Marketing Management MBA Degree Examination April 2010 Part I 1. What is customization? Explain with an example.

e. Ans: customize means to build, fit, or alter according to individual specifications. Customization as ...producing in response to a particular customers desires. Customization is intended to add increased customer perceived value to a product, since a customized product compared to a mass produced product increasingly fulfills the need of the customer. Product customization can be defined as producing a physical good or a service that is tailored to a particular customers requirements. In this context, customer involvement is an important issue, because customers dictate what the enterprise has to produce. In the case of physical goods, product customization can occur ex post after manufacturing by the retailer or the customers themselves. The internet has greatly increased the possibilities for mass customization. For example, Dell, a computer company, established its leadership of the PC market by allowing customers more or less to assemble their own PCs online. The company put together the components as requested at the last minute before delivery. Ford likewise allows its customers to build a vehicle from a palette of online options. 2. Describe the use of Marketing Information System. Ans: A marketing information system (MkIS) consists of people, equipment and procedures to gather, sort, analyze, evaluate and distribute needed, timely and accurate information to the marketing decision makers. Role of MkIS: To assess the managers information need To develop the needed information To distribute the information in a timely fashion. The components of MkIS are Internal records system Marketing intelligence activities Marketing research system Marketing decision support system (MDSS) I. Internal record system: Important opportunities and problems can be spotted by analyzing internal reports on orders, sales, prices, costs, inventory levels, receivables, payables etc. a. The order to payment cycle: This is the core of the internal record system. Orders are dispatched to the firm. The sales department prepares the invoice and sends to various departments. Out of stock items are back ordered. Shipped items are accompanied by shipping and billing documents that are sent to various departments. b. Sales information system: Marketing managers need up to the minute report on current sales. Sales representatives have to access information about prospects and customers &

provide immediate feedback & sales reports. New software for sales force automation called sales CTRL is helping a lot. 3. Describe the basis for marketing segmentation. Ans: It is the process of disaggregating the total market for a given product into a number of sub-markets. The heterogeneous market is broken up in the process into a number of relatively homogeneous markets.. Benefits of market segmentation: Market segmentation helps the marketing man to distinguish one customer group from another in the given market. It enables him to decide which segment of the market should form his target market. It helps to develop the marketing program on a predictable and reliable basis. The product mix, the distribution mix, the promotion mix and the pricing policy that suits the particular customer group can be easily achieved. Marketing efforts become more efficient and economical. It helps to assess how far the existing offers in the market from competitors match the need of the customer segment. It helps in spotting out relatively less satisfied segments and uncovered segments. Bases of market segmentation: Markets can be segmented using several relevant bases. They can be based on the various characteristics of the customers such as age, sex, education and geographical aspects etc. Usually, the variables are divided into two broad categories: a. Consumer characteristics geographic, demographic, psychographic etc b. Consumer responses ( behavioral ) benefits sought, use occasions or brands Geographic segmentation: Segmentation is based on region, country, state, district, urban, rural and climatic characteristics of the area. The company can operate in one or few or all geographic areas but pay attention to local variations. Region: City or metro size - based on population size it can be divided into different classes Density: urban, suburban, rural Climate: northern, southern etc Demographic segmentation: Segmentation is based on the following parameters * Age under 6, 6 11, 12 19 etc * Family size 1 -2, 3-4, 5 + etc * Gender male, female * Income high income group, middle income group, low income group. * Occupation professional, technical, managerial, proprietor, clerical etc * Education under school, metric, +2, degree, etc * Religion Hindu, Muslim, Christian, Sikh, Buddhist, Jain etc * Nationality Indian, African, European, American etc * Social class high, middle, low Psychographic segmentation: (Lifestyles and attitudes) Variables such as personality types, lifestyles and value systems form the basis of psychographic segmentation. It facilitates the selection of people who en masse react in a particular manner to a particular emotional appeal & share common behavioral patterns or buyers. * Lifestyle

* Personality - compulsive, gregarious, authoritarian, ambitious Behavioral segmentation: The basis for this segmentation is that different customer groups expect different benefits from the same product and as such their motivation in owning it and their behavior in buying it will be different. The variables in this are * Occasion regular, special * Benefits quality, economy, service, speed * User status non user, ex user, potential user, first time user, regular user. * Usage rate light, medium, heavy * Loyalty status none, medium, strong, absolute * Readiness stage unaware, aware, informed, interested, desirous, intending to buy * Attitude towards the product enthusiastic, positive, indifferent, hostile Volume segmentation: The quantity or the potential quantity of purchase is the base for segmentation. The variables are bulk buyers, small scale buyers, regular buyers, one time buyers. Multi attribute segmentation (Geo clustering): Marketers these days combine several variables in an effort to identify smaller, better defined target groups. One of the developments in this area is called geo clustering and it yields richer description of consumers and neighborhoods than traditional demographics. 4. Packaging is a silent promotion of FMCG products-Discuss. Ans: PACKAGING: A package is the actual container or wrapper. Packaging is a business function. It includes the activities of designing and producing container for a product. Purpose/Importance of packaging: To protect the product on its way to the consumer. Provide protection after the product is purchased to the time it is consumed. Be part of the companys trade marketing program to meet the needs of wholesalers and retailers. Be part of a companys consumer marketing program for identification by consumers. To face competition. To act as a five second commercial for the product. Retailers prefer products with attractive package. Rising consumer affluence is making people willing to pay extra for convenience, appearance and dependability of the package. Helps in building company and brand image. Innovation opportunity in packaging brings benefits to customers and profits to producers. Packaging strategies: a. Packaging the product line: A company has to decide whether to develop a family resemblance when packaging related products. Family packaging uses either highly similar packaging for all products or packages with a common and clearly noticeable feature. b. Multiple packaging: This is the practice of placing several units of the same product in one container. It also helps in increasing the sale. E.g towels, toffees etc c. Changing the packaging: This may be done in order to

- correct a poor feature in an existing package - take advantage of a new development in packaging - less expensive to design an attractive package than going for heavy advertising campaign. Criticism of packaging: Packaging depletes natural resources if it is not recycled or biodegraded Packaging is too expensive Some forms of plastic packaging & aerosol cans are causing health hazards. Packaging is deceptive Used and discarded packaging contributes significantly to solid waste problem. Recent developments in Packaging: 1. Aseptic container made of lamination of paper, aluminum foils and plastic ( tetra pack ). Keep perishables fresh up to 5 months without refrigeration. It costs about of that of cans and 1/3 of bottles. It is not bio degradable. 2. Sachet Packaging Packaging is a silent promotion of FMCG products Because of the increase in self-service retail outlets the packaging now had to do much of the work of selling your brand against a large number of competitors with similar products. While this adds to the pressure on packaging design to perform, it cannot be expected to sell what is not there the product itself must meet customers expectations. Contemporary packaging design is now the crucial brand personality vehicle for most FMCG brands, particularly if they cannot support a TV campaign. The pack design and graphics can help to create what Paul Southgate, of Brand House, calls total branding, where all the elements work to actively express the brand personality. Active branding is designing each element to add meaning to the brand personality, while passive branding relies on the meaning being added from external sources. Passive branding is therefore less controllable in terms of what the perception of the brand is, and usually takes longer to build over time. The first step of any new pack design is to decide whether it is a repositioning of an old brand pack or a new product development task. 5. Explain the functions of Marketing Channels. Ans: A marketing channel is a set of interdependent organizations involved in the process of making a product or service available for use or consumption. Objectives of distribution management: Convenience of consumers to get the product Choice of selection of goods Minimum incidence of breakage or damage during transportation Optimal distribution cost Effective and sincere promotional activity. Effective display and storage of goods Effective location of godown and warehouses Functions Transactional Function - Buying. Purchasing products for resale or as an agent for supply of a product -Selling. Contracting potential customers, promoting products, and soliciting orders -Risk Taking. Assuming business risks in the ownership of inventory that can become obsolete or deteriorate.

Logistical Function -Assorting. Creating product assortments from several sources to serve customers -Storing. Assembling and protecting products at a convenient location to offer better customer service. -Sorting. Purchasing in large quantities and breaking into smaller amounts desired by customers. -Transporting. Physically moving a product to customers. Facilitating Function -Financing. Extending credit to customers -Grading. Inspecting, testing, or judging products, and assigning them quality grades -Marketing information and research. Providing information to customers and suppliers, including competitive conditions and trends 6. Explain HMS and MMS Ans: HMS A merger of firms on the same level in order to pursue marketing opportunities. The firms combine their resources such as production capabilities and distribution in order to maximize their earnings potential. For example, a soft drink company may combine with a chips producer and the two products are marketing and distributed together. Joining of two or more corporations on the same level for the purposes of pursuing a new marketing opportunity. Usually a horizontal marketing system is established so that the individual members can combine resources to make the most out of the marketing situation. Products from each member can be marketed and/or distributed together, such as a bottle manufacturer combining with a producer of dehydrated salad dressing preparations. The two products are marketed together, allowing the two companies to combine their marketing resources and accomplish much more than either one might accomplish alone. Corporations in a horizontal marketing system also have the option of combining their capital and production capabilities, in addition to their marketing and distribution resources, to produce synergistic benefits for all members. A distribution channel arrangement whereby two or more organizations at the same level join together for marketing purposes to capitalize on a new opportunity. For example: a bank and a supermarket agree to have the banks ATMs located at the supermarkets locations, two manufacturers combining to achieve economies of scale, otherwise not possible with each acting alone, in meeting the needs and demands of a very large retailer, or two wholesalers joining together to serve a particular region at a certain time of year. MMS A multichannel marketing system is an approach to marketing that uses a variety of media to communicate with customers and prospects. You can use media such as websites, printed publications, advertising, email, mobile communications and social networking sites to communicate marketing messages, build customer relationships or sell products and services. The key to successful multichannel marketing is selecting the channels that customers prefer to use and ensuring that your messages are consistent across every channel.

