MB0046 – Marketing Management

Assignment Set- 1 Q.1 a. Explain the different micro-environmental forces with examples. (6 marks)

Ans: This external environment influences company’s strategies in two levels i.e. external Macro environment and external Micro environment. The macro environment involves political and legal, economic and natural, social and cultural and technology environment. The micro environment consists of supply chain, customer and competitor.

Microenvironment: The forces which are very close to company and have impact on value creation and customer service .

Forces in the micro environment

The company : Deducing a strategic plan in to specific marketing plan require coordination of other functions like finance, Human resource, production, and research and development. For example, Safe Express, a leader in the supply chain management solution wants to hold its position in the US $ 90 billion Indian logistics market. Company plans to expand its service areas in the coming months. To meet the targets of the marketing plan, other departments of safe express also expanding their horizon. Company is coming out with logistics parks in different cities; plan’s to hold seven million square feet of warehousing capacity in the next three years and investing Rs 10 billion in three years to meet that targets. The above example shows that company’s marketing plan should be supported by the other functional department activities also.

Intermediaries: The firms which distribute and sell the goods of the company to the consumer. Marketing intermediaries plays an important role in the distribution, selling and promoting the goods and services. Stocking and delivering, bulk breaking, and selling the goods and services to customer are some of the major functions carried out by the middlemen. Retailers, wholesalers, agents, brokers, jobbers and carry and forward agents are few intermediaries to name. Retailers are final link between company and customers. Their role in the marketing of product is increasing every day.

Publics: These are microenvironment groups, which helps company to generate the financial resources, creating the image, examining the companies’ policy and developing the attitude towards the product.

There are six types of publics

1. Financial publics influence the company’s ability to obtain funds. For example, Banks, investment houses and stockholders are the major financial publics.

2. Media publics carry news and features about the company e.g. Deccan Herald

3. Advertisement regulation agencies, telecom regulation agency( TRAI), and insurance regulation agency(IRDA) of the government

4. Citizen action groups: Formed by the consumer or environmental groups. For example, people for ethical treatment of animals (PETA) or Greenpeace.

5. General publics: a company should be concerned towards general publics’ attitude towards its products and services.

6. Internal publics: Employees who help in creating proper image for the company through word of mouth.

Competitors: A company should monitor its immediate competitor. The product should be positioned differently and able to provide better services.

Suppliers: are the first link in the entire supply chain of the company. Hence any problems or cost escalation in this stage will have direct effect on the company. Many companies adopted supplier relation management system to manage them well.

Customers: A company may sell their products directly to the customer or use marketing intermediaries to reach them. Direct or indirect marketing depends on what type of markets Company serves. Generally we can divide the markets into five different categories. They are:

a. Consumer market.

b. Business market

c. Reseller market

d. Government market and

e. International market

Example: MRF a tyre company sells its product directly to consumer (in case of urgency, customer purchases directly from showroom) i.e. operates in consumer market. It operates in business markets by selling tyres to companies like Maruti Udyog limited. MRF also sells TYREs to BMTC and KSRTC, transport organizations of Karnataka government. If MRF sells tyre in African or American countries then it is operating in the international market. If MRF buys the old tyres, retreads it and sells it to the consumer at a profit then company is operating in the reseller market

(b) Mention the different ad appeals with suitable examples.

Ans: Advertising intends to promote the sales of a product or service and also to inform the masses about the highlights of the product or the service features. It is an efficient means of communicating to the world, the value of the product or the service. Advertising utilizes different media to reach out to the masses and uses different types of appeals to connect to the customers across the globe. The various types of advertising appeals harness different means of highlighting the features of a product and drawing the attention of the masses towards it. Here is an overview of the different types of advertising appeals.

Audio-Visual Media Advertising: In this advertising technique, the advertisers use the very popular audio and visual media to promote a product. It is the most widely used media that can effectively influence the masses. Television and radio have always been used to achieve a mass appeal.

Corporate Advertising: Corporate advertising is an advertising appeal wherein corporate logos and company message are publicized on a large scale. Hot air balloons are commonly used in advertising a product. Some companies propose to place their logos on booster rockets and space stations to achieve a wide publicity of the company.

Email Advertising: This is a relatively new advertising appeal that makes use of emails to advertise products. Advertisements are sent through emails, thus bringing out communication with a wide range of audiences.

Emotional Words: This advertising appeal makes use of positive words to generate positive feelings in the minds of the people about a certain product. The advertisers often use the words like 'luxury', 'comfort' and 'satisfaction' to create positive vibes among the masses to attract them towards the product being advertised.

Internet Advertising: It is a relatively recent form of advertising appeal. Internet has become one of the most influential media of the modern times. Websites attract thousands of users everyday and expose them to the advertisements on the websites.

Outdoor Advertising: Outdoor advertising is a popular advertising appeal that uses different tools to attract the customers outdoors. Billboards, kiosks and tradeshows are some of the commonly used means of outdoor advertising. Fairs, exhibitions and billboards that draw in the passersby are often used in outdoor advertising.Relationship Marketing: This form of advertising focuses on the retention of customers and customer satisfaction. Advertisers appeal to the target audiences with information that suits their requirements and interests.

