MB0046 Assignment 2

7/30/2019 MB0046 Assignment 2

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Assignment Set- 2

Q1. Differentiate between Consumer market and business market.

Business Marketing is the practice of individuals, or organizations,including commercial businesses, governments and institutions, facilitating

the sale of their products or services to other companies or organizationsthat in turn resell them, use them as components in products or servicesthey offer, or use them to support their operations. Also known asindustrial marketing, business marketing is also called business-to-business marketing, or B2B marketing, for short. (Note that whilemarketing to government entities shares some of the same dynamics oforganizational marketing, B2G Marketing is meaningfully different.

While consumer marketing is aimed at large demographic groupsthrough mass media and retailers, the negotiation process between thebuyer and seller is more personal in business marketing. According to Hutt

and Speh (2001), most business marketers commit only a small part oftheir promotional budgets to advertising, and that is usually through directmail efforts and trade journals. While that advertising is limited, it oftenhelps the business marketer set up successful sales calls.

List of important differences between Consumer market and business markets:

1. Organizational consumers purchase capital equipment, raw materials,semi finished goods, and other products for use in further production oroperations or for resale to others, whereas final consumers usually acquirethe finished items for personal, family, or household use.

2. Organizational consumers are likely to require exact productspecifications. Final consumers more often buy on the basis of description,style, and color.

3. Organizational consumers often use multiple-buying responsibility, inwhich two or more employees formally participate in complex or expensivepurchase decisions. Final consumers employ it less frequently and lessformally.

4. Derived demand occurs for organizational consumers because thequantity of items they purchase is often based on the anticipated demandof their final consumers for specific finished goods and services; therefore,organizational consumers are less sensitive to price changes. As long asfinal consumers are willing to pay higher prices, organizational consumerswill not object to price increases.

5. Demand is volatile due to the accelerator principle, whereby finalconsumer demand affects many levels of organizational consumers.

6. There are fewer organizational consumers than final consumers.


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Q2. What is branding? Discuss the components of Brand Equity.

Branding is a process involved in creating a unique name and image for aproduct in the consumers' mind, mainly through advertising campaignswith a consistent theme. Branding aims to establish a significant anddifferentiated presence in the market that attracts and retains loyalcustomers.

Your brand strategy is how, what, where, when and to whom you plan oncommunicating and delivering on your brand messages. Where you

advertise is part of your brand strategy. Your distribution channels are alsopart of your brand strategy. And what you communicate visually andverbally is part of your brand strategy, too

"Brand Equity" is set of assets linked to a brands name and symbol thatadds value to the product or service and/or that firms customer.Components of brand equity:1. Brand loyalty

2. Brand awareness

3. Perceived quality

4. Brand associations

Brand Loyalty

Is consumer's commitment to repurchase the brand and can bedemonstrated by repeated buying of a product or service or other positivebehaviors such as word of mouth advocacy. True brand loyalty implies thatthe consumer is willing, occasionally at least, to put aside their own desiresin the interest of the brand. This will help organization to reduce thepromotion cost. For example, many girls in India use only Ponds products,

though competitors products like Fa, Spinz, Cuticura, and Mysore Sandalare present in the market and vice versa.

Brand Awareness

The number of customers exposed to the brand name. Higher the brandawareness, higher will be the brand equity. Organizations put all the effortin the introduction stage of the product to create awareness among thecustomers. For example, Xerox Company has huge brand awareness sincephotocopier machines were introduced by this company and even todayphotocopies are referred as Xerox copies.

Perceived Quality
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The customer perception about the actual quality level of the product. Forexample, when a customer purchases Levis jeans he knows that it indicatesquality even though there are several cheaper brands of jeans available inthe market.

Brand Associations

The attribute of the brand that customer associates with his/ her belief. Aperson may associate the brand for power, strength or protectiveness. Forexample, a customer may associate Nike brand not just for sports shoesbut also any accessory associated with sports. So, for him, Nike representssports.

Q3. What are the functions of marketing channels?

FUNCTIONS OF MARKETING CHANNELS

Marketing channels (Distribution channels) move goods and services forproducers to consumers. It overcomes the major time, place andpossession gaps the separate good and services from those who would usethem. Manufacturers, wholesalers, and retailers as well another channelsmembers exist in channel arrangements to perform one or more of thefollowing generic functions:-

Information gathering and distributing marketing research andintelligence information about actors and forces in the marketingenvironment needed for planning and aiding exchange.

