MM Final

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UNIT I
Q.
Define marketing. Also explain its nature in brief.
Ans. Introduction :
Marketing is a pervasive phenomenon in the present day world. Every day
we are exposed to marketing of goods, services, and ideas. Marketing may be
defined as a process by which goods and services are exchanged and the values
determined in terms of money prices. The American Marketing Association has
defined marketing as The performance of business activities that direct the
flow of goods and services through producers to consumers or users.
According to Philip Kotler ,Marketing is a social and managerial
process by which individuals and groups obtain what they need and want
through creating , offering and exchanging products of values with others .
Nature of Marketing :
1.
Marketing is Customer focused :
Marketing tends to satisfy and delight customer. The activities of

marketing must be directed and focused at the customer. Marketers can
remain in customer mind if they are provided value for what they spend.
Marketing efforts must be directed at meeting customer needs, not market
shares. For this , marketers must track customers needs on a continuous
basis.
2.
Marketing must deliver value :
Marketer has to track customer needs and deliver the product as per their
requirements. The company must satisfy the following equation with resultant
value above 1 :
Institute of IT & Management
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Benefits
Customer value =
Cost
The corporate strategy must be aimed at delivering greater customer value
than competitors.
3.
Marketing is Business :
When customer is the focus of all activities marketer has not to search
customer to seek response to his products. Customer group is decided for
whom the product is prepared and presented. All the environmental factors are
studied by marketing department ,keeping in mind the decided consumer
group.
4.
Marketing is surrounded by customer needs :
Marketing starts with the customer needs and requirements. These are
turned into probable features that might satisfy the basic needs .The portable
form of the product is made out and presented before the customer for approval
. The customer suggest changes or improvements in the portable product and
the final product is brought to the customer.The following figure illustrates the
point:
Identification of
Customer Need
Probable Features
of Product
Portable
Product
Customer Suggest
Changes
Final Product
Marketing
5.
and customer needs
Marketing is a part of total environment :
Total environment may be defined as the combination of all the resources

and Institutions which are directly related to the production and distribution of
goods, services, ideas, places and persons for the satisfaction of human needs.
However it is better to look at remote and immediate environment of any
marketing organization.
6.
Marketing System affects company strategy :

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MARKETING MANAGEMENT
Marketing has its own sub system which interact with each other to form
complete marketing system that is responsive to company marketing strategy
.Through the subsystems shown in the following figure , the company monitor
and adapts to the total marketing environment.
7.
Marketing as a Discipline :
The subject of marketing has emerged out of business which has derived
its existence from economics. After emerging from business, marketing has got
its strength from related areas law, psychology, anthropology, sociology,
statistics, mathematics because the related problems impinge heavily on
consumer behaviour, legal aspects of marketing , research on consumer needs,
advertising media, pricing, promotion methods etc.
8.
Marketing creates mutually beneficial relationship :
The customer is the focus of all marketing activities. But during the last
decade, the focus has shifted to the way of doing business, i.e. The strategic
aspect of marketing. Here the means of marketer are their knowledge and
experience, and the end result is in the form of mutually beneficial relationship
with the customer
Q.
Explain the scope of marketing .
Ans. The scope of marketing can be understood in terms of functions that a

marketing manager performs. In most of the business enterprises, marketing
department is set up under supervision of the marketing manager. The
functions of marketing may be classified into four categories as shown in the
following figure
Functions of
Marketig
Function of
Research
Function of
Exchange
Function of
Physical
Treatment
Functions
Facilitating
Exchange
A. FUNCTIONS OF RESEARCH :
A1. Marketing Research :
It means the intelligence service of organization Marketing research helps
in analyzing the buyers habit , relative popularity of a product, effectiveness of
advertising media , etc. Its major task is to provide the marketing manager with
timely and accurate information so that better decision can be made.
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A2. Product planning and development :

A product is something which is offered by a business to customers to
satisfy their needs. It has great importance in all other areas of marketing
management .The success of marketing depends upon the nature of the
product offered to the customers. The product must be so designed and
developed that it meets requirement of the customer.
B. FUNCTIONS OF EXCHANGE :
B1. Buying and Assembling :
Procurement of raw materials, semi -finished or finished products has
gained great importance for the modern industrial and commercial
enterprises. The marketing department plays an important role in purchasing
material for production or finished goods for resale. It is the marketing
department which will supply the information regarding the needs and taste of
customer.
Purchasing is different from assembling Assembling means collection of
goods already purchased from different sources at a common point . this is also
done by marketing department.
B2. Selling :
This is an important aspect of marketing under which ownership of goods
is transferred from the seller to buyer. If sales will not be there than all the
marketing activites will go waste. In selling activities marketer has to do
different activities such as creating demand, selecting distribution channels,
motivating customer to buy the products etc.
C. FUNCTIONS OF PHYSICAL TREATMENT :
C1. Standardisation, Grading, and Branding :
Standardisation means setting up of specification of a product. Grades of
agriculture products are based on these specifications and standards.
Industrial goods are given brand names by their manufactures to convey to the
customers that their goods conform to certain well-defined standards. These
activities promote the sale of products.
C2. ackaging :
Packaging has become one of
the essential
services of modern
marketing. It acts as a multipurpose arrangement. It gives protection to goods
on its route from manufacturer to consumer. Packaging facilitates the sale of
a product. It acts as a silent salesman of the manufacturer , particularly at a
place where there is widespread use of self-service , automatic vending and
other self-selection methods of retail selling.
C3. Storage :
Goods are generally produced in anticipation of the demand. They are
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stored in warehouses till they are actually sold in the market. Thus
warehousing creates time utility. In addition, modern warehouses perform
certain marketing services also such grading, packaging, labeling, etc.
C4. Transportation :
Modern organizations produce on a large scale to cater to the
requirements of customers scattered throughout the country. This calls for
transportation of goods from the place of production to the place of
consumption .Transportation provides the physical means which facilitate the
movement of persons,goods,and services from one place to another
Transportation is an important service which is provided by marketing
department. Rapid industrialisation and exchange of goods and services
cannot take place unless sufficient facilities for transportation are available.
D.FUNCTIONS FACILITATING EXCHANGE :
D1. Salesmanship :
Personal selling is an important method of selling goods. It is widely used
in retail marketing. The art of salesmanship has undergone a big change. The
attitude of salesman towards the customer and of customer towards the
salesman has also changed .Selling has become a science of human relations
and an art of getting along with people so effectively that sales resistance may
be reduced to minimum.
D2. Advertising :
Advertising has become an important function of marketing in the
competitive world. It helps to spread the message about the product and thus
promote its sale. The importance of advertising has increased in the modern
era of large scale production and tough competition in the market. Business
firm use several media of advertisement to sell their products. These include
newspapers, megazines, radio, television, etc.
D3. Pricing :
Determination of price of a product is an important function of marketing
manager. Price of product is influenced by the cost of product and services
offered , profit margin desired , prices fixed by the rival firms and government
policy. A sound pricing policy is an important factor for selling the products to
the customer . The price policy of a firm should be such that it attracts all types
of customers of different means.
D4. Financing :
Financing and marketing functions of a business are interlinked with
each other. The marketing department has an important say on policies of the
finance department in regard to cash and credit sales .Financing of customer
purchasing has become an integral part of modern marketing.
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D5. Insurance :
A large number of risks are involved in exchange of goods and services.
Insurance helps to cover these risks it facilitates the smooth exchange of goods
by covering risks in storage and transportation
Q.
Marketing is an indispensable activity for any organization. Do

you agree with the statement ? Elaborate your viewpoint with the
helpful examples.
Ans. Marketing is an indispensable activity for any organization. I am agree

with the statement : for todays businesses, change is the only constant. What
was in vogue yesterday is out of fashion today, what is in vogue today will not be
in fashion tomorrow. This applies equally well to businesses.
Existence of Marketing : Marketing is as old as mankind. A young child
trying to persuade his mother to buy him candy, a politician trying to
commence people to east their vote in his favor or a person trying to persuade
on employer to hire him are all practicing marketing. In a more formal setup,
business and non-business organizations are also involved in marketing.
Many management thinkers consider marketing to be the most critical
function of a business. In a business organization, the marketing division
generates the revenues essential for the survival and growth of the firm, the
finance department manages these revenues, and production and
manufacturing department use them to create products and services.
In this period of globalization, factors like economic crisis, differences in
standards of living, imbalances in income distribution, environmental
degradation, political unrest and other social, economic and technological
problem, tend to increase the challenges and threats faced by companies and
nations. While those factors can be threats to a business, marketers try
continuously to covert them into opportunities. This marketing plays a
significant role in successfully running a business.
Marketing : The American Marketing Association (AMA) defines
marketing as The process of planning and executing the conception,
promotion and distribution of ideas, goods and services to create exchanges
that satisfy individual and organizational goals.
A marketing transaction is one in which the buyer and the seller,
irrespective of the nature of the product, experience mutual satisfaction the
seller on selling the product and making a profit and the buyer on purchase
and subsequent consumption of the product.
Economic Utility of Marketing : Marketing lays emphasis on providing
the product to customers at the right place, at the right price, at the right time
and in the right place, at the right price, at the right time and in the right form.
Communication of information about the products helps customers determine
whether the product satisfies their needs. Marketers must focus on customer
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needs and wants to ensure customer satisfaction. The extent to which a

