Marketing Management MB0046

MBA-II : Subject code: MB0046 Page 1 of 26

ASSIGNMENT

MBA-II

Subject code: MB0046

Set 1

SUBJECT NAME: MARKETING MANAGEMENT

Q. No.1a). Explain the meaning of market with its features.

Answer: Market is a public place in a town or village, where household provisions and other objects

are available for sale. The definition of market has expanded in this globalized world. The traders

may be spread across a whole town, or city or region or a country and yet form a market. For

example, stock market, Oil & Oilseeds market, Steel or Metals market etc. where people across the

countries can participate in the business without being face to face.

The essential features of a market are

(i) existence of a commodity / item which is to be dealt with,

(ii) the existence of buyers and sellers,

(iii) a place; be it a certain region, a country or the entire world and even a virtual place like the

internet and

(iv) Interactions between buyers and sellers to facilitate transactions.

On the basis of Geographic Area

Local Market is the place where the purchase and sale of goods / services involve buyers and sellers

of a small local area. The example of local market is a village or a town market.

National Market

When the trading involves both buyers and sellers of the entire nation then it is called as a national

market.

Global or World Market

Many manufactured products and specialized services are also sold across the globe by many

companies.

On the basis of Nature of Competition in the market

Perfect Market

It refers to a market or market situation where there is perfect competition. Competition is said to be

perfect when (a) the sellers & buyers of a particular product are so many that none of them have to

sell or buy at a single uniform price. (b) Price is determined by the market forces of supply &

demand. This could be an ideal situation for all marketers.

Imperfect Market

In contrast to the perfect competition, the imperfect market will have imbalance between number

of buyers and sellers. This market is further divided into three parts. They are Monopoly, Monopolistic

and oligopoly. In case of monopoly, single seller dominates the entire market where as in oligopoly

few sellers dominate the market. The details of these types of markets will be discussed in the pricing

unit.

On the basis of Nature of Goods Sold

Consumer Goods Market

Definition: A Consumer Goods Market is defined as a market where the final output of the firm goes

for the consumption by individuals or institutions.

Consumer Goods Market


This is a market, where the buyers who are individuals and institutions purchase a variety of products

and services to satisfy their needs and wants. Products sold in consumer goods market are classified

as non-durables, which are frequently purchased such as bathing soap, detergent etc. and

durables such as refrigerator, TV set, washing machine, car, clothing etc. Non-durables are also

known as FMCG – Fast Moving Consumer Goods, e.g. soap, detergent etc.

Industrial Goods Market

Definition: A business market is defined as a market where output of one firm goes either as raw

material, goods in process or as consumables of another industry.The products which are sold in the

industrial goods market are typically, raw materials, machines, machine tools, equipments,

components and spares etc.

Non-Profit and Government Markets

This market which consists of Non-Profit organizations such as social-service agencies, educational

organizations, charitable organizations and Government Departments and agencies needs special

skills to sell to them. These buyers have limited purchasing power which is why pricing for this market

needs to be planned carefully.

Q. No 1b). Marketing is more than just an exchange process. How can you prove the validity of this

statement?

Answer: Marketing is more than just an exchange process, let‟s discuss the validity of the same:

1. Needs and Wants

The marketer‟s task lies in satisfying human needs and wants through the exchange process. It is

alleged that “marketing creates needs” and makes people buy things they do not actually need. In

reality, marketing or marketers do not create “needs”, but they create “wants”. Some needs are the

basic human requirements of food, clothing, shelter, water and air. There are other needs such as

social needs, esteem needs etc. When we desire certain specific objects or items to fulfill these

needs, they are called wants. The task of a marketer is to influence our wants rather than needs. He

does so along with other influential factors such as socio-cultural forces and institutions such as

family, religion, and different reference groups.

2. Demand

Human wants are unlimited, but their resources are limited. When a want for an object is backed or

supported by buying ability, willingness to spend and desire to acquire a product / service, it

becomes a potential demand. The task of assessing or estimating demand is very crucial for a

marketer. He should understand the relationship of the demand for his product with its price.

Demand forecasting is essential for allocation of resources in a company.

3. Product and Services

„Product is a generic term used to describe what is being offered by a seller or marketer. It may be a

good, a service or idea, which can be marketed by offering a set of benefits it offers to customers to

satisfy their needs. However, there is a distinction between products and services. When we say

„product‟, we mean a physical or a tangible product such as a tooth paste, a refrigerator or a

mobile phone, whereas „service‟ refers to an act, performance, a benefit and indicates intangibility

and absence of ownership or possession. Services can include banking service, hospitality service,

airlines service, health service, entertainment service etc. Thus, a product can be defined as

anything that can be offered to market to satisfy a need or want.

4. Target Market

Very few products can satisfy everyone in the market. Therefore, marketers divide the market into

distinct groups of buyers who have similar preferences. These groups are called segments with their

own specific demographic, psychographic and behavioral characteristics. The marketer decides as

to which of these segment or segments offer highest opportunity for his company.

5. Marketing Management

Marketing Management which is also the title of this course refers to all the activities which the

marketing managers, executives and personnel have to undertake to carry out the marketing

function of the firm. It involves


(i) analysing the market opportunities by undertaking consumer needs and changes taking place in

the marketing environment, (ii) planning the marketing activities, and (iii) implementing marketing

plans and settings control mechanism to ensure smooth and successful accomplishment of the

organizations goals.

6. Values and Satisfaction

In developed and developing economies, consumers have several products or brands to choose to

satisfy his/her need. Consumers‟ perceptions about value which they can expect from different

products or services depend upon several factors. Sources that build the customer expectations

include, own experience with products, friends, family members, consumers‟ reports and marketing

communications. Customer value is the difference between total benefits received and total costs

incurred by him in acquiring the product or services. The types of benefits could be product‟s

functional value, or its brand related image value and any accompanying service value. The types

of costs a customer can incur may be monetary cost and energy cost.

Value is primarily a function of quality, service and cost. Value increases with increase in quality and

service and decreases with increase in cost. Value is an important marketing concept and the task

of marketing is to identify, create, communicate, deliver and monitor customer value.

Customers generally experience satisfaction when the performance level meets minimum

performance expectations of a product or service. When the performance as perceived exceeds

the expected performance level, the customer will be not just satisfied, but delighted. Thus customer

satisfaction or delight with respect to a product or service encourages customers to come back and

repurchase the product or service in future.

Q. No.2a). Examine how a firm’s micro environment operates when compared with its macro or

external environment.

Marketing department alone cannot satisfy all the needs of customer. Therefore it is essential to

integrate the functions of suppliers, publics, internal departments and intermediaries in creating the

value to the customer. These forces are known as organization‟s microenvironment.