Promotion: Developing and spreading persuasive communications aboutan offer.

Contact: Finding and communicating with prospective buyers.

Matching: Shaping and fitting the offer to the buyers needs includingactivities such as manufacturing, grading, assembling and packaging.

Negotiation: Reaching an agreement on price and other terms of the offerso that ownership or possession can be transferred.

Others help to fulfill the completed transactions.

Physical distribution: Transporting and storing goods.

Financing: Acquiring and using funds to cover the costs of the channelwork

Risk taking: assuming the risks of carrying out the channel work

Carrying of inventory, demand generation or selling, after sales services.In getting its goods to end users, a manufacturer must either assume allthese functions or shift some or all of them to channel intermediaries. The


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foregoing discussion underscores three important principles in thestructure of marketing channels

Q4. Explain the different methods which allows a media planner to

decide budget allocation

Media vehicle selection, number of insertions and message structuredepend on the budget allotted for the communication program. A popularchannel may charge more for advertisement but organization gets betterviewership. A newspaper having high circulation charges premium for theadvertisement but all the organization may not have enough budgets tosupport such campaign. Hence marketer would like to decide what is thebudget for the communication program? And how shall it be allottedoptimally? There are four different methods on which a media plannerdecides the allocation of advertisement budget.

1. Affordable method: The method is used by small companies whodont have enoughcommunication budgets. In this method company allots the fixed amountfor the communication program. The advantage of this method is companycan have better control over the spending on the communication. Thedisadvantage is if sales require higher communication effort, company isnot in a position to allocate the budget.

2. Percentage of sales method: In this method company allots the

budget on the basis of total sales forecasted. This is the simplest method.Marketer can have better control over the budget and also have flexibilityto allocate the budget.

3. Competition method:The Company sets its promotion budget on thebasis of competitors advertising effort. Here company closely monitors thedevelopments of the competitors communication program and study theindustry trends in communication budget prior to setting upcommunication budget.

4. Objective and task method: The procedure involved in estimating the

advertisement budget by this method are First, Objectives are set for thecommunication programs. Second, identifying the task to be performed to


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achieve the objective and third, estimating the cost of achieving theseobjectives.

Q5. Define the term direct marketing Explain the differentmethods adopted for direct marketing.

When the company or organization is involved in marketing activities(usually selling products) without the use of any intervening media orchannel, then it is called as Direct Marketing. The company directly sells itsproducts to the final consumer and the consumer is expected to respondimmediately or at the earliest. Direct marketing is sometimes called as B2Cmarketing for example, direct factory shoe sale.Following are the methods of Direct Marketing:

1. Direct mail: It is the most common method used in direct marketing, itinvolves sending postal mails to the consumers address and consumersmay be randomly chosen or specifically selected as targets. For example,

credit card applications forms sent by banks, travel guides or manuals sentby tour operators, free trial packs of products sent by companies,subscriptions offers for magazines etc.

2. Telephone marketing: Telephone marketing is used to sell theproduct directly to consumer. The growth of BPOs in India fuelled thedevelopment of telephone marketing. In the case of BPOs, two types ofverticals exist. They are inbound call center and outbound call center. Incase of inbound call center, customer is given a toll free number forenquiry and executives try to sell the product to such customers. In out

bound call center employees call the customers and sell the products. Theexpansion of Indian telecommunication industry and its cheapest tariffs inthe world attracted domestic sellers to use this type of channel.

3. Catalogue marketing: According to Philip Kotler, catalogue marketingis direct marketing through print, video or electronic catalogues that aremailed to select customers, made available in stores or presented online.The growth of catalogue marketing in India is in a nascent stage. Thenotable example in this type of marketing worldwide is J.C. Penny.

4. Kiosk marketing: Organizations spreads the information and keep

ordering machines called kiosks in the shopping malls and other places. Forexample, Ambi Pur a perfume company recently organized a kiosk relatedmarketing campaign in the Nirmal life style Mumbai. Company usedinflatable as shown in the pictures to attract the small boys. Parents whocame along with their children stopped at Kiosk and got the informationfrom the company. The objective of campaign was to create awarenessabout the product among the target customers.

5. Online marketing: Marketing the organizations product on the virtualmedium using the company websites as selling point or ordering point forthe consumers. Sometimes companies use e-mails to offer their productsand make a sale to the prospective consumers or even existing consumers.