product satisfied customer needs and wants is called utility. If is the amount of
satisfaction a customer derives by consuming the product. Marketers can
provide four types of utility to their target customers Form Utility, Time
Utility, Place Utility and Possession Utility.
i)
Form Utility : Form utility is created when raw material is converted into
a finished product. For example, Britannia industry converts wheat,
sugar and other ingredients into biscuits and cookies and provides form
utility to its customers.
ii)
Time Utility : Marketers provide time utility to their customers by

providing their products when the customers wants them. For example,
Automated Teller Machine (ATM) installed by banks provides customer
access to banking services around the clock.
iii) Place Utility : Place utility is provided when a marketer provides the
product at locations preferred by the customer. Dominos pizza delivered
at your doorstep, is an example of place utility.
iv)
Possession Utility : Possession utility allows a buyer to use the product

as he wishes. It is the value that a buyer obtains from the product. For
example, a car purchased by a customer may use it for whatever purpose
he desires.
Marketing Dynamics : Products and markets are constantly changing due to

technological advancements. More and more companies are using advanced
technology to outsmart their competitors. The increasing usage of the same
technology by different companies has made it difficult for them to create and
maintain competitive advantage in the long run. The production cost per unit
declines over time due to the learning effect, which leads to reduction in the
price of the product. Due to the advances in the communication technology,
customers have gained easy access to useful and better information about the
brands via the internet. Some of the ways devised by Theodore Levitt to
outsmart the competition are :1.
2.
3.
Q.
Be customer led, not product oriented.

Market orientation should permeate throughout the organization.
Managers need to be proactive and visionary.
Give an overview
marketplace.
regarding
corporate
orientation
towards
Ans. Marketing is the delivery of satisfaction at a profit. It is a social and

managerial process whereby individuals and groups obtain what they need and
want through creating and exchanging products and values with others.
To understand what customer value and satisfaction are we should
understand the core marketing concepts, such as need, want, and demand.
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Need is a state of felt deprivation. It includes basic physical needs for food,
clothing, warmth, and safety; social needs for belonging and affection; and
individual needs for knowledge and self-expression. Need is a basic part of the
human makeup. Want is the form taken by a human need as shaped by culture
and individual personality. Demands are human wants that are backed by
buying power. People have almost unlimited wants but limited resources.
Thus, they want to choose products that provide the most value and
satisfaction for their money.
We understand a product as anything that can be offered to a market for
attention, acquisition, use, or consumption that might satisfy a want or a need.
It includes physical objects, services, persons, places, organizations, and
ideas. Likewise, the service is any activity or benefit that one party can offer to
another that is essentially intangible and does not result in the ownership of
anything.
When we learn the above mentioned concepts we can define the customer
value as the difference between the values the customer gains from owning and
using a product and the cost of obtaining the product. And consequently,
customer satisfaction is the extent to which a products perceived performance
matches buyers expectations. If the products performance falls short of
expectations, the buyer is dissatisfied. If the performance matches or exceeds
expectations, the buyer is satisfied or delighted.
When we are involved in the process of creating, maintaining, and
enhancing strong, value-laden relationships with customers and other
stakeholders, we say that we are in relationship marketing.
We comprehend a market as the set of all actual and potential buyers of a
product or service, and we manage the marketing through analysis, planning,
implementation, and control of programs designed to create, build, and
maintain beneficial exchanges with target buyers for the purpose of achieving
organizational objectives. On the contrary, when we reduce demand
temporarily or permanently with the aim not to destroy demand, but only to
reduce or shift it, we use the marketing techniques.
What weight should be given to the interests of the organization,
customers, and society? Very often these interests conflict. There are five
alternative concepts under which organizations conduct their marketing
activities.
1.
Production Concept :
Meaning : Production concept is the philosophy that consumers will
favor products that are available and highly affordable and that
management should therefore focus on improving production and
distribution efficiency.
Focus : The focus of the firms following the production concept is on
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lowering the cost of production by means of mass production and

distribution.
Drawback : Customer do not always buy products which are inexpensive
and available.
2.
Product Concept :
Meaning : Product concept implies that consumers will favor products
that offer the most quality, performance, and features and that the
organization should therefore devote its energy to making continuous
product improvements.
Focus : The focus of the firms following the product concept is on the
production of superior products and improvements of the products over a
period of time.
Drawback : Customer may not buy a product just because it is of high
quality unless they need it.
3.
Selling Concept :
Meaning : Selling concept states that consumers will not buy enough of
the organizations products unless the organization undertakes largescale selling and promotional efforts.
Focus : The focus of the firm following selling concept is on pushing the
products by understanding aggressive selling and promotion efforts to
make customer buy what is offered to them even when the customer have
non intention of buying the product.
Drawback : Selling relies on buyers manipulation. All buyers cannot be
manipulated and a buyer cannot be manipulated many times.
4.
Marketing Concept :
Meaning : Marketing concept implies that the achievement of
organizational goals depends on determining the needs and wants of the
target markets and delivering the desired satisfaction more effectively and
efficiently than competitors do.
Focus : The focus of the firm following the marketing concept is on the
development of those products or services which can satisfy the needs of
the consumers better than the competitors.
Drawback : It has led to many social and environmental ills like
pollution, drug abuse etc.
5.
Societal Marketing Concept :

Meaning : Societal marketing concept is the idea that the organization
should determine the needs, wants, and interests of target markets and
deliver the desired satisfaction more effectively and efficiently than do
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competitors in a way that maintains or improves the consumers and

societys well being.
Focus : The focus of the firm following societal marketing concept is to
Prevent many social evils such as pollutiondrug abuse etc.
Q.
Discuss in detail the Holistic Marketing approach of marketing. How

it is different from conventional concept ?
R.
Ans. The Holistic Marketing Concept : A whole set of forces that appeared in
the last decade call for new marketing and business practices. Companies
have new capabilities that can transform the way they have been doing
marketing.
The Holistic concept is based on the development, design and
implementation of marketing programs, processes and activities that
recognizes their breadth and interdependencies.
Holistic marketing
recognizes that everything matters with marketing and that a broad,
integrated prespective is often necessary. Four components of the holistic
marketing are relationship marketing, integrated marketing internal
marketing and social responsibility marketing.
Holistic marketing is thus an approach to marketing that attempts to
recognize and reconcile and the scope and complexities of marketing activities.
Communications
Internal
Marketing
Integrated
Marketing
Other
Departments
Marketing
Management
Products &
Services
Senior
Channels
Holistic
Marketing
Social
Responsibility
Marketing
Community
Customers
Relationship
Marketing
Legal
Ethics
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Environment
Channels
Partners
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Relationship Marketing : Increasingly, a key goal of marketing is to develop

deep, enduring relationships with all people or organizations that could
directly or indirectly effect the success of the firms marketing activities.
Relationship marketing has the aim of building manually satisfying long-term
relationships with key parties customers, suppliers, distributors and other
marketing partners in order to earn and retain their business. Relationship
marketing builds strong economic technical and social ties among the parties.
Relationship marketing involves cultivating the right kind of relationships
with the right constituent groups. Marketing must not only do customer
relationship management (CRM), but also partner relationship management
(PRM). For key constituents for marketing are customers, employees
marketing partners and members of financial community. The ultimate
outcome of relationship marketing is the building of a unique company asset
called a marketing network.
Integrated Marketing : The marketers task is to diverse marketing activities
and assemble fully integrated marketing programs to create, communicate and
deliver value for consumers. The marketing program consists of numerous
decisions on value-enhancing marketing activities to use. Marketing activities
comes in all forms. One traditional depiction of marketing activities is in terms
of marketing mix, which has been defined as the set of marketing tools the firm
uses to pursue its marketing objectives. McCarthy classified these tools into
four broad groups, which he called the four Ps of marketing : product, price
place and promotion.
In this situation, the company preparing an offering mix of products,
services and prices, and utilizing a communications mix of advertising sales
promotion, events and experiences and personal selling to reach the trade
channels and the target customers.
Robert Lauterborn suggested that the sellers four Ps correspond to the
customers four Cs
Four Ps
Four Cs
Product
Price
Place
Promotion
Customer Solution
Customer Cost
Convenience
Communication
Internal Marketing : Holistic marketing incorporates internal marketing,

ensuring that everyone in the organization embraces appropriate marketing
principles, especially senior management. Internal marketing is the task of
hiring, training and motivating able employees want to serve customers well.
Smart marketers recognize that marketing activities within the company is as
important as, or even more so than, marketing activities directed outside the
company.
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Internal marketing must take place at two level. First level, the various
marketing functions sales force, advertising, customer service, product
management, marketing research must work together. At another level,
marketing must be embraced by the other departments, they must also think
customer. Marketing is not a department so much a company orientation.
Social Responsibility Marketing : Holistic marketing incorporates social
responsibility marketing and understanding broads concerns and the ethical,
environmental, legal and social contact of marketing activities and program.
The care and effect of marketing clearly extend beyond the company and the
customer to society as a whole. Social responsibility also requires that
marketers carefully considers the role that they are playing and could play in
term of social.
Q.
Focal point of Marketing is building and delivering customer value

