3. mba 203 marketing management assignment 2nd semester

MBA 203 MARKETING MANAGEMENT Page 1

SPRING 2017

MBA

SEMESTER- II

SUBJECT CODE & NAME-MBA203 & MARKETING MANAGEMENT

SET - 1

Q.1 Define Marketing and various marketing orientations.

Ans.:

Marketing is said to be as old as civilization itself. In fact, marketing came into existence

with the barter system. With the passage of time, barter system evolved into the art of

selling. The origin of marketing dates back to the ancient civilization when man used

symbols, signs, and material artefacts to transact and communicate with others. The

industrial revolution of 18th and 19th century further fostered the evolution of marketing.

The rapid social change driven by technological and scientific innovation fuelled the

systematic approach for marketing.

The late 50s observed the emergence of real marketing concept, which was entirely

different from the sales concept. Higher level of competitiveness forced the marketers to

depart from the traditional sales approach. A marketing manager must formulate strategies

that can build profitable relationships with the target consumers. Things are continuously

changing in terms of business and social changes, customer related changes, and changes in

manufacturing and marketing organizations. Therefore, the organizations should select their

marketing orientation considering these factors. The various marketing orientations that

exist help in understanding how the marketing orientation has been undergoing various

shifts.


FIGURE: MARKETING ORIENTATIONS

The production concept

The basic proposition of this concept is that customers will choose products and services

that are widely available and are of low cost. So, managers try to achieve higher volume by

lowering production costs and following intensive distribution strategy.

The product concept

This concept is based on the idea that consumers will favor those products that offer

attributes like quality, performance, and other innovative features. Managers focus on

developing superior products and improving the existing product lines over a period of time.

The selling concept

This concept proposes that customers, whether individuals or organizations, will not buy

enough of the firm’s products unless they are persuaded to do so through the selling effort.

The marketers believe that the consumers need to be motivated to buy a firm’s products or

services through persuasion and selling action.

The marketing concept

The reason for success lies in the company’s ability to create, deliver, and communicate a

better value proposition through its marketing offer, in comparison to the competitors, for

its chosen target segment.


Social Marketing

Social marketing is an approach used to develop activities aimed at changing

maintaining people’s behavior for the benefit of individuals and society as a whole.

Combining ideas from commercial marketing and the social sciences, social marketing is

a proven tool for influencing behavior in a sustainable and cost-effective way.

Q.2 Write short notes on Environmental Scanning and Implications of Inflation.

Answer:

Environmental Scanning

Environmental scanning refers to the careful monitoring of an organization’s internal and

external environment for detecting early signs of opportunities and threats that may

influence its present and future marketing plans. It helps the marketer in taking decisions

regarding where to compete, how to compete, and on what to compete.

The opportunity in business can be a trend or event that could lead to a significant upward

change in sales and profit patterns, given the appropriate strategic response. In the absence

of a strategic response, a threat will result in a significant downward departure from current

sales and profits. If the strategic uncertainty is important and urgent, marketing managers

may conduct an in-depth analysis to take an urgent decision. Environmental scanning helps

marketing managers to find out the important forces outside an organization, which will

shape its business in relation to competitors.

Marketing managers should continually track changes in the outside world. Some

organizations have a formal marketing intelligence unit, which collects data on external

environment and feeds it into the decision-making unit of the firm. It helps the decision

makers to stretch their decision ideas by incorporating new information into business

planning. Whether the information required is just to make the marketing managers aware

about marketing trends or to be incorporated in the marketing planning and budgeting will

decide the immediacy and accuracy level of the data collected from the market.


Inflation and its implications:

Inflation is a rising price level resulting in reduced purchasing power for the consumer.

Inflation has the following effects:

Higher inflation leads to widespread concern about public policy to stabilise price

levels and ways of adjusting personally to the reduced spending power of

consumers

Higher taxes mean less consumer purchasing power, which results in decline of

sales of non-essential goods and services

Lower expenditure levels make the government a less attractive customer for many

industries.

Lowered money supply means less liquidity is available for potential conversion to

purchasing power.

Another way in which inflation affects marketing is by modifying consumer behaviour.

Modest increases in the general price level, often termed as creeping inflation, go largely

unnoticed by customers. But as purchasing power continues to decline, customers become

more conscious of inflation. This leads to price-consciousness, which in turn leads to three

possibilities.

Consumers can buy believing that the prices will increase.

Consumers can decide to reallocate their purchasing pattern.

Consumers can postpone certain purchases.

Q.3 Explain the various stages involved in Consumer Decision Making Process. Support

your answer with a proper diagram showing the Consumer Decision Making Process.