A system in which a producer uses more that one channel of distribution, commonly, producers who use multichannel marketing systems operate their own retail stores as well as sell through other wholesalers and retailers, multichannel retailers are also called merchandising conglomerates Multichannel marketing is marketing using many different marketing channels to reach a customer. In this sense, a channel might be a retail store, a web site, a mail order catalogue, or direct personal communications by letter, email or text message. The objective of the companies doing the marketing is to make it easy for a consumer to buy from them in whatever way is most appropriate. To be effective multichannel marketing needs to be supported by good supply chain management systems, so that the details and prices of goods on offer are consistent across the different channels. It might also be supported by detailed analysis of the return on investment from each different channel, measured in terms of customer response and conversion of sales. Some companies target certain channels at different demographic segments of the market or at different socio-economic groups of consumers. Multi Channel marketing allows the retail merchant to reach its prospective or current customer in a channel of his/ her liking. 7. Explain the merits and demerits of Telemarketing. Ans: Advantages of Telemarketing: 1. Provides a venue where you can easily interact with the prospect, answering any questions or concerns they may have about your product or service. 2. its easy to prospect and find the right person to talk to. 3. Its cost-effective compared to direct sales. 4. Results are highly measurable. 5. You can get a lot of information across if your script is properly structured. 6. If outsourcing, set-up cost is minimal 7. Increased efficiency since you can reach many more prospects by phone than you can with inperson sales calls. 8. Great tool to improve relationship and maintain contact with existing customers, as well as to introduce new products to the 9. Makes it easy to expand sales territory as the phone allows you to call local, national and even global prospects. Disadvantages of Telemarketing: 1. An increasing number of people have become averse to telemarketing. 2. More people are using technology to screen out unwanted callers, particularly telemarketers 3. Government is implementing tougher measures to curb unscrupulous telemarketers 4. Lots of businesses use telemarketing. 5. If hiring an outside firm to do telemarketing, there is lesser control in the process given that the people doing the calls are not your employees 6. May need to hire a professional to prepare a well-crafted and effective script 7. It can be extremely expensive, particularly if the telemarketing is outsourced to an outside firm 8. It is most appropriate for high-ticket retail items or professional services.

Understanding the Advantage with its availability and commitment, telemarketing provides client with direct response and essential information that can be promptly scrutinized. Telemarketing is definitely flexible, definitely practical because it provides you with neverending opportunities and possibilities to increase and enhance your business. Having these advantages proves that telemarketing is truly an ultimate marketing instrument 8. Explain the importance of Sales Promotion. Ans: The importance of sales promotion is the unique role it plays in the marketing mix. In particular, it enables the marketer to add time urgency and other behavioral influences to the promotion campaign. Along with advertising, public relations and personal selling, sales promotion is one of four key tools for marketing communication. The business world today is a world of competition. A business cannot survive if its products do not sell in the market. Thus, all marketing activities are undertaken to increase sales. Producers may spend a lot on advertising and personal selling. Still the product may not sell. So incentivesBusiness Studies need to be offered to attract customers to buy the product. Thus, sales promotion is important to increase the sale of any product. From the point of view of manufacturers Sales promotion is important for manufacturers because i. it helps to increase sales in a competitive market and thus, increases profits; ii. It helps to introduce new products in the market by drawing the attention of potential customers; iii. When a new product is introduced or there is a change of fashion or taste of consumers, existing stocks can be quickly disposed off; iv. It stabilizes sales volume by keeping its customers with them. In the age of competition it is quite much possible that a customer may change his/her mind and try other brands. Various incentives under sales promotion schemes help to retain the customers. From the point of view of consumers Sales promotion is important for consumers because i. the consumer gets the product at a cheaper rate; ii. It gives financial benefit to the customers by way of providing prizes and sending them to visit different places; iii. The consumer gets all information about the quality, features and uses of different products; iv. Certain schemes like money back offer creates confidence in the mind of customers about the quality of goods; and V. it helps to raise the standard of living of people. By exchanging their old items they can use latest items available in the market. Use of such goods improves their image in society 9. Explain CRM Ans: CRM is an acronym that stands for Customer Relationship Management. It describes the strategy that a company uses to handle customer interactions. One example of a common CRM strategy is

the rewards card program offered by many supermarkets. The store gives its customers a free card that gives them access to special deals and discounts when they swipe the card during checkout. But that card also tracks everything the customer buys and allows the store to create an extremely detailed customer profile based on his or her purchasing habits. Armed with that information, the store can then offer its customers targeted coupons and other programs that will motivate its customers to buy more products from that store. Customer relationship management (CRM) is a widely implemented model for managing a companys interactions with customers, clients, and sales prospects. It involves using technology to organize, automate, and synchronize business processesprincipally sales activities, but also those for marketing, customer service, and technical support. The overall goals are to find, attract, and win new clients, service and retain those the company already has, entice former clients to return, and reduce the costs of marketing and client service. Customer relationship management describes a company-wide business strategy including customer-interface departments as well as other departments. Measuring and valuing customer relationships is critical to implementing this strategy. 10. What is data warehousing? Ans: Data Warehousing Data warehousing is a collection of methods, techniques, and tools used to support knowledge workerssenior managers, directors, managers, and analyststo conduct data analyses that help with performing decision-making processes and improving information resources. A fundamental concept of a data warehouse is the distinction between data and information. Data is composed of observable and recordable facts that are often found in operational or transactional systems. At Rutgers, these systems include the registrars data on students (widely known as the SRDB), human resource and payroll databases, course scheduling data, and data on financial aid. In a data warehouse environment, data only comes to have value to end-users when it is organized and presented as information. Information is an integrated collection of facts and is used as the basis for decision making. For example, an academic unit needs to have diachronic information about its extent of instructional output of its different faculty members to gauge if it is becoming more or less reliant on part-time faculty. The Data Warehousing Process Determine Informational Requirements Identify and analyze existing informational capabilities. Identify from key users the significant business questions and key metrics that the target user group regards as their most important requirements for information. Decompose these metrics into their component parts with specific definitions. Map the component parts to the informational model and systems of record. Part B 11. Explain the stages in new product development. Every company must develop new products. New product development shapes the companys future. Booz, Allen and Hamilton identified 6 categories of new products.

(a) New to the world product (b) New product line: product is new for the company but an established market is there (c) Addition to existing product line: products that supplement a companys existing product line. (d) Improvements and revision for existing product: provide improved performance or greater perceived value. (e) Repositioning: existing products targeted to new market segments (f) Cost reduction : provide similar performance at lower price/cost. Steps in new product development: 1. Idea generation: New product development starts with new ideas. A system must be designed for stimulating new ideas within the organization and acknowledging and reviewing them properly and promptly. The sources for new ideas can be company employees, customers, suppliers, universities, inventors, advertising or market research agencies etc. 2. Idea screening: New product ideas are evaluated to determine which one wants further study. The ideas are sorted out into three categories promising, marginal and rejects. Care must be taken to avoid the following two types of errors: Go error permitting a poor idea to further processing and Drop error dropping an otherwise good idea. 3. Concept development and testing: Attractive ideas must be refined into testable product concepts. A product concept is an elaborated version of the idea expressed in meaningful consumer terms. Concept testing involves presenting the product concept to appropriate target consumers and getting their reactions. Conjoint analysis is a method for deriving the utility values that consumers attach to varying levels of product attributes. It is used to measure consumer preferences for alternative product concepts. 4. Marketing strategy development: After testing, the new product manager must develop a preliminary market strategy for introducing the new product which should include the target market size, structure, behavior, planned product positioning, price, distribution strategy and marketing budget etc for the first year. 5. Business analysis: To evaluate the proposals business attractiveness, the company should know the sales, cost and profit projections. They do this by - Estimating total sales = first time sales + replacement sales + repeat sales. This in turn depends upon whether the product is a one time purchase or infrequently purchases or frequently purchased. - Estimating cost and profits 6. Product development: If the product concept passes the business test, it moves to R&D or engineering department to be developed into a physical product. The target customer requirements is translated into a working prototype by a set of methods known as QFD or Quality Function Deployment wherein the list of customer attributes are converted into engineering attributes. Along with the products functional characteristics the lab scientists must also communicate the products psychological aspects through physical cues. Testing of the products: There are two types of tests a. Alpha testing done within the firm to see how it performs b. Beta testing testing is done with a set of customers & their feedback taken.

7. Market testing: After the management becomes satisfied with the functional and psychological performance of the product, the product is decorated with a brand name and packaging, it goes for market testing. This is once again divided into two categories a. Consumer goods market testing can be done by # Sales wave research initial trial is provided for free of cost and later the same product along with competitors product is provided at a reduced price to see how many purchase this brand. # Simulated test marketing 30 to 40 qualified shoppers are invited to a shop for purchasing any goods after showing them the screening of ads which contains the ad for the new product also. Those who dont buy the new product are given free samples and feedback taken. # Controlled test marketing: a market research agency conducts the test marketing for the product in selected cities. # Test marketing: full blown test marketing is conducted in selected cities. b. Business goods market testing this also undergoes Alpha testing and Beta testing. Other methods are introducing the new product at a trade show or testing by means of displaying at the distributor or dealers display room. 8. Commercialization: The factors that are to be considered for commercialization are When or timing - here they can adopt the following strategies a. First entry entering before competitors b. Parallel entry entering along with competitors c. Late entering entering after the competitors Where or geographic strategy: the company must decide whether to launch the product in a single locality, a region, several regions or the national market. To whom or target market prospect: the company must target its product to early adopters, opinion leaders, heavy users and those who can be reached at a low cost. How or introductory market strategy: to coordinate the many activities included in a new product launch, management can use network planning technique such as critical path scheduling i.e. developing a master chart showing the simultaneous and sequential activities that must take place to launch the product and the estimated time for each activity. 12. Explain various pricing strategies with a suitable example. Ans: Different pricing policies: 1. Cost based pricing: In this method, the price is determined on the basis of cost of production plus an additional margin of cost. E.g. mark up pricing, target rate of return on investment pricing 2. Demand based pricing: the price is fixed on the basis of demand. If the demand is high, price will be high. If the demand is low, the price is low. E.g. Perceived value pricing 3. Cost and demand based pricing: this takes into consideration both the demand factor as well as the cost of production. E.g. Value pricing 4. Competitor based pricing: Here the pricing is based on what the competitor is pricing or is expected to price. E.g Going rate pricing, Sealed bid pricing Different types of pricing method: 1. Mark up pricing: In this method, a standard mark up is added to the products cost.