Subliminal Advertising: This advertising appeal makes use of subliminal messages, which are intended to be subconsciously perceived. Subliminal signals go undetected by the human eye. However, they are perceived at a subconscious level. Subliminal appeal often makes use of hidden messages and optical illusions.Viral Advertising: It can take the form of word-of-mouth publicity or of Internet advertising. The aim of the advertiser is to market the product on a very large scale. This advertising appeal intends to achieve a speedy publicity of a product similar to the spreading of a pathological or a computer virus.

Q.2 What are the different market entry strategies if a company wants to enter international markets?

Ans: International Market Entry Strategies

Organizations that plans to go for international marketing need to answer some basic questions like:

a. In how many countries the company would like to operate?

b. What are the types of countries it plans to enter?

To answer the above questions companies evaluate each country against the market size, market growth, and cost of doing business, competitive advantage and risk level.

Checklist for country evaluation

Characteristics  weightages score 1. Political rights    1. Civil liberties    1. Control of corruption    1. Government effectiveness    1. Rule of law    1. Health expenditure    1. Education expenditure    1. Regulatory quality    1. Cost of starting a business    1. Days to start a business    1. Trade policy    1. Inflation    1. Fiscal policy    1. Consumption    1. Competition    

Once the market is found to be attractive companies should decide how to enter this market. Companies can enter international market from any one of the following strategies. They are

a. Exporting

b. Licensing

c. Contract manufacturing

d. Management contract

e. Joint ownership

f. Direct investment

Exporting is the techniques of selling the goods produced in the domestic country in a foreign country with some modifications. For example, Gokaldas textiles export the cloths to different countries from India. Exporting may be indirect or direct. In case of indirect exporting, company works with independent international marketing intermediaries. This is cost effective and less risky too. Direct exporting is the techniques in which organization exports the goods on its own by taking all the risks. Maruti udyog limited India’s leading car manufacturer exports its cars on its own. Company can also set up overseas branches to sell their products. Adani exports another leading exporter from India has international office in the Singapore.

Licensing: According to Philip Kotler licensing is a method of entering a foreign market in which the company enters into an agreement with a license in the foreign market, offering the right to use a manufacturing process, trademark, patent, or other item of value for a fee or royalty’. For example, torrent pharmaceuticals has license to sell the cardiovascular drugs of Chinese manufacturer Tasly. Licensing may cause some problems to the parent company. Licensee may violate the agreement and can use the technology of the parent company.

Contract manufacturing: company enters the international market with a tie up between manufacturer to produce the product or the service. For example, Gigabyte technology has contract manufacturing agreement with D- link India to produce and sell their mother boards. Another significant manufacturer is TVS electronics; it produces key boards in its own name as well as for other companies too.

Management contracting: In this type a company enters the international market by providing the know how of the product to the domestic manufacturer. The capital, marketing and other activities are carried out by the local manufacturer hence it is less risky too.

Joint ownership: A form of joint venture in which an international company invest equally with a domestic manufacturer. Therefore it also has equal right in the controlling operations. For example, Barbara a lingerie manufacturer has joint venture with Gokaldas images in India.

Direct Investment: In this method of international market entry Company invest in manufacturing or assembling. The company may enjoy the low cost advantages of that country. Many manufacturing firms invested directly in the Chinese market to get its low cost advantage. Some governments provide incentives and tax benefits to the company

which manufactures the product in their country. There is government restriction in some countries to opt only for direct investment as it produces the jobs to the local people. This mode also depends on the country attractiveness. It may become risky if the market matures or unstable government exists.

Q.3. a. State the meaning of Product life cycle and explain the different stages involved in it.

Ans: Product Life Cycle: This m

The product which is introduced into the market will undergo some modifications over the period. Its sales also fluctuate. Therefore marketer is interested in finding out How sales changes over period? And what strategies best suits at that point? A product life cycle can be graphed by plotting aggregate sales volume for a product category over time. Generally the curve resembles bell shaped curve but it is not the only one type of curve. We can obtain style, fashion or fad style of product life cycles also.

Product life cycle (bell shaped curve)

According to this type of cycle a product passes through five stages:

1. Product development stage: In this stage company identifies the viable idea and develops it. Sales in this stage are zero but require huge research and development budget. Therefore company incurs losses at this stage.

2. Introduction stage: Company introduces the product into the market. As the product is new to the market, awareness is usually very low. Here company adopts heavy sales promotion and product awareness programs. The cost of product is very high and a sale is very low. At this juncture company charges high price to the customer.

3. Growth stage: Company gets experience over the period and now tries to get the maximum market share (take first mover advantage). Sales will grow rapidly resulting in lesser cost and better profit. Company reduces the price of the product and offers varieties and values in it. It focuses on building better distribution network and pushes the product through it. Therefore company needs less sales promotion. Number of competitors will grow and it forces company to keep tab on them.

4. Maturity stage:

a. Peak sales.

b. Low cost per customer.

c. High profits.

d. Competition based pricing

e. Communicating the product differentiation to consumer.

f. Improving supply chain efficiency.

g. Defend the market share

h. Industry experiences the consolidation.

5. Decline stage: In this stage, product sales and profit declines. Company should phase out weak items from their product mix. The advertisement budget of the company also comes down.

Other product life cycles:

1. Style: a style is a basic and distinctive mode of expression appears in the field of human behavior. For example, style appears in homes, art, and clothing. Once the style is invented it will lost for longer period.

