure-seekers needing segments.
all-terrain capabilities.

Consumer and Business Markets

Understanding the differences between consumer and business markets is crucial, as each type
has unique characteristics, decision-making processes, and needs.

Consumer Markets Business Markets

Definition: Consumer markets consist of Definition: Business markets involve

individuals or households purchasing organizations purchasing goods or services
 products and services for personal use, to use in operations, incorporate into other
enjoyment, or consumption. products, or resell.

Characteristics: Characteristics:

● Individual Buying: Buying decisions ● Complex Buying Process: Business

are often influenced by personal purchases often involve multiple
tastes, emotions, lifestyle, and cultural decision-makers (e.g., purchasing
factors. manager, finance team) and detailed
evaluation criteria such as
● Varied Needs and Preferences: cost-effectiveness, supplier reliability,
Each consumer has unique needs, so and long-term partnerships.
products often target specific groups
based on factors like age, income, or ● Larger Quantities: Businesses buy in
interests. bulk to meet operational needs, such
as raw materials or equipment for
● Shorter Purchase Cycles: manufacturing.
Consumer purchases are typically
made more frequently and involve ● More Rational Buying: Decisions are
smaller quantities. typically based on objective factors
like ROI, product specifications, and
performance.

Example: A young professional buys a Example: A technology company buying

smartphone primarily for personal use, driven hundreds of computers for employee use,
by features like camera quality, brand where decision-makers focus on factors like
reputation, and design. performance, technical support, and warranty.

Developing and Communicating a Positioning Strategy (Deeper Dive)

Positioning is how a brand wants to be perceived in the minds of its target audience, relative to
competitors. Effective positioning can establish a clear, unique, and favorable place in the
market.

Developing a Positioning Strategy

● Identify Differentiators: Determine what makes the product or brand unique compared
to competitors. This could be based on product attributes, pricing, or target benefits.
Example: Tesla’s differentiator is its electric vehicle innovation, offering environmental
benefits and advanced technology.

● Create a Unique Value Proposition (UVP): A UVP clearly states the primary benefits of
the product and why it’s better suited to the target audience than competing products.
 Example: “Tesla—Drive the future with a sustainable, high-performance electric vehicle
that’s fun to drive.”

● Define Positioning Statement: The positioning statement includes the target audience,
the product’s main category, key benefits, and a differentiating factor. Example: "For
environmentally conscious professionals, Tesla is the electric vehicle that combines
sustainability with cutting-edge technology, unlike conventional gasoline cars."

Positioning Approaches

1. Product Attributes: Emphasizes specific features, like safety, durability, or battery life.
Example: Volvo emphasizes safety, aiming to attract families and safety-conscious
buyers.

2. Price/Quality: Positions the brand based on price level or quality, appealing to

budget-conscious or luxury-seeking customers. Example: Rolex focuses on high quality,
aligning with a luxury price point.

3. Application/Use Case: Focuses on specific scenarios in which the product excels,

making it relevant to customers with that need. Example: Gatorade positions itself as a
drink for athletes needing hydration during intense physical activity.

4. Competitor-Based: Positions the brand by differentiating it directly from competitors.

Example: Pepsi often contrasts itself with Coca-Cola, especially in taste tests and flavor
campaigns.

Communicating the Positioning

● Messaging Consistency: Use a unified message across all marketing channels to

reinforce the positioning. Example: Apple consistently promotes its products as premium
and user-friendly, evident in its minimalist design and high-quality advertising.

● Customer Touch Points: Reinforce the positioning through every customer interaction,
from website design and customer service to product packaging and advertisements.
 Example: Starbucks consistently communicates a high-quality coffee experience,
reflected in its store ambiance, barista service, and personalized drink options.

● Positioning Map: A positioning map visually represents where a product stands relative
to competitors on specific attributes, like price and quality. It helps identify market gaps
or assess alignment with target customers’ perceptions.

Example: In a positioning map of the car industry, brands like Mercedes and BMW might
be in the high-quality, high-price quadrant, while Toyota might be positioned in the
high-quality, moderate-price quadrant.

Factors Influencing Consumer Behavior

Understanding consumer behavior is essential for creating effective marketing strategies. The
factors influencing consumer behavior can be categorized into four main types:

1. Cultural Factors:

● Culture: The set of values, beliefs, and customs that shapes a person’s
preferences and behavior. Cultural factors strongly influence what people buy,
especially in different regions or countries.
● Subculture: Smaller groups within a culture, such as religious groups,
ethnicities, and geographic regions. For instance, in the U.S., consumers from
different ethnic backgrounds might prefer specific foods or fashion styles.
● Social Class: People’s social status, often influenced by income, education, and
occupation, can affect purchasing power and preferences. Luxury brands, for
example, often appeal to higher-income consumers.