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In this format buyers and sellers exchange the products on the internet.Organizations sell their products directly to consumers (called B2C), usetrading networks or auction sites to reach new customers and serve currentcustomers (called B2B) and encourage one customer to sell the product tothe another customer (called C2C).

Q6. Differentiate between International marketing and Domesticmarketing.

The important differences between International marketing and Domestic marketingare:

Scope The scope of domestic marketing is limited and will eventually dryup. On the other end, international marketing has endless opportunitiesand scope.

Benefits As is obvious, the benefits in domestic marketing are less than

in international marketing. Furthermore, there is an added incentive offoreign currency that is important from the point of view of the homecountry as well.

Sharing of technology Domestic marketing is limited in the use oftechnology whereas international marketing allows use and sharing oflatest technologies.

Political relations Domestic marketing has nothing to do with politicalrelations whereas international marketing leads to improvement in politicalrelations between countries and also increased level of cooperation as aresult.

Barriers In domestic marketing there are no barriers but in internationalmarketing there are many barriers such as cross cultural differences,language, currency, traditions and customs.


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MB0046 Assignment Set- 1

Q-1. What is meant by marketing management? Explain the importance of marketingmanagement.Ans:-

Market:-

Market is a place where buyers and sellers meets and goods and services sales and buys

producers.

Marketing:-It is a total system of business activities design to plan promote and distribute want

satisfying goods and services to target market.

Marketing management:-It can be define as a art and science of choosing target volume and getting keeping and

growing customer to creating delivering and communicating superior customer value.

Explanation:-1) Science and art2) Choosing target market


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3) Getting, keeping, growing customer (4ps)

1) Marketing Management is both a Science as well as an Art:-Marketing Management is both a science as well as an art. The science of marketing

management provides certain general principles which can guide the managers in their

professional effort. The Art of Marketing management consists in tackling every situation in

aneffective manner. As a Matter of fact, science should not be over-emphasized nor should art be

discounted the science and the art of marketing management go together and are both mutually

interdependent and complimentary. Marketing Management is thus a science as well as an art.

It can be said that-"the art of Marketing management.

2) Choosing target Market:-A marketer can rarely satisfy everyone in a market. Not everyone likes the same soft

Drink, automobile, college, and movie. Therefore, marketers start with market segmentation.

They identify and profile distinct groups of buyers who might prefer or require Varying

products

and marketing mixes. Market segments can be identified by examining Demographic,psychographic, and behavioral differences among buyers. The firm then decides which

segments

present the greatest opportunitythose needs the firm can meet in a superior fashion.

3) Marketing MixMarketers use numerous tools to elicit the desired responses from their target markets.

These tools constitute a marketing mix Marketing mix is the set of marketing tools that the

firm uses to pursue its marketing objectives in the target market. As shown in Figure 1-3,

McCarthy classified these tools into four broad groups that he called the four Ps of marketing:

product, price, place, and promotion.

Figure 1-1 The Four P Components of the Marketing Mix


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Importance of Marketing Management

It would be difficult to imagine the world without marketing. But it may be equally

difficult to appreciate the importance effective marketing plays most aspect of our lives. We

take for granted the media that are largely supported by advertising. The vast assortment of

goods distributed through stores close to your homes, and the ease with which we can make

purchases. Lets consider for a moment how marketing plays a major role in the global

economy , in the American socioeconomic system in any individual organization and in yourlife.

1) Globally:-Profit and growth objectives are most likely to be achieved through a combination of domestic

and international marketing rather then solely from domestic marketing.Until the late 1970s

American firms had a large and secure domestic market. The only significant foreign

competition was in selected industries, Such as agriculture, or for relatively narrow markets,

such as luxury automobiles. But this change domestically through the 1980s as

more foreign firms developed attractive products, honed their marketing expertise, and then

successfully entered the US market. Imported products in some industries, such as officeequipment, autos, apparel, watches and consumer electronics, have been very successful. As a

result in recent years the U.S. has been importing more then its exports, creating large annual

trade deficits.

2) Domestically:-Aggressive, effective marketing practices have been largely responsible for the high

standard of living in the United States. The efficiency of mass marketing extensive and rapid

communication with customers through wide verity of media and a distribution system that

makes products rapidly available- Combined with mass production brought the cost of many

products within reach of most customers.

a) Employment and costs:-When we get an idea of significant marketing in the U.S. economy by looking at how


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many of us are unemployed in same way in marketing and how much of what we spend covers

the cost of marketing. Between one third and one fourth of the U.S. civilian labor force is

engaged in marketing activities.

b) Creating Utility:-A customer purchases a product because it provides satisfaction. The Want satisfying

power of a product is called its utility and it becomes in many forms. It is through marketingthat much of a products utility is created.