and satisfaction. Do you agree with the statement ? Elaborate your
view point.
Ans. Concept of Value : Different customers look for different benefits from
the same product. Therefore the value of a product differs from one customer
to other. Value to a customer refers to the difference between the benefits he
derives from the product or service and the cost of acquiring the product. The
customer is happy when the benefits and the cost match. The wider the gap
between the derived benefits and the cost of acquisition, the happier the
customer is. Tools like buyer analysis, market research and market planning
are helpful in indenturing and measuring the value customers expert. A high
customer value plays a vital role in generating customer loyalty because
customers compare the value cost gaps of the competing offers and select the
products that delivers the maximum value to them.
Value Chain : Every firm performs a set of activities that helps in designing,
producing, marketing, delivering and supporting its products. These activities
form a process. At every stage of the process, the firm adds value. The Chain of
activities from raw material procurement to the after sales services is called the
value chain. It identifies nine strategic activities i.e. five primary and four
support activities to create value.
The Genouc Value Chain
FIRM INFRASTRUCTURE
HUMAN RESOURCE MANAGEMENT
TECHNOLOGY DEPARTMENT
PROCUREMENT
INBOUND
LOGISTICS
OPERATIONS OUTBOUND
LOGISTICS
MARKETING SERVICE
& SALES
Primary Activities
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Primary Activities : Primary activities are those activities that are involved in
the physical creation of the product, marketing and after sales support. The
primary activities involve buying and bringing the material into firm (inbound
logistics), manufacturing the product (operation), shipping the goods which
includes warehousing, order processing, scheduling, distribution etc.
(outbound logistics), advertisement, sales force management, promotion and
pricing (marketing and sales) and providing services like installation, training,
repair etc. (service).
Support Activities : Support activities assist primary activities by providing
infrastructure that allows them to take place ongoing basis. Support activities
such as procurement, hiring the personnel, R&D, infrastructure (i.e. general
management planning, government activities and quality management),
accounting and legal activities etc. are handled by various departments. The
value chain includes a profit margin creating value that exceeds costs so as to
generate a return for the effort.
Providing Value Cost Balance : Customers expect certain benefits from the
product. Marketers need to add as many benefits to their products as possible.
When the number of features in a marketing offer are more the customer feels
that the marketer has offered him more the customer feels that the marketer
has offered him more value. He also feels that his value expectations are met by
purchasing the product. Standard chartered bank offers a global credit card to
all its customers, while most of its competitions offers country specific cards.
However, marketers need to ensure that when adding benefits to a
product, the cost of the product does not increase exorbitantly.
Consumer satisfaction.
Todays customers face a growing range of choices in the products and
services they can buy. They are making their choice on the basis of their
perceptions of quality, service, and value. Companies need to understand the
determinants of customer value and satisfaction. Customer delivered value is
the difference between total customer value and total customer cost.
Customers will normally choose the offer that maximizes the delivered value.
What Is Customer Satisfaction?
Customer satisfaction measures how well a companys products or
services meet or exceed customer expectations. These expectations often
reflect many aspects of the companys business activities including the actual
product, service, company, and how the company operates in the global
environment. Customer satisfaction measures are an overall psychological
evaluation that is based on the customers lifetime of product and service
experience.
Why is Customer Satisfaction So Important?
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Effective marketing focuses on two activities: retaining existing customers

and adding new customers. Customer satisfaction measures are critical to any
product or service company because customer satisfaction is a strong predictor
of customer retention, customer loyalty and product repurchase.
As shown in Figure , customer satisfaction is influenced by perceived
quality of product and service attributes, features and benefits, and is
moderated by customer expectations regarding the product or service. Each of
these constructs that influence customer satisfaction need to be defined by the
researcher.
Product
or Service
Attribute 1
Product
or Service
Attribute 2
Customer
Needs
Fulfilled
Perceived
Quality
Quality
Reliability
Value
Function
Performance
Customer
Satisfaction
Product
or Service
Attribute 3
Customer
Expectations
Quality
Reliability
Value
Function
Performance
Post Purchase
Behaviors
Customer
Complaints
Repurchase
Word of Mouth
Loyalty
Satisfaction Measurement: Affective Measures of Customer Satisfaction

A consumers attitude (liking/disliking) towards a product can result from
any product information or experience whether perceived or real. Again, it is
meaningful to measure attitudes towards a product or service that a consumer
has never used, but not satisfaction.
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Satisfaction Measurement: Cognitive Measures of Customer Satisfaction

A cognitive element is defined as an appraisal or conclusion that the
product was useful (or not useful), fit the situation (or did not fit), exceeded the
requirements of the problem/situation (or did not exceed). Cognitive responses
are specific to the situation for which the product was purchased and specific
to the consumers intended use of the product, regardless if that use is correct
or incorrect.
Satisfaction Measurement: Behavioral Measures of Customer Satisfaction
It is sometimes believed that dissatisfaction is synonymous with regret or
disappointment while satisfaction is linked to ideas such as, it was a good
choice or I am glad that I bought it. When phrased in behavioral response
terms, consumers indicate that purchasing this product would be a good
choice or I would be glad to purchase this product. Often, behavioral
measures reflect the consumers experience individuals associated with the
product (i.e. customer service representatives) and the intention to repeat that
experience.
Q.
Discuss how a customer can retain with a business for a long period
Ans. Introduction : Apart from managing value chain and maintaining

delivery network, firms need to develop strong bonds with they customers. In a
fiercely competitive environment, it is hard to please the customers as they are
smarter, more choosy, more price conscious, have better alternatives and are
attracted equally by many competitors. The measures of retaining customers
are :Cost of losing a Customer : Attracting customers is of no use unless you
know the art of keeping them. Customers can be retained only if the products
meet their expectations. If they are satisfied with the performance of the
products, they may talk about them to others. On the other hand if they are
dissatisfied, they may stop using the products and talk negatively to others
about them. A word of month is the strongest medium for communicating with
potential customers, it might cost a company heavily if there is negative talk
about the company or its products. As a company can suffer customer
attrition. Therefore, it must pay close attention to the defection rate i.e. the
rate at which they lose customers. To reduce the customer defection rate, a
company must
i)
Define and measure the retention rate.
ii)
Identify the cause of attrition.
iii)
Estimate the amount of profit lost by losing the customer.
iv)
Figure out the cost of retaining a customer.
v)
Listen to the customer as it helps in retaining and overcoming

attrition problem.
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Need for Retention : There are some interesting facts on the basis of past
researches about acquiring a customer and retaining him.
1.
Acquiring a new customer costs five times more than satisfying an existing
customer.
2.
On an average, companies lose 10% of customers every year.
3.
The customer profit rate increases over the lifetime of retained customer.
4.
A 5% reduction in customer attrition may increase the profit rate by 25 to

85%.
A firm accrues several benefits by retaining its customers like

i)
Increased Revenue : If a customer stays with a company for longer time,

the chances of his spending more significantly increase because his
income might increase in that period. This will result in an increase in
revenue and is particularly true in cases where the customers family size
increases, leading to an automatic increase in the demand for various
products.
ii)
Decrease in Cost of Selling : A loyal set of customers keeps the selling

cost down and is likely to be more profitable in the future. A retained
customer is also less sensitive to price changes and is not easily driven
away by ads or competitors products.
iii)
Advertising : Customers usually influence other members of their

influence group who rely on them for references and opinions. Old
customers talk favorably about the company and its products. So, a
retained customer acts as a billboard for the firm by virtue of word of
mouth advertising for the firm.
iv)
Cross Selling Possibilities : A regular customer can be a potential

customer for the firms other products in the near future. For example, a
customer with a saving account with ICICI Bank can be a potential
customer for loan products, credit cards etc.
v)
Structural Ties : In order to attract new customers and retain old ones,
companies indulge in supplying special equipment or computer linkages
that helps the customers manage their tasks such as inventory, payroll,
order entry process etc.
Q.
Explain Marketing Environment with its concept.
Ans. The Marketing Environment

Marketing Environment : The actors and forces outside marketing that
affect marketing managements ability to develop and maintain successful
transactions and relationships with its target customers.
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Marketing
Environment
Company's
Micro Environment
Company's
Micro Environment
The Companys Microenvironment:

The Companys Microenvironment The forces close to the company that
affect its ability to serve its customers - the company, market channel firms,
customer markets, competitors and publics, which combine to make up the
firms value delivery system.
The Company : The Company In designing marketing plans, marketing
management must take other company groups, such as top management,
finance, research and development (R&D), purchasing, manufacturing and
accounting, into consideration.
Suppliers : Suppliers Firms and individuals that provide the resources
needed by the company and its competitors to produce goods and services.
Marketing Intermediaries : Marketing Intermediaries Firms that help
the company to promote, sell and distribute its goods to final buyer; they
include physical distribution firms, marketing-service agencies and financial
intermediaries.
Resellers : the individuals and organizations that buy goods and services
to resell at a profit. Physical distribution firms: warehouse, transportation and
other firms that help a company to stock and move goods from their point of
origin to their destinations. Marketing-service agencies: marketing research
firms, advertising agencies, marketing consulting firms and other service
providers that help a company to target and promote its products to the right
markets.
Financial intermediaries : banks, credit companies and other
businesses that help finance transactions or insure against the risks
associated with the buying and selling of goods.
Customers : Customers The company must study its customer markets
closely and keep up to date with changing customer requirements. The
company must communicate with its customers, and must listen to them
closely.
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Competitors : Competitors The marketing concept states that, to be

successful, a company must provide greater customer value and satisfaction
than its competitors. Thus, marketers must do more than simply adapt to the
needs of target consumers. They must also gain strategic advantage by
positioning their offerings strongly against competitors offerings in the minds
of consumers. They must strive to anticipate competitor activity and strategy.
Publics : Publics Any group that has an actual or potential interest in or
impact on an organizations ability to achieve its objectives. Publics include its
workers, managers, volunteers and the board of directors.
The Companys Macroenvironment
The Companys Macroenvironment The larger societal forces that affect
the whole microenvironment - demographic, economic, natural, technological,
political and cultural forces.
P
E
S
T
olitical Factors
eonomic Factors
ociocultural Factors
echnological Factors
Political and Legal Environment : Political and Legal Environment

Laws, government agencies and pressure groups that influence and limit
various organizations and individuals in a given society.
Demographic Environment : Demographic Environment The study of
human population in terms of size, density, location, age, sex, race, occupation
and other statistics.
Economic and Competitive Environment : Economic and Competitive
Environment Factors, including the effects of general economic conditions,
buying power, willingness to spend, spending patterns,types of competitive
structure, competitive tools and competitive behaviour, that influence both
marketers and consumers decisions and activities.
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Cultural Environment : Cultural Environment Persistence of cultural

values: core and secondary beliefs Shifts in secondary cultural values peoples
view of themselves peoples views of others peoples views of organizations
peoples views of society peoples views of nature peoples views of the universe
Social Environment : Social Environment Living standards and quality
of life Green movement: the trend arising from societys concern about
pollution, water disposal, manufacturing processes and the greenhouse effect
Consumer movement: a diverse collection of independent individuals, groups
and organizations seeking to protect the rights of consumers.
Technological Environment : Technological Environment Technology:
the knowledge of how to accomplish tasks and goals. Forces that create new
technologies, creating new product and market opportunities.
Natural Environment : Natural Environment Natural resources that are
needed as inputs by marketers or that are affected by marketing activities.
Issues Shortage of raw materials Increased cost of energy Increased pollution
Government intervention in natural resource management.
Q.
Explain the concept of

Marketing Information System and
Marketing Research with their difference.
Ans. Meaning : Marketing Information system is a system that consist of

people, equipment, and procedures to gather , sort analyze, evaluate, and
distribute needed, timely, and accurate information to marketing decision
maker .
The overall objective of MIS is to provide inputs from target markets,
marketing channels , competitors , publics, and other forces for creating ,
changing , and improving the marketing decisions.
Scope of MIS :
Marketing Information system includes a set of procedures and methods
for the continous analysis and presentation of information for decision
making. Marketing Information System includes internal record system,
marketing intelligence system, marketing decision support system, and
marketing research system. Thus marketing research is a part of marketing
information system which is again a part of company marketing strategy
.Marketing Information system does not operate in isolation . It is closely
integrarted with the environment with in which a business operates. This
includes marketing planning system , marketing organization and
implementation system, and marketing control system. Then these four
system are part of coordinating marketing where other department join to
achieve business objectives. However marketing information system is directly
concerned with marketing decisions related to product, pricing, place,
promotion, packaging and people as shown in the following figure:
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Marketing
Management
Decisions
Marketing
Information
System
Product
Pricing
Place
Promotion
Packaging
People
Process
Physical
Evidence
Internal
Records
Marketing
Intelligence
Marketing
Environment
Target
Markets
Competitors
Channels
MacroEnvironment
Marketing
Research
Analysis of
Information
Figure : Marketing Information Svstem

Marketing information System implies the application of the system approach
to the task of collecting, organizing, analysing and interpreting marketing
information. As shown in above figure marketing information has four sub
system i.e., internal records, marketing intelligence, marketing research and
analysis of information. The subsystem are interdependent and interrelated so
as to meet the requirement of marketing management. They also have active
interface with the marketing environment. In other words they exchange
information with target markets, channels, economic, social and political
forces in the external environment.
Market Research :
Marketing research is the intelligence service of a business enterprise. It
means the careful and objective study of product design, markets and transfer
activities such as physical distribution and warehousing, advertising and sales
management.
According to American Marketing Association ,marketing Research
can be described the gathering , recording and analyzing of all the data about
problems relating to the transfer and sale of goods and services from producer
to customer.
However The AMA redefined marketing research as a function which links
the consumer, customer and public to the marketer through information
information used to identify and define marketing opportunities and problems;
generate, refine, and evaluate marketing actions, monitor marketing
performance; and improve understanding of marketing as a process .
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Thus Marketing Research is a systematic and intensive investigation of all

the phases of marketing on a continous basis with a view to have a better
understanding and knowledge about the present and future marketing
problems for satisfaction of the consumer needs.
Distinction between Marketing Research and Marketing Information
System
Marketing Information System is broader in scope as compared to
marketing research. Marketing research is basically an important aid in the
development of marketing information system. However , the differences
between the two are listed below:
1.
Purpose : Marketing research aims at solving problems, whereas MIS is

concerned with both preventing and solving problems.
2.
Continuity : Marketing research is continous but conducted on a project

ton project basis, while MIS a continous process.
3.
Orientation : Marketing research focuses on past and present

information, whereas MIS is oriented towards future.
4.
Data : Marketing research mainly deals with external data (i.e ., from
customers, field staff, publications, etc.), but MIS handles both external
as well as internal data.
5.
Use of Computer : Marketing research may not be based on computers.

But MIS is necessarily based on computers.
Q.
Explain the objectives and scope of marketing research.
Ans. Marketing research is usually conducted to achieve the following

objectives:
1.
To know the demographics and psychographics of customer :

Marketing research tries to reveal the number of persons who buy , why
they buy, when they buy, the frequency of their buying, and the sources of
their buying. It also includes the social status and the regional location of
the customer .
2.
To find out the impact of promotional efforts : Marketing resar5ch

facilitates appraising and improving the methods of sales promotion . It
also leads to measure the effectiveness of advertising , pricing policies and
channels of distribution.
3.
To know customer response to a new product : This is also known as

product testing . Marketing research is frequently used to know the
opinion of the customer about the satisfaction given by a new product.
This helps in knowing the desired improvements in quality ,design, size,
packing, distribution method, etc.
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4.
To forecast sale : Marketing research helps in sales forecasting and

marketing planning .The researchers make sales forecast on the basis of
the response from the customers and the distribution media.
5.
To anticipate competitive moves : It helps the marketer to continuosly

monitor the competitor and judge about the right actions that might be
required .
6.
To probe what went wrong : This happens when the product is having
some special problems . then marketing department takes necessary
steps to solve the problem if the problem is related to any compliant
regarding the product, or the customers are dissatisfied in any manner.
Scope of Marketing Research :

Marketing research covers different aspects of marketing of goods ,
services and ideas. There are many areas of marketing management where
marketing research has special branches.
1.
Product Research : product research is associated with the conversion

of customer need into tangible product offer. This includes development
and testing of new products, improving the existing products, and a tab on
the changing customer preferences , habits, tastes, etc. Packaging design ,
branding and labeling decisions are also included here.
2.
Customer research : This research type includes investigation into the

customer buying behaviour-the economical, social, cultural, personal,
and psychological influences.
3.
Sales research : Sales research involves decision concerning selection

of store location, channels, territories, sales force motivation and
compensation etc. The purpose is to reach the target customer more
effectively, efficiently and timely.
4.
Promotion research : Promotion research encompasses all effortsb by

the marketers to communicate the companys offer . This includes
advertising , publicity, public relations, sales promotion etc.
Thus Market Research covers separately the different aspects of

marketing of goods , services and ideas with the help of study of product
research , customer research, sales research and promotion research. All these
division of marketing Research are although working independently but are
still interdependent .The main division of the marketing research can be shown
with its figure:
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Product
Research
Promotion
Research
Marketing
Research
Customer
Research
Sales
Research
Scope of Marketing Research
Thus it is very clear from the above diagram that Marketing research is a
systematic and intensive investigation of all phases of marketing on a
continous basis with a view to have a better understanding and knowledge
about the present and future marketing problems for satisfactions of customer
needs. It covers location of market , nature of the market , product analysis,
sales analysis, personnel selling channel of distribution etc.
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UNIT II
Q.
What is consumes behaviour? What are the various determinants of

consumer behaviour?
Or
Q.
How can we analyze consumer market and what are determinants

which tell buyer behaviour?
Ans. The most important issue for the marketers is to identify the needs of the
consumers because customer and consumer makes the marketing process
complete.
According the Hawkins Best and Coneef The field of consumer behaviour
is the study of individual groups or organizations and the processes they use to
select, secure, use and dispose of product, services, experiences or ideas to
satisfy needs and the impact that these processes have on the consumer and
society.
The above definition conclude that consumer behaviour is the study of
consumer regarding what they buy, when dee they buy, from where they buy,
how frequently they buy, and how they use certain products. But this
definition not only conclude this thing but they goes further study for post
purchase and evaluation of the consumers.
The consumer behaviour studies that how individual groups and
organization select buy use and dispose of goods and services, ideas and
experience to satisfy their needs and desires. Marketing manages rely on a 7
Os framework for consumer research to understand the key questions abort
any market.
Who constitute the market
What does the market buy
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objects
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Why does the market buy