2. Social Factors:

● Reference Groups: Groups like family, friends, and social networks influence
individuals by setting trends or endorsing products.
● Family: Family members have a strong influence on buying decisions, especially
for products used by the whole household, like groceries or furniture.
 ● Roles and Status: A person’s role and position in society (e.g., student, parent,
manager) influence buying decisions. For example, a professional may invest in
high-quality business attire to reflect their status.

3. Personal Factors:

● Age and Life Cycle: People’s needs and spending habits vary across life
stages, from students and young professionals to families and retirees.
● Occupation: A person’s profession often determines what they need and can
afford, influencing their buying behavior.
● Lifestyle: A person’s way of living, shaped by their interests, activities, and
opinions, guides their buying choices. For instance, a fitness-focused lifestyle
may lead to buying healthy foods and workout equipment.
● Personality and Self-Concept: People buy products that match their
personalities or reflect their self-image. A creative person might prefer unique or
trendy clothing.

4. Psychological Factors:

● Motivation: The internal drive that compels someone to fulfill a need, based on
models like Maslow’s hierarchy of needs.
● Perception: How consumers interpret information can affect how they view a
product, especially through selective attention, distortion, and retention.
● Learning: Experience with products influences future buying decisions. Positive
or negative experiences can shape brand loyalty.
● Beliefs and Attitudes: People develop beliefs and attitudes over time, which can
influence their responses to products or brands.

Buying Decision Process

Step 1 Need Recognition: The Example: A person notices

process begins when a their phone is outdated,
consumer recognizes a need prompting a desire to buy a
or problem that requires a new one.
solution. This need may arise
 from internal stimuli (hunger,
thirst) or external stimuli
(advertisements, social
influence).

Step 2 Information Search: The Example: The person

consumer gathers information researches the latest
about potential products or smartphone models,
services that can fulfill their comparing features and
need. This can be an internal prices.
search (recalling previous
experiences) or external
(researching online, asking
friends).

Step 3 Evaluation of Alternatives: Example: After comparing

Consumers compare the features, the person narrows
available options based on down their choices to two or
criteria like price, quality, three smartphones.
features, and brand
reputation. Each person has
their own way of weighing
these factors.

Step 4 Purchase Decision: The Example: The person

consumer selects a product decides to purchase a
and decides where to buy it. specific smartphone model
Factors like timing, discounts, from an online retailer that
and stock availability can offers a discount.
influence the final decision.

Step 5 Post-Purchase Behavior: Example: If the smartphone

After making a purchase, the meets the person’s
consumer evaluates their expectations, they are likely
satisfaction. A positive to stay loyal to the brand in
experience can lead to brand the future.
loyalty, while dissatisfaction
may result in returns or
complaints.

Theories of Consumer Decision Making

1. Economic Man Theory: Assumes consumers are rational decision-makers who seek to
maximize their satisfaction with each purchase. They carefully weigh costs and benefits,
aiming for the most economical choice.
 Limitations: This theory often doesn’t hold up in real-world scenarios, as people are
influenced by emotions, social factors, and impulsive behaviors.

2. Psychodynamic Theory: Developed by Sigmund Freud, this theory suggests that

unconscious psychological forces (such as inner desires and fears) significantly affect
decision-making. This theory emphasizes the role of subconscious motivations in
consumer choices.

Example: A person may purchase luxury goods driven by a subconscious desire for
status, even if it strains their budget.

3. Cognitive Theory: This theory views consumers as problem-solvers who actively seek
information and evaluate it logically before making decisions. It involves mental
processes, such as perception, memory, and reasoning.

Example: A consumer researching various car models, reading reviews, and analyzing
technical specifications before buying reflects cognitive decision-making.

4. Learning Theory: This theory explains that consumer behavior is shaped by prior
experiences. Consumers learn from past purchases, especially through reinforcement
(satisfaction) or punishment (dissatisfaction), which influences future choices.

Example: If a consumer had a positive experience with a certain skincare brand, they
are more likely to repurchase products from that brand.

5. Socio-Cultural Theory: This theory emphasizes the influence of societal and cultural
factors, suggesting that decisions are shaped by social norms, cultural background, and
group affiliations.

Example: A consumer may choose organic products due to cultural values of health and
sustainability promoted within their community.