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

and customer service.

The Company

Remember, in the previous unit we discussed about marketing mix and marketing plan. Safe Express,

a leader in the supply chain management solution wants to hold its number one position in the US $

90 billion Indian logistics market. The 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. The Company is coming out with logistics parks in different cities; plans to

hold seven million square feet of warehousing capacity in the next three years and invest Rs 10 billion

in three years to meet those targets. The above example shows that the company‟s marketing plan

should be supported by the other functional departments also.

Intermediaries


Marketing intermediaries: These are firms which distribute and sell the goods of the company to the

consumer.

Marketing intermediaries play 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 forward agents are few of the intermediaries. Retailers are final link

between the company and the customers. Their role in the marketing of product is increasing every

day.

Publics

These are microenvironment groups, which help a company to generate the financial resources,

creating the image, examining the companies‟ policy and developing the attitude towards the

product.

We can identify 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 competitors as its sale will be affected by the nature and

intensity of the competitors. The sale of Coca cola will be affected by Pepsi cola, or Britannia

cheese by Amul cheese. Michael Porter, the author of Competitive Advantage of Nations

suggested that, in addition to direct competition, companies should also consider competition from

substitutes. In addition to existing competitors, the potential competitors should also be anticipated.

Competition may arise from

a. Small firms with low overheads producing duplicates.

b. Firms which diversify into certain products by merely being in the particular industry for e.g. Pepsi

entered the snacks sector competing with pure snack producers like Haldiram.

c. Firms which expand in the same vertical for e.g. Godrej which manufactured office furniture and

steel cupboards went on to the entire range of home furniture thereby giving competition to

pure home furniture makers.

How do companies or enterprises survive and grow under the above circumstances. While we shall

study this in detail later, a simple step could be that the product should be positioned differently and

the company should be able to provide better services

Suppliers

There are many kinds of suppliers to an enterprise or an institution. There are typically, raw material

suppliers, energy and fuel suppliers, labour suppliers, office item suppliers and so on.

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. Suppliers are a source of competition to firms

today. For a large retail store like Reliance Retail or Big Bazaar the suppliers play the most significant

role in both cost and time. Timely supplies reduce stocking of goods and blocking of space, at the

same time meet customer requirements.

In a globalised scenario suppliers are even more important as competition goes up manifold! The

Tamil Nadu State Electricity Board imports coal from New Zealand despite huge coal reserves in

India. For Volvo, India is a manufacturing hub.

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

Q.No 2b). Mention the key points in one of the four-buyer behavior models.

Answer: The Psychoanalytical Model: The psychoanalytical model draws from Freudian Psychology.

According to this model, the individual consumer has a complex set of deep-seated motives which

drive him towards certain buying decisions. The buyer has a private world with all his hidden fears,

suppressed desires and totally subjective longings. His buying action can be influenced by

appealing to these desires and longings. The psychoanalytical theory is attributed to the work of

eminent psychologist Sigmund Freud. Freud introduced personality as a motivating force in human

behavior. According to this theory, the mental framework of a human being is composed of three

elements, namely,

1. The id or the instinctive, pleasure-seeking element. It is the reservoir of the instinctive impulses that

a man is born with and whose processes are entirely subconscious. It includes the aggressive,

destructive and sexual impulses of man.

2. The superego or the internal filter that presents to the individual the behavioral expectations of

society. It develops out of the id, dominates the ego and represents the inhibitions of instinct

which is characteristic of man. It represents the moral and ethical elements, the conscience.

3. The ego or the control device that maintains a balance between the id and the superego. It is

the most superficial portion of the id. It is modified by the influence of the outside world. Its

processes are entirely conscious because it is concerned with the perception of the outside

world.

The basic theme of the theory is the belief that a person is unable to satisfy all his needs within the

bounds of society. Consequently, such unsatisfied needs create tension within an individual which

have to be repressed. Such repressed tension is always said to exist in the sub-conscious and

continues to influence consumer behavior.

Q. No. 3a). State the meaning of Marketing Information System and Marketing Research.

Answer: Marketing Information System:

A Marketing Information System supplies three types of information.

1. Recurrent Information is the data that MIS supplies periodically at a weekly, monthly, quarterly, or

annual interval. This includes data such as sales, Market Share, sales call reports, inventory levels,

payables, and receivables etc. which are made available regularly. Information on customer

awareness of company‟s brands, advertising campaigns and similar data on close competitors

can also be provided.

2. Monitoring Information is the data obtained from regular scanning of certain sources such as

trade journals and other publications. Here relevant data from external environment is captured

to monitor changes and trends related to marketing situation. Data about competitors can also

be part of this category. Some of these data can be purchased at a price from commercial

sources such as Market Research agencies or from Government sources.

3. Problem related or customized information is developed in response to some specific

requirement related to a marketing problem or any particular data requested by a manager.

Primary Data or Secondary Data (or both) are collected through survey Research in response to

specific need. For example, if the company has developed a new product, the marketing

manager may want to find out the opinion of the target customers before launching the

product in the market. Such data is generated by conducting a market research study with

adequate sample size, and the findings obtained are used to help decide whether the product

is accepted and can be launched.


Marketing Research

Earlier we saw that Marketing Research is an important component of the Marketing Information

System. Marketers need to acquire good understanding of their own markets to monitor the

changing environment. They need information to assess their own past performance as well as to

prepare future marketing plans. Hence they require timely and accurate information on their

consumers and competitors as well as on the performance of their products. In today‟s highly

competitive and complex environment consumer needs are changing at a fast pace. Hence

decision making is very challenging.

Marketing Research performs the task of collecting, recording and analyzing relevant data. Thus, it

has emerged as one of the important activities of the marketing function.

American Marketing Association (AMA) defines Marketing Research as –

Definition: Marketing Research is the function which links the consumer, customers and public to the

marketer through information – information used to identify and define marketing opportunities and

problems; generate, refine and evaluate marketing actions; monitor marketing performance; and

improve understanding of marketing as a process.

Philip Kotler defines Marketing Research as – the systematic design, collection, analysis and reporting

of data findings relevant to a specific marketing situation facing the company.

Features of Marketing Research

1. It is a systematic process – It has to be carried out in a stepwise and systematic manner and the

whole process needs to be planned with a clear objective.

2. It should be objective – It is important that the methods employed and interpretations are

objective. The research should not be carried out to establish an opinion nor should it be

intentionally suited towards predetermined results.

3. It is multi-disciplinary – Marketing Research draws concepts from other disciplines such as

Statistics for obtaining reliable data and from Economics, Psychology and sociology for better

understanding of buyers.

