What Is Digital Marketing? How It Is Different From Traditional Marketing?

Introduction to Digital Marketing

What is digital marketing? Now, digital marketing is all marketing that is done over the digital platform or digital media.

What are the things that marketers can possibly do over a digital platform?

Digital Marketing

They can use digital media for the creation of products and services.

There are a lot of companies that gather ideas from customers over social media platforms.

There are a lot of companies that engage in a specific activity called co-creation or co-production where the customers actively participate and get involved in the creation of products and services.

Digital Media and digital platforms can also be used for communication and for the promotion of the products.

We also know that there is a lot of social media promotion that happens. Many times companies have a lot of sales and a lot of promotional activities that they do.

For example, there are e-commerce companies in India which basically have huge sales around the festival seasons.

So you can use digital platforms to communicate about products, about services, about specific events that you're doing, about different people who are involved in the company's ecosystem.

It can also be used to manage a lot of your reputation in the marketplace. For example, there are companies that often have to encounter a lot of negative news in the market place. So how is that you can reach out to customers very effectively and make sure that all of this negative news can be neutralized? For communication and promotion, digital technologies can be used.

Of course, another important element of using digital marketing is for the selling or delivery of products and services to customers. E-commerce is a very brilliant example here. You have a lot of companies that have created their businesses and their business models in the e-commerce space.

Companies like Amazon, companies like Flipkart are engaged in creating a marketplace for customers to come and purchase your products. So delivery and selling of products and services to customers is also something that is done through the digital platform.

There is a lot of data that you can collect from digital media. You had a lot of problems collecting authentic data from customers earlier. You had a problem wherein you had to go to customers with a survey or a questionnaire and ask for their feedback about a lot of things.

But as of today with the help of digital marketing techniques, it has become very easy for you to collect all of this data because this data is available to you in real-time.

You can listen to what the customer is saying, you can also understand what the customer is saying. One example is a lot of customers today use your products and give feedback, give reviews about your products on online platforms.

Say for example, when you go to Amazon, you see there are star ratings and there are review comments that customers have provided. Now all of these review comments are rich information about what your product is and what customers feel about your product.

Many times companies use all of this to understand what improvements can be made on this product.

So unlike the case where you had to go to the customer to understand what the customer felt about the product, in today's day, because of digital marketing tools and techniques, it is very easy for you to listen to and understand the customers.

A lot of this can be used to improve the products and services. In a lot of cases when you have to come out with new products, such information becomes very important.

There are also a lot of techniques that are used to manage relationships with customers. You would have heard about this term called customer relationship management, wherein you are trying to have a relationship with the customer that is beyond the normal selling and buying cycle, wherein you're trying to keep reminding the customer about a lot of benefits that you're doing, wherein a lot of loyalty programs are done by companies.

In the digital space, all of this becomes very easy. Say for example, when we use emails to remind customers about their consumption patterns, to give them some loyalty benefits and all of this is communicated either through emails or through social media or through mobile platforms. All of this is because digital marketing is the enabler here.

It also helps you to understand what the competition is doing. Nowadays, it has become a very open world. We all understand what everybody else in the world is doing.

Hence it has become very important and very easy for us to understand what the competition is doing.

Philip Kotler Definition of Digital Marketing

Philip Kotler has also given a definition of what digital marketing is. He defines digital marketing as a form of direct marketing, which links consumers with sellers electronically using interactive technologies like emails, online forums, and newsgroups, interactive television, mobile platforms, social media, etc.

So in this definition, basically he captures everything that I have been talking to you about: use of electronic platforms, use of electronic media, and how customers can be made aware of your products, how products can be delivered to these customers, how you can understand what the customer is feeling about your products, and on top of all of that, how you can create new products and strategize your way to success.

Salient Features of digital marketing and how it is different from traditional marketing?

digital marketing ecosystem

Now there are certain salient features of digital marketing and how it is different from what traditional marketing was.

For example, when we think about traditional marketing and the way in which traditional marketing used to operate, we always used to think that the marketer knows everything.

The marketer or the company that is manufacturing the product has all understanding of what the customer wants, what the customer feels, and the only activity that you're involved in was to communicate it to the customer.

Today with the emergence of digital platforms, it has become much more interactive in nature.

The communication is no longer one way from the marketer to the customer, but it is a two-way interaction now. The marketer can, of course, reach out to the customer while the customer can also come back to the marketer, give the marketer feedback about the product, ask questions to the marketer, etc.

Remember the case of television advertising. It is a one-way platform. You can only communicate with the customer through the television platform.

You cannot hear back what the customer is feeling. In many cases, companies don't necessarily know what the customer is feeling.

In digital media, it is very easy for you to communicate both ways, so that is why two-way communication is very effective.

It is also important to understand that apart from the marketer and the customer communicating with one another, there is also many-way communication that is going on.

Think of the case of social media. You use a product, you like the product, you might go and talk about that as a status update on Facebook, you might go and tweet about the product, you might take a picture of yourself in a very fancy location using the product and put it on Instagram.

Now the communication has become many-way rather than the marketer and the customer talking to one another. You have many customers who are interacting with your product easier and in much more accessible platforms without spending any money.

Segmentation and targeting have become much effective now. You might recall we had discussed segmentation and targeting in one of the previous articles.

Segmentation was how you broke down the heterogeneous market into homogeneous groups so that you can target one or a few of these groups very effectively.

Now with digital platforms, you can do segmentation and you can do targeting much effectively because segmentation and targeting require data and understanding of the customer which the digital platform provides to you.

If you remember your YouTube consumption, when you go to YouTube from one browser on your computer, you might see a set of videos, a set of recommendations that are provided specifically to you. No other customers in the world might have the same usage pattern, same videos and the same channels that they're watching.

So now it is possible for us to market individually to each customer and provide options and services and products for the requirements of specific customers at an individual level, which was not very easy and not very effective in the earlier days of traditional marketing.

As I mentioned already, it is easy to measure and also every company has an equal opportunity in the digital space because earlier if you're talking about television advertising, it is expensive, it is only accessible to companies who have a big budget.

Today when you're talking about social media platforms and reaching out to customers on such platforms, it has become easy for most companies to operate in this place. So the opportunity has become very easy.

You might also remember there are generally two types of techniques that marketers use. One is called push marketing and the other is called pull marketing.

Push Marketing

Push marketing is where you use a lot of trade promotions, a lot of incentives to trade partners specifically to retailers and wholesalers who are now going to push your product to the market.

Say for example, if you go to a Kirana store near to your house and you are trying to buy a product, but you don't know which product to buy, you might ask the retailer, the owner of the Kirana store as to which product should I buy?

The Kirana store owner in most cases is going to recommend the product which gives him the highest margins. So if I sell a product for 10 rupees, I get two rupees on this product v/s three rupees on the other product, I will always recommend the three rupee product because that is what gives me a higher margin.

So this kind of incentivization on the trading platform or to trade partners and thereby making sure that the product is available in the market and bought by customers are generally known as push technique.

Read more - Five stage process that consumers use to make a purchase decision

Pull Marketing

On the other hand, there are techniques where you provide a lot of advertising, a lot of information to customers, and all of this information is used by customers to now go to the retail space and collect your product or for demanding your product. That is what a lot of other companies do. These kinds of techniques which basically make the customer pull your product is known as pull marketing.

Now, digital platforms help you do both of these things simultaneously.