4 Types of Consumer Behavior

1. Complex Buying Behavior: This type of behavior occurs when consumers are highly
involved in the purchase decision, often due to significant differences among brands and
high perceived risk. The product is typically expensive, infrequently purchased, and
carries a lot of social or personal significance.

Characteristics

● High involvement and extensive information search.

● Consumers evaluate various alternatives before making a decision.
● Often involves considerable emotional investment.

Example: Purchasing a car. Consumers research multiple brands, compare features,

read reviews, take test drives, and consider factors like financing options, safety ratings,
and fuel efficiency before making a final decision.

2. Dissonance-Reducing Buying Behavior: Dissonance-reducing buying behavior occurs

when consumers are highly involved in a purchase but see little difference between
brands. The decision can lead to post-purchase dissonance (regret) if the consumer is
not satisfied with the choice made.

Characteristics

● High involvement due to perceived risk but low differentiation among alternatives.
● Consumers may experience buyer's remorse after the purchase.
 Example: Buying a washing machine. Consumers may be overwhelmed by choices, but
once they select a model, they may question if they made the right decision, especially
regarding price and features compared to other models.

3. Habitual Buying Behavior: Habitual buying behavior is characterized by low consumer

involvement and low differentiation among brands. Consumers often make habitual
purchases without much thought or evaluation because the products are frequently
bought and perceived as low-risk.

Characteristics

● Low involvement and minimal information search.

● Purchases are often based on habit rather than brand loyalty.

Example: Purchasing household items like toothpaste or detergent. Consumers may

choose the same brand they have always used without considering alternatives, as
these products are low-cost and frequently purchased.

4. Variety-Seeking Buying Behavior: Variety-seeking behavior occurs when consumers

have low involvement in a purchase but seek to try new products or brands for the sake
of variety, even if they are satisfied with their current choice.

Characteristics

● Low involvement but high interest in exploring new options.

● Consumers switch brands frequently to experience something different.

Example: Snack foods or beverages. A consumer who regularly buys a particular brand
of chips may choose a different flavor or brand on occasion to satisfy a desire for variety,
even if they are satisfied with their usual choice.

For Decision Sheet

Concepts Probable Criteria Possible Decision

Alternatives
- Implementing Behavioural 1. Greater Positive 1. Implementing Incentives
change Behavioral Shift for Eco-Friendly Purchases
- Leveraging sustainable
marketing 2. Enhanced Sustainability 2. Launching Awareness
Levels Campaigns on Sustainability

3. Increased Consumer 3. Establishing Partnerships

Engagement with Sustainable Brands

4. Improved Transparency in 4. Creating Interactive Digital

Messaging Experiences for Engagement

5. Stronger Measurable 5. Organizing

Outcomes Community-Based
Sustainability Initiatives

- Market Segments 1. Expanded Potential in 1. Targeting Emerging Market

- Segment Profitability Market Segments Segments
- Target Marketing
2. Boosted Profitability of 2. Implementing Tiered
Target Segments Pricing Strategies for
Profitability
3. Stronger Alignment with
Brand Goals 3. Developing Tailored
Marketing Campaigns for
4. Optimized Fit with Specific Segments
Customer Needs
4. Conducting In-Depth
5. Enhanced Competitive Customer Insights Research
Differentiation
5. Enhancing Product
Offerings Based on Segment
Needs

- Importance of Segmentation 1. Clearer Segmentation and 1. Developing

and Positioning Positioning Strategies Comprehensive
- Consumer Psychology and Segmentation Models
Personality 2. Richer Insights into
- Value creation for market Consumer Psychology 2. Conducting Behavioral and
segments Psychographic Consumer
3. Enhanced Value Offerings Research
for Target Segments
3. Creating Customized Value
4. Deeper Emotional Propositions for Each
Connection with Consumers Segment

5. More Distinct Competitive 4. Implementing Emotional

Positioning Branding Strategies

5. Refining Competitive
 Positioning Tactics in
Marketing

- Consumer behaviour 1. Alignment with Emerging 1. Leveraging Data Analytics

- Changing consumer Consumer Trends for Consumer Insights
landscape
2. Flexibility in Adapting to 2. Implementing Agile
Consumer Preferences Marketing Strategies

3. Effectiveness in Boosting 3. Enhancing Personalization

Consumer Engagement in Customer Interactions

4. Utilization of Consumer 4. Adopting Omnichannel

Research Insights Engagement Approaches

5. Capacity to Build 5. Creating

Long-Term Consumer Loyalty Community-Centric Marketing
Initiatives