Objectives of Marketing Research

Marketing Research may be conducted for different purposes. Based on how organizations use

Marketing Research, objectives of Marketing Research can be summarized as follows:

1. To understand why customers buy a product

2. To forecast the probable volume of future sales or expected market share

3. To assess competitive strengths and strategies

4. To evaluate the effectiveness of marketing action already taken

5. To assess customer satisfaction of company‟s products/services

Q. No 3b). Explain the various steps involved in the business buying process.

Answer:

Problem recognition:

1. Problem can be identified from either internal stimuli or external stimuli. Company would like to

launch new product hence it searches for the suppliers who can supply the material and

equipments required for the new product. A large printing company may find that it can set up

an exclusive design section as a profit center. For this it may want high end design software and

systems. It is possible that the system requirement s can only be provided by Apple Macintosh.


2. External stimuli like trade show, conference also helps the company to identify the problem.

Need description:

After finalizing the problem, companies will define need description. The need description includes

1. Characteristics and quantity of the needed item.

2. For the complex products team assessment is required.

3. The required items are assessed on the basis of reliability, durability, price, and other attributes

needed in the item.

Product specification:

Organizations develop detailed product specification with value analysis. In the value Analysis

Company analyzes the components and their production process. Here emphasis is given to find the

alternative methods of producing the components and finding the optimum method that suits the

company.

Supplier search

The buyer now tries to identify the most appropriate suppliers. The buyer can examine trade

directories, do a computer search, phone other companies for recommendations, watch trade

advertisements, and attend trade shows. The supplier‟s task is to get listed in major business

directories, develop a strong advertising and promotion program, and build a good reputation in

the marketplace. Suppliers who lack the required production capacity or suffer from a poor

reputation will be rejected. Those who qualify may be visited to examine their manufacturing

facilities and meet their personnel. Qualified suppliers are shortlisted for further process.

Proposal solicitation

The buyer will now invite qualified suppliers to submit proposals. Some suppliers will send only a

catalog or a sales representative. Where the item is complex or expensive, the buyer requires a

detailed written proposal from each qualified supplier. The buyer will invite qualified suppliers to

make formal presentations.

Thus business marketers must be skilled in researching, writing and presenting proposals. Their

proposals should be marketing documents, not just technical documents. Their oral presentations

should inspire confidence. They should position their company‟s capabilities and resources so that

they stand but from the competition.

Supplier selection

This stage is also known as vendor selection. During this stage companies will prepare the checklist.

Weightages are assigned against each checklist point and evaluated. Some of the important

attributes those commonly found in the vendor evaluations are

a. Quality

b. Delivery

c. Communication

d. Competitive prices.

e. Servicing

f. Technical advice

g. Performance history

h. Reputation

Order routine specifications:

The buyer now negotiates the final order with the chosen supplier(s), listing the technical

specifications; the quantity needed, the expected time of delivery, return policies, warranties and so

on. In case of MRO items (Maintenance, Repair and Operating items), buyers are increasingly

moving towards blanket contracts rather than periodic purchase orders. Writing a new purchase

order each time stock is needed, is expensive. Nor does the buyer want to write fewer and larger

purchase orders because that means carrying more inventories. A blanket contract establishes a

long-term relationship where the supplier promises to re-supply the buyer as needed on agreed

price terms over a specified period of time. The stock is held by the seller, hence the name stockless

purchase plan. The buyer‟s computer automatically sends an order to the seller when stock is


needed. This locks the supplier with the buyer and makes it difficult for out-suppliers to break in unless

the buyer becomes dissatisfied with the in-supplier‟s prices, quality or service.

Performance review

In this stage organization review the performance of the suppliers. This will help it to decide whether

to continue with existing suppliers or should search for the new vendor.

These eight stages are very much essential for new task but not necessary for straight re-buy or

modified re-buy. To know which stages are important in the new task, a straight re-buy or modified

re-buy we will study Buy- grid Model

Buy Grid model

Buy grid model is developed to understand the business buying process in three different business

buying situations:

Q. No. 4a). Suppose you need to conduct a small marketing research study in your neighborhood

regarding the purchase and use of detergent powders. What will be your approach in the process?

Answer: Marketing Research study:

Every marketing research problem is different requiring a special approach or emphasis. Still there is

a sequence of steps, called the research process which can be followed in all the marketing

research studies and projects. Each step in this research process in independent but it is closely

related to other steps, because the result of the preceding step is the basis for the succeeding step.


Define the research objectives for detergent powders

It is said that „a problem well – defined is a problem half – solved‟. A careful and precise definition of

the marketing problem will lead to useful and relevant results which can solve the marketing

problem.

Develop the Research Plan and Design

A Research plan is simply the framework within which collection and analysis of data is undertaken.

This step involves decisions on the data sources, research approaches, and research instruments,

sampling plan and contact methods.

1. Data sources – The researcher has to decide which data sources to use – Secondary Data or

Primary Data or both.

Secondary Data are data, which collected for some other purpose or for commercial purpose of

selling.

Primary Data are freshly gathered for a specific purpose or a specific research project.

2. Research Approaches – Primary Data can be collected using any of the five approaches. They

are:

1. Observational Research – Fresh data can be collected by observing the situation and the

people in the situation.

2. Focus Group Research is a method of discussion in which a team of eight to twelve persons

invited for a group discussion in presence of a skilled moderator to discuss a product, service,

a firm or any marketing related activity. The proceedings are observed and recorded on

videotape and subsequently analyzed to understand consumer attitudes, beliefs and

behavior.

3. Survey Research – This is the most common of the approaches wherein surveys are

undertaken with the help of a questionnaire to learn about people‟s knowledge, beliefs and

preferences.

4. Behavioral Research – Customer‟s actual behavior in terms of actual purchases reflect their

preferences and are more reliable than responses provided in surveys which are memory

based.

5. Experimental Research – The most scientific method of research is experimental research,

which tries to capture cause and affect relationships.

Experiments are conducted by selecting matched groups of subjects, here the detergent powders.

3. Research Instruments – There are mainly two types of research instruments: questionnaires and

mechanical devices, but here need only questionnaire research.

i Questionnaire – This consists of a set of questions logically arranged and presented to the

respondents to answer. Questionnaire is the most commonly used instrument for collection of primary

data due to its flexibility. It needs to be carefully prepared and pre – tested before being used for

actual data collection.

4. Sampling Plan – Now the researcher must prepare a sampling plan which outlines who should be

surveyed (detergent powders), How many should be surveyed (no of people) and how should

they be selected for the survey (randomly).

i. i Sampling Unit – Researcher must define the element of the target population by whom

information shall be collected. For example, housewife in detergent case.

ii. ii Sample Size – Large samples provide more reliable results than smaller samples. But

normally sample size is decided based on nature of the study and variance in the

population, level of accuracy desired and above all money available for research.

iii. iii Sampling procedure – Two types of methods are available for selecting the samples –

Probability Sampling and Non– Probability Sampling.

