70  Marketing: Concept and approaches; Marketing channels; Marketing mix; Strategic marketing planning; Market segmentation, targeting and positioning

70.1 Concept of Marketing

Marketing is “the activity, set of institutions and processes for creating, communicating, delivering and exchanging offerings that have value for customers, clients, partners, and society at large” (AMA 2017). Philip Kotler defines it as “the science and art of exploring, creating, and delivering value to satisfy the needs of a target market at a profit”. The core idea: needs → wants → demand; matched by product/offering → value → exchange → relationship.

70.2 Evolution — Approaches to Marketing

TipFive Marketing Orientations (Kotler)
Orientation Era Core idea
Production up to 1920s Make more, cheaper; “Any colour as long as it is black” — Ford
Product 1920s-30s Focus on quality and features
Selling 1930s-50s Aggressive selling and promotion to push surplus
Marketing 1950s-90s Customer needs first; integrated marketing
Holistic / Societal 2000s onwards Internal, relationship, integrated, social-welfare

70.2.1 Holistic Marketing — Four Components

Kotler & Keller (2006) — holistic marketing has four dimensions: Relationship marketing, Integrated marketing, Internal marketing, Social responsibility (Performance) marketing.

70.3 Marketing Mix

The Marketing Mix is the set of controllable, tactical tools a firm uses to elicit the desired response from the target market.

70.3.1 4 Ps — McCarthy (1960)

Tip4 Ps of Marketing
  • Product — variety, quality, design, features, brand, packaging, services.
  • Price — list price, discounts, allowances, credit terms.
  • Place — channels, coverage, locations, inventory, transport.
  • Promotion — advertising, sales promotion, PR, personal selling, direct marketing.

70.3.2 Expanded 7 Ps — Booms & Bitner (1981, for services)

Adds: People, Process, Physical evidence.

70.3.3 4 Cs — Robert Lauterborn (1990, customer-side translation)

Customer solution, Cost to customer, Convenience, Communication.

70.3.4 Other extensions

8 Ps (Productivity & quality), 10 Ps (Personalisation, Performance), Digital marketing 5 Ds (Devices, platforms, media, data, technology).

70.4 Marketing Channels

A marketing channel is a set of interdependent organisations engaged in making a product or service available for use or consumption. Two key concerns:

TipChannel Levels
  • Zero-level (D2C) — manufacturer → consumer.
  • One-level — manufacturer → retailer → consumer.
  • Two-level — manufacturer → wholesaler → retailer → consumer.
  • Three-level — manufacturer → agent → wholesaler → retailer → consumer.

70.4.1 Channel Functions (Stern & El-Ansary)

TipChannel Functions
  • Information gathering (research).
  • Promotion.
  • Contact — finding prospects.
  • Matching — assortment.
  • Negotiation — price, terms.
  • Physical distribution — transport, storage.
  • Financing — credit, working capital.
  • Risk taking.
  • Ownership transfer.

70.4.2 Channel Designs

TipDistribution Intensity
  • Intensive — Coke, soaps, FMCG.
  • Selective — premium electronics, cars.
  • Exclusive — luxury, dealerships.

70.4.3 Channel Conflicts

  • Horizontal — among same-level members.
  • Vertical — across levels (manufacturer vs retailer).
  • Multichannel — between online & offline.
  • Resolution: superordinate goals, exchanging persons, co-optation, diplomacy, arbitration.

70.5 Strategic Marketing Planning

70.5.1 The Plan Hierarchy

TipLevels of Marketing Plan
  • Corporate-level — mission, SBUs, resource allocation.
  • Business / SBU level — strategic positioning, BCG/GE matrix.
  • Functional / Product-level — marketing mix tactics.
  • Annual — marketing plan for the year.
  • Long-range plan — 3-5 years.

70.5.2 Strategic Planning Process

Mission → External & Internal analysis (SWOT, PESTEL) → Objectives & Goals → Strategy formulation (Porter’s generic, Ansoff matrix, BCG, GE matrix) → Implementation → Evaluation & Control.

70.5.3 Key Strategic Frameworks

TipMarketing Strategy Frameworks
  • BCG Growth-Share Matrix — Stars, Cash Cows, Question marks, Dogs.
  • GE / McKinsey Multifactor Matrix — 3×3 (market attractiveness × business strength).
  • Ansoff Matrix — Market Penetration, Market Development, Product Development, Diversification.
  • Porter’s Generic — Cost leadership, Differentiation, Focus.
  • Porter’s Five Forces — competitor analysis.
  • Porter’s Value Chain.