E.g. suppose for a pen manufacturer Variable cost per unit = Rs 10/Fixed cost per unit = Rs 3, 00,000/Expected unit sales = 50, 000 Manufacturers unit cost = variable cost + fixed cost Unit sales = 10 + 3,00,000 50,000 = Rs 16/suppose mark up is 20% then mark up price = unit cost 1 desired return on sales = 16 1 0.2 = Rs 20/Profit per unit = 20 16 = Rs 4/Mark ups are higher on seasonal items, specialty items, slow moving items, items with high storage and handling costs. 2. Target return pricing: The firm determines the price that would yield its target rate of return on investment ( ROI ). Suppose the pen manufacturer has invested 1 million rupees and wants to earn a 20% rate of return. Then: Target return price = unit cost + desired return * invested capital Unit sales = 16 + 0.2 * 1,000,000 50,000 = Rs 20/this target will be realized only if the sales reach 50,000 units. 3. Perceived value pricing: The price is based on the perception of the value not the seller cost, as the key to price. They use other marketing mix elements such as advertising and sales promotion activities to create an enhanced image of the product. E.g. gift articles. 4. Value pricing: Here a fairly low price is charged for a high quality offering. Value pricing says that the price should represent a high value offer to the customer. Value pricing is not about lowering the price but reengineering the companys operation to become a low cost producer without sacrificing quality or profit. 5. Going rate pricing: The firm bases its price on the competitors. In industries like steel, paper etc where the product is standardized, usually the leader sets the price and accordingly others also set. The individual firms do not charge on the basis of their cost or their demand.

6. Sealed bid pricing: The firm bases its price on the expectation of how competitors will price rather than on a rigid relation to their firms cost or demand. The firm wants to win a contract and that normally requires submitting a lower price bid at the same time price cannot be set lower than the cost. Pricing strategies: a. Geographical pricing: Here different prices are set for different markets situated at different locations based on the transportation and shipping costs. The mode of payment may be Barter exchange of goods of equal worth or compensation part payment in cash and part payment in the form of goods or buy back arrangement i.e. if the company is supplying technical know how to one country, it accepts the goods back produced in that company or offset entire payment in cash but a part of the payment has to be spent in that country itself. b. Promotional pricing: Loss leader pricing: the prices of well known brands are lowered to stimulate store traffic. Special event pricing: establish special prices during special season like Deepawali etc Cash rebates: some discounts are given if the product is purchased during a specified time period. Low interest financing: e.g. automobiles arrange for low interest financing so that people do not have to take the botheration of arranging loans etc. Longer payment terms: helps in lowering monthly installments, thus lowering the monthly expense for people. Psychological discounting: set an artificial high price, then sell at a lower price. E.g.500 => 350/c. Discriminatory pricing: this is the practice of selling the same product to different customers at different prices. The discrimination can be on the following bases: Customer segment pricing: different customer groups charged differently. E.g. children charged half in buses, museums, train etc Product form pricing: different versions of the product are priced differently. E.g. liquid soap or bar soap. Image pricing: same product priced differently on the basis of difference in pricing. E.g. perfumes Location pricing: e.g.. theatres Time pricing: e.g hotels, airlines etc. d. Product mix pricing: following are the different ways of product mix pricing: Product line pricing: the companies usually produce a product range not a single product and thus have the same product in a range. E.g. shirt costing from 800/- to 1500/- from the same manufacturer. Optional feature pricing: many companies offer a basic product and other optional features for which the customer has to pay extra for only those features which the customers are opting.

Captive product pricing: some products require the use of ancillary or captive products. The main or basic product will cost less, the captive product will cost more. E.g. camera, razors. Two part pricing: it consists of a fixed fee + variable fee depending on usage. E.g. telephone connection. By product pricing: the production of certain products like petroleum leads to production of by products like Vaseline. In such cases, the by products should be priced on their value. Product bundling pricing: sellers often bundle their product and features at a set price.

13. explain the selection and training process of marketing channel members Ans: Managing the sales force includes the following: Recruiting and selecting Training Supervising Motivating Recruiting and selecting To select a good sales force, first the company must develop the selection criteria, that is what are the traits that must be looked in a sales candidate: Following are the traits identified by many people: 1. According to a survey of customers, successful sales representatives have the following quality- honest, reliable, knowledgeable and helpful. 2. According to a study by Charles Garfield about superacheivers, following are the qualities in super achievers risk taking, powerful sense of mission, problem solving bent, care for the customer, and careful call planners. 3. Robert McMurry added the following traits high level of energy, abounding self confidence, a chronic hunger for money, a well established habit of the industry and a state of mind that regards each obstacle, objection or resistance as a challenge. After the management develops the selection criteria, it must recruit. The sources for right candidates can be educational institutions, own employees, placing job ads or using employment agencies. Selection procedure may include Written test Interview Group discussion Medical tests Reference Interview of spouse. Training sales representatives : It is necessary to provide the new sales representatives with enough training before they go to the field so that they are well prepared in handling the customers. The Training Program goals are Sales representatives should know and identify the company. Sales representatives should know the company products.

 Sales representatives should know customer and competitor characteristics. Sales representatives should know to make effective presentations. Sales representatives should understand field procedures and responsibilities. The techniques or methods used for training are Lecturing, role playing, sensitivity training, cassette tapes, video tapes, CD ROMS, programmed learning and films on selling. Supervising sales representatives: This is done by establishing norms for customer calls, norms for prospect calls and to see whether the sales time is used efficiently. Motivating sales representatives: Churchill, Ford and Walker gave a model which says that the higher the sales personnels motivation, the greater his/her efforts. Greater efforts will lead to greater performance, greater performance will lead to greater rewards, greater rewards will lead to greater satisfaction and greater satisfaction will reinforce motivation. This model thus implies the following: Sales managers must be able to convince sales personnel that they can sell more by working harder or by training them to work smarter. Sales managers must be able to convince sales personnel that the rewards for better performance are worth the extra efforts. The importance of various rewards with respect to motivation follows the following order highest is pay, followed by promotion, personal growth and sense of accomplishment. Sales quotas: Sales quotas prescribe what the sales representative must or should sell during the year. It can be set on rupee value, unit volume, margin, selling effort or activity and product type. Compensation is often tied to the degree of quota fulfillment. On the basis of sales forecast, sales quotas are set which will usually be higher than sales forecast to encourage managers and sales personnel to perform at their best level. There are three schools of quota setting: a. High quota school: Quotas are set more than what most of the reps achieve but that are attainable. It assumes that high quotas spur extra efforts. b. Modest quota school: Set quotas that majority of the sales force can achieve. It assumes that sales force will accept the quota as fair, achieve them and gain confidence. c. Variable quota school: it says that individual differences among sales representatives warrant high quota for some & modest quota for others. Supplementary motivators: Periodic sales meetings provide a social occasion, a break form routine, a chance to meet and talk with other company employees and a chance to put forth the feelings. Sales meetings are an important tool for communication, education and motivation. Sales contests spur the sales force to a special selling effort above than the average or what is normally expected. The contest period should not be announced in advance otherwise sometimes sales people defer their regular selling activities. 14. Explain the growth and benefits of direct marketing. Ans: According to the official definition of the Direct Marketing Association (DMA), direct marketing is an "interactive system of marketing which uses one or more advertising media to affect a measurable response and/or transaction at any location."

The notion of interactivity, or one-to-one communication between the marketer and the prospect or customer, is one factor that distinguishes direct marketing keting from general advertising and other types of marketing. Direct marketing makes an offer and asks for a response. By developing a history of offers and responses, direct marketers acquire knowledge of their prospects and customers, resulting in more effective targeting. Measurability also sets direct marketing apart from general advertising and other forms of marketing. Direct marketers can measure the response to any offer. Measurability allows direct marketers to test a variety of lists, offers, mediavirtually any aspect of a campaignin order to allocate marketing resources to the most effective combination of elements. Direct marketing uses a variety of media, including mail, magazine ads, newspaper ads, television and radio spots, infomercials (also television but longer format), free standing inserts (FSIs), and card decks. This flexibility allows direct marketing to provide interactivity and measurability and still take advantage of new technologies. By being adaptable to virtually any media, direct marketing will lead marketers into the twenty-first century as interactive television, the information superhighway, and other new technologies become a reality. Finally, in direct marketing, the transaction may take place at any location and is not limited to retail stores or fixed places of business. The transaction may take place in the consumer's home or office via mail, over the phone, on the Internet, or through interactive television. It may also occur away from the home or office, as at a kiosk, for example. It is necessary to distinguish direct marketing from direct mail or mail-order businesses, although direct marketing encompasses those two concepts. Direct mail is an advertising medium, one of several media that direct marketers utilize. Mail order is a distribution channel, as are retail outlets and personal selling.