Probability sampling method requires that each element of the population has an equal or known

chance of getting selected. It also allows the calculation of confidence limits for Sampling Error.


Three commonly used Probability sampling methods are Simple Random Sampling, Stratified

Random Sampling and Cluster Sampling.

In Non Probability Sampling method, respondents are chosen on the basis of researcher‟s judgment

or convenience and this method does not allow sampling error to be measured. In spite of these

limitations, many researchers take Non – probability samples due to time and cost constraints. Three

commonly used Non – Probability sampling methods are Convenience Sampling, Judgment

Sampling and Quota Sampling.

5. Contact Methods – Now the researcher has to decide how the respondent should be

contacted. The choices of methods available are mail, telephone, personal interview or online

interview.

Telephone Interview – This method is very quick way for gathering information. The method is

interactive, in case any clarification is required, but such an interview typically should be short. Only

few questions can be asked through this method. In India, Telephone interviewing is difficult as

people do not like to answer questions coming from strangers.

Personal Interview – This is the most versatile method which can be adapted to any kind of research

subject. By face to face interaction researcher will be able to make personal observations. It is the

most expensive and also time consuming method. Personal Interviews can be undertaken after

arranging interviews at the respondent‟s premises or at Shopping Malls by stopping people and

requesting interview. The latter method is called Mall Intercept Method. This method is necessarily a

non – probability method but is less expensive and does not take too much time.

Online Interviews – There are many ways to collect information through the internet. A Company

can put a questionnaire on its web site and offer incentive to people to answer; a banner can be

kept on a popular site like Yahoo!, inviting people to answer some questions and win a prize. Every

day new methods are being evolved to start a new way to collect data. Advantages of online

Interview are that it is very inexpensive and can be very fast, whereas disadvantage is that it has

limited reach and results can be skewed.

Step III – Collect the Information – After designing the research instrument, the researcher should

now actually contact the respondent and collect the information. At this stage, it is very important to

keep the quality of the data under control by ensuring accurate unbiased answers and by seeking

the entire respondent‟s co – operation. In case the researcher has to appoint data collectors to

collect the information from respondents, they must be well trained and motivated.

Step IV- Analyze the information –In this stage researcher collects the data and codify it. Nowadays,

many questionnaires are pre coded which makes the task of data entry very easy. The coded data

is then tabulated to provide frequency distributions. Tabulated data is now analyzed. Averages and

measures of dispersion are computed for the major variables. Advanced Statistical Techniques are

used to discover findings. Here the data is converted to information which may be used in decision –

making.

Step V – Present the findings – At this last step, the researcher should present findings to the decision-

makers or users of the information.

Q. No. 4b). As a consumer, what factors will you consider when you have to buy a laptop? How will

you arrive at a decision whether or not to buy a particular brand? Once you have selected a brand,

identify the various marketing P’s for that brand.

Answer: I will follow the Consumer Buying Decision Process Model as given below.

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

customers 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 behaviour

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 were

not able to get resale value lost their market positions.

Q. No.5a). What are the features of Business markets? How are they different from consumer

markets?

Answer: 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.

6. 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.

7. 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.

8. 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 stationers to the paper

manufacturer who in turn provides papers to the supplier.

9. 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.

Difference between Consumer and Business Market

The differences stated above may not exacting and water tight divisions. Even in case of a business

making a purchase for a regular stationary item, the responsible employee may adopt an

individualistic and direct approach. Similarly industrial advertising may be effective. The differences

lead to behavior patterns which are also different. As an example, emotion plays a major role in a

purchase decision for an individual in a consumer market but will hardly come into play in the

business market.

Q. No. 5b). List out the 5 important prerequisites of effective segmentation by giving suitable

examples.

Answer: Requisites of Effective Segmentation

To be useful, market segmentation 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 does not specify how many of the migrated employees are educated

and if educated how many are in white collared jobs. If a company wants to target white color

collared employees who are migrated to Particular City, it will not able to measure the same. .

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 for outgoing calls to the

lowest level in the world.

3. Accessible: The segment should be accessible through existing network of people at an

affordable cost. For example, Majority of the rural population is still not able to access the

internet due to the high cost and non-availability of connections and bandwidth.

4. Differentiable: The segments should be different from each other and may 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 the important bases for segmenting markets and then identify the bases for these

products by giving appropriate reasons:

i) A digital wrist watch ii) Sunglasses

iii) Air-cooler iv) Dictionary

Answer: Bases for Segmenting Markets

1) Geographic segmentation: In this type of segmentation, the market is divided into different

geographical units such as nations, states, regions, cities or neighborhoods. The company can

operate in one or a few Geographic areas or operate in all but pay attention to local variations.

2) Demographic Segmentation: In demographic segmentation the market is divided into groups

based on variables such as age, family size, family life-cycle, gender, income, occupation,

education, religion, race, generation, nationality and social class. Demographic variables are

the most popular bases for distinguishing customer groups.

a) Age and Life-Cycle Stage: Consumers‟ wants and abilities change with age. On the basis of

age, a market can be divided into four parts viz., children, young, adults and old. For the

consumers belonging to the different age groups, different types of products are produced.

For instance, different types of ready-made garments are produced for consumers of

different age groups. A successful marketing manager should understand the age group for

which the product would be most suited and determine a suitable marketing policy, pricing

policy, advertising policy etc…

b) Gender: Gender segmentation has long been applied in clothing, hair-styling, cosmetics and

magazines.

c) Income: Segmentation based on Income is a traditional practice followed in product

categories such as automobiles, clothing, cosmetics and travel. However, income does not

always determine the best customers for a given product.

3) Psychographic Segmentation: In Psychographic segmentation, buyers are classified into different

groups on the basis of life-style or personality and values. People within the same demographic

group can exhibit very different psychographic profiles.

a) Life-style: People have different life-styles and products they consume express their life-styles.

Many companies seek opportunities in life-style segmentation. But life-style segmentation

does not always work.


Using the self-orientation and resources dimensions, VALS defines eight segments of adult consumers

who have different attitudes, exhibit distinctive behavior and decision making patterns. These

segments are Innovators Thinkers, Achievers, Experiencers, Believers, Strivers, Makers and Survivors

Innovators are successful, sophisticated, active, take-charge people with high self-esteem and

abundant resources. They are leaders in business and government and are interested in growth,

innovation, and change. They seek to develop, explore and express themselves in a variety of ways,

sometimes guided by principles and sometimes by a desire to have an effect or to make a change.