3) Organizationally:-Marketing consideration should be integral part of all short and long range planning in any

company. Heres why:

The success of any business comes from satisfying the wants of its customers which is

the social and economic basis for the existence of all organizations.

Although many activities are essential to a companys growth , marketing is the only one

that produce revenue directly.

a) Services marketing:-The U.S has gone through from primarily manufacturing economy to the worlds first

service economy. As opposed to goods, services are activities that are the object of a

transaction. For example transportation, communication entertainment, medical care, financial

services, education and repair services account of over two third of the nations gross domestic

product.

b) Not for profit marketers:-During 1980s and early 1990s many not for profit organizations realized thy needed

effective marketing programs to make up for shrinking government subsidies a decrease incharitable contribution and other unfavorable economic.

Not for profit organizations need to improve their image and gain greater acceptance

among donors, government agencies, news, media, and consumers all of which collectively

determine an organizations success.

4) Personally:-Consider how many marketers view you as a part of their market. With people like you in

mind, firms such as Nike, VSA, and Microsoft have designed products, set prices, created

advertisement and chosen the best methods of marketing their product available to customers.

In response customers watches TV. With its commercials buy various articles over internet and

in stores etc.

Marketing occupies a large part in our daily life. Studying marketing will make you

better informed. You will have a better idea for why some firms are successful and other

seemingly run business fail. More especially you will discover how firms go about deciding

what products to offer, and what price is to charge. Marketing will help you understand the

many forms of promotion and how they are used to inform and persuade customers. And it will

help you the modern miracle of efficient distribution that make product available when and

where buyers want them.

Q-2. What is brand equity? Explain in brief.


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Ans:-

Brand equitypermits companies to charge premium prices for products and services,

contributing to increased profit margins.

Brand equityis therefore a valuable asset that companies invest huge amounts of money to

develop.

Brand equity is aphrase used in the marketing industry which describe the value of having awell-knownbrand name, based on the idea that the owner of a well-known brand name can

generate more money from products with that brand name than from products with a less well

known name, as consumers believe that a product with a well-known name is better than

products with less well known names.[1][2][3][4] Another word for "brand equity" is "brand

value".

Some marketing researchers have concluded that brands are one of the most valuable assets a

company has,[5] as brand equity is one of the factors which can increase the financial value of abrand to the brand owner, although not the only one.[6] Elements that can be included in the

valuation of brand equity include (but not limited to): changing market share, profit margins,

consumer recognition of logos and othervisual elements,brand language associations made by

consumers, consumers' perceptions of quality and other relevant brand values.

Consumers' knowledge about a brand also governs how manufacturers and advertisers market

the brand.[7][8] Brand equity is created through strategicinvestments in communication channels

and marketeducation and appreciates througheconomic growth inprofit margins, market

share,prestige value, and criticalassociations[disambiguation needed]. Generally, these strategic

investments appreciate over time to deliver a return on investment. This is directly related to

marketing ROI. Brand equity can also appreciate without strategic direction. A StockholmUniversitystudy in 2011 documents the case ofJerusalem's citybrand.[9] The city organically

developed abrand, which experienced tremendous brand equity appreciation over the course

of centuries through non-strategic activities. A boomingtourism industry in Jerusalem has

been the most evidentindicatorof a strongROI.

Brand equity is strategically crucial, but famously difficult to quantify. Many experts have

developed tools to analyze this asset, but there is no universally accepted way to measure it. As

one of the serial challenges that marketing professionals and academics find with the concept

of brand equity, the disconnect between quantitative and qualitativeequity values is difficult to

reconcile. Quantitative brand equity includes numerical values such asprofit margins and

market share, but fails to capture qualitative elements such as prestige and associations of

interest. Overall, most marketing practitioners take a more qualitative approach to brand equity

because of this challenge. In a survey of nearly 200 senior marketing managers, only 26

percent responded that they found the "brand equity" metric very useful

Purpose

The purpose of brand equity metrics is to measure the value of abrand. A brand encompasses

the name, logo, image, and perceptions that identify a product, service, or provider in the

minds ofcustomers. It takes shape in advertising,packaging, and other marketing

communications, and becomes a focus of the relationship with consumers. In time, a brandcomes to embody a promise about the goods it identifiesa promise about quality,

performance, or other dimensions of value, which can influence consumers' choices among
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The greater a company's brand equity, the greater the probability that the company will use a

family branding strategy rather than anindividual branding strategy. This is because family

branding allows them to leverage the equity accumulated in the core brand. Aspects of brand

equity include: brand loyalty, awareness, association[13] and perception of quality.