2. Fashion: currently accepted or popular style in a given field for example, cargo jeans are now fashion with college going students.

3. Fad: a fashion that enters quickly, adopted with great zeal, peaks early, and decline very fast for example, when the pager is introduced, every body would like to have the product. But when people found mobile as alternatives the demand for the product went down drastically.b. Define Customer Relationship Management.

Ans: Customer Relationship Management

The following are few definitions of Customer Relationship Management:

1.Berry defines CRMS as “attracting, maintaining and– in multi-service organizations— enhancing customer relationships.”

2.Berry and Parasuraman define CRMS as “attracting, developing and retaining customer relationships.”

3.In industrial marketing, Jackson defines CRMS as “marketing oriented toward strong, lasting relationships with individual accounts.”

4.Doyle and Roth define CRMS as “the goal of relationship selling is to earn the position of preferred supplier by developing trust in key accounts over a period of time.”

5.Christopher considers relationship marketing as “a tool to turn current and new customers into regularly purchasing clients and then progressively moving them through being strong supporters of the company and its products to finally being active and vocal advocates for the company.”

6. Relationship marketing is in essence “selling by using psychological rather than economic inducements to attract and retain customers. It seeks to personalize and appeal to the hearts, minds and purses of the mass consumers.”- James J. Lynch

7. “Customer Relationship Management is about acquiring, developing and retaining satisfied loyal customer; achieving profitable growth, and creating economic value in company’s brand,”

Thus it can be concluded from the above definitions, that Customer Relationship Management refers to all marketing activities directed towards establishing, developing, and sustaining long lasting, trusting, win-win, beneficial and successful relational exchanges between the focal firm and all its supporting key stakeholders.

Q.4. (a) You are a sales manager in ABC firm. You have taken some interviews and short listed a few candidates. How will you select the right candidate for the sales job?Ans: Being the sales manager of ABC firm , the steps I will follow to select the right candidate for the sales job:

1. Application blank

2. Screening

3. Reference

4. Personal interview

5. Test

6. Medical examination

7. Final interview (appointment)

a) Application Blank: Necessary information about the applicant is required to be considered for appointment. Generally, the candidates are asked to apply on company’s application form, sent directly to applicants against a requisition or an application is known as application blank given in the advertisement itself. This is with a view to gather only the necessary details of the applicants. It contains a number of questions, when filled in, gives a clear idea about the candidate. Generally, it may contain the name, sex, qualification, age, experience, health, social activities, references etc.

b) Screening: All applications will not be considered. Screening is a process by which applications are to be screened out (rejected) from further consideration, on the basis of unsuitability. The remaining applications are formally considered for appointment, subject to further formalities. By rejecting the applications of unqualified applicants, much time and energy can be saved in further processing.

c) Reference: Generally, it is a common practice to ask the applicant to mention the names of two references or referees, to whom the sales manager can make enquiries about the integrity, general character and ability of the applicant concerned. The qualities are checked with care and caution by the sales manager, by contacting the referees. If the opinions are favorable, the applications pass on to the next stage; and in case the referee gives unfavorable comment, the application is rejected at this stage.

Personal contact is necessary and it is better, because people are straight forward in tongue better than in pen. This is one-sided, but the effectiveness of such opinion is doubted, as there may be chances of telling only the good qualities of applicants. Moreover, only the names of such favorable persons are mentioned in reference, with pre-intimation. To overcome this, personal interview is essential.

d) Personal Interview: This is an important step in the process of selection. Only the screened applications are considered for selection and the firm sends out interview letters. Personal interview is a must. By this interview, the sales manager can understand the positive and negative qualities of the applicant, with reference to the job duties. A good interviewer must be unbiased, able to discover facts and be a keen observer of the interviewee.

Interviews are also of two types: (a) Patterned and non-patterned. Under patterned interview, questions are designed and the same questions are asked to all, which is easy for comparison purposes. (b) In non-patterned interview, no standardized questions are asked. The applicant is allowed to talk freely. A few direct questions are asked. By this

type of interview, the applicant gets a chance of speaking about his attitude and interest freely. The interviewer must be able to make an easy evaluation of the interview.

e) Tests: Test is an additional tool, with which the applicants are further tested to determine their suitability to the job. Generally, following are the important types of psychological tests conducted:

(i) Ability Test: This test is devised to ascertain the capacity to grasp things, and is a measure to know how well a person performs a particular task with motivation. This can also be called a mental ability or intelligence test. Such tests determine the suitability of a candidate for a particular job.

(ii) Habitual Characteristic Test: A man may be intelligent but may hesitate to take a decision. This test is aimed to know one’s aptitude and interest on normal, daily work, irrespective of the best behavior occasionally.

(iii) Achievement Test: This test is designed to know what knowledge a man has gained from his education or training.

By all these psychological tests, the ability and suitability of a candidate can be verified. One can aim to evaluate the honesty, cheerfulness, leadership quality, assertiveness, co-operation, supervision capacity, emotional stability, determination, ability etc., of the personnel. The effectiveness and reliability of these tests are questionable, as the qualities cannot be measured exactly and the circumstances to be faced by salesman are also different.

f) Medical Examination: The important thing about any person, apart from all qualities and eligibility, is that he must be physically fit for the job. Diseases and physical deficiencies of the salesmen will affect the business. As such, selected applicants have to undergo medical examination.

g) Final Interview and Appointment: The selected applicant is probably, called for a final interview and his suitability is measured through different tests, physical reports etc. The job must be explained to him along with all relevant details, which are required to perform the duties efficiently.