Thinkers are mature, satisfied, comfortable, reflective people who value order, knowledge, and

responsibility. Most are well educated and in (or recently retired from) professional occupations,

content with their career, families, and tend to center around the home. Thinkers have a moderate

respect for the status quo institution, but they are open minded to new ideas and social changes.

Achievers are successful career or work oriented people who like to feel that they are in control of

their lives. They value predictability and stability over risk. They are deeply committed to work and

family. Work provides them with a sense of duty, material rewards, and prestige. Their social lives are

centered on family, religion and career. Achievers follow conventional lives, are conservative in

nature, and respect authority and status quo. Image is important to them.

Experiencers are young, enthusiastic, impulsive, and rebellious. They seek variety and excitement,

savoring the new, the offsets, and the risky. They are still in the process of formulating life values and

behavior patterns and quickly become enthusiastic about new possibilities but are equally cool also.

Believers are conservative, conventional people with commitment to family, religion, community,

and the nation. Living by a moral code is very important to them. As consumers, Believers are

conservative and predictable and favor domestic products and established brands.

Strivers seek motivation, self-definition and approval from the world around them. They strive to find

a secure place in life, and may lack economic, social, and psychological resources. Strivers are

concerned about the opinions and approval of others

Makers are practical people who have constructive skills and value self-sufficiency. They live within a

traditional context of family, practical work and physical recreation and have little interest in what

lies outside that context. Makers experience the world by working in it, building a house, raising

children, fixing a car, or canning vegetables and have enough skills, income and energy to carry out

their projects successfully.


Survivors tend to be chronically poor, ill-educated, low skilled, elderly and concerned about their

health. Preoccupied with the urgent needs of the present moment, they do not show a strong self-

orientation. Their chief concerns are security and safety. Survivors are cautious consumers.

b) Personality: When Marketers use personality variables to segment the markets, they endow their

products with brand personality that corresponds to consumer personalities. For example, Raymond

advertises its fabrics with the tag „The Complete Man.‟

c) Social Class: It has a strong influence on the consumer preferences and the products they buy or

consume. For example, when buying cars, clothing, home furnishings, leisure activities, reading

habits etc., Social class becomes the key factor.

4) Behavioral Segmentation or Consumer Response Segmentation:

In behavioral segmentation, buyers are divided into groups on the basis of their knowledge or

attitude towards the use of, or response to a product. Some marketers believe that behavioral

variables are the ideal primary factors for creating market segments. Some of the behavioral factors

are:

a) Occasions: According to the occasions, buyers develop a need, purchase a product or use a

product. It can help firms expand product usage. A company can consider critical life events to

see whether they are accompanied by certain needs.

b) Benefits: Buyers can be classified according to the benefits they seek from the products.

c) User Status: Markets can be segmented into non-users, potential users, first time users and regular

users of a product. Each market segment requires a different marketing strategy. The company‟s

market position will also influence its focus. Market leaders will focus on attracting potential users,

whereas smaller firms will try to attract current users away from the market leader.

d) Usage Rate: Markets can be segmented into light, medium and heavy product users. Heavy

users are often a small percentage of the market but account for a high percentage of total

consumption. Marketers prefer to attract one heavy user rather than several light users and so,

they vary their promotional efforts accordingly.

e) Loyal Status: Consumers have varying degrees of loyalty to specific brands, stores and other

entities. Buyers can be divided into four groups according to brand loyalty status.

f) Buyer-Readiness Stage: A market consists of people in different stages of readiness to buy a

product. Some are unaware of the product, some are aware, some are informed, some are

interested, some desire the product and some intend to buy. The relative number makes a big

difference in designing a marketing program. For example, People may be aware of Aqua

guard but don‟t know much about it.

For I) and ii) we will have to take the Demographic Segmentation & Psychographic Segmentation.

i) A digital wrist watch ii) Sunglasses

For iii) and iv) we will have to take Geographic segmentation & Behavioral Segmentation or

Consumer Response Segmentation

iii) Air-cooler iv) Dictionary

ASSIGNMENT

MBA-II

Subject code: MB0046

Set 2

SUBJECT NAME: MARKETING MANAGEMENT

Q. No.1a). What factors are considered before deciding upon a distribution channel?

Answer: Marketers should consider various factors before deciding the particular type of channel. It

may be organizational or competitive factors. The type of goods to be transported and stored will


decide the length and intensity of channel. To decide on the particular channels, marketer will have

to take into account the following factors.

1. Understanding the customer profile: Purchasing habits differ from individual to individual.

Individuals who face shortage of time would like to purchase on the net (direct channel) and

those who have abundant time would like to go through the shopping experience. Some of

them would like to have variety of goods, while others want unique or specialized products.

Hence marketers should understand who are his customers? How do they purchase and how

often they purchase? For example, customers don‟t like to travel half a kilometer to purchase a

shampoo sachet, but they don‟t mind travelling two kilometers while purchasing durable goods.

2. Determine the objectives on which channel is to be developed.

a. Reach: Company would like to make the goods available in most of the retail outlets. So it,

will adopt intensive distribution channel.

b. Profitability: Company wants to reduce the cost in the channels and enhance their

profitability. It will restructure the channel to optimum level so that it can reduce the cost and

increase the profit.

c. Differentiation: Company positions their products differently. When most of the industry

players follow conventional system, company goes with new format of channels. For

example, all computer manufacturers were adopting dealer-retailer channel to sell their

products, but Dell started selling its product on the Internet.

3. Identify type of channel members: Once the objectives are set on the basis of company‟s

policies, it will analyze which types of channels are most suitable. Merchants, agents and resellers

are some intermediaries involved in the distribution. Merchants are those who buy the product,

take title and resell the merchandise. Agents will find the customers, negotiate with them, but do

not take the title of the product. Facilitators are the people who aid the distribution but do not

negotiate or take the title of the product.

4. Determining intensity of distribution: Intensity of distribution means how many middlemen will be

used at the wholesale and retail levels in a particular territory. If the number of intermediaries is

more, then the cost of the channel will increase. However, if the number of intermediaries is less,

then company will not be able to meet all target customers. Therefore company should adopt

optimum number of intermediaries. On the basis of how many intermediaries are required,

company can adopt any one of the following strategies.

a. Intensive distribution: A strategy in which company stocks goods in more number of outlets.

The intention is to make the goods available near to the customer. For example, you can find

Parle-G glucose biscuits available in almost all the retail outlets in rural and urban areas.

b. Selective distribution: A strategy in which company stocks goods in limited number of retail

outlets. For example, televisions are sold only in selected retail outlets. TVs cannot be sold like

toothpaste. Onida TVs are available in electronic retail shops like Viveks, Girias, Next, E-zone

etc…

c. Exclusive distribution: In this type of channel format, marketer gives only a limited number of

dealers the exclusive right to distribute its products in their territories. For example, a Kaya skin

care solution of Marico is marketed through exclusive distribution.