Q-3. Briefly explain the major external and uncontrollable factors that influence anorganization decision making, performance and strategies

Ans:-

Major external and uncontrollable factors that influence an organisation's decision making, and

affect its performance and strategies, factors outside and enterprises control.

These factors include the economic, demographics, legal, political, and social conditions,

technological changes, and natural forces.

1. Social and demographic environment

is concerned with society as a whole; it covers health, media, education, minorities, women,

organised labour, legal system and demographics.

The biggest challenge to firms is the society's changing demands.

1.1 Health

As defined by World Health Organization (WHO), it is a "State of complete physical, mental,

and social well being, and not merely the absence of disease or infirmity". Health is a dynamic

condition resulting from a body's constant adjustment and adaptation in response to stresses

and changes in the environment for maintaining an inner equilibrium called homeostasis.

My aim is not to discuss health but the impact it has on organisations.

Example on how changes in social environment can affect a business

Extract from bbccouk

'It's our human right to smoke'

By Tom Warren

BBC News, Birmingham
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Takings at Stechford Working Men's Club have slumped by 20,000 since the smoking ban

came into force. Just before July last year members at the long established Birmingham club

began working hard to improve the venue to try to retain trade from smokers. They painted the

walls, laid new carpets and installed a partially covered smoking shelter equipped with heaters.

But since new smoking laws came into force across England, smokers have deserted the clubin droves, preferring to light up at home. 'Desperate' situation

Treasurer Ray Guest, who has been a member for 23 years, said nothing had prepared the club

for the huge drop in trade which he blames directly on the ban ban.

1.2 Media

Communication channels through which news, entertainment, education, data, or promotional

messages are disseminated. Media includes every broadcasting and narrowcasting medium

such as newspapers, magazines, TV, radio, billboards, direct mail, telephone, fax, and internet.

Media usageMedia (the plural of "medium") is a term referring to those organized means of dissemination

of fact, opinion, entertainment, and other information, such as newspapers, magazines, out-of-

home advertising, cinema films, radio, television, the World Wide Web, books, CDs, DVDs,

videocassettes, video games and other forms of publishing.

Literacy

The traditional definition of literacy is considered to be the ability to read and write, (basic

literacy) or the ability to use language to read, write, listen, and speak. In modern contexts, is

more of a (functional literacy), the word refers to reading and writing at a level adequate for

communication, or at a level that lets one understand and communicate ideas in a literate

society, so as to take part in that society. The United Nations Educational, Scientific and

Cultural Organization (UNESCO) has drafted the following definition: "Literacy is the ability

to identify, understand, interpret, create, communicate and compute, using printed and written

materials associated with varying contexts. Literacy involves a continuous learning to enable

an individual to achieve his or her goals, to develop his or her knowledge and potential, and to

participate fully in the wider society".

Basically, someone who is well educated in one language and go to work at another country,

cant communicate in the language of a host county, is functionally illiterate.

For example In UK, there are many educated and experienced people from Eastern Europeancountries like Poland, Czech Republic but cant speak English, as a result they end up doing

menial jobs.

Knowledge capital The introduction of the term is explained and justified by the uniquecharacteristics of knowledge. Unlike physical labour (and the other factors of production),knowledge is:


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Expandable and self generating with use: as doctors get more experience; their knowledgebase will increase, as will their endowment of human capital. The economics of scarcity is

replaced by the economics of self generation.

Transportable and shareable: knowledge is easily moved and shared. This transfer does not

prevent its use by the original holder. However, the transfer of knowledge may reduce itsscarcity value to its original possessor.

Human capital refers to the stock of productive skills and technical knowledge embodied in

labour. Labour competences are what make a nation more competitive and innovative.

Q-4. Discuss the potential benefits associated with MIS.