If everything is in favor of the applicant, an agreement must be executed by him. Generally, the agreement contains duties and authorities, sales quota, sales territory allotted, salary and conditions of resigning. It is followed by an appointment order, which contains designation, jobs to be performed, salary and other financial benefits etc.

b. As a consumer, what are the steps you will undertake before you decide to buy a car?

Ans: Consumer buying decision process.

In general Consumer passes through five different stages while purchasing the product.

1. Need recognition: Customer posses two type of stimuli’ at this juncture. One is driven by the internal stimuli and another is external stimuli. The examples of internal stimuli are customer’s desire, attitude or perception and external stimuli are advertising etc…From both stimuli customer understand the need for the product. Here marketer should understand what customers needs have that drew customers towards the product and should highlight those in the communication strategy.

2. Information search: In this stage customer wants to find out the information about the product, place, price and point of purchase. Customer collects the information from different sources like

a. Personal sources: Family, friends and neighbors

b. Commercial sources: Advertising, sales people, dealers, packaging and displays.

c. Public sources: mass media and consumer rating agencies.

d. Experiential sources: Demonstration, examining the product.

In this stage marketer should give detailed information about the product. The communication should highlight the attributes and advantages of the product in this stage so that he created the positive image about the product.

3. Evaluation of alternatives : After collecting the information, consumers arrive at some conclusion about the product. In this stage he will compare different brands on set parameters which he or she thinks required in the product. The evaluation process varies from person to person. In general Indian consumer evaluate on the following parameters

a. Price

b. Features

c. Availability

d. Quality

e. Durability

At this stage marketer should provide comparative advertisements to evaluate the different brands. The advertisement should be different for different segments and highlight the attribute according to the segment.

4. Purchase decision

In this stage consumer buy the most preferred brand. In India affordability plays an important role at this stage. Organizations’ bring many varieties of the products to cater to the needs of customers.

5. Post purchase behavior

After purchasing the product the consumer will experience some level of satisfaction and dissatisfaction. The consumer will also engage in post purchase actions and product uses of interest to the marketer. The marketer’s job does not end when the product is bought but continues into the post purchase period. Customer would like to see the performance of the product as he perceived before purchase. If the performance of the product is not as he expected then he develops dissatisfactions. Marketer should keep an eye on how consumer uses and disposes the product. In some durable goods Indian consumer want resale value also. Many automobile brands that not able to get resale value lost their market positions.

As a consumer the steps I will undertake before buying a car:

(a) Firstly ,I will analyze the desire ,attitude or perception in me regarding car .I will chart out my needs which have the top priority. I will possibly go through the advertisement which gives information regarding cars. I will shortlist car’s which satisfies my needs.(b) My second step will be to collect information regarding the car,place,price and point of purchase form sources like family ,friends neighbors ,advertising ,sales people ,media etc.© After collection of information regarding various brands of cars, I will compare different brands based on my needs and priorities.

(d) I will select the most suitable brand satisfying my needs and take a purchasing decision.(e) After purchasing the car , I will put my decision of buying a particular brand of car to test. Be it a satisfying or dissatisfying experience, I will make sure that the manufacturers of the product are updated with my experiences.

Q. 5 (a) What are the features of Business markets? How is it different from consumer markets?

Ans: Features or Characteristics of Business Markets

Following are some of the unique features of business markets where large establishments purchase the required goods and services from other businesses :

1. Few but bulk Buyers: The no. of buyers is few but they buy in large quantity. For example, major airlines buy the necessary equipments from the aircraft manufacturers

2. Geographical concentration of buyers: Buyers are geographically concentrated. For example, shipping industries are located on the east and west coasts of India than in any other places.

3. Variable demand: The nature of demand is fluctuating because the demand is basically a derived one. Based on the requirements of the consumer markets, organizations buy the goods and make the finished goods available in the market for final consumption. Larger the consumer demand, larger will be the organizational buying. For example, mobiles are being used by a large population and so cellular companies have to meet this rising demand.

4. Inelastic demand: The demand is also inelastic because organizations cannot make rapid changes in the production structure and so prices remain constant in the short-term. For example, Shoe manufacturers will not buy much leather if the price of leather is less neither will they buy less leather if the price increases.

5. Systematic purchasing: The purchasing activity is directly between the buyer and supplier organization which means there are no or very few middlemen involved. Purchasing activity is usually undertaken by purchase departments based on a proper structure and through various mechanisms like having purchase requisitions from other sections, inviting tenders and sending invoices from the suppliers, purchasing agreements or contracts with the key suppliers, renewing agreements etc. For example, Reliance Fresh has regular contracts with the agricultural producers for smooth supply of fresh fruits and vegetables.

6. Multiple buying influences: there will be several parties involved in deciding about the purchases because organizations will have several departments and units functioning under it with different requirements. So, unless they have the proper resources to work with there will be problems in the departments. For example, purchase department in a Hospital must be aware about the specific requirements in the clinical wards, operation theaters, labs, etc.