5. Assigning the responsibilities to channel members. Company should define the territory in which

the channel member should operate, at what price he should sell, services he should perform,

and how he should sell.

6. Selecting the criteria to evaluate the channel member: Company may have different types of

channel alternatives. It would like to choose any one of the alternatives, which meets its

objectives. Channels can be evaluated in the design phase by the method called SCPCA.

a. Sales (S): The ability of each channel member to generate the sales for company in a given

period.

b. Cost(C): How much cost each channel alternative incurs? Which one of the alternatives

provides the optimum solution?

c. Profitability (P): Various channel alternatives available to the company and their profitability

shall be compared. Channel with better profitability shall be selected.

d. Control (C): Every company would like to have better control over its channel members.

Alternative channels can be evaluated on the basis of how much control each channel

member desires. And how much control the company is willing to provide.

e. Adaptability (A): Marketing is a dynamic world. Competition exerts pressure on companies to

relook at their practices and supply chain continuously. The channel alternatives should be


flexible enough to meet the changing requirements. Whichever channel alternative meets

such objectives shall be selected.

Q. No. 1b). Analyze the product mix pricing strategies with relevant examples.

Answer: Product Mix Pricing Strategies

1. Product Line pricing: Strategy of setting the price for entire product line.

Marketer differentiates 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 at Rs 10 Rs 20 and

Rs 30 respectively.

In the above example of Nokia mobile phones Nokia 1110 is priced @ Rs 1349, Nokia 7610 priced @

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: this 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 accessory 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: It is determining the price for by-products in order to make the main

product‟s 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 is adopting by-product

pricing.

5. Product bundle pricing: It is offering companies several products together as a bundle 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.


Q. No. 2a). Critically assess the different types of advertising media.

Answer: Advertising- Any paid form of non-personal presentation and promotion of ideas, goods, or

services by an identified sponsor. For example: Print ads, radio and television ads, billboard,

brochures and, signs, in-store displays, posters, motion pictures and banner ads,

Characteristics of major media

I. Broad cast media

Radio

1. Provides up to date information

2. Reaches the local audience effectively

3. After FM revolution this is one of the fastest growing media.

Television

1. Expensive medium

2. Products can be well explained and demonstrated.

3. It provides wide geographic coverage

4. Image creation is difficult in this medium because of spontaneity.

5. Wide number of media vehicle creates the problem for media planners.

II. Print media

Newspapers

1. Continue to dominate local markets

2. Retail and classified advertisement are key

3. Important advantages include flexibility and community prestige

4. Newspapers offer powerful merchandising services like promotional and research

support.

Magazines

1. Divided into two broad categories of consumer magazines and business magazines

2. These categories are also subdivided into monthly publications and weekly publications

3. Specialty advertisements can be promoted through this media.

III. Outdoor Advertising

1. Includes billboards, painted bulletins or displays, and electric boards

2. The oldest and simplest media business

4. Effective in the high traffic areas.

5. Environmentalists oppose this type of advertisement.

IV. Online advertising

1. Contains characteristics of both print and broadcast media

2. Enhances two-way communication and encourages audience participation.

3. Example of this media is e- mail.

V. Other Advertising Media

1. Transit advertisement: advertisements placed on the buses and moving vehicles.

2. Movie advertising: Inserting the advertisement inside the movie

4. In flight commercials: advertisements placed in the airplanes.

5. Using yellow pages and pamphlets to advertise the product.

Q. No. 2b). Describe with examples the different international market entry strategies.

Answer: International Market Entry Strategies

Organizations that plan to go for international marketing should know the answers for some basic

questions like –

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

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


That‟s why 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

2. Civil liberties

3. Control of corruption

4. Government effectiveness

5. Rule of law or legal issues

6. Health expenditure

7. Education expenditure

8. Regulatory quality

9. Cost of starting a business

10. Days to start a business

11. Trade policy

12. Inflation

13. Fiscal policy

14. Consumption patterns

15. Competition

Once the market is found to be attractive, companies should decide how to enter this market.

Companies can enter the international market by adoptingany 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 technique of selling the goods produced in the domestic country in a foreign

country with some modifications. For example, Gokaldas textiles export the cloth 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 technique 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.

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 case, 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 invests 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 invests 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. No .3a). With the help of a neat diagram, briefly explain the different stages in the Product Life

Cycle.

Answer: Product Life Cycle (PLC)

Meaning of Product Life Cycle: It means a product has to go through the various stages since its

inception and till it completely fades out from the market.

The following graph represents the PLC curve and the 5 stages that it has to undergo

The product which is introduced into the market will undergo some modifications over the period. Its

sales also fluctuate. Therefore a marketer will be interested in finding out how sales changes over a

period and what strategies are best suited 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 a

bell shaped curve. We can obtain style, fashion or fad style of product life cycles also.

According to PLC, a product passes through five stages which are as follows:

1. Product development stage: In this stage company identifies the viable idea and develops it. Even

if sales in this stage are nil it requires huge research and development budget. Therefore company

incurs losses at this stage. For example, TATA Docomo before entering the cellular services market

had done research and found that calls were charged for minutes rather than seconds.

2. Introduction stage: Company introduces the product into the market. As the product is new to the

market, consumer awareness is usually very low. Here company adopts heavy sales promotion and

product awareness programs. The cost of product is very high and sales are very low. At this juncture

the company charges high price to the customers. For example, TATA Docomo has entered into

cellular services initially through the Billboards.

3. Growth stage: Company gets experience over the period and now tries to get the maximum

market share (takes „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. There will be increase in Competition and the company is

forced to keep a tab on its competitors. For example, TATA Docomo has entered into the growth

stage by aggressively advertising on Television and other mediums and at the same time giving

competition to the existing players.

4. Maturity stage: In this stage, the product has already established itself in the market. These are the

characteristics of this stage –

iii. Peak sales.

iv. Low cost per customer.

v. High profits.

vi. Competition based pricing


vii. Communicating the product differentiation (or USP) to consumers.

viii. Improving supply chain efficiency.

ix. Defend the market share

x. Industry experiences consolidation.

For example, Airtel in its advertising is clearly stating its subscriber base as 1, 10,000 indicating that it

has entered into a mature stage.

5. Decline stage: In this stage, product sales and profit decline. Company should phase out weak

items from their product mix and may even lower the prices of the existing products. The

advertisement budget of the company also comes down and the company may struggle to meet

its costs. For example, VCR‟s have been replaced with DVD players and so VCR entered into the

decline stage and is almost out of the market.