70.6 Segmentation, Targeting, Positioning (STP)

The STP framework, popularised by Kotler, is the spine of modern marketing:

70.6.1 Segmentation

Market segmentation is dividing a market into groups of buyers with distinct needs, characteristics, or behaviours who might require separate products or marketing programmes.

TipSegmentation Bases
  • Geographic — region, climate, urban-rural.
  • Demographic — age, gender, income, family, occupation, religion.
  • Psychographic — lifestyle, personality, values (VALS, AIO).
  • Behavioural — usage rate, loyalty, benefits sought, occasion.

70.6.2 Requirements of Effective Segmentation — MADRA

Measurable, Accessible, Differentiable, Responsive, Actionable (Kotler also calls these “Measurable, Substantial, Accessible, Differentiable, Actionable”).

70.6.3 Targeting Strategies

TipTarget Market Coverage
  • Undifferentiated (mass) — one offering for all.
  • Differentiated — separate offerings per segment.
  • Concentrated (niche) — focus on one segment.
  • Micro-marketing / 1-to-1 — local / individual.

70.6.4 Positioning

Positioning is the act of designing the company’s offering and image to occupy a distinctive place in the minds of the target market (Kotler). Tools: perceptual map, points of parity & differentiation, value proposition, positioning statement.

TipPositioning Strategies
  • Attribute — feature-based (“Lightest laptop”).
  • Benefit — benefit-led (“Cleans 100 stains”).
  • Use / application — best for X use case.
  • User — for a specific user.
  • Competitor — vis-à-vis rivals (“Avis: we try harder, #2”).
  • Quality / price — premium or value.
  • Cultural symbol — Marlboro cowboy.

flowchart TB
  M[Marketing Management] --> O[Orientations<br/>Production → Holistic]
  M --> Mix[Mix<br/>4P · 7P · 4C]
  M --> Ch[Channels<br/>0-3 levels]
  M --> Pl[Planning<br/>SWOT · BCG · Ansoff · Porter]
  M --> S[STP<br/>Segment · Target · Position]
    classDef default fill:#003366,color:#ffffff,stroke:#ffcc00,stroke-width:3px,rx:10px,ry:10px;

NoteDistractor warning

PYQ trap: 4 Ps — McCarthy 1960 (not Kotler); 7 Ps — Booms & Bitner 1981; 4 Cs — Lauterborn 1990. STP sequence: Segmentation → Targeting → Positioning. BCG uses growth and relative market share.

70.7 Practice Questions

Q 014 PsEasy

The 4 Ps of marketing were proposed by:

  • APhilip Kotler
  • BE. Jerome McCarthy (1960)
  • CTheodore Levitt
  • DBooms & Bitner
View solution
Correct Option: B
**McCarthy 1960** — Basic Marketing: A Managerial Approach.
Q 027 PsMedium

The extra 3 Ps in services marketing (over 4 Ps) are:

  • APeople, Process, Physical evidence
  • BPackaging, People, Promotion
  • CPower, Process, Place
  • DProductivity, People, Personalisation
View solution
Correct Option: A
**Booms & Bitner 1981**.
Q 034 CsMedium

The 4 Cs were proposed by:

  • ALauterborn (1990)
  • BMcCarthy
  • CKotler
  • DDrucker
View solution
Correct Option: A
**Robert Lauterborn 1990** — Customer solution, Cost, Convenience, Communication.
Q 04STPEasy

The correct STP sequence is:

  • ATargeting → Segmentation → Positioning
  • BSegmentation → Targeting → Positioning
  • CPositioning → Targeting → Segmentation
  • DSegmentation → Positioning → Targeting
View solution
Correct Option: B
**STP** in that order.
Q 05BCGMedium

BCG matrix axes are:

  • AIndustry attractiveness × Business strength
  • BMarket growth rate × Relative market share
  • CPrice × Quality
  • DCost × Differentiation
View solution
Correct Option: B
**BCG** uses market growth (Y) and relative market share (X).
Q 06AnsoffMedium

"New product to existing market" in Ansoff matrix is:

  • AMarket penetration
  • BMarket development
  • CProduct development
  • DDiversification
View solution
Correct Option: C
**Product development** — new product, existing market.
Q 07PorterMedium

Porter's generic strategies do NOT include:

  • ACost leadership
  • BDifferentiation
  • CFocus
  • DDiversification
View solution
Correct Option: D
Diversification is from Ansoff. Porter — **Cost / Differentiation / Focus**.
Q 08ChannelEasy

Manufacturer → Consumer is which level of channel?