7. Reciprocation: This means that when an organization buys goods from another organization then the supplier organization also might need certain other goods that are

produced by the buyer organization. For example, a stationery supplier will supply the necessary stationeries to the paper manufacturer who in turn provides papers to the supplier.

8. Lease agreements: Most organizations take on lease the expensive equipments required by them rather than buy it. So, in this way, they reduce cost, get better service and the lessor or one who provides the equipments will also profit from the rent or lease charges. For example, TATA provides the transport trucks to other organizations on lease.

Differences between Consumer and Business markets are as follows:

(b) List out the 5 important requisites of an effective segmentation by giving suitable examples. Ans:

Requisites of Effective Segmentation

Segmentation of market must exhibit some characteristics that are as follows:

1. Measurable and Obtainable: The size, profile and other relevant characteristics of the segment must be measurable and obtainable in terms of data. If the information is not obtainable, no segmentation can be carried out. For example, Census of India provides the data on migration and education level, but do not specifies how many of the migrated employees are educated and if educated how many are there in white color jobs. If a company wants to target white color employees who are migrated to particular city, will not able to measure due to non availability of data.

2. Substantial: The segment should be large enough to be profitable. For consumer markets, the small segment might disproportionably increase the cost and hence products are priced too high. For example, when the cellular services started in India cost of the incoming calls and outgoing calls were charged at Rs 12/minute. As the number of subscribers grew, incoming calls became free. Further growth of subscribers resulted in lowering tariffs to the lowest level in the world.

3. Accessible: The segment should be accessible through existing network of people at a affordable cost. For example, Majority of the rural population still not able to access the internet due to high cost and unavailability of connections and bandwidth.

4. Differentiable: The segments are different from each other and require different 4Ps and programs. For example, Life Insurance Corporation of India needs separate marketing programs to sell their insurance plans, unit plans, pension plans and group schemes

5. Actionable: The segments which a company wishes to pursue must be actionable in the sense that there should be sufficient finance, personnel, and capability to take them all. Q. 6. Explain briefly what are the several processes involved in new product development.

Ans: New Product Development

New products are essential for existing firms to keep the momentum and for new firms they provide the differentiation. New product doesn’t mean that absolutely new to the world. It may be modification, or offered in the new market, or differentiate from existing products. Therefore it is necessary to understand what are new products?

Meaning of New Products are :

a. They are really innovative: Google’s Orkut a networking site which revolutionized social networking. In this site people can meet like minded people; they can form their own groups and many more.

b. They are very different from the others: Haier launches path-breaking 4-Door Refrigerators First time in India

c. They are imitative; these products are not new to the market but new to the company. For example, cavin Kare launched ruche pickles. This product is new to cavin kare but not to the market.

New product development process:

Stage 1: Idea generation: New product idea can be generated either from the internal sources or external sources. The internal sources include employees of the organization and data collected from the market. The external source includes customers, competitors and supply chain members. For example, Ingersoll rand welcomes new ideas from the General public .

Stage 2: Idea screening: Organization may have various ideas but it should find out which of these ideas can be translated into concepts. In an interview to Times of India, Mr. Ratan Tata, chairman TATA group discussed how his idea saw many changes from the basic version. He told that he wanted to develop car with scooter engine, plastic doors etc… But when he unveiled the car so many change were there in the product. This shows that initial idea will be changed on the basis of market requirements.

Stage 3: Concept development: The main feature that it caters to or the basic appeal of the product is created or designed in the concept development.

Example: Concepts used for Tata Nano car are:

Concept 1: low-end ‘rural car,’ probably without doors or windows and with plastic curtains that rolled down, a four-wheel version of the auto-rickshaw

Concept 2: a car made by engineering plastics and new materials, and using new technology like aerospace adhesives instead of welding.

Concept 3: Indigenous, in-house car which meets all the environment standards

Stage 4: Concept testing: At this stage concept was tested with the group of target customers.

Stage 5: Marketing strategy development: The marketing strategy development involves three parts. The first part focuses on target market, sales, market share and profit goals. TATA’s initial business plan consisted sales of 2 Lakh cars per annum. The second part involves product price, distribution and marketing budget strategies. TATA’s fixed Rs 1 Lakh as the car price, and finding self employed person who works like agent to distribute the cars. The final part contains marketing mix strategy and profit goals.

Stage 6: Business analysis: It is the analysis of sales, costs and profit estimated for a new product to find out whether these align with company mission and objectives.

Stage 7: Product development: During this stage, product is made to undergo further improvement; new features are added to the product. There is also scope for innovation and using the latest technology into the product.

Example: TATA Nano car development

1. Tried to outsource the product from allover the world.

2. Development of ‘mule’ or prototype with 20bhp.

3. Designing the small engine

4. Thermodynamic simulations and final engine

5. Development of MPFI with help of Bosch.

6. Cost reduction and negotiating with vendors.

7. Sona Koyo and Rane Group came up with hollow steering shafts, saving cost and cutting weight. Sharda Motors and Emcon designed the exhaust system and MRF tweaked the tyres to bear extra weight on rear wheels.

Stage 8: Test marketing:

1. The product is introduced into the realistic market

2. The 4P’s of marketing are tested.

3. The cost of test marketing varies with the type of product.

Stage 9: Commercialization: In this stage product is completely placed in the market and aggressive communication program is carried out to support it.