GROWTH OF DIRECT MARKETING Direct marketing extends this convenience beyond mail-order shopping to consumers receiving all kinds of offers in the homevia mail or commercial television, as is common today, or via home-shopping networks, interactive TV, and the Internet. Another factor contributing to the growth of direct marketing was the increased cost associated with personal sales calls. By the end of the 1970s, the average cost of a single sales call was estimated to be about $137. By the end of the 1980s, the cost had risen to more than $250 per call. An interesting application of direct marketing now is to generate qualified sales leads that can be followed up with a personal sales call. Thus direct marketing can make personal selling more cost-effective. The growth of technology in general, and of computer-based technologies in particular, has also played an important role in many areas of direct marketing. New computer technologies have allowed direct marketers to be more precise in the analysis of results, in the targeting of messages based on more complex psychographics and demographics, in developing more

sophisticated customer and prospect databases, and even in the creative execution of direct mail packages. Increased consumer acceptance of the telephone as a way to place orders has also helped direct marketing achieve phenomenal growth. Coupled with telephone-based ordering are faster order fulfillment and the elimination of delays previously associated with mail order. Today, placing an order by phone offers almost the same "instant gratification" as picking up a piece of merchandise at the store. The same is rapidly becoming true of purchases made over the Internet, although some consumers still balk at the perceived security risks of transmitting personal and financial data online. Other socioeconomic factors contributing to the growth and acceptance of direct marketing include a population growing older, rising discretionary income, more single households, and the emergence of the "me" generation. External factors include the rising cost of gasoline (at-home shoppers use less gasoline and reduce environmental pollution), the availability of toll-free telephone numbers, the expanded use of credit cards, the low cost of data processing, and the widespread availability of mailing lists. Benefits Direct marketing is attractive to many marketers because its positive results can be measured directly. For example, if a marketer sends out 1,000 solicitations by mail and 100 respond to the promotion, the marketer can say with confidence that campaign led directly to 10% direct responses. This metric is known as the 'response rate,' and it is one of many clearly quantifiable success metrics employed by direct marketers. In contrast, general advertising uses indirect measurements, such as awareness or engagement, since there is no direct response from a consumer. Measurement of results is a fundamental element in successful direct marketing. The Internet has made it easier for marketing managers to measure the results of a campaign. This is often achieved by using a specific website landing page directly relating to the promotional material. A call to action will ask the customer to visit the landing page, and the effectiveness of the campaign can be measured by taking the number of promotional messages distributed (e.g., 1,000) and dividing it by the number of responses (people visiting the unique website page). Another way to measure the results is to compare the projected sales or generated leads for a given term with the actual sales or leads after a direct advertising campaign. 15. Explain the strategies for leaders, challengers, followers with eg. MARKET LEADER STRATEGIES: Market leader: Has the largest market share Leads the other firms in price changes, New product developments, distribution coverage and promotional intensity. Broadly speaking, the market leader has to adopt the following three strategies Expand the total market demand Defend its current market share Increase its market share a. Expand the total market demand

When the total market expands, the market leader stands to gain the maximum. The market can be expanded by looking for new users, new uses and more usage of its products. New users: the potential buyers who are unaware of the product or are not buying because of price or lack of certain features. The new users can be from market penetration strategy, new market segment strategy or geographical expansion strategy. New uses: the market can also be expanded by discovering and promoting new uses for the product. E.g. cold drinks being promoted as a drink for guests too. More usage: the third strategy is to convince the people to use the product more per use occasion. E.g. shampoo. b. Defend its current market share: Even when the leader is trying to expand, it should continuously keep on defending its current market share against rival businesses. Sometimes the competitor is domestic, sometimes it is foreign. E.g. Ambassador vs Maruti. The constructive response is continuous innovation developing new products and customer services, distribution effectiveness and cost cutting. This increases the companys strength and value to customers. Following can be the defensive strategies: Position defense: this is the basic defense strategy building a concrete wall around ones current position. But it does not mean leaders should put all their resources in protecting the current product alone. Flank defense: the market leader should also defend its weak front or possibly make it an invasion base for counterattack. Preemptive defense: here the leader attacks even before the enemy start its offense. It can start attacking many competitors at a time or develop its market in a grand manner or decrease its price. Mobile defense: here the leader enters new territories that can serve as future centers for defense and offense. The leader can adopt the strategy of market broadening i.e shifting the focus from the current product to underlying generic need. Else the leader can adopt the strategy of market diversification i.e. entering into unrelated industry. Contraction defense: if the situation becomes such that it is no longer possible for the company to defend all its territories, it starts planned contraction or strategic withdrawal. It means giving up weaker territories & assigning the resources to strong territories. c. Expanding market share: Market leaders can improve their profitability by increasing their market share. The company should consider three factors before pursuing increased market share strategy in order to ensure that increase in market share results in corresponding increase in profitability: It should not provoke antitrust action by the competitors. It should watch the cost incurred in increasing the market share. The company should not use the wrong marketing mix strategy in order to increase their market share. MARKET CHALLENGER STRATEGIES: The firms that occupy second, third or lower ranks are the challengers. They are large enough in themselves & they can adopt any one of the following two strategies attack the leader ( challenger) or follow the leader (follower) Defining the strategic objective & opponents:

The main objective behind attacking another firm is to increase ones own market share. The challenger must decide whom to attack: It can attack the market leader: it involves high risk but potentially high pay off strategy and makes good sense if the leader is not serving the market well. It can attack firms of its own size that are not doing the job properly and are underfinanced: these firms may have aging products, prices will be high & the customer will not be satisfied. It can attack small, local & regional firms: Choosing the general attack strategy: a. Frontal attack: the attacker matches the opponents product, advertising, price and distribution. E.g Pepsi and Coke. Modified frontal attack: cutting the price vis--vis the competitors. It works well if the market leader does not retaliate by cutting the price. b. Flank attack: this means attacking the weak front because the opponents defense will be the strongest at its strong point. When the challenger attacks the leader at its strong point, all the resources of the leader are deployed there and then the challenger can launch the real attack at the side or rear. A flank attack can also be directed along two strategic dimensions geographic and segmental. In geographic, the challenger spots areas where the leader is under performing. Another flanking strategy is to serve uncovered market needs. Flanking strategy also identifies shift in market segments that develop gaps then rushing in to fill in the gap and develop them into strong segments. c. Encirclement attack: here the attacker launches a grand offensive on several fronts. It is appropriate provided the challenger commands superior resources and believes a swift encirclement will break the opponents will. d. Bypass attack: this is an indirect assault strategy. It means by passing the enemy and attacking easier markets to broaden ones resource base. The following three approaches can be there (i) diversifying into unrelated products, (ii) diversifying into new geographic markets, (iii) or leapfrogging into new technologies to supplant existing products. e. Guerilla attack: it consists of waging small, intermittent attacks to harass & demoralize the opponent and eventually secure permanent footholds. The attacks can be in the form of price cuts, intense promotional blitzes and occasional legal actions. Normally it is practiced by smaller firms. Choosing a specific attack strategy: (i) Price discount the company offers a lower price than the leader provided the company is able to convince the customers that the products and/or services are comparable, the buyers are price sensitive and the leader will not cut the price. (ii) Cheaper goods average or low quality products are provided at a lower price. (iii) Prestige goods higher quality products are provided at a higher price. (iv) Product proliferation provide a larger product variety. (v) Product innovation provide product improvements or breakthroughs. (vi) Improved services (vii) Distribution innovation (viii) Manufacturing cost reduction (ix) Intensive advertising promotion.

MARKET FOLLOWER STRATEGIES: The market leader goes for product innovation and bears the expense of developing a new product, educating the market and distributing the product. The returns for all this expense are the market leadership. The follower usually imitates the product or improves on the existing product. It cannot overtake the market leader by doing this but it can make substantial profit since it did not bear any of the innovation expense. Following are the strategies followed by a market follower: Counterfeiter: they duplicate the leaders product and packaging and sell it on the black market through disreputable dealers. Cloner: here they copy the leaders product, name and packaging with slight variations. E.g. Safari Safar Imitator: they copy something from the leader but maintain differentiation in terms of packaging, advertising, pricing and so on. Adaptor: the adaptor takes the leaders product and adapts or improves them. The adaptor may choose to sell to different markets but they often grow into future challengers. MARKET NICHER STRATEGIES: Instead of being a follower in a large market, some companies prefer to be a leader in a small market. They are called nichers. These firms have low market share of the total market but are highly profitable through smart niching. Such companies offer high value, charge a premium price, achieve lower manufacturing costs and shape a strong corporate culture and vision. Following specialization roles can be played by the nicher: End user specialist serving one type of end user segment. Vertical level specialist Customer size specialist usually they serve small size customers who are ignored by the majors. Specific customer specialist selling to one or very few customers. Geographic specialist selling only in a certain locality, region or area. Product or product line specialist produces and carries only one product or product line. Product feature specialist specialize in producing a certain type of product feature. Job shop specialist customizes the product for individual customer. Quality price specialist these firms operate either at the low end or high end of quality. Service specialist offer services that other firms do not. Channel specialist

Marketing Management MBA Degree Examination April 2011 Part I 1. Explain Personal selling Ans: The principles of personal selling are professionalism, negotiation and relationship network. I. Professionalism: Companies are concentrating more and more in conducting sales training program so that the sales personnel transforms from a passive order taker to an active order getter. For this there are two basic approaches: a. Sales oriented approach: trains the person in age old high pressure techniques. b. Customer oriented approach: trains sales personnel in problem solving of the customer. The person learns how to listen and question in order to identify customer needs and come up with sound product solutions. The major steps involved in any effective sales process are as follows: Prospecting and qualifying | Pre approach | Approach | Presentation and demonstration | Overcoming objections | Closing | Follow up and maintenance Major steps in effective selling 1. Prospecting and qualifying: The first step in selling is to identify and qualify prospects. Previously this was the job of the sales personnel but now mostly the companies do it and pass on to sales personnel. The source of identifying prospects are Examining data sources ( CD- ROMS, newspaper, directories ) in search of names Putting up a booth at tradeshows to encourage drop bys Inviting current customers to suggest names of prospects Cultivating other referral sources like suppliers, dealers etc Contacting organizations and associations to which prospects belong Using telephone, internet, mail etc These sources are then qualified by contacting them by mail or phone to assess their level of interest and financial capacity. The leads are categorized as hot prospects and warm prospects and cool prospects. Hot prospects are turned over to sales personnel and warm prospects to telemarketing units. 2. Pre approach: The sales personnel should learn as much as possible about the prospects. The sales personnel should set call objectives like to qualify the prospects, to gather information and making an