Who participate in buying
How does the market buy
When does the market buy
Where does the market buy -
- objectives
- organisations people
- operations
- occasions
outlets
Consumer Buying Dynamic or Determinants of Consumer Behaviour

There are four factors which determine the consumes behaviour are as
follows :Cultural
Social
Personal
Psychological
Culture
Reference group
Motivation
Sub Culture
Social Class
Family
Roles & Status
Age & Stage in

Life cycle
Occupation
Economic
Circumstances
Perception
Learning
Personality
1.
Psychological : A persons acquired needs are influenced by certain

psychological factors such as motivation, perception, learning and
personality.
a)
Motivation : Motivation means influencing the behavior of people to

do or not to do certain activities.
b)
Perception : It is a process by which an individual selects stimuli,

organizes information about whose stimuli and interprets the
information.
Stimuli is a reaction of person comes out suddenly for a movement.
No consumer purchase can take place unless a consumer perceives
that the product or services will off the benefits her or she needs.
2.
c)
Learning : It is a continuous process by which individual acquire

knowledge so that it causes a permanent change in behaviour.
Learning reflects both current and past experience. Consumer
behaviour is largely learned behaviour.
d)
Personality : Personality depends on two characteristic of a person

that is a persons physical appearance and his mental ability.
Personal Factors : A consumers decisions are also affected by his

personal characteristics including age, occupation and life style.
a)
Age and Stage in Life Cycle : The need for different product
changes with passing of age. Life for babies and children need milk
powder, toys, baby foods. For adult require clothing, educational
facilities and much more items related to fashion. With different
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stage of life there is need for different products such as unmarried

needs educations facilities, married needs some home appliances,
and other thing used in home.
3.
4.
b)
Education and Occupation : Level of educations also influence

how decision are made. They seed books, healthies foods and
entertainment. Same in occupation, people in different occupation
needs different products. Like type of occupation affect the type of
clothing a person boys, transportation choices, food purchases etc.
c)
Life Style : It is a patterns in which people live and spend their

money and time. These are based on consumers motivation,
learning, social class, demographics and other varieties.
d)
Economic Circumstances : The choices regarding product is

greatly affected by persons economic circumstances. It consists of
consumers spend able income, saving, assets, borrowing, power,
perception and attitude towards spending and saving etc.
Social : These includes family and their role and status.

a)
Family : These also influence the buying behaviour like women

make decision related to buying household items like healthcare
products, food, landing supplies and kitchenware etc.
b)
Role and Status : A role is a set of functions and activities that a

person in a particular position is expected to perform since people
possess different position within groups, institute, organization,
societies and families, they have different roles to play.
Cultural Factor : This factor influence the consumer behaviour by his

culture, subculture and social class.
a)
Culture : It is a process is which people come together and have

formed common action and reaction patterns, common ways of doing
things, forming common values and beliefs to help one decide what to
do or what not to do.
b)
Sub-culture : A subculture is a segment of large culture whole

member share distinguishing patterns of behaviour part of
nationality, religious, regionality and even age characterize
subculture.
Eg. India as a whole consider as a culture but different states like
Punjab, Haryana, J&K are considered as subculture.
Q.
What is difference between Business Market and the Consumer

Market.
Ans. The business market consists of all the organizations that acquire goods
and services which are used for further production so that these are sold or
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supplied to others and also involve many activities like bankery, finance,
insurance, distribution and services etc.
Some of the differentiating points between two markets are as follows :a)
Fewer Buyers : In business market, buyers are fewer is number as

compared to consumer market.
eg. A book publisher looks towards universities for the
recommendations of its books. But after recommendations sells the
same to the students who are thousands in number.
Q.
b)
Close Supplier : Customer relationship : There is a smaller

customer base but having important power, we can observe that
there is a close relationship between the two parties because
customer is heavily dependent upon supplier.
c)
Geographically Concentrated Buyers : Most of the business

concerns that products the same nature of products are generally
found concentrated in a particular geographic area. Availability of
raw material and transportation reduces its cost but in consumes
market there is different way.
d)
Derived Demands : The demand for many business goods is

ultimately derived from demand of consumer goods. Organisations
often target marketing as ultimate consumer even though firms dont
sell them directly in consumer market.
e)
Inelastic Demand : The demand for many business goods and

services is inelastic, means fluctuations in prices of product will not
significantly affect the demand for product in business market.
Elastic demand means a change in price will cuase an opposite
change in demand in consumer market.
f)
Fluctuating Demand : The demand for business good and services

tends to be more volatile than the demand for consumer goods and
services.
g)
Professional Purchasing : Products in business markets are

purchased generally by highly spelled and professional people by
inuiting bids, tenders and quotation which is not found in case of
consumer market buying.
h)
Direct Purchasing : In business market buyers buy directly from

manufactur rather then through intermidiator, as in case of
consumer buying.
What is Organizational Buying Behaviour? Explain the buying

decision process ? Who are part of this buying decision ? How can a
buyer decides in making a purchase ?
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Ans. An organization not engage only in selling of products, they also engage in
buying of products also like material, manufactured parts, plants and
equipments and different services etc. So they need the services of other
organization also. So for their services there is need of understanding buying
procedures.
According to S.J. Skinner Organisational buying behaviour refers to the
actions and decision process of procedures, reseller and government in
deciding what products to buy.
From this definition it is conclude that organizational buying is the
decision-making process in which one organization receives the resources from
other organization and the provides identify the needs for products and
services and the receivers identify, evaluate and choose among alternative
brands and suppliers.
While purchasing a decision of buying goods is made by just one person
instead of most organization who work in it but they can participate in the
purchase decision process. The people who are part of buying decision are
users, influencers, buyers, deciders, and gate helper.
a)
Users : These are those individuals who actually use the products in
the organization. They frequently initiate the purchase process.
b)
Influences : These are highly technical people such as engineers,

who help develop the specifications and evaluate alternative
products of the competitors.
c)
Buyers : These people are also called purchasing agent who helps in
selecting suppliers and negotiating the terms and condition of
purchase.
d)
Decides : These are the individuals who actually choose the

products and suppliers. For routine items, decides are same but if
there is critical case then top management tapes decision.
e)
Gatekeepers : These people consists of secretaries and technical

personnel who control the how of information to and among the
persons in the buying center.
A buyer has to take number of decision in making a purchase. For these

decision there are many situations/transaction made by buyers. These
situations divided in three categories new task, modified rebury and straight
rebug.
1.
Network : It is a kind of buying situation in which a purchaser buys a

product or services for the first time to perform a new job or to solve a new
problem. In this case the buyer has to face many challenged regarding
product specifications, vendor specifications and procedures for the
future purchase, therefore the longer the time to decision completion.
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2.
A modified rebury purchase : It is a type of buying situation in which the

buyer wants to modify product specifications, prices delivery requirement,
and other terms and conditions.
eg. We might find faster delivery, low prices or high quality of products to
meet the changing needs of your customers.
3.
A straight rebuy purchase : It is a routine purchase of the same

products under approximately the same terms of role. The buyer choose
from suppliers on its approved list giving weight to its past buying
satisfaction.
The organizational Buying Decision Process

Business buyers dont buy goods for personal consumption. They buy
goods and services to make money, to reduce operational cost or to satisfy
social obligation. There are different stages in decision making process in
business buying.
1.
Problem Recognition : Like any other decision-making process; the first

stage of the organizational buying decision process involve problem
recognition, where one or more persons recognize a problem.
2.
Information Search : Information searching can be in both ways Formal

and Informal. In formal way site visit to evaluate potential vendor,
laboratory test of a new product or prototype and investigation of possible
product specification. Informal information search can occur during
discussion with sales representative, while attending trade shows, or
reading industry specific journals.
3.
Evaluation and Selection : There are two-stage decision process of

circulating of supplier and their selection. In the first stage the
organizations screen out potential suppliers that do not meet all its
criteria.
In second stage these are two rules disjunctive and
lexicographer. In disjunctive, a minimum level of performance for each
important attribute is established. In lexicographic requires the business
buyers to rank the criteria in order to importance.
4.
Purchase and Decision Implementation : Once the decision to buy has

been made, the method of purchase must be determined. In this it is to
consider that how and when they will get paid.
5.
Post Purchase Performance Evaluation : In the final stage of buying

process, the products performance is evaluated. The products actual
performance is compared to specification and necessary adjustments are
made of the product is not functioning as per expectations.
Q.
What is market segmentation and what are the bases for

segmentation?
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Or
Q.
What is market segmentation and what are the level of segmentation.
Ans. Market Segmentation : Market segmentation is the process of dividing a

total market into group of consumers who have relatively similar product
needs.
According to Schiffman and Kanuk it is the process of dividing a market
into distinct subset of consumers with common needs or characteristics and
selecting one or more segments to target with a distinct marketing mix.
Bases for Segmentation : To develop a segmentation strategy the first step is
to select the most appropriate bases on which to segment the market. Five
major categories of consumer popular bases for market segmentation.
1.
Geographical Segmentation : In geographic segmentation, the market

is divided by location such as nations states, regions, cities or
neighbourhoods. Marketers can decide to separate in one or a few
geographic areas or in allareas but pay attention to local varieties in
geographic needs separately. Some companies even subdivided major
cities into smaller geographic areas.
2.
Demographic Segmentation : Demographic characteristics such as

age, sex, marital status, income, occupation and education are most often
used as the basis for market segmentation. Demographic variables are
most popular bases for segmenting consumer groups because consumers
wants, meets, prefrences and usage rate are highly associated with
demographic variables.
3.
Psychographic/Psychological Segmentation : Psychographic or