Q. No. 3b). Write a short note on product line and product mix.

Answer: Product line: The group of related products which uses same marketing efforts 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.

Pidilite Industries, the adhesives and chemical company, have the following group of related

products (or product lines) in consumer and business markets.

Consumer market.

1. Adhesives and sealants.

2. Art materials and stationeries.

3. Construction chemicals.

4. Automotive chemicals

6. Fabric care

Business market

1. Industrial adhesives.

2. Textile chemicals.

3. Organic pigment powders.

4. Industrial resins and

5. Leather chemicals.

Product Line Decisions:

The major product line decisions are

a. Product line length

b. Product line stretching

c. Product line filling

d. Product line pruning

a. Product line length: The number of items in the product line is called the product line length.

Company should decide whether it requires longer chain or shorter length. The decision

depends upon the objective of the company, competitive environment and profitability. If the

chain is short company can add new products and if it is lengthy company can reduce the

number of products. For example, Pidilite‟s adhesives and sealants line has following 11 items in

the product line. Hence the length of product line is 11

1. White Glue 2. Paper Glue

3. Glue Stick 4. Instant Adhesive

5. Epoxy Putty 6. Epoxy Adhesive

7. PVC Insulation Tape 8. Silicone Sealants

9. Contact Glue 10. All Purpose Glue

11. Maintenance Spray

b. Product line stretching: Company lengthens its product line either by stretching upwards or

downwards or both ways. Line stretching decision depends on three situations -

i. Company which operates in high end market may come up with mid class or low

class targeted products.


ii. ii. The company which operates in lower end of market may come up with high end

market products.

iii. If the company operates in mid segment and comes out with low end product as

well as high end product then it is stretching both ways.

c. Product line filling: Adding more items in the present product line. For example, in the year 2000

Maruti Suzuki launched Alto. This product was between Maruti 800 and Maruti Zen. Here

company was trying to fill the gap existing in the segment by introducing ALTO, i.e. line filling.

d. Product line pruning: Removing the unprofitable products form the product line. Toyota Kirloskar

phased out their well known brand Qualis when they thought the brand was not adding value to

the product line.

Product Mix

Product mix: The number of product lines and items offered by marketer to the consumers

A company‟s product mix has four different dimensions. They are product mix width, product mix

length, product mix depth and product mix consistency.

Fabric care House hold

insecticide

Utensil

cleaners

Fragranc

es

Personal care Allied

business

Ujala supreme

(9ml, 30ml, 75ml,

125ml,250ml)

Maxo

cyclothrin

coil

(8hr, 10hr,

12hr)

Exo dish

wash bar

(100g, 200g

380g)

Maya

(8, 15, 20,

40 and

100

sticks.)

Jeeva Natural

(Coconut Milk with Milk Protein,

Coconut Milk with Jasmine and

Coconut Milk with Kasturi Manjal,

and is presented in 75gm packs. )

Continenta

l special

Ujala washing

powder

(25g, 500g, 1Kg)

Max

vaporizer

(30ml,

45ml)

Exo dish

wash liquid

(500ml,

125ml)

Marketing

of Godrej

Tea

Stiff & shine

(20gm sachets,

100ml and 200ml

bottles)

Max

aerosol

(150ml,

300ml)

Marketing

of Ekta

dhoop

Product mix width: The total number of product lines that company offers to the consumers.

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

Product line depth: The number of versions offered of each product in the line.

Product mix consistency: If company‟s product lines usage, production and marketing are related,

then product mix is consistent, else it is unrelated.

Q. No. 4 a). Choose any brand of ball-point pen and evaluate its positioning strengths or weakness in

terms of attributes, benefits, values, brand name and brand equity.

Answer: Brand Positioning

The image of the product should be created or positioned in the minds of consumers. Brand

managers use three levels of positioning strategies to get the mind share of the customer.

Product attributes

Ingredients: the product speaks about the innovative ingredients that company offers in the

product. In the Raynold ball pen example the com-pany explains the availability, pricing and quality

advertisement

Benefits: Safe from leakage of ink performance is great,

Beliefs and values: Smooth writing, comfortable


Brand Loyalty

Consumer‟s commitment to repurchase the brand for long

Brand Awareness

Everyone is well aware about Raynold brand name.

Perceived Quality

The customer perception about the Raynold actual quality level of the product is great.

Brand Associations

The attribute of the brand that customer associates with his/ her belief. A person may associate the

brand for power, strength or protectiveness.

Q. No. 4b) If you as a marketing advisor were to introduce a new variety/flavor of chocolate in an

already established chocolate category of a firm, what kind of brand development strategy would

you undertake and why?

Answer: Brand Development

Company can develop the brand on the basis of product category and brand name. Some of the

different strategies adopted by companies to develop the brands are as follows:

1. Line extension: Company uses its well-known brand name to introduce additional items in a

given product category such as new forms, flavors, ingredients or package sizes.

2. Brand extension: A strategy in which company uses one of its familiar brand names for new

product category‟s items. For example, United Breweries (UB) Limited group used its flagship

brand Kingfisher to different categories. Kingfisher was originally a beer brand extended to

airlines.

In the question case we will go with Line extension, we will add the new products in the same line.

Q. No. 5a). As a salesperson in a dealership firm that engages in consumer durables like washing

machines, refrigerators, air-conditioners etc. what kind of knowledge and training do you think is

required for you so as to make you sell more products?

Answer: "Sales Promotion comprises that range of techniques used to attain sales or marketing

objectives in a cost effective manner by adding value to a product or service either to

intermediaries or end users, normally but not exclusively within a defined time period."

Sales promotions are short-term incentives and best suits for generating instant sales. Organizations

that are into the retailing and managing it independently are using these to the maximum.

Sales promotion methods: Sales promotion uses three different types of tools. They are consumer

promotion tools, Trade promotion tools and business promotion tools.

Consumer promotion tools: These promotion tools are directly targeted to customer. These tools

stimulate an interest among target customer to purchase the products quickly. Some of the

consumer promotion tools used in the Indian market are listed below.

1. Price promotion: Organization offers price reduction on the product. For example, Rs 5 off on the

purchase of Revive 200g.

2. Contest promotion: organization requests the customer to purchase the product to participate in

the contest and win the prizes. For example,

3. Multiple promotions: Promotions offer includes more than one promotional offer. For example,

20% off on the festive seasons.

4. Add on promotion: Promotion offers a free or an add on product (same or different) on the

product.


5. Exchange promotion: Price of a product is reduced in an exchange of an old product. For

example, bring your old color television and take home a Philips LCD TV for Rs 15,000.

6. Combination promotion: two or more products are offered together at a discount price or some

incentive is given on a combination pack. Discount on the combo of washing machines

refrigerators.