immediate sales. Sales personnel should also decide on the best approach personal visit or a phone call or a letter and the best timing. The sales personnel has to plan an overall sales strategy for the account. 3. Approach: The sales personnel should know how to greet the customers, show courtesy and attention to buyers and avoid distracting mannerisms. The opening line should be positive followed by key questions and active listening to understand the buyers need. 4. Presentation and demonstration: The sales personnel details the product to the buyer following the AIDA formula of Attention, Interest, Desire and Action. The sales personnel uses Features, Advantages, Benefits and Value ( FABV ) approach. Features: describes the physical characteristics. Advantages : describe why the features provide advantages. Benefits : describe the economic, technical, service and social benefits delivered by the offering Value : describes the summative worth of the offering Companies have developed three different styles of sales presentation.: a. Canned approach: a memorized sales talk covering the main points. It is based on the stimulus response thinking that the buyer is passive and can be moved to purchase by the use of right stimulus, words, pictures, terms and actions. b. Formulated approach: also based on stimulus response thinking but first identifies the buyers needs and buyers buying style and then uses a formulated approach for this type of buyer. c. Need satisfaction approach: starts with the search of a customers real need by encouraging the customer to do most of the talking. Presentation can be improved by using aids such as demonstration aids, booklets, flip charts, slides, movies, audio and video cassettes, product samples and computer based simulations. 5. Overcoming objections: Customers pose objections and show the following resistance: a. Psychological resistance: resistance to interference, preference for established sources or brands, apathy, reluctance to give up something, unpleasant associations created by the sales personnel, pre determined ideas, dislike of making decisions and neurotic attitude towards money. b. Logical resistance: objections to the price, delivery schedule, certain product or company characteristics. To handle these objections sales personnel has to maintain a positive approach, ask the buyer to clarify their objections, deny the validity of the objection or turn the objection into a reason for buying. 6. Closing: Sales personnel can use one of the several closing techniques Can ask for order Recapitulate the points of agreement Offer to help the secretary write up the order Ask whether the buyer wants A or B. Indicate what the buyer will loose if order is not placed now. Offer specific inducements such as special price, an extra quantity or a token gift. 7. Follow up and maintenance:

This is necessary if the sales personnel wants to ensure customer satisfaction & repeat business. Immediately after the closing, the sales personnel should inform the customer about necessary details on delivery time, purchase terms and other matters that are important to the customers. The sales personnel should make a follow up call when the initial order is received to make sure there is proper installation, instruction and servicing. II. Negotiation: Marketing is concerned with exchange of activities & the manner in which the terms of exchange are established. The two parties need to reach agreement on the price and the other terms of sale. Sales personnel need to win the order without making deep concessions that will hurt profitability. Formulating a negotiation strategy: A negotiation strategy is a commitment to an overall approach that has a good chance of achieving the negotiators objectives. The principled Negotiation approach to bargaining: a. Separate the people from the problem: each party must understand the other sides viewpoint and the level of emotion with which they hold it. Active listening to opposing arguments and addressing the problems in response improve the chance of reaching a satisfactory conclusion. b. Focus on interest, not position: by focusing on interests, the negotiators are more likely to find a mutually agreeable means of achieving common interests. c. Invent options for mutual gains: Looking for options that offer mutual gains help identify shared interests. d. Insist on objective criteria: insist that the agreement reach fair objective criteria independent of either sides position. This approach avoids a situation in which one side must yield to the position of the other. 2. Discuss about product diversification. Ans: Differentiation: It is the act of designing a set of meaningful differences to distinguish the companys offering from the competitors offering. Following can be the basis for differentiation: a. Product Differentiation: Product can be differentiated on the following aspects (i) Form: e.g. Aspirin dosage, size, shape, coating etc, i.e, the product is differentiated on the basis of difference in shape, size etc (ii) Features: the company can offer varying features, characteristics that supplement the basic product like automobiles. The customer has to pay extra for each additional feature opted for. (iii) Performance quality: the level at which the products primary characteristics operate, i.e., high, low, average or superior (iv) Conformance quality: this tells the degree to which all the products are identical & meet the promised specification.

(v) Durability: this is the measure of the products expected operating life under stressful or natural conditions. (vi) Reliability: this is the measure of the probability that product will not malfunction or fail within a specified time period. (vii) Repair ability: this is the measure of the ease of fixing a product when it malfunctions or fails. (viii) Style: this tells about the products look and feel to the buyer. The customers are usually ready to pay extra for a stylish looking product. (ix) Design: According to Prof. Robert of Harvard, 15 years back, the competition was on price, today its on quality and tomorrow it will be on design. To the company a well designed product is the one that is easy to manufacture and distribute. To the customer it is the one that is pleasant to look at and easy to open, install, use, repair and dispose of. The designer has to take into account all these factors. 3. What are the various types of salesman? Ans: Transactional Transactional salespeople are those that simply wait for the transaction to make their sale. These are the salespeople that you might refer to as the order-takers because they passively sit by waiting for the sale to come to them. They may still be quite successful in what they do, despite their passive attitude, because they may become adept at positioning themselves in the right place at the right time to get the sale. However, most of these salespeople are better off working in a retail environment where the primary job of the salesperson is to help the buyer find the product she is already looking for and then ring it up. Relational The relational salesperson thrives off of the customer-salesperson relationship. This type of salesperson is good at quickly building rapport with the customer and often gets sales because the buyer likes her enough that she becomes the deciding factor in the sales process. These salespeople also establish the long-term relationship with a customer that brings the customer back around for repeat business. These types of salespeople tend to excel in industries like advertising or any type of sales where established accounts selling is important. Closers A large portion of the sales force in many different industries is made up of closers or those who are always trying to close the deal on a sale. These are what many people think of when they think of the used car salesman. This type of salesperson is constantly inching the customer toward the goal of closing the deal. While relationships with customers may still be important for future sales with this type of salesperson, they are usually secondary to the immediate goal of going for the close. Consultants Consultants are probably the best-rounded of the different types of salespeople. These are people persons who know how to close a deal and build relationships at the same time. Consultants

genuinely thrive off of the problem-solving aspect of their job, listening to customer needs and helping them find a solution to their problem. Consultants have superior listening skills and tend to be patient with customers when necessary, but aggressive when necessary also. 4. Explain product planning process. Ans: Product Planning The Product Planning Process Identify Opportunities Evaluate and Prioritize Projects Allocate Resources and Plan Timing Complete Pre-Project Planning 5. Role and importance of branding Ans: Branding is a key concept in marketing circles, as it is the pivotal springboard that can thrust your business forward, and give you a competitive edge. A well-defined and strong brand will drive sales, build customer loyalty, create brand value, and most of all, it will be the catalyst for business growth, as consumers will be motivated to buy your product. A brand is usually associated with the logo, sign, name, or other image that consumers associate with your company and product. But in fact, brand also incorporates other factors, and encompasses those unique characteristics that distinguish your product, and sets it apart from the competition. It also relates to the quality of your product, the way you do business, and how you are perceived by others. Business branding is therefore important to every business regardless of the size, because it communicates information about your business and product to the market. It will influence the cost of your product, packaging, marketing and advertising strategies, distribution channels, and more. Branding is all about establishing an identity, and becoming recognized for it. There is no denying the importance of branding, especially for the small business. Consumers are always willing to buy products they know and trust. A strong, well defined brand, gives you a competitive advantage in the market. It allows you to charge more for your product, knowing that consumers will remain loyal, and buy it at the higher cost. That is the result of consistent reinforcing of the brand, which enables positive responses from the consumer. Branding is one way to attract new customers. When a customer comes to you because of all they have heard about your product and business, then you can be certain that they are serious about buying. When you run marketing campaigns, you are simply throwing out a wide net to attract a large number of customers. From there your marketing guys spend time with those leads to find out who is really serious. That takes a lot of time and money, and in the end, you

are not sure that those customers will buy. On the other hand, branding puts you in a position to attract serious buyers first off. Those leads might have been generated because of satisfied customers, who are happy to spread the word. Or, they might have been the result of persistent market reinforcement. However the key is, they came about due to a branding strategy that effectively communicated the solution the customer was looking for. Branding puts you in touch with customers who know your business and your product before they even step inside your place of business, or buy your product off the shelf. They know about you because of your brand, and the value that goes with it. As we have seen, branding is an effective way to facilitate the growth of your business. When successfully implemented, branding can give you a strategic position in the market, and eventually lead to increased profit. This is achieved as a result of the influx of new customers, and the continuing support of existing ones. Branding builds brand loyalty and value, attracts new customers, and makes you stand out from the competition. 6. Sales promotional strategies roles in consumer durables To increase the sale of any product manufactures or producers adopt different measures like sample, gift, bonus, and many more. These are known as tools or techniques or methods of sales promotion. Let us know more about some of the commonly used tools of sales promotion. (i) Free samples: You might have received free samples of shampoo, washing powder, coffee powder, etc. while purchasing various items from the market. Sometimes these free samples are also distributed by the shopkeeper even without purchasing any item from his shop. These are distributed to attract consumers to try out a new product and thereby create new customers. Some businessmen distribute samples among selected persons in order to popularize the product. For example, in the case of medicine free samples are distributed among physicians, in the case of textbooks, specimen copies are distributed among teachers. (ii) Premium or Bonus offer: A milk shaker along with Nescafe, mug with Bournvita, toothbrush with 500 grams of toothpaste, 30% extra in a pack of one kg. are the examples of premium or bonus given free with the purchase of a product. They are effective in inducing consumers to buy a particular product. This is also useful for encouraging and rewarding existing customers. (iii) Exchange schemes: It refers to offering exchange of old product for a new product at a price less than the original price of the product. This is useful for drawing attention to product improvement. Bring your old mixer-cum-juicer and exchange it for a new one just by paying Rs.500 or exchange your black and white television with a colour television are various popular examples of exchange scheme. (iv) Price-off offer: Under this offer, products are sold at a price lower than the original price.