Say for example, if I use display advertising, if I use email campaigns, if I use any kind of technique whereby I'm pushing my product to the customer, it helps me to push marketing.

At the same time if I know of customers who are interested in certain products who might be willing to search for this product on a search engine, they might see my advertisement and buy this product, so pull also is possible.

So both push, as well as pull marketing, can be done very easily. You get real-time feedback from customers and feedback on your campaigns.

Earlier in traditional campaigns, if you run an advertising campaign, you hardly know what the impact of the campaign is.

There is a very interesting quote that says that traditional advertising is mostly about spray and pray.

You are spraying the content and spraying the message across the entire market or across the entire target group and you're praying that people will come and buy your product.
It was not very accountable. You didn't know if your campaign was doing good or doing bad. You might have had created a campaign, you might have spent millions of dollars in the production and in the airing of all of these advertisements, but the impact might not be significantly high.

In digital platforms, it is not the case. You have real-time feedback so you can measure return on investment in real-time.

There is also a drastic shift in the moment of truth theory. Generally, we used to consider three moments of truth that used to happen when we're talking about traditional marketing: the first, the second, and the third moment of truth.

The first moment of truth is basically the first interaction that the customer has with your product. Often times it happens in the point of purchase location or probably in the retail space where the customer first sees the product on the retail shelf.

The second moment of truth is where the customer actually purchases your product from the retail location.

And the third moment of truth is once a customer has used the product, what is the feedback that the customer gets, whether the customer sees that the product has met his or her expectations, or whether the product has not been good enough to meet his or her expectations.

So, in traditional marketing, these were the three moments of truth.

Now what has happened with digital marketing is that there has now become a Zeroth Moment Of Truth.

What Is Zeroth Moment Of Truth?

ZMOT (Zeroth Moment Of Truth) is basically the digital information search that the customer engages in. Many times prior to you going to a retail location or prior to you going to an e-commerce platform, there's a lot of information search that you do wherein the customer now has one more stage wherein the customer interacts with the product.

So zeroth moment of truth is again something that has gotten itself evolved because of the digital marketing practices and that is one salient feature that makes itself different from the traditional marketing practices.

Read more - Word of Mouth Marketing

Digital marketing applications are always available to customers irrespective of the location of the customer, irrespective of what the customer wants as language preference, irrespective of whether the customer is browsing for your product information in the morning hours, in business hours, or during the midnight or during later hours in the day.

It becomes very easy for you to provide your information to the customer and be available to the customer round the clock. So information is always available and you can purchase the product at any point of time in the day.

Traditionally you had to wait for information when the business hours of the company are on, you had to wait for purchasing the product when the retail store is available and when the retail store is open, which might be from nine in the morning till ten in the night, but after that you have to wait till the next business day.

With digital marketing, all of this has become much easier for customers, so always availability is one more thing and personalization, of course, remember I mentioned to you about the YouTube example.

You can personalize content, you can personalize information and you can personalize the product for each customer's requirement because digital technology helps you do all of these things, so these are some salient features that make digital marketing a lot different from traditional marketing.

The Key Elements of the Digital Marketing Ecosystem

key elements of the digital marketing

We are going to discuss the key elements of the digital marketing ecosystem now. The manufacturer or the marketer of the product is on one end and the customer or the consumer of the product is on the other end and we're trying to see what are the directions and what are the different things that are out there for which a marketer can use in order to make sure that the product is communicated, promoted and sold effectively in between these two entities.

So the first element here is the manufacturer, and then you have the consumer.

All the activities that are involved in the fulfillment or the delivery or selling of products and services from the manufacturer to the customer happen across platforms which are generally called the e-commerce platforms.

So, any platform that you're talking about, Amazon, Flipkart or any other platform, eBay for example; all of these platforms are e-commerce platforms.

Now in e-commerce platforms, you might have platforms that are consumer-driven. There might be platforms that are business to business-driven. So, there are a set of platforms that are B to B driving.

There are a set of platforms that are B to C driven. There are also other platforms which are C to C driven, wherein consumers or customers can now interact with other customers and sell products to them. So, all of these platforms exist.

Now when we're talking about other platforms, there are some platforms that basically the manufacturer or the marketer uses to reach out to the customer and communicate to the customer. These kinds of platforms are generally known as outbound marketing tools or outbound marketing techniques.

This is where you're basically trying to reach out to the customer rather than the customer coming to you. You're trying to go to the customer and try to talk to the customer.

Inbound marketing is where the customer is looking for something and you make yourself available for the customer. So in many cases, like we discussed in the awareness, interest, desire, stages of the customer's journey, the customer might be specifically looking for some information. So this is where the customer has an opportunity or the customer is trying to reach out to you and gather information about you.

In many cases, the consumer is now reaching out to you, which is now called inbound marketing. This is where you are making sure that there is an opportunity that all customers who have a necessity or who have a requirement for your product or service can directly reach out to you and come to you. So such kinds of platforms are inbound marketing platforms.

So you might use a lot of search engines here. Specifically you might use search engine optimization techniques wherein the customer is coming and searching for some information and he is directed to your website.

There might be social communities, communities on social media, etc, wherein the customer can go and discuss with other customers or discuss with experts who have the information and can provide this information.

There might be other opportunities where you will have a lot of email forums where the customer can come and register and type in a lot of information and it comes to you as an email wherein you can reach out to the customer very easily.

There might be a lot of call to action kinds of campaigns out there wherein the customer can get your address, get your phone number and thereby the customer can reach out to you.

So all of these elements where the customer can now easily come to the manufacturer are known as inbound marketing.

There is a completely different animal out there, which is social media. Now, social media is where consumers are interacting with other consumers. So is the case of mobile technologies. So social media and mobile platforms are predominantly used by consumers to interact with other consumers.

What manufacturers or marketers try to do is try to make themselves relevant in this ecosystem that predominantly is a consumer to consumer-driven. So when consumers go and register themselves for a Facebook page or for an Instagram account, what they're trying to do is to manage relationships with other consumers.

When you buy a mobile phone, you're buying a mobile phone so that you can now communicate with your family members, friends, etc. Now in these scenarios also marketers try to make themselves relevant. So that is where you'll find that a lot of Facebook, LinkedIn, Twitter marketing, which is part of the digital ecosystem, as part of the social media marketing, part of the digital ecosystem, as well as a lot of location-based applications, a lot of applications that are created so that customers can use them specifically on their mobile phones. All of this becomes important.

So there are five elements of the digital marketing ecosystem –

1. E-commerce

2. Outbound marketing

3. Inbound marketing

4. Social media marketing

5. Mobile marketing

If you take any company out there and try to see what kind of activities they do, this could be a good exercise for you to understand this better.

Take any company out there and try to map all the different activities that they do in the digital space. You'll find that companies have a mix of all of these different elements.

They might have a presence on e-commerce platforms. It could be their own e-commerce platform. It could be some other third-party e-commerce platform.

They might have applications where they try to reach out to customers and do outbound marketing.

They might have techniques where they are available when the customer is looking for them and do inbound marketing.

They might have a significant presence on social media wherein they will have their own Facebook pages, they will have their own twitter accounts, they will have a LinkedIn page, and they might have an account on Instagram. They might use a lot of influencers to talk positively about them.

They might also have mobile applications and a lot of mobile-based technologies that are used to reach out to customers.