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MB0046 – Marketing Management

Assignment Set- 2

Q.1 Highlight the importance of Distribution channel and marketing intermediaries in carrying out the marketing function.

Ans: Need of marketing channels

Marketing channels are set of independent organizations involved in the distribution of the goods or services to the consumer from the factory at right time, and right place. E.g. Haldiram a company which produces snacks, chats and sweets have two manufacturing locations at Delhi and Nagpur. The products from Delhi will be sent to 25 C&F agents. These C&F agents distribute the goods to 700 distributors, who in turn sell to 0.4 million retail outlets. In the same way, goods reaches to 0.2 million retailers from Nagpur plant via 25 C&F’s and 375 distributors. Consumer buys Haldiram snacks throughout India through these 0.6 million retailers.

Marketing channels include retailers, wholesalers, agents, brokers etc. Some companies do not use these channels. They directly market their products to consumer. For example, Dell computers ask its customers to login to the website, configure their product, and order the same on the internet. Then generally a question comes to the mind, why many companies use marketing channels and some do not. To answer the question we need to understand what are the functions marketing channels do and how they are advantageous than direct marketing.

Functions of marketing channels

1. Physical distribution: transporting and storing goods.

2. Communication: Marketing intermediaries promotes the company’s products. Here channel member provide the information regarding the product and pushes it to customer.

3. Information: retailers and wholesalers collect the information from the customer and provide the same to the company.

4. Title transforming: Marketing intermediaries purchases the goods from the company and transform the title of goods to next intermediary or customer.

5. Relationship management: Here marketing intermediaries try to understand the needs of consumer, try to match his needs and satisfy them.

Retailers and Wholesalers are one of the most important market intermediaries:

Functions of retailing

1. Sorting: Retailers arrange the items in proper order so that customer can easily identify his goods or services.

2. Breaking bulk: the process of unpacking big packets into small packets. Retailer will perform this function as customer may not be able to purchase large quantity of goods and services.

3. Holding stock: Retailer works as storage facility to organizations. Retailer holds inventory to meet the day to day needs of consumer.

4. Channels of communication: Retailer promotes the company product through word of mouth communication. The retailer location is also used for point of purchase display.

5. Transportation: Retailer undertakes door delivery order in case of durable goods. This feature is now adopted by the small grocery stores.

Functions of wholesaler

1. Selling: wholesalers have well defined network of retailers. Hence, they can sell the company product in the large area.

2. Bulk breaking: wholesalers buy the product in large quantities and send in small quantities to retailers.

3. Warehousing: Wholesalers have huge space to store the goods. They help in reducing the inventory cost to the company.

4. Transportation: Some companies have agreements with wholesalers on transporting the goods to retailers.

5. Credit and risk taking: wholesalers provide credit to the retailers. By doing this they take the risk of finance as well as products.

6. Information: Wholesalers provide the information to company on retailers purchase, retail market characteristics.

Q.2 (a) Explain the different product mix pricing strategies.

Ans: 1. Product Line pricing: strategy of setting the price for entire product line. Marketer differentiate the price according to the range of products i.e. suppose the company is having three products in low, middle and high end segment and prices the three products say Rs 10 Rs 20 and Rs 30 respectively

Example : Nokia mobile phones Nokia 1110 is priced @ Rs 1349, Nokia 7610priced @ Rs 6249 and Nokia E90 priced @ Rs 34599. All the three products cater to the different segments Low, middle and high income group respectively. The three levels of differentiation create three price points in the mind of consumer. The task of marketer is to establish the perceived quality among the three segments. If the customers do not find much difference between the three brands, he/she may opt for low end products.

2 Optional Product pricing :strategy is used to set the price of optional or accessory products along with a main product. Maruti Suzuki will not add above accessories to its product Swift but all these are optional customer has to pay different prices as mentioned in the picture for different products. Organizations separate these products from main product so that customer should not perceive products are costly. Once the customer comes to the show room, organization explains the advantages of buying these products.

3. Captive product pricing: Setting a price for a product that must be used along with a main product. For example, Gillette sells low priced razors but make money on the replacement cartridges.

4. By product pricing: is determining the price for by products in order to make the main products price more attractive. For example, L.T. Overseas manufacturers of Dawaat basmati rice, found that processing of rice results in two by products i.e. rice husk and rice brain oil. If the company sells husk and brain oil to other consumers, then company

5. Product bundle :pricing is offering companies several products together at the reduced price. This strategy helps companies to generate more volume, get rid of the unused products and attract the price conscious consumer. This also helps in locking the customer from purchasing the competitors products. For example, Anchor toothpaste and brush are offered together at lower prices.

(b) Give a note on marketing concepts.1. Ans: The Marketing Concept – The Marketing Concept proposes that a company’s task is to create, communicate and deliver a better value proposition through its marketing offer, in comparison to its competitors; to its target segment and that this customer oriented approach only can lead to success in the market place.

To day, marketing function is seen as one of the most important function in the organization. Many marketers put the customers at the centre of the company and argue in favor of such a customer orientation where all functions work together to respond, serve and satisfy the customer.

Many successful and well known multinational companies have adopted marketing concept as their business and marketing philosophies. Many Indian companies in the banking and other service sectors follow customer orientation and service as their motto. According to this concept, a company’s marketing effort must start right from identifying, through Market Research, exact needs & wants of the target market.