Trade promotion tools: These promotions are targeted to retailers and wholesalers. The objective of

this type of promotion is to get the self space, motivate to sell the products and promote brands in

the local media. There are various types of Trade promotion tools are used in the market but we are

limiting our discussion to two major types. They are discounts and allowances.

1. Discounts: manufacturer offers straight reduction in the list price on every purchase that channel

member does in the particular period.

2. Allowances: This is the promotion value provided by the manufacturer to the channel member

to advertise the product in the local media or display the product in the store.

Business Promotion tools: the promotion tools used to lead generation, reward customer and

motivate salespeople for business customers. An organization uses conventions and trade shows.

Q. No. 5b). Make a note of any 2 organizations which had to suffer losses on account of bad

publicity in India. Also find out how the organizations overcame the effects of bad publicity.

Answer: Publicity:

Publicity can be said as a simple act of making a suggestion to the concerned parties – TV or radio

channel, news reporter or journalist, film makers, etc. that leads to the inclusion of a

company/products in an already existing story or a newly developed one. Publicity may also include

any such information that attracts attention to a company, its products, its people or any event,

usually generated by a third party such as media. Publicity maybe a part of PR or it may be

independent of it in certain situations.

Bad Publicity:

Publicity may have positive or negative impacts. For example, it became a negative publicity for

Coca-Cola when people in India, started to throw or break the bottles on the roads because of the

belief that it contained pesticides or toxic substances. News channels covered the same giving

negative publicity to the company and the products, same with Cadbury’s chocolate worm

controversy.

Solution to overcome the effects of bad publicity.

· Providing people with the accurate information and giving clarifications if needed either through

press release, media interviews, websites, public messages, advertising etc.

· Company‟s top management or spokesperson can give a public statement or comment in the

various media.

· Improvising Public Relations and designing good publicity message to erase the effects of bad

publicity.

· Continuing to provide quality products and services to the consumers.

· Involving in community work or environmental protection campaigns or any such activity for a

good cause.

Q. No. 6a). What is CRM? What are its objectives?

Answer: CRM-Customer Relationship Management

Berry defines CRM as “attracting, maintaining and – in multi-service organizations – enhancing

customer relationships.”

Berry and Parasuraman define CRM as “attracting, developing and retaining customer

relationships.”

In Industrial Marketing, Jackson defines CRM as “marketing oriented toward strong, lasting

relationships with individual accounts.”

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.”


The sequence of activities for performing relationship marketing would include developing core

services to build customer relationship, customization of relationship, augmenting core services with

extra benefits, and enhancing customer loyalty and fine-tuning internal marketing to promote

external marketing success.

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.”

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

Thus, “Customer Relationship Management is about acquiring, developing and retaining satisfied

loyal customers; achieving profitable growth, and creating economic value in company‟s brand,”

From the above definitions, it could be concluded 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.

CRM is not a new concept but an age-old practice, which is on the rise because of the benefits it

offers, especially in the present marketing scenario. So, CRM today is a discipline as well as a set of

discrete software and technology which focuses on automating and improving the business process

associated with managing customer relationships in the area of sales, marketing, customer service

and support. CRM helps companies understand, establish and nurture long-term relationships with

clients as well as in retaining current customers. The most important step that an organization has to

take in the direction of CRM is to create an interdisciplinary team to review how the organization

interacts with each customer and determine how to improve and extend the relationship.

Objectives:

· Reduction in customer recruitment cost.

· Generation of more loyal customers.

· Expansion of customer base.

· Reduction in advertisement and other sales promotion expenses.

· Increase in the number of profitable customers.

· Easy introduction of new products.

· Easy business expansion possibilities.

· Increase in customer partnering.

The customers are also benefited by relationship marketing in terms of improved service quality,

personalized care, reduction of customer stress, increased value for money, customer

empowerment, etc.

Q. No. 6b). Write a short note on Rural Marketing and Online Marketing.

Answer: Rural Marketing

In a rapidly changing scenario, marketers have to continuously explore new markets and ways of

serving them. In India, enterprises are discovering the potential of a huge rural population to drive

business. Prof C K Prahlad, had aptly summed up the potential as „fortune at the bottom of the

pyramid‟ in a pathbraking book of the same name. Rural marketing is not something akin to

glocalisation. It is not the modification of urban marketing strategies to suit the rural market. On the

other hand it is developing products to meet the needs of the rural sector and reaching it across as

per the specific characteristics of the rural environment. In case of a detergent, it is producing one

which will suit the rural environment (considering that the dirt and grime is different, clothing

alternatives are different, availability of water and number of times of washing is different and so on);

packaging and pricing which will be akin to their requirement and alternative ways for which the

detergent may be put to use. For example Hindustan Lever found that its detergent was being used

for washing the cattle.

This has to be understood in the light of the 4Ps or 7Ps of marketing. Imagine that you are trying to

establish a Coffee Café Day Outlet in a remote village in Maharashtra. Will that be viable

proposition? Yet there may be consumers for coffee in the rural sector too. The offering has to suit


the sector. Similarly an ice cream parlor may not be a workable idea in a village or a cluster of

villages if there is no electricity connection there. The ice cream cart vendor is a better idea.

Keeping these situations in perspective, one can draw some inferences why rural marketing is

different.

1. Accessibility and mobility: This applies both for the supplier and the consumer. 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.

3. Average income level of consumers: The average wage earners are characterized by lower per

capita income and disposable income in comparison to the urban.

4. Geographical distances: The living quarters are separated more than they are in the urban

areas. The cluster of villages is also segregated by distances.

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

urban sector.

There could be several other issues, which are specific to the rural sector. These may force marketers

to take a different approach for the entire marketing process or at least some of them as against the

urban sector.

Online Marketing

You may be familiar with „Amazon.com‟, „Timesmusic.com‟ and „e-Bay‟. By visiting these websites

you may be able to purchase products and pay through your debit and credit card. Today you can

virtually conduct your entire shopping online and the products will be delivered to you at your

home. Similarly, you can book your air, bus or rail ticket as per your desire. Are these merely

facilitating availability through the internet medium or are there marketing elements embedded into

these.

If you try to understand a little closely, you will find that these sites have altered the way we make

our buying decisions. The mere fact that these sites are able to offer a far wider variety from across

the globe, at highly competitive prices, are indications of the differences that e-marketing could

bring to the field/function of marketing. At the same time it may not be able to provide the same

buying experience that physical presence can do.

The challenge for the marketer in this form of marketing lies in making it comfortable for the

customer to „browse‟ through the site and make a purchase decision. It should be attractive

enough for him to forego the experience of physical shopping.

Documents

Marketing Management MB0046