So again, the elements of the digital marketing ecosystem include e-commerce, outbound marketing, inbound marketing, social media marketing, and mobile marketing.

We will come to each of these in a specific article that we're going to cover on this blog.

Read more - what are the different factors that influence the consumer?

Also to understand here are the three types of media that a company can have. These three types of media include paid media, owned media, and earned media.

So if you take the first letters of each of these, terms, P, O, E, M, it's also known as the POEM framework wherein we're talking about three types of media that the company can have.

Paid media is all the kind of platform wherein you're paying a third party to have a presence.

Say, for example, if you're advertising on Google, you basically are paying a certain amount of money to google so that your ad comes up in the top position in the search result page. So that is what paid media is.

You can do advertising on Facebook wherein Facebook is now going to show your advertisement. It could be a video advertisement, it could be a text advertisement, or it could be a remarketing campaign. Any of these can be shown by Facebook if you're going to pay Facebook a certain amount of money.

So, paid media is all the kind of media that you can use by paying a third party or paying the owner of certain media.

Owned media is all the media that you own. This is where we're talking about all different digital assets that the company owns.

We're talking about websites that the company owns. We're talking about social media accounts that the company owns. We're talking about different applications that the company owns from the google play store or from the apple store.

There could be a lot of such assets that the company has now invested money and resources in and created for themselves and they own all of these accounts or all of these platforms. So that is what owned media is.

In many cases, you get a lot of attention in the digital marketing space, not by paying the third party, not by investing in owning such accounts. This is where customers talk about you in a favorable manner. This is where customers like to talk positive things about you.

So all such platforms and all such media attention that you get that is basically because of the good products that you make or the good work that you're trying to do is what is known as earned media.

So paid media is when you're paying a third party for certain activities. It could have the cost per conversion, cost per lead, or cost per click kind of methods that are used. It could be the cost of impression.

If you remember, you would have seen a lot of advertisements that pop up at the beginning of a YouTube video wherein you'll see that the advertisement pops up and then after five seconds probably you'll click on that link which says skip the ad.

So all of this is basically by paying the media partner and this kind of advertising or this kind of media is paid media.

There are a lot of companies that have their own websites, their own digital applications, applications that the customer can download and use, websites where the customer can come and have information, raise grievances, buy products, etc. All of these are owned media and there are a lot of things that the customers do on their own.

Now, say, for example, you are a mobile phone company. The customer uses your mobile phone and finds that the mobile phone is extremely great. The customer talks about it in a video. The customer is a blogger who talks about it in a small video on YouTube.

So, such content you had not paid google for that, you have not paid YouTube for that, you have not invested in the production of such content, such content is called user-generated content and such user-generated content or such content that customers provide or customers make is generally what is known as earned media.

So, all of these are extremely important for us to understand as part of the ecosystem.


So, the "digital marketing" ecosystem gives us an understanding of the opportunities. It also gives us an opportunity to understand what kind of mix we should have. And when you strategize, you start by defining what your objectives are, designing the kind of digital marketing strategy, implementing the strategy, measuring it, and finally improving the overall strategy.

What Does AIDA Mean in Digital Marketing?

In this article, we’ll talk about the AIDAA model that helps us understand how the customer goes through in making a purchase decision. This is similar to the one that we discussed in the previous article under the title ‘five-stage process that consumers generally use to make a purchase decision.'

Now, the AIDA model is also a five-stage model which starts off with awareness, interest, desire, action, and advocacy.

Now I'll come into each of them in detail and we'll discuss how the customer moves from one stage to the other and how he comes to the purchase decision and why is it so relevant to us.


AIDA in Digital Marketing

1. Awareness

This is where the customer is aware of the certain products that are out there.

For example, when we talk about how the customer buys a certain product, today if you're thinking about buying a certain mobile phone, you need to be aware of the different brands that are out there. You need to be aware of different products that are out there, so that is where the first stage of awareness talks about.

So the first and most important activity that marketers need to do is to make sure that you are somebody who the customer is aware of, the customer knows that your brand exists.

Say for example, when we talk about different products out there, if you take the entire number of products that are available in the mobile phone category and put everything down into one bucket, all the brands of products, all the brands of mobile phone manufacturers and put them into one bucket, you can call them the total set, the total set of every brand or every offering that is available in this particular category.

Now, from the total set, of course, the customer is not going to be aware of all brands that are out there, the customer might be aware of a few brands which are out there. So from the total set, there are a smaller number or a limited number of brands that the customer is aware of.

Now, I might be aware of three brands, five brands, seven brands in a certain category. Think of all the brands that you're aware of in the mobile phone category.

Each customer has a certain number of brands that the customer is aware of. This is what we call the awareness set.

Now, one of the most important activities that marketers try to do or advertisers tries to do is to make sure that your brand is in the awareness set of all the customers in your target group.

All customers, which are part of the target segment that we discussed in the previous article, should be aware of your brand. So that is where awareness set comes into the picture.

Once the customer is aware of a certain brand, once there is also a need for buying a new mobile phone, the customer starts looking into the awareness sets and start considering not all, but a few of these brands that are out there.

Say, for example, I as a customer am aware of 10 different brands of mobile phones, but I might not necessarily be considering all these 10 brands when I'm making a purchase.

For example, there might be brands which I know, but these brands are not suitable for my requirement. So I might necessarily not think about these brands when I'm thinking about the purchase.

So that is where you talk about a smaller set of brands out there, even smaller than the awareness set, which generally we call the consideration set.

Now the consideration set is all the brands that the customer is evaluating.

In the evaluation of alternatives, the brands that we evaluate are the ones that are there in the consideration set.

Now, even from the consideration set, the customer now thinks about reducing the options and arriving at the final choice. So that is where the customer thinks about the choice set.

The choice set is generally a one or two or at max three brands from which the customer is now thinking to purchase.

So you start from the total set, you went into the awareness set, you came into the consideration set, you went into the choice set, and from the choice set, the customer finally makes a purchase decision.

The first stage is where you create awareness for your product. You might be communicating that the offering that you have, has certain benefits. You might be talking about the points of differentiation of this product. You might be talking about other advantages, the unique selling proposition of this product.

By doing so, you are now telling the customer, “Hey, look, see, I am having this offering for you and you should be aware of this offering.” Once the customer is aware of this offering, the next stage in the AIDA model is basically interesting.

2. Interest

Once a customer is available, once the customer is aware, the customer might start showing interest in the product.

Now, when the customer starts showing interest in the product, this is where the customer seeks out a lot of information. This might be the case where the customer goes into a search engine and starts looking for your product.

This might be the case where the customer, talks about your product and price to gather information.

So once awareness and interest are done, the third stage is where the customer has a lot of information about your product to now start desiring to buy your product.

3. Desire

This is where the customer is actually given much more information, a lot of incentives, a lot of motivating factors to now come and purchase your product. So that stage is a desire.

Once attention, interest, and desire are created, the fourth stage is that the customer actually acts.

4. Action

Action is where the customer actually purchases the product. So like we discussed in the earlier model, action is where the customer is buying your product and the next stage is advocacy.

5. Advocacy

Once a customer uses the product as we discussed earlier, he can be satisfied, or he can be dissatisfied. In each of these cases or either of these cases, the customer is now going to talk about your product.

He might talk good in case he liked the product, he might talk bad in case he didn't like the product. So in either of these cases, the customer will now talk about your product. So that is the advocacy.