Psychological characteristics refers to inner characteristics of individual
consumer. In psychographic segmentation consumer are regenerated
into different groups on the basis of life styles, personality and attitude.
People with some demographic groups on exhibit very different
psychographic profits. Marketers conduct psychographic research to
capture insight and creat profiles of consumers they wish to target.
4.
Socio-Cultural Segmentation : Consumer markets are subdivided in to

segments on the basis of social-cultural variables like social class, sub
cultural membership, core cultural values, family life cycle etc.
5.
Use Related Segmentation : An extremely popular and effective form of

segmentation categories consumers in terms of product, services or brand
usage characteristics such as usage rate, awareness status and degree of
brand loyalty.
Levels of Market Segmentation

The number of possible segments that will result from a segmentation
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analysis can be as few as one or as many as the total number of consumers that
are in the total market. Market segmentation represent an effort to increase a
companys targeting precision. It can be carried out at four levels as (1)
Segment (2) Niches (3) Local (4) Individual Customer but firstly we will discuss
about Mass Marketing :1.
Mass Marketing : In mass marketing consumers are indistinguishable

and all are in one segment seller engages in mass production, mass
distribution, and mass promotion of one product for all buyers. Mass
Marketing would be a logical strategy if all consumers were alike regarding
their needs, wants and demands with same background, education and
experience.
2.
Segment Marketing : A segment market consists of a large identifiable

group within whole market. Companies practice segment marketing
recognize that buyers differ in their wants, needs, purchasing power,
geographical locations, buying attitude and habits. Segment marketing is
a sort of midpoint between mass marketing and individual marketing.
3.
Niche Marketing : Niche Marketing is sometimes also called micromarketing. Marketers usually identify niche by dividing a segment into
subsegments. The customers in the niche have a different set of needs and
they are also ready to pay a premium to the firm that best satisfies their
needs.
4.
Local Marketing : When marketing programmes are designed to cater

the needs and wants of local customer groups (trading areas,
neighbourhoods, individual stores).
eg. Vegetable shapneas to our locality and like P&B Bank gives every
services in different branches.
5.
Individual Customer Marketing : When a marketers detects as many

segments as there are consumers so that each segment is composed of
only one consumer, it has been identified an individual. Marketing as a
customized marketing. This results when the marketer believes that no
two consumers will respond the same way to its marketing efforts.
Q.
What are approaches for selecting target Markets ?
Ans. Market Targeting : Once the form has identified its market segment
opportunities, it has to evaluate various segments and finally decide how many
and which ones to target. This is called market targeting which a marketer
does with appropriate marketing mix. To be an effective target a market
segment must be :1.
Identification : Marketers must be able to identify the relevant

characteristics about product or services to divide the market in to
separate segments on basis of common need some segmentation variables
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such as geographical, demographics are observable or easily identifiable

others such as education, income, marital status can be determined
through questioners.
2.
Sufficiency : For any market segment to be world wide target it must

have sufficient number of people constituting the segment of market.
3.
Stability : Most marketers prefer to target consumer segment that are

relatively stable or increasing or growing larger question. They avoid
fickle segments that are unpredictable.
4.
Accessibility : Fourth requirement to effective targeting in accessibility

which means that marketers must be able to reach the market segment
they want to target but in an economic way.
Once a firm understand its markets and the appropriate bases for
segmenting those markets, it must choose an approach for selecting its target
markets.
There are different approaches for selecting target markets which are
as follow :1.
Undifferentiated Approach : In the undifferentiated (or total market)

approach, a company develops a single marketing mix and directs it at the
entire market for a particular product. This approach is used when an
organization defines the total market for particular product as its target
market. A company using the undifferentiated approach assumes that
individual customers in the target market for a specific type of products
how similar needs. Therefore, the firm creates a single marketing mix that
it hopes will satisfy most of those customers. Product that can be
marketed successfully with the undifferentiated approach include staple
food items such as sugar and salt, certain kinds of farm produce and other
goods that most customers think of as identical to competing products.
Companies that use the undifferentiated approach often try distinguish
their own products from competitors product through marketing
activities.
2.
Concentration Approach :- When an organization directs its marketing

efforts towards a single market segment through a single marketing mix, it
is using a concentration approach. It allows a company to focus all its
marketing efforts on a single segment. A major limitation of the
concentration approach is that, if a company depends on a single market
segment for all its sale and that segments demand for the product
declines, the companys sales and profits will also decline.
3.
Multi segment Approach : When an organization directs its marketing

efforts at two or more segments by developing a marketing mix for each
segment. A firm may use the multi segment approach after successfully
using the concentration approach on one market segment and expanding
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to other segments. Production and marketing cost may be higher with the
multi segment approach because it often requires a great number of
production processes, material and skills as well as several different
promotion, pricing and distribution methods.
Q.
What is product positioning ? What are the strategies to position

products ?
Ans. Product Positioning : Product Positioning is the act of designing

companys offering image so that they occupy of meaningful and distinct
competitive position in minds of target customers. Once market has been
segmented, and attractive segments have been targeted, the next task is to
work with in a targeted segment to position the product in mind of customers
and develop a marketing mix that will satisfy the consumer.
Product positioning is achieved through a variety of marketing strategies
and programs in product design, pricing, distribution of promotion.
Strategies for Product Positioning
Marketers rely on many strategies to position the products or services the
following are some of these strategies the combination of these strategies are
also possible.
1.
Position on Product Features : Product may be positioned on basis of

its features on advertisement may attempt to position the product by
reference to its specific features. Yet this may be a successful way to
indicate products superiority consumers are usually more interested in
what such features means to them.
2.
Position on Benefits : This approach and strategy is closely related to

previous one. Here product is positioned on its benefits like colgate
(strong teeth and safety) Pepsodent (Gum Protection), Close-up (Fresh
Breath).
3.
Position on Usage : This strategy is related to benefit positioning many

products are sold on basis of their consumer usage situation. A company
sometime sought to broaden brand association with a particular usage
and situation.
4.
Position on User : This strategy associate a product with its user or a

class of user. Sometimes cosmetics companies seek successful highly
visible model as their spokesperson as association to their brand.
5.
Position against Competition : So many times, success for a companys

strategies involves looking for weak points in the positions of its
competitions and then launching marketing attacks against those weak
points. In this approach the marketer may either directly or indirectly
comparison with competing products.
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Q.
What is product ? What are the levels of product ?

classify the goods ?
How can we
Ans. In simple words we can say that Product is anything that can be offered to
a market to satisfy a want or need. It represent a solution to customers
problems. It is a set of tangible and intangible benefits including packaging,
colour, price, manufactures name and prestige, brand, manufacturers on
retail services, which buyer may accept as offering satifaction of want and
needs, for example a refrigeration not merely steel, plastic, freon gas, brand
name, No. I doors etc. but also involves factors like after sale service, delivery,
installation, dealers factors like after sale service, delivery, installation, dealer
network and services also. Product that are marketed include physical goods,
services, ideas, experience, person, places, proportion, information, clients.
Product Level :
Marketers need to think through five level of product while planning its
market offering as each level add more customer value.
Product
Core Benefit
Basic Product
Expected Product
Augmented Product
Potential Product
1.
First and more fundamental level is core benefit means fundamental

services customer is buying. Buyer of AC is buying for cooling hotel room
for buyer rest and services.
2.
Second level, market has to turn core benefit into basic product.
Hotel customer get in hotel room, bed, bathroom, AC, table, towel etc.
3.
At third level marketer prepares an expected product by anticipating set of

conditions and attributes buyer normally expect while buying this
product. Hotel guest expect air room, clean bed, fresh towel and light and
peace.
4.
At fourth level members prepare augmented product that increases

customers expectation. eg. of Hotel can include projection T.V. set, fresh
flowers, effective additional entertainment.
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5.
Fifth level stand potential product, which encompasses all the possible
augmentations and transformations the product might undergo in future.
Product Classification or Tools of Product Differentiation