Q.3 a. What are the features of business markets?

Ans: Characteristics of Business Markets

Following are some of the unique features of business markets where large establishments purchase the required goods and services from other businesses. Such B2B operations determine the organizations as buyers and those organizations who supply the various requirements will be the sellers or suppliers or service providers.

1. Few but bulk Buyers: The no. of buyers is few but they buy in large quantity. For example, major airlines buy the necessary equipments from the aircraft manufacturers

2. Geographical concentration of buyers: Buyers are geographically concentrated. For example, shipping industries are located on the east and west coasts of India than in any other places.

3. Variable demand: The nature of demand is fluctuating because the demand is basically a derived one. Based on the requirements of the consumer markets, organizations buy the goods and make the finished goods available in the market for final consumption. Larger the consumer demand, larger will be the organizational buying. For example, mobiles are being used by a large population and so cellular companies have to meet this rising demand.

4. Inelastic demand: The demand is also inelastic because organizations cannot make rapid changes in the production structure and so prices remain constant in the short-term. For example, Shoe manufacturers will not buy much leather if the price of leather is less neither will they buy less leather if the price increases.

5. Systematic purchasing: The purchasing activity is directly between the buyer and supplier organization which means there are no or very few middlemen involved. Purchasing activity is usually undertaken by purchase departments based on a proper structure and through various mechanisms like having purchase requisitions from other sections, inviting tenders and sending invoices from the suppliers, purchasing agreements or contracts with the key suppliers, renewing agreements etc. For example, Reliance Fresh has regular contracts with the agricultural producers for smooth supply of fresh fruits and vegetables.

6. Multiple buying influences: there will be several parties involved in deciding about the purchases because organizations will have several departments and units functioning under it with different requirements. So, unless they have the proper resources to work with there will be problems in the departments. For example, purchase department in a Hospital must be aware about the specific requirements in the clinical wards, operation theaters, labs, etc.

7. Reciprocation: This means that when an organization buys goods from another organization then the supplier organization also might need certain other goods that are produced by the buyer organization. For example, a stationery supplier will supply the necessary stationeries to the paper manufacturer who in turn provides papers to the supplier.

8. Lease agreements: Most organizations take on lease the expensive equipments required by them rather than buy it. So, in this way, they reduce cost, get better service and the lessor or one who provides the equipments will also profit from the rent or lease charges. For example, TATA provides the transport trucks to other organizations on lease.

(b) Write a short note on product line and product mix.

Ans: Product line: The group of related products which uses same marketing effort to reach the consumer. The product line identifies profitable and unprofitable products and helps in allocation of resources according to that. The product line understanding helps the marketer to take line extension, line pruning and line filling strategies of the company.

The major product line decisions are:

a. Product line length:

b. Product line stretching

c. Product line filling

d. Product line pruning.

(i)Product line length: The number of items in the product line is called the product line length.

(ii)Product line stretching: Company lengthens its products line either by stretching upwards or downwards or both ways.

(iii)Product line filling: Adding more items in the present line

(iv)Product line pruning: removing the unprofitable products form the product line.

Product mix: The number of product line and items offered by marketer to the consumer. A company’s product mix has four different dimensions. They are product mix width, product mix length, and product mix depth and product mix consistency.

(i)Product mix width: The total number of product line that company offers to the consumers

(ii)Product mix length: The total number of items that company carries within its product line.

(iii)Product line depth: The number of versions offered of each product in the line

(iv)Product mix consistency: If company’s product lines usage, production and marketing are related then product mix is consistent else it is unrelated

Q.4. a. Select any deodorant brand and evaluate its positioning strengths or weakness in terms of attributes, benefits, values, brand name and brand equity.

REXONA DEODARANT has positioned itself in the following way:

1. Product Attributes :

Rexona explains its attributes in the following way:

“It happen every day. Those unexpected moments when the adrenalin starts to pump and the sweat starts to flow. With Rexona's unique body-responsive technology, which releases extra protection as you need it, you'll know that your deodorant won't let you down. Better still, everyone can enjoy this peace

of mind as Rexona is the only deodorant tailored to the needs of both sexes, with separate product ranges for each”.

2. Benefits as explained are as follows:

“ Now that we've established ourselves as a truly dual-gender brand with tailored solutions for men and women, we're extending our 'won't let you down' promise “.

3. Values projected are : Pioneering bigger, better results.

4. The importance given by the company for Safety and Care are given as follows:

(i)Our Rexona 50ml roll-on deodorant is one of the most environmentally friendly on the market. The moulding, assembly and packaging processes were streamlined and energy efficiency improved, with the resulting roll-on weighing an average 8% less. The new offering uses 1 000 tonnes less plastic a year than the old 50ml roll-on.

(ii) In addition to our proprietary body-responsive technology, we've also been the first company to introduce Rexona Crystal, a product that eliminates the unsightly white deposits on dark garments commonly associated with aerosols and sticks. Rexona is now present in Europe, North America and Latin America. And the revolutionary new Rexona for Men range addresses men's very particular physiological needs.

(iii) Affordable for everyone: We're enabling millions of people in low-income markets, such as Asia, to enjoy the brand's benefits via affordable mini-sticks, mini-roll-ons and sachets of deodorant lotions, supported by personal hygiene education programmes.