So awareness, interest, desire, action, and advocacy (AIDAA) are the five stages in the consumer behavior model that we discussed.

So it is important for you to understand the AIDA model and why this model is important. Because it helps us map the entire journey that the customer goes through in arriving at a product purchase decision and beyond the product purchase decision, the customer might also engage in post-purchase behavior.

Five Stage Process That Consumers Use To Make a Purchase Decision

In this article, we'll talk about five-stage processes that help us understand how the customer goes through in making a purchase decision. Now you might feel that it's a very simple thing.

Every time that the customer has to buy a mobile phone or every time the customer has to buy a television or sometimes that they have to buy an air conditioner, it is a very easy thing for consumers to make their choice and it is something that automatically happens in the consumer's mind.

But no, in psychology, in marketing and in consumer behavior, we try to break this process down into different stages.

So we'll talk about a five-stage process that consumers generally use to make a purchase decision. Now, these five stages that you can see are need recognition, search for information, evaluation of alternatives, product purchase and post-purchase behavior.

Five Stage Process That Consumers Use To Make a Purchase Decision

Now I'll come into each of them in detail and we'll discuss how the customer moves from one stage to the other and how he comes to the purchase decision and why is it so relevant to us. Because we try to make sure that the customer can seamlessly move from one stage to the other and at the end of the day, the customer can come and procure our products.

Five Stage Process That Consumers Use To Make a Purchase Decision

1. Need Recognition

Now, the first and most important stage here is need recognition or identification of a certain need.

In the previous article ‘what is marketing,’ we had discussed that a need is basically a basic human requirement that the customer has. Say, for example, hunger, thirst, air, etc. are basic needs.

Now the customer needs to understand that there is certain need that exists. In many cases, the customers feel and understand these needs on their own.

Say, for example, you have your mobile phone, your mobile phone breaks one fine day. You have a need for a new mobile phone because you want to communicate with others. You have an understanding that your mobile phone doesn't work as well as it was expected to work because it has become very old, so now you have a need for replacing this and getting a new mobile phone.

So in many cases, the customer will identify the need in himself or herself.

In many other cases, the customer doesn't necessarily know the need, so hence there are ways in which we provide stimuli and we help the customer understand these needs.

2. Search for Information

Now, once a customer has understood that there is a specific need, the next thing the customer does is to search for information, search for ways in which he can fulfill that need, and this thirst for information is one of the critical ways wherein we try to make ourselves relevant to the customer.

The search for information in most cases starts from your immediate reference group like we discussed earlier in the article - what are the different factors that influence the consumer?

You will go about to ask your friends. You'll see what kind of products you're friends are consuming. You will see a lot of advertisements out there and in today's day because the information is so easily accessible, almost two-thirds of consumers who are making a purchase decision start from the internet.

They go to a search engine like Google or Yahoo or Bing or any of these places. They start searching for information there.

You see which products exist. You see which companies are offering these products. You see what are the prices of these products? What are the different features that are available? You have options to compare all of these products. That is where we talk about the second stage, which is the search for information.

3. Evaluation of Alternatives

Once the customer has searched for a lot of information, the third stage basically is to evaluate the available alternatives.

Say consider the example that the customer is now buying a mobile phone or let's take the example of any of you is buying a mobile phone, a very easy decision.

Now, the answer to this question in many cases is no, because the number of options that you have, the number of brands that are available, the closeness of all of these brands, all the brands look the same. The specifications are the same.

It is very difficult for you to identify which of these brands to buy, so it becomes very difficult for customers to now evaluate the available alternatives.

Many times the customer looks for key features in each of these products. The customer looks for features that are relevant to the customer.

Some customers might find that the battery life of the product is the most important feature for me, so I will go for the product that has the highest battery life.

Some other customers feel that the style of the product is more important to me, so I'll go for the product that has the best style.

Some other customers think that I'm a brand conscious person, so I should buy a product that is the best-known brand, so customers will go for the product that is the best-known brand.

So irrespective of whichever customer you are, the customer identifies a set of parameters or a set of attributes in the product and based on these attributes, the customer starts evaluating all of these different products.

4. Product Purchase

Once you have evaluated all the alternatives, think back at the case of you buying a mobile phone.

It's not a very easy decision to make, but once you have arrived at a product to buy; this particular brand, this particular model, this particular price point that I have to buy, now you get into the fourth stage which is the actual purchase decision or actual purchasing of the product.

There are different options that you have. You can think about buying the product from the online space. You can go to one of the e-commerce portals and buy the product there. You can think about buying the product from the offline space wherein you can go to the electronic store nearby to your house and buy the product from there.

There are different reasons why you choose one over the other. We know that in general if you consider online versus offline shopping scenarios, online shopping scenarios, you'll have products which are a little cheaper.

There are different reasons why online companies are able to provide new products at a cheaper rate, but you'll find that there are price advantages you have when you buy it from the online space, but it takes time for the product to be delivered to you.

If you are looking for a product immediately, you want the possession of the product immediately, then you cannot wait for the product to be delivered to your house probably three days, four days or a week later, so hence you might go to a retail store nearby and buy the product from the retail store nearby wherein you'll be able to get the product immediately, but it will, of course, be at a higher price.

Now, that is a trade-off that the customers generally mix. So purchasing is the fourth stage of the purchase process or the decision making a journey of the customer, and the next important element here is about the post-purchase behavior.

5. Post Purchase Behavior

After you have purchased the product, there are certain behaviors that the customer, a customer generally shows. One of them is the evaluation of whether the product was worthy or not. You would have, all heard about this concept of satisfaction.

Now satisfaction essentially is the difference between how the product or service performed versus how you expected it to perform.

Say, for example, you identified that you wanted a new product, searched for all the information that was available and evaluated different mobile phone options out there. The most important parameter for you was battery life. You expected that brand A is going to give you a battery life of three days.

You buy this product, bring it back home. Remember, your expectation was that the battery life is going to be three days.

Once you have come home, you start using this product and in eight hours the battery has gone dead. You started off with a full charge, but the battery died in eight hours.

Now the performance of the product was eight hours, whereas your expectation was three days. Now the performance was not able to meet your expectations, the outcome is going to be dissatisfaction.

When the performance of the product is exceeding expectations, say, for example, you expected the product to be working for three days, but the product actually works for a whole week. Now performance is actually exceeding the expectations and that is where we say that the customer is extremely satisfied.

Now, what happens when you're satisfied, you generally have a good feeling about the product. You have a reason why you will go about talking good about the product. You will also write a lot of good reviews on eCommerce platforms, on social media.

If you are unhappy with the product, you will do all the things on the contrary. You will go about talking bad things about the product. You will tell your friends and family members never to buy the product.

So how the customer behaves towards the end of the purchase process and after the purchase of the product is extremely important because many times, this is where genuine feedback is collected from the customer.

Whether the customer liked the product? If the customer liked the product, then he is going to share a lot of positive word of mouth. If the customer didn't like the product, there is going to be a lot of negative word of mouth that will happen.

If the customer extremely like the product, there is going to be a concept where the customer will come back and buy the same product. This is what we call loyalty.

If the customer doesn't like your brand, then the customer is never going to come back and buy the product from you. So this is where we say that you have lost a customer.