Rs. 2 off on purchase of a lifebouy soap, Rs. 15 off on a pack of 250 grams of Taj Mahal tea, Rs. 1000 off on cooler etc. are some of the common schemes. This type of scheme is designed to boost up sales in off-season and sometimes while introducing a new product in the market. (v) Coupons: Sometimes, coupons are issued by manufacturers either in the packet of a product or through an advertisement printed in the newspaper or magazine or through mail. These coupons can be presented to the retailer while buying the product. The holder of the coupon gets the product at a discount. For example, you might have come across coupons like, show this and get Rs. 15 off on purchase of 5 kg. of Annapurna Atta. The reduced price under this scheme attracts the attention of the prospective customers towards new or improved products. (vi) Fairs and Exhibitions: Fairs and exhibitions may be organised at local, regional, national or international level to introduce new products, demonstrate the products and to explain special features and usefulness of the products. Goods are displayed and demonstrated and their sale is also conducted at a reasonable discount. International Trade Fair in NewSales Promotion (vii) Trading stamps: In case of some specific products trading stamps are distributed among the customers according to the value of their purchase. The customers are required to collect these stamps of sufficient value within a particular period in order to avail of some benefits. This tool induces customers to buy that product more frequently to collect the stamps of required value. (viii) Scratch and win offer: To induce the customer to buy a particular product scratch and win scheme is also offered. Under this scheme a customer scratch a specific marked area on the package of the product and gets the benefit according to the message written there. In this way customers may get some item free as mentioned on the marked area or may avail of price-off, or sometimes visit different places on special tour arranged by the manufacturers. (ix) Money Back offer: Under this scheme customers are given assurance that full value of the product will be returned to them if they are not satisfied after using the product. This creates confidence among the customers with regard to the quality of the product. This technique is particularly useful while introducing new products in the market. 7. Differentiate advertising with Publicity. Ans: Advertising is the process of letting the public knows of the new product or service or of any alterations to the existing one with the main aim of offering it for sale to gain profit. Advertising can be done through all sorts of media. Publicity is informing the world about news events or ground breaking developments in the company through radio, television, magazines, pamphlets, or newspapers. The publicity is usually picked up by news or industry related media and is not a paid advertisement. Difference between Advertising and Publicity: 1. Advertising is paid form of ideas, goods and services while publicity is not paid by the sponsor.

2. Advertising comes from an identified sponsor while publicity comes from a neutral and impartial source. 3. Advertising is controllable by the organization while publicity is not controllable because it comes from a neutral source. 4. Advertising is less credible in comparison to publicity while publicity is more credible because it comes from an impartial source. 5. Advertising is what you or your organization says and promotes about you or your organization but publicity is what others say for you or your organization. 6. In advertising same content is repeated by the sponsor while in publicity it is not generally possible. 7. Advertising always carries a positive message about your organization because it is the content you pay for but publicity can be positive or negative because it comes from an impartial source. 8. In advertising you have full chance to show your creativity but in publicity creativity is limited because it comes from non paid source. 9. Advertising is targeted to the particular audiences by the sponsor while in publicity it is not focused. 10. Most of the times in advertising social responsibility is ignored while in publicity special focus is given on social responsibility. 8. Explain the various techniques involved in marketing for retaining customers. Ans: 1. Offer payment plans. 2. Conduct customer satisfaction surveys. 3. Develop a system to track your customers. 4. Ask all customers how they heard of your business. 5. Identify a market you may have overlooked. 6. Return all telephone calls. 7. Ask your customers to come back again. 8. Offer incentives. 9. Learn customer names. 10. Keep track of customer comments. 11. Make follow-up calls to customers. 12. Provide regular customers with discounts. The lifetime value of the consumer concept is based on the fact that it is much more cost effective to keep a good consumer than to attract a new one. For large ticket items (automobiles) or items that require frequent purchase over time (breakfast cereals), the lifetime value of a consumer can be very high. So, encourage young customers to buy your products and services. This will help your business to remain healthy over time and to create a longer lifetime value of the customer.

Techniques for keeping good consumers include the following: database marketing, special services, product customization, personal touches, legendary service, communication that reinforces previously made purchases (especially to overcome post purchase anxiety and doubts for large ticket items), programs that reward loyalty and heavy brand consumption, and avoiding programs that encourage brand switching.

9. Define strategic marketing planning.

Ans:

The extent to which each part of the above process needs to be carried out depends on the size and complexity of the business. In a small or undiversified business, where senior management have a strong knowledge and detailed understanding of the overall business, it may not be necessary to formalise the marketing planning process. By contrast, in a highly diversified business, top level management will not have knowledge and expertise that matches subordinate management. In this situation, it makes sense to put formal marketing planning procedures in place throughout the organisation.

Component of the plan Mission statement

Description A meaningful statement of the purpose and direction of the business The overall business objectives that shape the marketing plan The way the information for marketing planning is organised. Assesses the situation of marketing in the business the products, resources, distribution methods, market shares, competitors etc The markets the business is in (and targeting) size , structure, growth etc An assessment of the firms current position, showing the strengths & weaknesses (internal factors) and opportunities and threats (external factors)

Corporate objectives Marketing audit

Market analysis

SWOT analysis

Marketing objectives and What the marketing function wants to achieve (consistent with corporate objectives) and how it intends to do it (e.g. Ansoff, strategies Porter) Marketing budget Usually a detailed budget for the next year and an outline budget for the next 2-3 years The detailed implementation plan

Action plan

PART -B 10. Define packaging and explain its importance. PACKAGING: A package is the actual container or wrapper. Packaging is a business function. It includes the activities of designing and producing container for a product. Purpose/Importance of packaging: To protect the product on its way to the consumer. Provide protection after the product is purchased to the time it is consumed. Be part of the companys trade marketing program to meet the needs of wholesalers and retailers. Be part of a companys consumer marketing program for identification by consumers. To face competition. To act as a five second commercial for the product.

Retailers prefer products with attractive package. Rising consumer affluence is making people willing to pay extra for convenience, appearance and dependability of the package. Helps in building company and brand image. Innovation opportunity in packaging brings benefits to customers and profits to producers.

11. Explain the importance of branding. Ans: A brand is a name, term, sign or symbol or a combination of them intended to identify the goods or services of one seller or group of sellers to differentiate them from those of competitors. Reasons for branding: Easy to identify goods and services. Assurance that a minimum level of quality will be provided Reduces price comparison Adds prestige to otherwise ordinary commodities. Reasons for not branding: Responsibility attached with branding to promote and maintain consistent quality of output. Difficulty to differentiate e.g. nails, raw materials Essential/desirable characteristics of a brand name: Should suggest something about the product, particularly benefits & uses. Easy to pronounce, spell and remember. Distinctive Should be adaptable to new products when they may be added to product line. Capable of registration & legal protection. Challenges to branding: To decide whether to brand or not Selecting a good brand name as more and more new products are coming but the words available are fixed. To see whether the brand name chosen already exists or resembles some existing ones. Brand Equity: It denotes the value a brand name adds to the product. E.g. Sony, Reebok etc Brand name decision: a. Individual names: It means individual name for all the products. Benefits: if one of the product fails, it will not affect other products. If the company wants to introduce low quality products, its overall image will not be tarnished The firm can search the best name for each product. b. Blanket family name: All the products carry the same name. E.g. Maggi, Bajaj etc

Benefits: Development cost is less as no money needs to be spent on name research or for heavy advertising for brand recognition. Initial awareness is easily achieved due to manufacturers image c. Separate family name for all product lines: Different family names are invented for different quality lines within the same product class. E.g. Lakme, Elle d. Company trade name combined with individual product name: Some manufacturers tie their company name to an individual brand name for each product. The company name legitimizes and the individual name individualizes the product. Brand strategy decision: A company can choose the following five strategies: 1. Line extension: Existing brand name extended to new sizes or flavors in the existing product category. Companies may also introduce brand variants which are specific brand lines supplied to specific retailers or distribution channels. 2. Brand extension: Using the existing brand name to launch new products in other categories. E.g. Tata, Honda etc 3. Multi Brands: A company can also introduce additional brands in the same category. The company may be trying to establish different features or appeals to different buying motives. 4. New brand: If none of the existing brand names suit a new product, the company can come up with a new brand name. 5. Co Brand: Two or more well known brands are combined in an offer. E.g. Bajaj Kawasaki, Kinetic Honda, Kotak Mahindra 11. Differentiate standardization Vs adaptation. Ans: When planning to enter (a) foreign market(s), you need to consider whether or not your current products will meet the needs of the foreign target market. After all, this market is likely to have a totally different environment that you will need to come to terms with. As we have mentioned before, this environment may have socio-cultural, legal, economic, technical and even geographic differences from the domestic market that you are familiar with. The market research investigations that you have undertaken should provide you with a good idea as to what product strategy you need to follow. Technically, there are essentially three product strategies at your disposal. These are: 1. Sell the same product as you are currently selling in the domestic market, to all of your foreign target markets - product standardisation 2. Modify the product to meet the needs of the foreign environment - product adaptation 3. Invest in and develop a totally new product for the export market - new product development Given the limited resources and competitive strengths of most companies, it is unlikely that your company would be able to tackle both a new market and invest in new product development simultaneously. It is also very seldom that companies can enter a foreign market without

adapting their product at all (this is commonly referred to as product standardisation) - usually some form of product modification is necessary (if only very minor - this is referred to as product adaptation or product differentiation). The realistic choice at your disposal is therefore: Make only the minimum of changes to your product to meet the needs of the foreign marketplace; or Make significant changes to your product in order to meet the needs of the foreign marketplace In choosing a particular product strategy, you need to compare the likely improvement in sales turnover and profit levels with the additional costs involved in, for example, product modifications, new market research, additional product R&D, and shorter production runs. However, the firm would first have to assess: How much is already known about the customer requirements in the various markets The extent to which these requirements differ Whether the various requirements could be met through superficial changes to the product (e.g. packaging) or whether the product will have to be completely redesigned The extent to which customers in different markets could, as a result of various promotional messages, be persuaded to accept a product which will have less than ideal characteristics, but would nevertheless be cheaper, rather than one which has been completely adapted to their needs but which will ultimately be more expensive The size of the market, as this would determine whether or not product modification would, in fact, be profitable It should not be forgotten that the product is more than just a physical item - it is a bundle of utilities that the buyer receives. These utilities include the product's form, taste, colour, odour, texture, its packaging, labelling, warranty, service requirements, etc., as well as the actual functioning of the product. In short, the market will react to a product in the light of its own values and customs.