6. Brand Equity :

Rexona deodarant is a product of one of the largest FMCG company HUL Ltd.This itself brings in the faith of the consumer in the brand. Thus Rexona achieves the following to a large extent:

1. Brand loyalty 2. Brand awareness 3. Perceived quality 4. Brand associations

Thus Brand name is very strong for Rexona Deodarant.

7. Due to its already established distribution network HUL is able to deliver its product far and wide into remote parts of India.8. The Rexona have a wide range of produt line.

(b) You are a research expert in the field of marketing footwear products. What are the various research approaches you would consider before making a consumer survey regarding footwear? Ans: The various research approaches that I would consider before making a consumer survey are as follows: 1. Observational Approach: I would try to collect fresh data on footwear by observing various situations and people in various situations. E.g. People in rainy season.

2. Focus Group Research: I would consider method of discussion ,in which I would invite knowledgeable persons connected with marketing footwear’s ,consumers to carry out a healthy discussion in the presence of a moderator to identify various facets of footwear market. Subsequently I would analyze the recorded tape to understand the consumer attitudes ,beliefs and behavior.

3. Survey Research: I would take the help of questionnaire to learn about people’s knowledge ,beliefs and preferences.

4. Behavioral Research: I would try to learn customer’s actual behavior in term’s of actual purchases reflecting their preferences .5. Experimental Research: I would arrange for experiments by selecting matched groups of subjects , who would be subjected to different treatments. E.g. What effect has product of footwear on various types of skin.

Q. 5 a. What advice would you give a company that has facing bad publicity? What steps would you tell the company to improve its reputation?

Ans: The advice I would give a company facing bad publicity are as follows:1. The media should be handled effectively. 2. Bring in professional advice, in the form of a PR firm, and commit resources and senior management’s time in drafting and implementing a media strategy. 3. The PR firm should be used in making the senior management understand how the media works, demolishing negative misconceptions and building understanding of how the media can help your business grow.4. Bad news should be dealt with quickly.5. Ensure that company’s side of the story is heard instead of burying one’s head in sand.6. Promote positive news regarding the organization. 7. Harness the media’s power to communicate to wide audiences will help protect and grow the reputation of the firm.

The steps that the company needs to improve its reputation:

1. Provide people with the accurate information and giving clarifications if needed either through press release, media interview, websites,public messages, advertising etc. 2. Company’s top management or spokesman can give a public statement or comment in the various media.3. Improvising Public Relations and designing good publicity message to erase the effects of bad publicity.4. Continuing to provide quality products and services to the consumers.5. Involving in community work or environmental protection campaigns or any such activity for a good cause.

(b) As a brand manager, what are the ways in which you will select a brand name for your product- watches and how will you position it in the market? Ans: In selecting a brand name for a watch I would the following ways: 1. I would suggest a name that highlights the product benefits and qualities: e.g Celebrations, which highlights that watch would be the right pick for happy occasions.

2. The name Celebration is also easy to pronounce, recognize and remember.

3. The selected name can easily be translated into different languages of India as well as in foreign languages. Everyone can connect themselves with it .4. I will ensure that it is capable of registration and legal protection. Brand Positioning:1. Product attributes:

Celebration for you, with you throughout lifeI will use the above caption to speak that watch is all special occasions,their remembrance and the technology used for the long life or durability of the watch.

Thus I will position the watch brand Celebrations by Product attribute strategy.

Q. 6 (a) What is MIS? What are its benefits? Ans: MIS can be defined as a system that consists of people ,equipment and procedures to gather, sort, analyze, evaluate and distribute needed, timely and accurate information to marketing decision makers. Characteristics of MIS are as follows:

1. It is a planned system developed to facilitate smooth and continuous flow of information.

2. It provides pertinent information, collected from sources both internal and external to the company, for use as the basis of marketing decision making.

3. It provides right information at the right time to the right person.

Benefits of MIS are as follows:

1. It allows marketing managers to carry out their analysis, planning implementation and control responsibilities more effectively.

2. It ensures effective tapping of marketing opportunities and enables the company to develop effective safeguard against emerging marketing threats.

3. It provides marketing intelligence to the firm and helps in early spotting of changing trends.

4. It helps the firm adapt its products and services to the needs and tastes of the customers.

5. By providing quality marketing information to the decision maker, MIS helps in improving the quality of decision making.

(b) How is rural marketing different from urban markets? Ans: The urban marketing strategies cannot be modified and applied to a rural market. The marketing environment of a urban area and a rural area are totally different. Due to different marketing environment in rural areas, thrust needs to be given to develop products to meet the needs of the rural sector and reaching it across as per the specific characteristics of the rural environment.

Rural marketing is different due to the following reasons:1. Accessibility and mobility: The movement of the people is restricted by the

lack of surface roads and the mode of transport. There are restrictions by way of visibility during night. This becomes a problem for the supplier as well as consumer.

2. Average income level of consumers: The average wage earners are characterized by lower per capita income and disposable income in comparison to the urban consumers.

3. Geographical distances: The living quarters are separated more than they are in the urban areas.The cluster of villages is also segregated by distances.

4. Literacy Level: On an average the literacy level in the rural sector is lower in comparison to the urban sector.

Other issues also exist specific to the rural sector. These force marketers to take a different approach for the entire marketing process or at least some of them against the urban sector.

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