So these are the five stages and each of these five stages is critical because every customer or let's say in most cases, the customer goes through all of these stages one after the other. These stages, once again are need recognition, information search, evaluation of alternatives, purchase and post-purchase decision making.

Psychological Factors Affecting Consumer Behavior with Examples

In this article, we are going to understand what are the psychological factors that influence consumer buying behavior?

In the previous article, we have already discussed the five major factors such as environmental factors, societal factors, cultural factors, aspirational groups and personal factors that are influencing consumer behavior.

Next, we're going to discuss a few other elements which are generally heard of, but we need to have a deeper understanding of those as well.

Psychological Factors Affecting Consumer Behavior with Examples

There are five extremely critical psychological factors that the customer goes through in arriving at a product purchase decision. First of these elements is what we call motivation.

Psychological Factors Affecting Consumer Behavior

1. Motivation

What is the motivation? Motivation is when the customer has a very strong drive to purchase a certain product and fulfill the need associated with it.

Now, we discussed what needs are. Needs are basic human necessities. Needs could be biogenic needs or psychogenic needs. Biogenic needs are those that are required for your survival.

Psychogenic needs are things that are required for you to feel complete, feel happy. So there are different motives that drive customers to make purchase decisions in the marketplace.

Say, for example, the need for hunger. Once the need for hunger or need for food gets beyond a certain point, you will be extremely motivated to purchase a food item or go to a restaurant or have a burger.

When you have an extreme need to associate with a certain reference group or with a certain aspirational group, you will consume a product which associates with that aspirational group.

The second important thing that you would have commonly heard is perception.

2. Perception

What is perception? Now, perception is where the customers collect a lot of information, organize this information and try to paint a picture of what the world is according to them.

Now, everybody has a certain perception of how the world is.

Now even products and services that we offer to become part of this perception of the customer.

Remember, when we discussed positioning, there are points of differentiation and points of parity where-in we're trying to create an image of what our product or service is, in the customer's mind.

We are essentially trying to create a perception in the customer's mind. This perception is very important because many times it is this perception that drives the customer to either choose your product or to choose the competitors' product.

Now, this perception is created by the kind of information that you provide to customers, the kind of offerings that you provide to customers, the kind of things the customer hears about your product or services from other people that they are associated with.

Now, not all information that you provide to the customer is always understood by the customer. The customer has a very selective span of attention.

3. Selective Attention

The customer only pays attention to things that the customer is interested in. Say, for example, you might not always pay attention to an advertisement about, say, for example, a nutritional health drink. But if you are on a diet, you'll start paying attention to a healthy nutritional drink advertisement. This is what we call selective attention.

Now, selective attention is critical because you have to understand that not everybody is going to be attentive about what you provide.

The next case is selective distortion.

4. Selective Distortion

Not everything that you provide to the customer or not all information that you provide to the customer is always accepted and memorized in a way that you provide to the customer. The customer has a method by which the customer now starts distorting facts that you provide with only understanding things in the way that the customer wants to understand.

So in many cases, you will have to be very clear to the customer and tell the customer very clearly because otherwise, the customer has a way of being biased in certain directions whereby they might want to distort information that you provide.

5. Selective Retention

The third element is the fact that the customer doesn't always remember everything that you show the customer, the customer has selective retention.

The customer is only going to retain information that you provide to the customer about things that the customer is so interested in.

You might remember advertisements which are extremely interesting, extremely new, extremely exciting, something that is novel, and something that you've not seen. Other advertisements which are generic out there, advertisements which are very commonly seen, you might not remember.

Now, there are some elements of content that make it interesting enough to be retained in your memory. So this is what we generally say selective retention.


So, selective attention, selective distortion, and selective retention, all three are extremely important in how the customer learns and how customer retains things in their memory because every experience that the customer has in the market place helps the customer learn a few things.

If you consume a product and the product ends up being not so great, you will realize and you will learn that this product is not so great. That will stop you from considering this product in your subsequent purchase additions.

If you go to a certain place in the market and buy a product, the product ends up being counterfeit. You realize that such marketplaces or such places in the market where you get products are not good, are risky in certain ways, and all of this learning that you have is somewhere encoded into your memory.

So every time the customer now has to make a purchase decision, there is certain retrieval of this information from the memory which helps the customer in making decisions.

So motivations and perceptions are extremely critical, and perceptions are what, as marketers, we try to create in the marketplace.

Word of Mouth Marketing Advantages & Disadvantages with Example

Word of Mouth Marketing

You would have heard this concept very frequently. Word of mouth is all informal customer to customer interaction that is not controlled by the marketer.

Word of Mouth Marketing

Now the definition of word of mouth is right here. You can see and read the definition of word of mouth and advantages and disadvantages with examples to understand the importance of word of mouth.

Advantages of Word of Mouth Marketing

Word of mouth is generally compared with advertising and other sources of the market are controlled ways of reaching out to customers.

Word of mouth is essentially all informal communication that you get to hear from your friends, from your family members, from other people who don't have necessarily a reason to talk to you about a product in a good way or in a bad way.

Word of mouth is all the product reviews that you see on social media.

It is all the product reviews that you see on e-commerce platforms on amazon.com, on Flipkart, on Paytm, on any of these e-commerce platforms.

You will see that there are product reviews available. Now, most of these product reviews out there, of course, I'm not saying all product reviews, but most of these product reviews are uninfluenced organic inputs given by customers who have either used the product or seen somebody else using the product.

Now it is much more relevant and much more credible than advertising that is out there because when generally a customer sees an advertisement, the customer has a feeling that this advertisement is out there to influence me to go and purchase the product that is being advertised.

A word of mouth, on the other hand, doesn't necessarily have such a motive. Word of mouth is generated by customers who have used a certain product and have found that product to be useful and have told me that this product is extremely great and extremely useful, so I had attached greater credibility to word of mouth.

I attach more importance to word of mouth as compared to the other forms of communication or information available to me.

I generally have a tendency to go to e-commerce platforms and look into word of mouth before making a purchase decision.

So all of this information that is out there in the digital space, specifically information that is known as word of mouth, is extremely critical in how the customer goes about, making the purchase decision.

And this is one essential thing that has changed the way in which consumers make purchase decisions.

Earlier too, there was a lot of word of mouth out there. Customers attached greater importance to word of mouth, but with the emergence of digital technology, word of mouth has now taken center-street.

Example of Word of Mouth Marketing

For example, earlier say 20-30 years ago, if you wanted to buy a car, you would have spoken to a few friends. You would have spoken to one person who's either an expert in automobiles, who works in an automobile company or is a mechanic nearby, to understand which the best car out there is.

You would have heard from these people. All the information that you heard from these people would have come to you immediately, you would have forgotten it in some time. Your family members, your friends, other people would have heard from you. They wouldn't have necessarily got this information directly.

So, the reach of word of mouth was very limited. Word of mouth was very spontaneous. There was no way by which you could remember all of these exact details about the vehicle and talk to somebody else, but with the emergence of the digital space, word of mouth has unlimited reach right now.

You write something on Facebook, probably 3000 of your friends hear about. You tweet about this, a few million people hear about it.

You put it up on amazon.com or Flipkart or any of these e-commerce platforms, every single customer who comes to that platform is now viewing the certain content that you have provided.

So the reach of word of mouth has become exponentially high. Word of mouth is extremely, extremely fast propagating.