Answer:

The consumer decision making process is the way in which people gather and assess

information and make choices among alternative goods, services, organizations, people,


places, and ideas. It consists of the process itself and factors affecting the process.

The consumer decision making process consists of six basic stages. Factors affecting the

decision making process are a consumer’s demographic, social, and psychological

characteristics.

STIMULUS: A stimulus is a cue or drive meant to motivate a person to act. A stimulus can be

any of the following: Social, Commercial, Noncommercial, Physical. A prospective consumer

may be exposed to any or all of these types of stimuli. If a person is sufficiently stimulated,

he or she will go on to the next step in the decision process.

PROBLEM AWARENESS: During problem awareness, the consumer recognizes that the

good, service, organization, person, place, or idea may solve a problem of shortage or

unfulfilled desire. Many consumers are hesitant to react to unfulfilled desires because there

are risks and the benefits may be hard to judge.

EVALUATION OF ALTERNATIVES: The alternatives are evaluated on the basis ofthe

consumer’s criteria and the relative importance of these criteria. They are then ranked and

a choice made.


FIGURE: CONSUMER DECISION MAKING PROCESS

PURCHASE – The purchase act involves the exchange of money or a promise to pay for a

product, or support in return of ownership of a specific good, the performance of a specific

service, and so on. Purchase decisions remaining at this stage center on the place of

purchase, Terms and Availability, If the above elements are acceptable, a consumer will

make a purchase.

POST-PURCHASE BEHAVIOR: Frequently, the consumer engages in post-purchase behavior.

Buying one item may lead to the purchase of another. Re-evaluation of the purchase occurs


when the consumer rates the alternative selected against performance standards. Cognitive

dissonance, doubt that a correct purchase decision has been made, can be reduced by

follow-up calls, extended warranties, and post-purchase advertisements.

INFORMATION SEARCH: Information search involves listing alternatives that will solve the

problem at hand and a determination of the characteristics of each. Search can be internal

and/or external .As risk increases; the amount of information sought also increases. Once

the information search is completed, it must be determined whether the shortage or

unfulfilled desire can be satisfied by any alternative.

SET-2

Q.1 Explain Product Life Cycle (PLC).

Answer:

Products follow certain kinds of lifecycle patterns. We discuss the different stages in the

lifecycle of products.

Introduction stage

Research or engineering skill leads to new product development. The product is submitted

to the market at the stage of commercialization. The concept of product lifecycle starts from

the ‘commercialization’ stage of new product development. At this stage, product

awareness and acceptance among prospective customers are minimal. As the sales are low,

there are high promotional costs. This is due to the fact that the company has to spend

money for advertising, sales promotion, and other forms of promotion.

The major obstacle to rapid market penetration at this stage is poor distribution strategy.

Many retailers will not support a new product launch and will wait till they hear positively

about the brand. Many companies prefer regional roll outs in which the new product is

introduced market-by-market, region-by-region. This system of new product introduction

often brings physical distribution and logistics problems to the forefront.

Growth stage


The product begins to make rapid sales gains because of the cumulative effects of

introductory promotion, distribution, and word-of-mouth influence. There is a sharp rise in

profits at this stage. However, for sustained growth, consumer satisfaction must be ensured

at this stage. This stage begins when demand grows rapidly. In the case of repeated buying

situation, the innovators move from trial purchase to adoption stage. If the innovators are

satisfied with the products, they influence other buyers through word-ofmouth and referral

communication.

Maturity stage

Sales growth continues, but at a diminishing rate, because of the declining number of

potential customers who remain unaware of the product or who have taken no action. The

last of the unsuccessful competing brands will tend to withdraw from the market. For this

reason, sales are likely to continue to rise while the survivors mop up the customers for the

withdrawn brands.

Decline stage

Eventually, sales start declining due to multiple reasons. Changes in customer preferences,

competitive structure in the market, technology and other environmental forces lead to the

decline of sales. Sales begin to diminish absolutely as the customers begin to get bored with

the product. If the decline is for the product category, the marketer may decide to prune

the product portfolio and drop the declining brands or may plan to reintroduce brands with

product modifications.

Q.2 What do you mean by Brand? Enlist various advantages of Branding.

Answer:

A traditional definition of brand stands as a name, word, mark, symbol, device, or a

combination thereof, used to identify some product or service of one seller and to

differentiate them from those of the competitors. The definition clearly focuses on the

function of a brand, that is, to identify, irrespective of the specific means employed for the

identification. A modern definition talks about the brand as a vehicle for delivering a certain

value to the consumers. Hence, a brand is a mental patent and set of associations that


delivers a set of functional and emotional value to the consumer in a unique way as

compared to others in the business.