As products have many tangible and intangible attributes so products
should be consider in identifiable groups, formally using a classification
pattern which aids marketing planning.
Product
Consumer Product
Industrial Product
Consumer goods are further divided into four groups which are explain as
under :a)
b)
c)
Convenience Goods : These are usually inexpensive items whose

purchase requires very little efforts on the part of the consumer. The
weekly shopping list is, for the most part, composed of convenience goods.
These are further divided into two goods.
i)
Staple convenience goods. There are goods consumed by most people

everyday (eg. Milk, bread, potatoes etc.)
ii)
Impluse convenience goods. These are goods which are not

preplanned and purchase on the spot.
Shopping Goods :- Shopping goods includes durable and semi durable

items. These are generally expensive Homogeneous and Heterogeneous
items.
i)
Homogeneous Goods : White goods such as T.V., Refrigerator,

Washing Machines.
ii)
Heterogeneous Goods : Stylish and non standard prices in

secondary behaviour for these type of goods and habbit play
important role in buying.
Speciality Goods : Consumers of speciality goods pay for prestige as well

as product itself. eg. Jewelly, branded clothes, designer, watches etc.
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d)
Unsought Goods : The customer not considered these goods before made
aware of them. Or we can say the goods which are unaware.
2.
Industrial Goods : Industrial goods are further divided into five

categories as we have seen in diagram. These goods are not directly used
by consumers. Those are need to make finished goods for consumers.
Q.
a)
Installations : For producing any product there is used of

machinery and plant. There are goods used tea installation of plant
and machinery to produce further products.
b)
Accessories : Accessories include ancillary plant and machinery,

office equipment and office furniture.
c)
Raw Material : Raw material are bases of finished goods such as

thread are low material and cloth are finished goods.
d)
Component Parts and Material : Component part and materials

include replacement and maintenance items for manufacturing
machinery.
e)
Supplies : These includes office stationery, cleaning material and

goods require for general maintenance and repairs.
Explain the product life cycle ?
Ans. Product Life Cycle (PLC) : PLC is based on the premise that a new
product enters a life cycle once it is launched in the market. The product has a
birth and a death its introduction and decline. The intervening period is
characterized by growth and maturity. There are four stages in this life cycle
that is introduction, growth, maturity, decline etc.
PLC is influenced by following factors :
1.
2.
3.
4.
The essential and intrinsic nature of the product itself.

Change in marketing environment.
Changes in consumer prefrences
Competitive actions.
If according to PLC we want to plan our marketing strategiesther in

strategic terms, the task of marketing management is :1.
2.
3.
4.
Anticipate the latest consumer needs and prefrences.

Forest and estimate the stage wise shape of total cuque of product life
cycle.
Carefully and wisely design on active and appropriate strategy of
marketing for each stage from introduction.
Identify the products pace of movement from one stage of PLC to
another.
Stages of Product Life Cycle and their Strategies :

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1.
2.
3.
4.
Introductory Stage
Growth Stage
Maturity Stage
Decline
Products have limited life. Product sales passes through distinct stages
each passing different challenges opportunities and problems to seller. Profit
rise and falls at different stages. Product require different marketing financial,
manufacturing, purchasing and human resources strategies in each stage of
their life cycle.
The different stages of PLC are as follows :
1.
Introductory Stage : A period of new product launch and its duration

depends on products rate penetration through concerned market
segment. This period turns to growth period when market is well aware of
product to attract wider user groups. It is a period of slow sale growth as
the product is introduced in market. Profits are non existent in this stage
due to heavy expenses of product introduction limited distribution as in
this stage. It is often exclusive distribution in selective segment. Role of
pricing at this stage of life cycle is to establish the product in such a way to
permit further strategy to be implemented.
2.
Growth Stage : A period of rapid market acceptance of product and

substantial profit improvement also. During this stage product is still
vlnerable to failure (although most failures occur early in the product life).
Competitive product, launched by more powerful form, can enter the
market in this stage. Some characteristics :1.
2.
3.
4.
3.
Maturity Stage : A period of a slowdown in sales growth as productions

achieved acceptance by most potential buyers. Profits stabilize or decline
because of marketing outlays to some characteristics :1.
2.
4.
More competitors and less product distinctiveness

More profitable returns
Rising sales
Company or product aquistion by larger competitors.
Sales continuing to grow, but at a very much decreased rate.

Prices beginning to fall in battles to retain market share. Profit begin
to fall correspondingly.
Decline Stage : A stage when sales shows a downfall producers decides

to abandon the market but not only enough. Sometimes extension of life is
possible as number of competitors are falling some characteristics :1.
2.
3.
Sales falling continall for the total period.

Intensification of price cutting.
Producers deciding to abandon the market.
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Marketing strategies stagewise

1.
Introductory Stage :
i)
Rapid skimming strategy : Launch new product at high rate and a

high promotion level. Firm charge high prices as much profit as
possible at earliest.
ii) Slow skimming strategy : Launching new products at high price
and low profile promotional level.
iii) A rapid penetration strategy : Launching new products at low
price and spending heavily on promotional strategies.
iv) A slow penetration strategy : Launching new products at low price
and low level promotion.
2.
Growth Stage :
i)
ii)
iii)
iv)
v)
3.
Maturity Stage :
i)
ii)
iii)
iv)
4.
Improve product quality, add new product features and improve

styling.
Add new model and flanker products (products of sizes and falvour to
protect main product).
Enter new market segment
Product awareness adverting shifts to product preference
advertising.
Lower price to attract next layer of price sensitive buyers.
Try to convert non users into use of product.
Enter new market segments.
Try to with customers of competitors.
New or more varied use of product introduced.
Decline Stage
i)
Identify the weak and weakest products.
ii) Prop unprofitable customer group.
iv) Harvesting the investment to recover cash quickly
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UNIT III
Q.
Explain the New Product Development process ?

Or
Q.
What are the stages through which a New Product Move ?

Or
Q.
Write a short note on Test Marketing ?
Ans. New Product Development in respect of altogether New products gives

through several important stages as given below :1.
2.
3.
4.
5.
6.
7.
Product Development Strategy

Generating New Product Ideas
Idea Screaning
Concept Testing
Business Analysis and Market Share
Test Marketing
Commercialisation
Each of these stages involves considerable study and analysis at each

stage. A management decision is called for proceeding to ten next stage :1.
Product Strategy Development : Based on corporate objectives and

strategy. The corporate Role for new product is determined. The external
environment is scrutinized to identify emerging products threats and
opportunities, industry are evaluated to determine the growth potential of
existing markets, previous product experience in various markets are
considered, internal capabilities are evaluated to identify relevant
companies strength and weaknesses. The existing management style is
weighed and the position of existing procedures in the product life cycles
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considered. A new product strategy provides a sol of strategic rol that in

turn help, identify the markets to which new product ideas will be
developed.
2.
Idea Generation : Although some companies get their ideas almost by

change. Firms that are trying to manage their product mixes effectively
usually develop systematic. Approaches for generating new product ideas.
At the heart of innovation is a purposeful focused efforts to identify new
ways to serve a market, unexpected occurance new needs, industry and
market changes and demographic changes all may indicate new
opportunities.
New product ideas can come from several sources. They may occur
from internal sources e.g. marketing managers, reserchers, sahs
personals, engineers, or other organizational personals. Brain storming
and incentive or rewards or good ideas or typical intrafirm devices for
stimulating to development of ideas. New product ideas may also arise
form sources out side the firm e.g. customers, competitors, advertising,
agencies, management consultant and private research organization.
Asking customers that they want from products and organizations has
helped many firms to become successful and to remain competitive.
3.
Idea Screening : The process of screening. The idea with the greatest
potential are selected for future review. During screening, product ideas
are analysed to determines whether they match to organizations
objectives and resources.
If a product idea results in a product that is similar to the forms
existing products, marketers must assess the degree to which the new
product could multiply the sales of current products. The companies
overall ability to produce and market product are also analysed. Other
aspects of an idea that should be weighed are the nature and wants of
buyers and possible environmental changes. At a time a checklist of new
products requirments is used when making screening decisions. If
compared with other phases largest No. of New Product Ideas is rejected
during the screening phase.
4.
Concept Testing : To evaluate ideas properly. It may be necessary to