You would have seen a lot of viral campaigns recently. You would have seen a lot of campaigns which basically have been started by consumers and which basically are spread like wildfire.

You talk bad about a product. You remember there was a product, a noodle product in India recently, a few years back, which basically pulled off the shelves because of the controversy.

Such negative word of mouth spread much faster. So although word of mouth has always been there, it is with the emergence of the digital space, that word of mouth has now taken center-stage.

Digital Word of Mouth Marketing

Apart from this word of mouth, the entire marketing context has also changed drastically with the emergence of the digital space.

Say, for example, the reach has exponentially increased with the emergence of the digital marketplace. Earlier you had a limitation with respect to how many customers you could reach. You had a limitation with respect to how many customers could come to your retail store. You had a limitation on how many customers view television or read a magazine or read a newspaper.

Today, you basically have let go of all of these limitations. You can basically reach out to any customer anywhere in the world who has access to the internet and access to a platform or a device that can access the internet. So the reach has become exponentially great.

The second thing is you are today able to reach customers throughout the day, any time of the day. Earlier, customers had to wait for office timings, had to wait for the time that the shop was open and only on these times you were able to get to the customer or the customer was able to reach out to you.

Today you basically have a 24x7 operation. The customer can come to an e-commerce platform at any point of the day, any time of the week and purchase the products that they are looking for. You don't need to necessarily have the kind of people, staffing the e-commerce platform because most of these things are automated today.

Earlier, it was very difficult for us to gather information. If you had to have some information about what customers thought, what customers behave or what things customers were thinking, it was very difficult for you because you always had to have those long surveys that you had to take to the customer and gather a lot of information from the customer as part of your marketing the search activity.

But today all of this has become much easier because everything that the customer does on a digital space is now trackable. You have access to a lot of data. The customer browses from website A to website B you are able to see what the customer has been doing. The customer comes to your e-commerce platform and looks for a certain product. You know that this is the customer who was looking for this particular product. You know that the customer is also going to these other websites.

You know that the customer has a social media account where the customer is connected to 10 other people, a few of whom could be influencers whom you can use to reach out to this customer and motivate this customer to buy.

You also have options wherein new business models have come out. The entire e-commerce industry has come out wherein you are able to sell a lot of products which traditionally you were not able to sell, because a traditional retail space has limited shelf space. You couldn't sell a lot of products there.

Today, with e-commerce, you are able to sell many more products through these channels. So the entire way in which we do marketing, the whole of the creation, communication, delivery and exchange of value has completely transformed with the new technology, and with the emergence of the internet.


Now, that we have understood the definition of word of mouth, advantages, and disadvantages of word of mouth marketing and how word of mouth marketing context has changed drastically with the emergence of the digital space.

Read also the complete marketing concept and step by step guide of marketing on our blog for a complete understanding of digital marketing.

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What Are The Different Factors That Influence The Consumer?

There are different things that essentially are influencing the consumer and basically influencing the decision that the consumer makes. And as marketers, the role that we have to follow is to ensure that all of these different influences are somewhere interpreted and somewhere influenced in such a way that the consumer is now interested in purchasing or procuring our products and services, rather than those of the competition. So, in this article, we are going to understand what are the different factors that influence the consumer?

In the previous articles, we had discussed the definition of marketing, the concept of value, segmentation, targeting and positioning and the marketing mix elements. If you have already read that move the next.

At the center of the entire marketing activity that you do is the customer or the consumer and it is important for us to understand how and what are the different elements that make the consumer so unique. So we'll start off from understanding what are the different factors that influence the consumer?

5 factors that influence the consumer

What are the different factors that influence the consumer?

There are 5 factors that essentially are influencing the consumer and basically influencing the decision that the consumer makes.

1. Environmental Factors

The first and most important elements that influence the consumer are environmental conditions. Say, for example, there is a certain political environment in the country, there's a certain technological environment in this society, all of which influence a consumer in certain ways. 

There are different social classes. Say, for example, you have a middle class, an upper class, and a lower class. Each of these customers who identify themselves with one of these social classes will have a certain way of consuming. If you carry a product that is meant for the upper class, it associates yourself with that class of people or with that creed of people or with the people who are generally able to procure and use such products.

2. Societal Factors

The second important factor is the societal factors. In societal factors, one of the most important things to understand is the role of reference groups. 

Now, there are a lot of groups that basically are reference groups, when consumers make purchase decisions. 

Say, for example, many of you are students. You would have a group of friends who influence all the purchase decisions that you make, your mobile phone choices, your social media consumption choices, your t-shirt, and apparel choices, all of which are influenced by a set of friends that you have.

Because now you want to associate yourself as being part of this group, you will consume things that are also consumed by these people. So that is what we generally call as a reference group. And the reference group is very important because the reference group often is the direction in which you consume.

3. Cultural Factors

Culture is one of the major influences on how consumers behave. When I say culture, these are a set of societal norms that are generally acceptable for a vast number of people out there.

Say for example, if you take the Indian culture, there are different food habits, there are different dressing styles, there are different consumption patterns that you see, there are different festivals that you observe and there are different consumption patterns in different festivals.

All of these are influenced by culture, a culture that most of the people in the country share. There are also some subcultures that have a little deviation from the general culture that you see always.

4. Aspirational Groups

There are also aspirational groups. Many times you know that your immediate friend group or your immediate family doesn't necessarily have a certain consumption pattern, but you might find that the Indian cricket team is endorsing a certain product, a product that you want to consume because you aspire in with the kind of people who are consuming these products.

You look into Bollywood actors and actresses and they endorse a certain set of products and because you aspire to be part of that group, you will consume these products. So aspirational groups, as opposed to reference groups, are also important influences in consumer decision making.

There are also people out there who are experts in certain areas. Say for example, in your friend group, there might be a person who has the expertise and who has a greater understanding of digital cameras as compared to all the other friends that you have.

So, this person becomes somebody who we call in marketing literature as an opinion leader. Every time you have a certain doubt, or every time you have a certain requirement of consumption of a certain product category, you will reach out to this person. You'll ask this person as to what are the products out there and what are the parameters based on which you should make your consumption decision.

So, opinion leaders, reference groups, and aspirational groups all of them influence consumer decisions and consumer buying patterns in the market place.

5. Personal Factors

There are, of course, a lot of other personal factors like the age of the consumer, the income of the consumer, the place that the consumer lives in, the life-cycle stage of the consumer. All of these patterns and all of these features also influence a consumer's decision making in the marketplace.


Now, that we have understood what are the key factors that influence the consumer, which is the societal factors, the cultural factors, your family, your friends, etc. and a lot of personal factors that are essentially influencing the consumer behavior.

Apart from these 5 key factors, there are lots of decision-making processes that consumers generally use to make a purchase decision. These processes are need recognition, search for information, evaluation of alternatives, product purchase and post-purchase behavior. All of these elements will be discussed in the next article. So stay tuned.

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What Is Market Segmentation? Targeting, Positioning & Marketing Mix Explained

Hello everyone, welcome to the next very interesting concept of segmentation, targeting, positioning and marketing mix. Earlier we have discussed the definition of marketing. We also discussed value creation, communication, delivery, exchange, need, want and demand. Read what is marketing first if you haven’t read that yet.

What Is Market Segmentation

Now, once we have understood the market, needs, wants and demands, we need to understand one other thing that is very relevant to how marketing operates and that is you have very limited resources.