The company which applies a standardisation policy to its product offers a unique version of a product (the product sold in the domestic market) in all of its foreign markets. In its profitability study (which depends jointly on costs and sales) the company which opts for standardisation of the supply will prefer a strategy of cost minimisation. Standardising a product can be can be done for many of its components : for example, on the level of product design or its packaging (ex : multilingual packaging). Product standardisation can adjust itself with standardised or adapted communication : a standardised product and communication corresponds to the supply of a perfectly identical product (example : Coca-Cola). It is the simplest strategy for an exporting

company which therefore offers the same products to all its foreign markets with the same communication campaigns and promotional arguments which they use in the domestic market ; a standardised product and adapted communication corresponds to the discovery of new uses for the product (example : packet soups sold as soups in Europe and as sauces in the United States...). Within this strategy, the company exports a product absolutely identical but the job which it does and the function which it fulfils is different to that for which it was initially designed. The only costs incurred by this approach are connected to identifying different functions of the product (R&D, investigating consumers) and to altering the communication strategy according to the newly identified uses. This low cost strategy enables moreover the life cycle of a domestic product to be lengthened, and therefore new markets for a product developed for the domestic market to be found.

Generally it is not possible to standardise products completely in foreign markets ! Actually, despite the potential benefits of standardisation, there are great obstacles linked to foreign markets (climate, culture of local consumers, level of revenue, legal constraints,...) which prevent such a strategy from being adopted.

Advantages of standardisation The three principal advantages generated by standardising the product are the following : cost economies consistency amongst consumers simplification of planning and control 1. Cost economies Economies of scale on the level of production and R&D (Research and Development). By offering the same basic product in different markets, the company can make economies connected to mass production and storage. It can pass the expenses on Research and development onto greater production volumes and therefore reduce the total cost of the unit price. Economies connected with communication. Even when the communication policy is adapted to each market, the company can generate economies of scale on the subject of communication when its products are standardised. Actually communication tools such as company documentation and advertising have more chances of being similar through markets where the product is identical. 2. Consistency amongst consumers

Thanks to the standardisation of its product, the company can benefit from a homogenised and consistent brand image through the markets. This homogeneity of the offer is particularly important to preserve the loyalty of "multinational" consumers. The new type of consumer, who is extremely mobile and has privileged access to other markets, thanks to developments in transport (planes,...) and new information and communication technology (TV, Internet, Newspapers,...) requires of the products that performances are standardised from one market to another. A company which exports products which are likely to be bought and consumed by these "multinationals" must take their demands into account !

3. Simplification of planning and control A product standardisation strategy is a lot less complicated to set up and is operational very quickly.

Drawbacks of standardisation

Despite the economies of scale, which it generates, standardising a product can however lead to failure ! Indeed, this strategy does not take into account the differences in cultures, tastes, needs, purchasing power,... of consumers in different markets. The company, which adopts this strategy, risks offering "the lowest common denominator" which does not satisfy any client. It does not take into account the differentiation strategies of local competitors nor possible market evolution. In doing this, its commercial efficiency risks being reduced and the volume of sales not being satisfactory !

Driving forces of standardisation There are certain conditions where adopting a standardisation strategy for the product supply is favourable : when the company, which is slightly internationalised exports selectively. Companies which export passively (non solicited orders or requests for prices from abroad, without the company having made enquiries there) or which consider foreign sales as a

supplementary market which enables surplus stocks of a domestic product to be sold, tend to adapt their products slightly, or not at all to the specifications of the markets ; when the company is slightly competitive and occupies a dominant position, finds itself in a favourable power struggle in view of distributors and consumers. A company which markets a strongly innovative new product where the supply is limited can exert pressure on the world demand and has no need to adapt to the foreign market ; when the company has limited financial, human, or production resources ; when the cost of adapting the product is too high. Therefore, due to the fact of its high research and development costs, a highly technical product will be less susceptible to being adapted than another product ; when the consumers have uniform purchasing power in different markets ; when the price is an essential purchasing factor for consumers as standardisation enables this to be reduced greatly ; when the conditions for using the product are the same in different markets ; when the product satisfies a universal need, as it results from a relatively homogenised market segment where tastes and desires converge through the borders. Homogenised market sections strive to develop themselves following the development of international means of transport and communication devices which render people more conscious of tastes for those coming from other countries. For example, on the subject of musical tastes, the preferences of adolescents in Tokyo are closer to those of young Londoners of French than those of their own parents. In addition, there are categories of products where the parts of the market on a national basis are weak, but which are successful on an international level (examples: whisky, top of the range cameras). These markets can be qualified as niche markets ; when "multinational" consumers who travel can purchase the product (examples: Gillette disposable razors, Kodak film, Hilton hotels, audit services,...). To make these mobile consumers more loyal and more familiar with international products, (thanks to a progression in means of communication and transport) it is necessary to standardise the product ; when the product is a cult product where the attraction rests in its origin. Among these products are standard bearing or emblematic products which carry a country's image (example: luxury French products (perfume, champagne, fashion,...) Japanese electronic products, cameras and cars) but also products without cultural roots and history which have become legendary products over the years (such as: Levi jeans, Marlboro cigarettes, Coca-Cola,...). For all these products where the attraction is universal, it is inappropriate to alter them as the purchaser is looking for the original products ; when the product is an industrial product (computers, Caterpillar bulldozers, raw materials such as steel or oil, chemicals, electronic chips,...) technical specifications are essential. In fact, industrial products are generally less susceptible to cultural aspects than goods consumed in large quantities, and do not directly influence the level of consumer

well being. In this way, they have a tendency to be standardised beyond borders. However it occurs that industrial products are subject to minor alterations, generally imposed by specific national standards (for example: electric voltage) ; certain durable consumer goods (examples: TV, cars,...) as opposed to non durable consumer goods can be standardised (except for certain local specifications such as for example technical characteristics connected to electrical plugs and voltages which require change) ; when products are not directly influenced by the level of the consumer's well being. Therefore, industrial products are easier to standardise than products such as clothing, food and cosmetics ; Definition Adapting a product for foreign markets consists of offering a product to targeted foreign consumers altered to specific tastes, preferences and needs. The extreme position of adaptation would consist of altering the product until it is completely new. Adaptation can logically concern all the characteristics of the product (central physical product, name and denomination, design, packaging and labeling, brand, additional services, positioning, ...). Adapting a product signifies that the company is opting for maximising sales and not minimising coast in its search for profitability!

Above some products, for which a certain standardisation in tastes is observed, or for which the segmentation criterion are international, the adaptation policy of the product remains predominant. This strategy will be adopted if the sales forecast justifies the cost of adapting the product ! Generally, it agreed on to distinguish technical adaptations and commercial adaptations ! 1. Technical adaptations Technical adaptations concern all of the obligatory, minimal adaptations of the product to which the company must conform in order to be able to "put into consumption" its product. Alterations of a regulation nature are imposed by the law and by public powers, and condition how a market is accessed. It can be connected to the following factors : customs policies. Certain modifications have to be made in order to respect customs procedures before "putting into consumption" ;

taxation policy. For example, the power of car engines tends to be lower in countries where cars are taxed according to engine power (for example, in France and Belgium, ...) ; local professional certification ; national standards (for example : electric voltage) ; technical regulations (notably concerning grocery products, medicines, electrical equipment, ...).

Not respecting a regulation technique or standard connected to a market makes it impossible to enter ! Technical adaptations of the product also include alterations of a structural nature, linked to geographical and climatic characteristics, religious standards, and language differences ...

2. Commercial adaptations Commercial adaptations are of a marketing nature. They translate into considering the level of supply, consumer expectations and socio-cultural aspects of the foreign market according to the chosen positioning. The company can refuse this marketing adaptation if it is left to the free evaluation of the company, in contrast to technical adaptations! However commercial adaptations is a factor, which determines commercial success. These adaptations are connected to economic and socio-cultural aspects following the targeted foreign consumers : consumption habits ; preferences and tastes ; level of income (which influences the frequency of purchase but also the size of packaging) ; level of education and literacy (which influences the packaging and labeling) ; ... Advantages and drawbacks The essential advantage in adapting a product is the associated probability that sales and revenue will be increased thanks to a better appropriateness to the specific needs of the targeted foreign markets. In doing this, the company's profits are likely to increase, due to the revenue generated by product adaptation is larger than the adaptation costs.

However, the company which adopts an adaptation policy for the product in each foreign market has to make sure that they harmonise the strategies in these markets in order to avoid policies employed in some markets not harming the results in others. It is a veritable challenge to guarantee its cohesion for a company, which alters its product for each market In addition, the organisation and implementation of a product adaptation policy in all the foreign markets is quite complicated.

There are certain circumstances, which favour using an adaptation strategy for the offered product : when the company has a low reputation and finds itself in an unfavourable balance of power with local consumers and distributors ; when the company has plentiful financial, human and productive resources available or it has local production sites or branches ; when the company is subjected to strong competition and it does not occupy a dominant position in the market. In this competitive context, foreign consumers can choose from a large assortment of products and are therefore in a position of strength. For the exporter, this signifies that he will have to design specific products for these consumers if he wants to be different from the competition and maintain his part of the market. In addition, if the competitors themselves market the products adapted to local consumers' wishes this would be a strategic error which could generate large losses of sales ; when the product (industrial or consumer goods) is subject to local legislation and regulations. Within the field of grocery or medical products for example national legislation relating to the product, packaging and labeling are often sources of variation between countries. Taxation policies are equally susceptible to influencing the nature of products (example: car manufacturers tend to reduce the size of their engines in countries that tax "large engines" more). Different technical and industrial standards could also bring about modifications ; when the conditions for using the product are different in the foreign market due to the effect of factors such as the climate, the level of expertise and education of users, the market infrastructure, and technical standards. Therefore, as an example, the state of the roads and the level of traffic in a market can demand product modifications such as for cars, lorries, tyres, ... The differences in the size and shape of houses (houses in the United States are larger than those in Europe, which themselves are larger than those in Japan) can influence the design of domestic appliances as well as furniture. Cars designed

for the British or Australian markets must be altered to drive on the left-hand side of the road ; when the product is influenced by the geographical and topographical environment as well as by the local climate. The climate has an obvious effect on the sales potential for a certain number of products and can demand adaptations connected with the packaging or the product itself (for example: cars must be adapted to extreme climate conditions in tropical countries) ; when the purchasing power of local consumers is different to that of domestic consumers as this has an influence on their purchasing behaviour. In developing countries, many consumers tend to buy in smaller quantities than in developed countries and certain products, which are considered affordable in developed countries, are perceived there as luxury products. Therefore, the level of revenue will have an influence on the nature, size and marketing of durable and non-durable consumer goods ; when the product is subject to the specific culture, language, tastes, preferences, needs, and habits, ... of local consumers.