Ans:-According to Kenneth C. Laudon and Jane Price Laudon in their bookManagementInformation Systems: A Contemporary Perspective, an information system is "a set of

procedures that collects (or retrieves), processes, stores, and disseminates information to

support decision making and control." In most cases, information systems are formal,

computerbased systems that play an integral role in organizations. Although information

systems are computerbased, it is important to note that any old computer or software program

is not necessarily an information system. "Electronic computers and related software programs

are the technical foundation, the tools and materials, of modern information systems, " Laudon

and Laudon wrote. "Understanding information systems, however, requires one to understand

the problems they are designed to solve, the architectural and design solutions, and the

organizational processes that lead to these solutions."

An MIS provides the following advantages.

1. It Facilitates planning : MIS improves the quality of plants by providing relevant

information for sound decision making . Due to increase in the size and complexity of

organizations, managers have lost personal contact with the scene of operations.

2. In Minimizes information overload : MIS change the larger amount of data in to

summarized form and there by avoids the confusion which may arise when managers are

flooded with detailed facts.

3. MIS Encourages Decentralization : Decentralization of authority is possibly when there is a

system for monitoring operations at lower levels. MIS is successfully used for measuringperformance and making necessary change in the organizational plans and procedures.

4. It brings Co ordination : MIS facilities integration of specialized activities by keeping each

department aware of the problem and requirements of other departments. It connects all

decision centers in the organization .

5. It makes control easier : MIS serves as a link between managerial planning and control. It

improves the ability of management to evaluate and improve performance . The used

computers has increased the data processing and storage capabilities and reduced the cost .

6. MIS assembles, process , stores , Retrieves , evaluates and Disseminates the information .


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Q-5. Write short notes on Segmentation.

Ans:-

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

1. Measurable and Obtainable: The size, profile and other relevant characteristics of thesegment 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 andoutgoing 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 aaffordable 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 andprograms. 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 thesense that there should be sufficient finance, personnel, and capability to take them all

Q-6. Explain the various stages involved in new product development

Ans:-New Product DevelopmentNew products are essential for existing firms to keep the momentum and for new firms they

provide the differentiation. New product doesnt mean that it is absolutely new to the world. It

may be a modification, or offered in a new market, or differentiated from existing products.

Therefore it is necessary to understand the concept of new products.

Meaning of New Products:a. They are really innovative. For example, Googles Orkut, a networking site which

revolutionized social networking. In this site people can meet like minded people; they can

form their own groups, share photos,

comments 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. Forexample, Cavin Kare launched Ruchi pickles. This product is new to Cavin Kare but not to the

market.


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New product development process:Stage 1 -Idea generation: New product idea can be generated either from the internal sourcesor 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 ofthese 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, there were many changes in the product. This shows that initial idea will be

changed on the basis of market requirements.

Stage 3 - Concept development: The main feature or the specific desire that it caters to or thebasic appeal of the product is created or designed in the concept development. Concepts used

for Tata Nano car are

Concept I: Low-end 'rural car,' probably without doors or windows and with plastic curtainsthat rolled down, a four-wheel version of the auto-rickshaw.

Concept II: A car made by engineering plastics and new materials, and using new technology

like aerospace adhesives instead of welding.

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

Stage 4 -Concept testing: At this stage concept is tested with the group of target customers. Ifany changes are required in the concept or the message it will be done during this stage. Also

the effectiveness is tested on a minor scale. If the concept meets the specific requirements, then

it will be accepted.

Stage 5 Marketing strategy development: The marketing strategy development involvesthree parts. The first part focuses on target market, sales, market share and profit goals.

TATAs initial business plan consisted sales of 2 lakhs cars per annum. The second part

involves product price, distribution and marketing budget strategies. TATAs fixed Rs 1 lakhs

as the car price, and finding self employed persons who work 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 profits estimated for a newproduct and to find out whether these align with the company mission and objectives.

Stage 7 -Product development: during this stage, product is made to undergo furtherimprovements, new features or improvised versions are added to the product. There is also

scope for innovation and using the latest technology into the product.

Stage 8 -Test marketing: is the most crucial stage for the testing products performance andits future in the market. There are certain cases where product has failed in the test marketing

and had to be withdrawn.

. The product is introduced into the realistic market

. The 4Ps of marketing are tested.

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

Stage 9 - Commercialization: In this stage product is completely placed in the open marketand aggressive communication program accompanied with promotion activities is carried outto support it.

Documents

MB0046 Assignment 2