Any company, for example, has a limited amount of money to advertise, has limited people in the sales force and has limited partners to reach out to the market. So it becomes very essential for marketers to identify the right set of customers for whom they should create value, communicate value, exchange and deliver value. So to do this, we use the concept of segmentation, targeting and positioning.

What Is Market Segmentation?

You would have heard this term very frequently. What is segmentation? Now if you take, for example, any market out there, the market consists of a large number of people. We generally called markets to be heterogeneous in nature.

When you have a large number of people, say, for example, people who are using mobile phones, there are a large number of people out there. There are consumers who are interested in buying mobile phones, which are cheaper. There are consumers who are interested in buying mobile phones which can be used for playing very sophisticated games, there are consumers who might be interested in having mobile phones that have great cameras, there are other customers who are interested in buying mobile phones that have longer battery life.

So if you take for example, any product or any service or any offer, the consumers or the market, in general, is very large. It is heterogeneous.

Related - What is Word of Mouth Marketing?

To satisfy the needs of all customers out there, it becomes very difficult for organizations. Think about the case of building a mobile phone that is the best for all customers. It might be a very difficult activity. One, you might not be able to achieve excellence in all different things that you do and even if you are able to achieve excellence in all different things, your product might be extremely expensive, because of which the customer cannot buy it. So it becomes extremely important for you to divide this heterogeneous market down into smaller, homogeneous groups for whom you can create products, for whom you can have campaigns that can target them, for whom you can basically reach out to the customer by having a retail channel or having a delivery channel.

So the act of dividing the entire market down into smaller, homogeneous groups is what is essentially called segmentation.

Geographic Segmentation

Segmentation can be done by different means. One of the most commonly used methods of doing segmentation is at a geographic level.

Geographic segmentation is where you basically break down the market into different regions on a geographical map.

Say for example, if we're talking about India, food habits in the northern part of India and the southern part of India are diverse. People like certain foods in the northern part of India, people like certain other foods in the southern part of India. So you can have different offerings for different parts of the country depending on the kind of food habits that they have. Such kind of segmentation is called geographic segmentation.

Demographic Segmentation

Another way of which segmentation happens is based on demographics. Demographics can include anything from age, income, gender, lifecycle stage, all of these different things.

Say, for example, if you take offerings out there, for example, mobile phones. There might be mobile phones that are offered to customers who are in a certain age group. For younger people, you will have mobile phones that are more worthy of playing games, which might be more entertaining, which might have greater battery life. For a little older people, you might have phones which are loaded with features that can be used in a professional space.

For people who are elderly, people who have difficulty to see and use a touch-screen, you might have mobile phones with large buttons which can be easily used by these people. So this is a segmentation that has happened based on age.

Similarly, you might have offerings that are for the really wealthy and really rich class of people. You might have other offerings for people in the middle class. There are people who don't earn as much. You will have offerings even for them. So segmentation can even happen with respect to the income group of people.

There are different people who are indifferent lifecycle stages, for example, somebody who has just married versus somebody who is thinking about getting married. There are different types of consumption that these two people might think. For people who have just recently had a child versus people who are still in college, there might be different ways in which these two sets of people are consuming products. So based on age, gender, income, lifecycle stage, and other parameters that you can see on the screen, there might be a demographic segmentation that might happen. So geographic segmentation and demographic segmentation are very obvious, very easy to understand.

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Psychographic Segmentation

The third basis by which segmentation can happen is based on how people think, how people believe that the world should be, how people's attitudes are about different things and different objects. So this is known as psychographic segmentation.

Say, for example, if you are somebody who is an adventure-lover, say for example, if you're somebody who believes in the idea of using green things versus somebody who is only interested in saving a lot of money; these are basic elements of the personality of these people.

So segmentation of the market can also be done based on the ways in which people behave, the ways in which people have the attitude, depending on the different things that they see in the world. 

So this is basically psychographic segmentation, which is the third way in which segmentation can happen.

Behavioral Segmentation

And the last way in with segmentation can happen is based on behaviors that people show in the marketplace.

Say, for example, if you are a frequent flyer, you get greater benefits from the airline because your behavior is in such a way that you consume air tickets and consume air travel much more than other people. So you might get extra miles for your travel. You might get freebies for your travel. You might not have to wait in long queues. You might get privileged checking counters, etc. based on the behavior that you show and depict in the marketplace.

There might be other consumers who might be heavy users, say for example, if you consume the internet as part of your mobile package, and if you are a heavy internet user, the service provider will give you a package that is suited for you because you are a heavy user.

So based on your behavior, based on the kind of consumption that you do, you can be also segregated into different sets of people. So that is the last basis by which segmentation can happen.

So geographic, demographic, psychographic, and behavioral are the four ways in which you can do segmentation.

But by doing segmentation in either each of these ways, you basically are trying to break down a very complex and heterogeneous marketplace into smaller homogenous groups.

And by breaking them down into smaller homogenous groups, you are now able to reach out to one or a few of these groups and make products and services and offerings that will be most appropriate for one or a few of these groups, rather than having a product that doesn't necessarily be good enough for any of these set of people. So that is why we do segmentation.

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What Is Target Marketing?

What Is Target Marketing

The next activity that we do is to identify one or a few of these groups, wherein you can go and try to offer your products and try to make revenue from these groups.

Targeting is where you identify which of these segments is going to be the key or the central segment where you're going to offer your products.

So you have to basically look for five different things when you're trying to do targeting. The first of these things is that the segment should be measurable. The second is where it should be substantial. The third is where it should be accessible. The fourth is where it should be differentiable. And the last is where it should be actionable.

Now I'll talk about each of these different things.

The Segments Should Be Measurable

Now think about the case where the entire heterogeneous market was divided into smaller homogeneous groups, which we call segments. The segments should be measurable.

When I say the segment should be measurable, you should be able to measure key factors that are relevant to you in each of these segments.

Say, for example, the number of customers who are there in each of these segments, the total number of competitors that are there in these segments, all of these different elements should be measurable.

The Segment Should Be Substantial

The second element is that the segment should be substantial. When you are thinking about entering a certain segment and trying to offer your products to one certain segment, you should be able to get revenues or get money from that segment, which is going to be enough for sustaining the costs of your business. It should also be able to provide you profits. It should also be able to give you growth potential in the future. So the segment should be substantial in itself.

The Segment Should Be Accessible

The segment should be accessible. The segment should not be something that is very difficult to reach out to. It should not be very difficult for you to get into that segment. You should be able to access the segment and that is where we say that targeting should be done in a way that you are looking into segments that are accessible.

The Segment Should Be Differentiable

The fourth element and the most important of all of these elements according to me is that the segment that you choose should be differentiable. There is going to be a set of competitors that you will have to compete against in the marketplace for the offerings which you are providing to the customer.

Say, for example, if you go back to the example of a mobile phone, there is going to be a set of competitors out there. Now, the segment that you choose should be in such a way that you are able to differentiate your product as opposed to your competitors.

The Segment Should Be Actionable

And the last one is where your segment should be actionable. When I say actionable, there are these elements of a marketing mix that we generally use in order to create a marketing strategy.

You should be able to create a difference from everybody else by using the marketing mix elements that you are employing. So the product, the price, the place, and the promotion should be giving you a different result as compared to another segment.

So that is where we call about the fact that targeting should be in such a way that it is actionable.