Cultural preferences are a major reason for adapting products as they affect purchasing behaviour and product use. The influence of cultural variables makes itself felt particularly on the level of goods for personal use (clothing, food) and non-durable consumer goods, above all, those used in the home (grocery products,...). The cultural influence is less appreciated even not at all- with regard to industrial goods, production goods (machine tools) professional equipment goods (example: photocopier), household goods (example: household appliances) and durable consumer goods (such as cars). However even if the latter are less subject to modifications due to the cultural environment, alterations can be necessitated for other reasons, for example connected to legislation or climate ! As a general rule, assume that the closer a product is to the body (food, clothing, cosmetics,...) the more likely it is to be adapted ! when the company is marketing a grocery product. Generally, food is a very difficult product to standardise as food habits, which are rooted profoundly and emotionally in the culture are very difficult to change. In this context, it would be necessary to take into account the differences in taste in the target market (for example: McDonald's adapts its menus in certain markets : it offers pork sandwiches and beer in Germany, fish and rice in Japan. Equally Coca-Cola modifies the flavour of its drinks according to the tastes of local consumers). However certain uniformity can slowly be witnessed in culinary habits in developed countries, in particular with young people. In addition, certain very typical products (example: pizza, pasta,...) tend to be exported well without being submitted to strong modification. Their are also foodstuffs without cultural roots which have a "universal formulation" and which satisfy a global needs without having to be adapted ( example: TWIX chocolate bars).

Marketing Management MBA Degree Examination April 2012 Part A 1. Examine the forces in the marketing environment. Ans:

2. Explain the challenges faced by a firm, while adapting marketing to a new liberalized economy. Ans: Cocoon of protection enjoyed so far by existing players disappears. Existing notions on economic size are challenged Industry structure too alters radically in many businesses, forcing players to changers. Economic Darwinism becomes the order. From shortage to surplus; the challenge of being price competitive. Buyers market causes sharp change in business style. From shoddy products to excellent products; the quality challenge. The new trade policy, linking of imports to exports and market driven exchange rates, constitute the main compulsion Heat of competition at home, another compulsion However, exporting remains a difficult game Indias lack of competitiveness as a nation compounds the problem Competitive advantage and core competence become technology based Investment in R&D and innovation becomes inescapable Vulnerability due to capital inadequacy Lack of product clout and brand power PSUs become vulnerable due to acombination of factors

Problem of one product syndrome Vulnerability due to loss of Monopoly Past ceases to be an indication of the future It is no longer business as usual; managements at the crossroads Problem of managing mega change; need for new approaches, new systems and structures, new leadership

Each country, based on its individual endowments and circumstances, will have to design and implement national policies in a range of areas that ensure the country takes advantage of the opportunities that globalization provides and at the same time deals with the risks that it introduces. (a) Lack of complete access to product markets caused by both trade barriers and hefty subsidies in developed countries on commodities of interest to agricultural producers; (b) Limited access to financial resources and for some countries high conditionality attached to concessional resources; (c) The constraints on acquiring technology in terms of resources, both human and financial, and inadequate infrastructure. 3. Enumerate factors affecting the pricing strategy of a firm Ans:

4. How market logistics decisions have assumed significance? Ans: SIGNIFIGANCE OF MARKETING LOGISTICS The important of logistics systems lies in the fact that it leads to ultimate consummation of the sales contract. The buyer is not interested in the promises of the seller that he can supply goods at competitive price but that he actually does so. Delivery according to the contract is essential to fulfilling the commercial and legal requirements. In the event of failure to comply with the

stipulated supply of period, the seller may not only get his sale amount back, but may also be legally penalized, if the sales contract so specifies. There is no doubt that better delivery schedule is a good promotional strategy when buyers are reluctant to invest in warehousing and keeping higher level of inventories. Similarly, better and/or timely delivery helps in getting repeat orders through creation of goodwill for the supplier. Thus, as effective logistics system contributes immensely to the achievements of the business and marketing objectives of a firm. It creates time and place utilities in the products and thereby helps in maximizing the value satisfaction to consumers. By ensuring quick deliveries in minimum time and cost, it relieves the customers of holding excess inventories. It also brings down the cost of carrying inventory, material handling, transportation and other related activities of distribution. In nutshell, an efficient system of physical distribution/logistics has a great potential for improving customer service and reducing costs. Logistics has gained importance due to the following trends Rise in transportation cost.

mass merchandise with large demands & very sophisticated logistics services, by pass traditional channel & distribution.

As a result of these developments, the decision maker has a number of choices to work out the most ideal marketing logistics system. Essentially, this system implies that people at all levels of management think and act in terms of integrated capabilities and adoption of a total approach to achieve pre-determined logistics objectives Logistics is also important on the global scale. Efficient logistics systems throughout the world economy are a basis for trade and a high standard of living for all of us. Lands, as well as the people who occupy them, are not equally productive. That is, one region often has an advantage over all others in some production specialty. An efficient logistics system allows a geographical region to exploit its inherent advantage by specializing its productive efforts in those products in which it has been an advantage by specializing its productive to other regions. The system allows the products landed cost (production plus logistics cost) and quality to be competitive with those form any other region. Common examples of this specialization have been Japan s electronics industry, the agricultural, computer and aircrafts industries of United States and

various countries dominance in supplying raw materials such as oil, gold, bauxite, and chromium. Further more Logistics has gained importance in the international marketing with the following reasons: 1. Transform in the customers attitude towards the total cost approach rather than direct cost approach. 2. Technological advancement in the fields of information processing and communication. 3. Technological development in transportation and material handling. 4. Companies are centralizing production to gain economies of scale. 5. Most of the MNC organizations are restructuring their production facilities on a global basis. 6. In many industries, the value added by manufacturing is declining as the cost of materials and distribution climbs. 7. High volume data processing and transmission is revolutionizing logistics control systems. With the advancement of new technologies, managers can now update sales and inventory planning faster and more frequently, and factories can respond with more flexibility to volatile market conditions. 9. Product life cycles are contracting. Companies that have gone all out to slash costs by turning to large scale batch production regularly find themselves saddled with obsolete stocks and are unable to keep pace with competitors new-product introductions. 10. Product lines are proliferating. More and more product line variety is needed to satisfy the growing range of customer tastes and requirements, and stock levels in both field and factory inevitably rise. 11. The balance of power in distribution chain is shifting from the manufacturers to the trader. 5. Discuss the technological developments taking place in marketing Ans: Technology will be a key component, over the next 20 years, as the refining industry is pushed to meet the challenges of producing more, and higher quality, transportation fuels and lubes, as crude oil feedstocks become more difficult to refine. As materials like bitumen from Canadian tar sands, shale oil, and heavy, high acid crudes become a larger percentage of the feed to the worlds refineries, it is critical that refiners find new ways to operate more reliably, efficiently, and safely. All this will happen as refineries continue to find ways to reduce emissions of materials like NOx, SOx, and volatile organics. Marketing technologies With the Internet playing an ever increasing role in reaching customers and sharing information about customers, marketing increasingly requires companies and individuals with technical expertise across a range of fields that know both marketing and Internet technologies.

Particularly as companies want to understand their customers better and develop new ways of partnering with customers using a wide range of interaction tools. More particularly, the Internet is providing a key route for information, comment and feedback from customers to the supplier and between customers about the supplier whether from social networks, apps, traffic analysis or new ways of inviting help from customers. Focus areas Though we are not purely an online company, on technologies, our focus is on using the Internet and online and mobile technologies to better understand what customers what and to provide mechanisms for delivering this. Whether it is through websites aimed at customers, or using the Internet to build knowledge and information within your business via customer surveys, webanalytics, market intelligence or online experiments. In particular, we have software skills and a development platform to create web-based communities, experimental design work in online advertising (which bit of the adverts work hardest), experimental design in terms of landing pages and website content delivery. We have developed our own Web content management system that incorporates communities, buying and selling, user generated content that can be used for both rapid prototyping of functional websites, or for experimental design in website creation. In additon we have our own survey tools that enable us to think in completely fresh ways about how questions are asked, what we present to people and how we use the data. See some examples of what we can do. Web-applications and rapid prototyping It is becoming more important that sites are functional, interactive and not just informational. We develop a range of practical, easy-to-use, distributed web-applications for managing on-line services, from information publishing, to private shared address books, to distributed information systems to subscription based services. Our flagship web-application is Notanant which can be used to manage any form of website with members. It can also be used for rapid prototyping work to test features and functionality. It can also be combined with our survey software and experimental design theory to test a range of website styles and functions - for instance using a set of carefully designed landing pages to investigate On-line communities and web-sites Web-site development and e-commerce need to be in place as another arm of your channels of distribution. The most effective web-sites are those that provide customers with a space to communicate and share information among themselves and with your employees. These on-line communities can be an extension of your loyalty programmes or customer feedback programmes, or they can just be autonomous in their own right. For specific campaigns, or for aspects such as building a collection of customers for research, it can be

extremely useful to have a pre-built system to capture and engage with customers. Building this rapidly and keeping control of the lists and comments generated can help in areas such as eventbased marketing or specific local campaigns. We have in-house skills in all the major web-technologies and can help you generate your own on-line community. FieldShare was entirely developed in-house including the database and discussion forum elements. IT tools for marketing In addition to bespoke software development (for example our Questionnaire Wizard), we are also able to configure and supply specialist tools for marketing project management and automated competitive intelligence gathering. In addition we can advise on the selection of data analysis tools for the statistical analysis of market research and database data and can provide training if necessary. We also advise smaller companies on the use of online advertising and provide analytical help and assistance to enable businesses to optimise their site and campaigns. We know about SEO and email marketing, but we do not offer these as specific services.