Creating a brand is the ultimate aim of marketing Endeavour.

The AMA defines it as “A brand is a name, term, sign, symbol, or design, or a combination

of them, intended to identify the goods or services of one seller or group of sellers and to

differentiate them from those of competitors.” A brand is a name, term, design, symbol, or

any other feature that identifies a seller's good or service as distinct from those of other

sellers. There are three aspects of this definition. Firstly, it focuses on ‘what’, of the brand.

Secondly, it emphasizes on what the brand ‘does’. A brand can be a combination of name,

symbol, logo, or trade mark. Brands do not have fixed lifetimes. Under the trademark law,

the users are granted exclusive rights to use brand names in perpetuity.

Advantages

The following are the advantages of branding.

(a) A brand promises and delivers a high level of assurance to consumers.

(b) A brand serves as an assurance to the customer about the product performance. A brand

helps customers to identify the product on the shelf and helps in making an informed

choice.

(c) A brand as a symbol of status and social s ignificance gives you psychological satisfaction.

(d) The brand speaks about the product's attributes and how they perform, about the brand

name and what it stands for and about the company associated with a brand. Hence, for a

consumer, the brand aids decision making by building trust, familiarity, and assurance of a

certain standard.

The brand also provides benefits to the company. It develops a loyal customer base e.g.,

brands like Starbucks coffee, Harley, Lux, Kellogg's, and Horlicks have a strong loya l

consumer base.

Q.3 Explain Advertising. Also explain any 12 types of Advertising.


Answer:

Advertising is a paid form of communication in which the sponsor or the brand owner has

made payments to the media to carry the message through their set of media vehicles.

The Oxford Dictionary explains advertising as 'to make an announcement in a public place,

describe or present goods publicly with a view to promoting sales.' Advertising is a public

announcement, formerly by town criers, now usually by newspapers, posters, television, or

radio. The word advertising is derived from a Latin word Advertere which means to turn the

mind. Broadly speaking, advertising does turn the attention of people to a commodity or

service.

The American Marketing Association defined advertising as "any paid form of non personal

persuasion and promotion of ideas, goods or services, by an identified sponsor."

Types of advertisements

Advertising can be classified into various forms as mentioned below.

Brand advertising – This is the most popular form of advertising. All possible media

including television is flooded with brand advertising. Brands like Surf Excel, Pepsi,

and Coke in India are shown more frequently on Indian televisions.

National advertising –These advertisements are uniform across the nation and are

released through national media covering the nation.

Local advertising – These advertisements are carried out in local and vernacular

media to promote the product in a local region.

Retail advertising – These advertisements are brought out to promote retail outlets

and dealer points.

Nation and destination advertising – These advertisements are brought out to

promote a nation as a tourism destination. These are also used for promoting states,

cities, and tourist attractions.

Political advertising – These advertisements are done for political parties,

politicians, and individual candidates during elections and referendums.


Social advertising – These advertisements are brought out for a social cause like

against AIDS, sexual exploitation, women trafficking, child labour, and other critical

issues in a society.

Directory advertising – These advertisements are done in directories and yellow

pages and followed by people while collecting a telephone number or a home

address.

Direct response advertising – These advertisements are used in any medium that

tries to stimulate sales directly. The consumer can respond by mail, telephone, or

the Internet.

Business-to-business advertising – These advertisements are carried out by

targeting business and organizational marketers. These messages are directed

towards retailers, wholesalers, and distributors.

Institutional advertising – Institutions like colleges, universities, missionary of

charities, and large corporate bring out these advertisements. When these are

brought out by large corporate, we call them corporate advertising.

Public services advertising – Government and government-sponsored institutions

bring such advertisements for the benefit of general public. They communicate a

message on behalf of some good cause.

Interactive advertising – These are typical Internet based advertisements, which are

delivered to individual consumers who have access to the World Wide Web.

Advertisers use web pages, banner ads, spots, pop ups, and email programs to reach

the target audience.

Outdoor advertising – These are advertisements in which the marketer uses out of

the home media like wall paintings, billboard, hoardings, bulletins, kiosks, and

mobile vans for communicating with the audience.

Electronic advertising – These advertisements use electronic media like television,

radio, video and audiocassettes, electronic display boards, and CD-ROMs for

promotion of products and services.


In film advertising – These are new forms of advertisements in which actors are

shown using the products in the movie in order to increase its usage among the

audience.