Each of these elements together will define the target group that you are going to decide. So we started off with segmentation. We took the whole market, broke it down into different smaller groups. We looked into each of these groups as to what are the key factors that are relevant to us. What kind of potential growth do we have? Do we have enough scope to differentiate ourselves? Do we have an ability to access these segments and are these segments actionable?

All of these elements are looked into, to identify one or a few of these groups that we call as target groups. This is what essentially targeting is. Now, once you have done segmentation, you have gotten down to a set of groups which are most appropriate to you, the next element is called positioning.

What Is Positioning?

Positioning is where you're trying to create a position for yourself and the position that you create is not in the marketplace but in the customer's mind because it is important for us to understand that a customer is a person who thinks, who understands reality, who has a worldview of how his needs are, his requirements are, what are the different products out there? What are the key attributes of each of these products? How is product A different from product B? How is the mobile phone A different from mobile B? And for the marketer, it is important that we create an image in the customer's mind. That is what we try to do by doing positioning. And to do positioning, we have a set of vehicles that we can use.

Say, for example, you can use advertising, sales promotion, retail presence, etc. Your product itself can be used for positioning, but the key here is to understand that you are trying to differentiate yourself from the other players in the market. Now, differentiation can be done based on the product that you offer. It can be done based on the image that you offer. It can be done based on the people who work for you. It can be done based on where your product is available. It can also be done with respect to the price that you offer.

Now to do differentiation, you have to identify what are the specific points of differentiation which are going to make your product different from the other products that are out there.

Say for example, if you're a mobile phone company that is pioneering mobile phones, which have an exceptionally great battery life. We live in an age where most mobile phones have a life of say, at max one day or two days. Now, think about yourself as a company that has come out with a mobile phone that has a battery life of a week. This becomes a point of differentiation as compared to other people in the marketplace.

Now, when you position yourself as somebody who's the leader with respect to battery life, you are able to create a different image. Every customer who now thinks about your product knows that you're known for exceptional battery life.

You can think about creating an image for the durability of the product. You can think about creating an image for the service that you're offering. You can think about any of these elements and identify a point of differentiation. Once you have identified a point of differentiation, you have to create the marketing mix elements, which is the product, the price, the place, and the promotion, which coincide with these points of differentiation that you have created.

Now, let me also tell you that we are not always trying to be very different from the competition. There are some elements that also have to be very closely associated with the competition. These are generally known as the points of parity, wherein you're creating a lot of features in your products or offerings which are closely associated with other competitors in that certain category.

We know how a mobile phone looks. If you're going to drastically change the styling of the phone, say, for example, today you have a phone which basically is a flat phone, which has a touch-screen display, which is not very thick, which is basically a rectangle shape. Now think about the case where I'm giving you a phone that is a very bulky cylinder.

Now, the customer doesn't associate it with the regular phones that he sees in the market. So your product has to be different from your competitor to differentiate it, but at the same time, there are a lot of features and a lot of characteristics that customers associate with a certain category of products. So you have to also be close to these category products or these points of parity.

Now, once you have identified which segment we enter into, once you have done your targeting properly, once you have created a position in the customer's mind, then you can actually get to the market with the marketing mix elements, which are the 4 Ps which we'll discuss next.

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What Is Marketing Mix? And The 4Ps of Marketing Mix?

Okay, so the 4Ps of marketing like you would have all heard about or the marketing mix is what we'll discuss next. So these four Ps are essentially what we try to, strategize and what we try to change in the marketplace. These include the product, the price, the place, and the promotion.

What Is Marketing Mix

What Is The Product?

The product is basically the offering that you give to the customer. It can be something that is pure good. It can be something that is a pure service. It can be something that is a combination of the two.

Say for example, in the case of a mobile phone, the product is the mobile phone. It is also associated with a set of services that go alongside. Say, for example, the after-sales service that you get, the warranty that you get, etc. So that is what the product is all about.

What Is The Price?

Now the product is associated with a certain cost that you have to incur. That is what the price is. A mobile phone can be 20,000 rupees worth. The mobile phone can be worth 50,000 rupees.

These two elements are extremely important because many times the customer starts comparing these two elements. The customer starts comparing the product, the features of the product with the price that the customer has to pay. So the product and the price are very critical in the success of any product.

What Is The Place?

The third of these elements is the place or the third P is what place is. Now, place is where the customer can actually come and purchase the product. Remember, we discussed the electronic store near to your house or the department store where you can buy a mobile phone from? That is essentially what the place is. So which is the place in the market where you can go and buy this product? So that is where we talk about place.

What Is The Promotion?

And the last of P is promotion. Promotion is where you're trying to make sure that the customer is aware of your product, the customer is motivated and the customer has a good reason to come and buy your product. So it could be advertising, it could be a sales promotion, etc.

So, all of these four elements is what we have in our hands to play around with and make sure that we can generate as much revenue from the market as possible.

Now, the reason why we dealt into detail of what marketing is, what value concept is, what segmentation, targeting, positioning is, and what the 4Ps are, is because we want to introduce all of these concepts to be similar to what we see in the digital space. Say, for example, marketing in the digital space and in the traditional space is more or less the same.


In the digital space, segmentation becomes very easy. Say, for example, you would have seen a lot of search engine advertising. You would have seen that every time you go to the search engine and type for some specific set of information, you'll see a lot of product advertisements or a lot of links that are sponsored, that popup.

When you go to social media, when you go to Facebook, you would have seen that a lot of advertisements about products that you are looking for at an e-commerce platform and then purchased, are popped up to you. These are all ways in which the value is communicated to you.

Now the way by which the marketer reaches out to you is based on either your geography, either the demographics that you have; your age, gender, income, etc. or the kinds of browsing behavior that you display.

So even in the digital space, there is a very strong presence of segmentation. There's a very strong presence of targeting that is a very critical method by which the products are positioned in your mind.

Say, for example, you might see certain advertisements where products are displayed in certain fashions. You might see that the product is doing certain social campaigns so that they create an image of being socially aware. All of these elements are done in a way to position the product and create an image of the product in your mind.

You would have also seen that in the digital space you have the 4Ps operationalized very effectively.

The product; it could be a traditional product, it could be a product that is completely digital. It could be a product like a mobile phone, it could be something that is similar to a YouTube channel that gives you a lot of really rich content. So the product holds in the digital space. Price; you have traditional channels where you are paying a certain price, you have subscription-based models or a premium model or other business models that are operational in the digital space.

The place that you get the product from in the traditional space was predominantly retail or direct selling where you went to the store and bought products for you. You went to the hospital to get a service or you went to a bank to get certain financial services or you had direct selling where people came to your house and sold the product to you.

With the emergence of the digital space today, you have a new business model that operates. Say, for example, you have e-commerce sites where you can buy the product. The product comes to your house. It is shipped to your house. You have other services and other offerings that are also delivered to you from the digital space.

You have the last P, which is a promotion, which has significantly changed, which will be a major impact or a major area that we'll discuss.

Say for example, how has promotion changed? Traditional advertising is not as relevant as it was earlier. You have digital and social media that are picking up, so all the different elements of the definition of marketing, the concept of value, segmentation, targeting, positioning, and the marketing mix elements, all of them are still relevant in the digital space.

So a basic understanding of what segmentation is, what targeting is, what positioning is, and what the marketing mix elements are, is what this article is offering to you.