  • AZero level
  • BOne level
  • CTwo level
  • DThree level
View solution
Correct Option: A
**Zero-level / D2C**.
Q 09MarketingMedium

Who defined marketing as "delivering value to satisfy needs of a target market at a profit"?

  • AMcCarthy
  • BKotler
  • CDrucker
  • DLevitt
View solution
Correct Option: B
**Kotler**.
Q 10HolisticHard

Holistic marketing has how many components?

  • A2
  • B3
  • C4
  • D5
View solution
Correct Option: C
**4** — Relationship, Integrated, Internal, Performance (Social).
Q 11SegmentationMedium

VALS framework is a tool for:

  • ADemographic segmentation
  • BPsychographic segmentation
  • CGeographic segmentation
  • DBehavioural segmentation
View solution
Correct Option: B
**VALS** — Values and Lifestyles (psychographic).
Q 12PositioningMedium

"Avis — we try harder, we're #2" is example of:

  • AAttribute positioning
  • BCompetitor positioning
  • CBenefit positioning
  • DCultural positioning
View solution
Correct Option: B
**Competitor positioning** vis-à-vis market leader.
Q 13NicheMedium

Focusing on one segment in depth is called:

  • AUndifferentiated
  • BDifferentiated
  • CConcentrated / niche
  • DMass
View solution
Correct Option: C
**Concentrated / niche** — one segment.
Q 14ConflictHard

Conflict among retailers in the same area is:

  • AVertical conflict
  • BHorizontal conflict
  • CMultichannel conflict
  • DDiagonal conflict
View solution
Correct Option: B
**Horizontal** — same-level members.
Q 15IntensityMedium

Coca-Cola uses which distribution intensity?

  • AIntensive
  • BSelective
  • CExclusive
  • DDirect only
View solution
Correct Option: A
**Intensive** — maximum reach for FMCG.
Q 16SWOTEasy

SWOT analysis covers:

  • ASales, Wages, Operations, Trade
  • BStrengths, Weaknesses, Opportunities, Threats
  • CStrategy, Will, Output, Threats
  • DStrategy, Workforce, Operations, Technology
View solution
Correct Option: B
Strengths-Weaknesses are internal; Opportunities-Threats are external.
Q 17StarMedium

In BCG, "Star" has:

  • AHigh growth, low share
  • BHigh growth, high share
  • CLow growth, high share
  • DLow growth, low share
View solution
Correct Option: B
**Stars** = high growth + high share.
Q 18OrientMedium

"Make more, sell cheaper" reflects which orientation?

  • AProduction
  • BProduct
  • CMarketing
  • DSocietal
View solution
Correct Option: A
**Production orientation** (Ford era).
Q 19Niche authorHard

"Marketing myopia" was coined by:

  • AKotler
  • BTheodore Levitt (1960)
  • CMcCarthy
  • DDrucker
View solution
Correct Option: B
**Levitt 1960 — HBR article**.
Q 20MatchMedium

Match framework with author:

Framework Author
(i) 4 Ps (a) Booms & Bitner
(ii) 7 Ps (b) Lauterborn
(iii) 4 Cs (c) McCarthy
(iv) Five Forces (d) Porter
  • A(i)-(c), (ii)-(a), (iii)-(b), (iv)-(d)
  • B(i)-(a), (ii)-(b), (iii)-(c), (iv)-(d)
  • C(i)-(b), (ii)-(d), (iii)-(c), (iv)-(a)
  • D(i)-(d), (ii)-(c), (iii)-(b), (iv)-(a)
View solution
Correct Option: A
4P-McCarthy; 7P-Booms&Bitner; 4C-Lauterborn; 5F-Porter.

70.8 Quick Recall

ImportantQuick recall
  • Definitions: Marketing — AMA (2017); Kotler — “deliver value at profit”.
  • Orientations: Production → Product → Selling → Marketing → Holistic (Kotler 4 components).
  • Mix: 4 Ps McCarthy 1960; 7 Ps Booms & Bitner 1981; 4 Cs Lauterborn 1990.
  • Channels: Zero (D2C) → Three-level; conflicts (horizontal/vertical/multichannel); intensive/selective/exclusive.
  • Planning: Mission → SWOT/PESTEL → BCG / GE / Ansoff / Porter → Implement → Control.
  • STP: Segmentation (geo/demo/psycho/behave; MADRA criteria) → Targeting (undiff/diff/niche/micro) → Positioning (attribute/benefit/user/competitor/quality).
  • Classics: Levitt 1960 “Marketing Myopia”; Drucker — “purpose of business is to create a customer”.