test product concepts testing is a phase in which a small sample of
potential buyers is presented with a product idea through a written or oral
description to determine their attitude and initial buying intentions
regarding the product. For a single product idea an organization can test
one or several concepts of the same products. Concept testing is a low cast
procedure that lets an organization determine customers initial reactions
to a product idea before it invests considerable resources in research and
development. The result of concept testing can be used by product
development personnel to better understand which product attributes
and benefits are most important to potential customers.
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5.
Business Analysis and Mark Share Analysis : This stage is very much
important in total process of new product development because several
vital decisions regarding the projects are taken based on the analysis done
at this stage.
This stage will decide whether from financial and marketing point of
view the project is worth proceeding with investment and profitability
analysis of the project under different assumptions are made at this stage.
The projects overall impacts on the corporations financial position with
and without the new products are estimated and compared. The financial
estimate would be reliable only if they are based on a fairly accurate
demand forecast and related market factors. The marketing exports by
now should have undertaken detailed exercise on the marketing of the
product.
6.
Test Marketing : During this stage the product is actually tried out in
selected Market Segments only based on the results of test Marketing will
be a marketer and manufacturer usually launch large scale
manufacturers of the New products. Test marketing is a form of business
errors. It is a controlled marketing experiment with minimum possible
cost and risk to decide on the soundness and feasibility of full-fledged
marketing of the product. If totally new products are introduced into a
market on commercial scale without resorting the test marketing. It may
so come to light that the product was not the right one for the chosen
market. This may be too costly a mistake for the firm Test Marketing. In
such a case may indicate that too sales prospects for the product is bound
to be poor and the firm may opt. to drop the new product idea and save the
investment contrary to that if results are received +ve the firm may go
ahead with commercial production and marketing of the new products.
7.
Commercialization or Crash Introduction : A crash introduction is full

scale commercialization of a new product as quickly as possible. The
resources needed to move into target markets are immediately committed.
In this way competitors are given little time to prepare their responses to
the product. A crash programme is most often selected when competitors
can counter quickly and maximum lead time is needed to establish
market position. A crash introduction tends to maximize other risks
because substantial resources are committed quickly.
Q.
Discuss in detail the various Decisions Regarding product mix and

product line ?
Ans. Product Mix : The 1 task of Marketing Manager is to answer the

question. What products are we going to sell since a marketing oriented
company sells Bundles of customers satisfactions and not simply physical
products. The strategic task requires determination of satisfaction which the
company proposes to sell to customers. This requires consideration of not only
st
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the functional aspects of the product but also its features, design, colour, style,
price, distribution channels after sales services etc.
A related product strategy decision involves the consideration of the depth
and breath of the product line eg. The Marketing Manager of a fan
manufacturing company has to decide whether he should sell all kinds of fans
including table, ceiling and pedestal fans of all standard size and in various
price ranges to suit the pocket of customers of all income groups. He may
choose to market a limited product line or a full product line.
A company may diversity by broadning its product line in related products
or unrelated products or both in related as well as unrelated products. When
the Co. Diversity into unrelated products this is called as Scramble
Diversification. On the other hand, Bata Shoe Company has diversified in
related products by marketing socks, boot polish etc. This is called related
product diversification.
In certain situations, a company may adopt the strategy of slimming or
contracting the product mix it may do so by abandoning a product line or
reducing the variety of models in a product line called product line
simplification. Many companies like Xerox, Radio-corporation of America,
General Electric, etc. dropped certain products lines altogether and also
thinned certain fat product lines. The objective of trimming the product line is
to abandon the low sales volume and low profit products and concentrate on a
limited number of high-profit products.
Thus a product mix (also called product assortment) is the set of all
products and items that a particular sellers offers for sale.
It is the set of all product lines and items that a particular company offers
to buyers. The width of a product mix refers to now many different product
lines a company carries. For example Proctor and Gambles (P&G) product
mix in India consists of four lines such as Detergents, Bar Soaps, Personal
Hygienes Products and disposable Diapers.
Product Line : It is a group of products that is closely related because they
perform a similar function, targeted at same customer groups and marked
through the same channels. The important attributes associated with product
line are discussed below :1.
2.
3.
4.
1.
Line Stretching
Line Filling
Line Modernization
Line Teaturing
Line Stretching : Decision related to line stretching are taken whenever

the marketer feels he can increase his profits by either adding or dropping
items from the line. It can be upward, downwards or both ways.
Downward stretch taken place when the company final that its offering are
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at high price and of the market and than stretch their line downward for
example P&G. Ariel detergent began at premium end and then the down
market ariel bar was introduced to tap lower segment.
Conbary to that upward stretch occurs. Occurs when a company
enters the upper end through a line extension. The regimes for this may
be a higher growth rate, better margins or simply a wish to be a full line
marketer, an example of a successful upward stretch would be that of
lifebuoy, which started from hygienic bath soap for the masses to a
premium quality liquid hand wash for higher starter of society. Through
out this stretch the brand had used hygiene as is core benefit, so that there
was no dissonance in the minds of the consumers.
2.
Line Filling : A product line can also be lengthed by adding more items
within present product range there are several reasons for line filling
Reaching for incremented profit.
Trying to satisfy dealers who complain about lost sales because of

missing items on line.
Trying to utilize excess capacity.
Trying to offer a full line of product.
Trying to pluge holes in the positioning map.
For example : To launch of cinthol indifferent variants is an example of line

filling. Today cinthol is a line-soap with yellow packaging and a cologne
variatum with blue wrapping apart from the initial cinthol fresh. There is also
cinthol international. Packed in a red pack with a picture of mountains
depicting freshness.
The company needs to differentiate each item in the consumers mind. For
their each item must possess a difference which sets it apart from others.
3.
Line Modernization : Even when the product line length is adequate the
line might need to be modernized. The issue is whether to overhand to line
completely or one at time. The piecemeal approach allows the company to
see how customers and dealers react to the new style.
Piecemeal modernization is less of a drain on the companies cash
flow. A major disadvantage of Piecemeal Modernization is that it allow
competitors to see changes and starts redesigning their own line.
In rapidly changing Market Product Modernization is carried out
continuously because competitors are continuously upgrading their
options. Each company must redesign their own offering. A company
would like to ungrade customers to higher valued higher priced items. A
major issue is the timing of the product line improvement so that they do
not happen to early and damage the sales of their current product line or
came out too late so that the competitors can establish a strong foothold.
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4.
Line Featuring : In case of durable products marketers at the times

seleets one or a few items to feature the idea is to attract consumers into
showrooms and then try to get them exposed to other moduls.
A times marketer will feature a high end items to lend prestige to the
product line. These products acts as a flagships to enhance the whole
line. Sometimes a company tends one end of its line selling well and other
poorly. The company may try to boost the demand for the slow moving
items, especially if they are produced in a factory that is lying idle due to
luck of demand.
Q.
Elaborate the term packaging ? Also explain the strategic decision

regarding packaging.
Ans. Even after the development of product and branding that product needs
arise to fulfil the other aspects of marketing mix. Most physical products have
to be packed and labeled one such product feature and a critical one for raw
products is packaging which consists of all to activities of designing and
producing the container or wrapper for a product.
Packaging includes the activities of designing and producing the
container for a product.
The above definition shows that package in the actual container or
wrapper. Thus packaging is a one of the important function of the business as
it is the package where 1 get the attention of the customers. It has become the
potential marketing tool well designed packages can create convenience and
promotional value.
st
Benefits of Packaging :
1.
It protects a product in a way to the consumer.
2.
It provides protection to the product after it is purchased.
3.
Package size and shape must be suitable for displaying and stocking
the product in the store.
4.
It helps to identify a product and this may prevent substitution of

competitive products.
Packaging is also one of the way through which Marketer can differentiate
his product from the competitors brand. Despite of having various benefits
there are certain limitations of packaging also
Limitations :
1.
Packaging decreases the natural resources.
2.
Packaging is too expensive.
3.
Some forms of plastic packaging are health hazards.
4.
Packaging is deceptive.
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Packaging Strategies : To manage the packaging of a product executives

must make the following strategic decisions.
a)
Packaging the product line : A company must decide whether to

develop a family resemblance when packaging related products.
Family packaging uses either highly similar packages for all products
or packages with a common and clearly noticeable feature.
b)
Multiple Packaging : It is the practice of placing several units of the

same product in one container for eg. Candy bar, towels, beer, cricket
balls are in the multiple units.
c)
Changing the package : A firm may need to correct a poor feature in

an existing package. It may want to take the advantage of a new
development as the container made up of laminations of papers,
plastic and alluminium foil. However this farm of packaging might
be slowed because it is not bio-degradable.
Facing rising cost many producer feels the need to increase the price.
However they fear the consumer resistance. What can they do. A No. of
companies turn to reaching the amount of product in a package while
maintaining the price.
Q.
Explain the following in detail :1.

3.
Brand
Branding Strategies
2. Brand equity
4. Brand Personality
Ans.
1.
Brand : Brand is nothing but a way of creating an identity for a product

somewhat like Amitabh Bachan whose name evokes a certain identity
when you think of his personality you automatically identify him through
certain characteristics and qualities which makes him unique. And
differentiate from other stars. Similarly when we wants to sell or buy a
product we do not think in term of the product in general but we are
required to identify the particular brand within the entire product range
which we like eg. When we go to purchase shaving cream we do not ask for
any shaving cream, we ask for specific brand like eg. Old spice, Denim etc.
Is it simple as that of course not it takes lot of time to become a Big Brand.
A brand is some total of particular satisfaction that it delivers to the consumers
who buys that specific brand.
The American Marketing Association defined the brand
As A brand is a name, term, symbol, design or a combination of these,
intended to identify the goods and services of are seller or group of sellers and to
differentiate them from those of competitors.
From sellers point of view also the brand name give the whole summary
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about the product. It provides the legal protection for unique product feature.
Marketer should develop a deep set of positive associations for a brand.
Marketer must know at which level the brand identity. It will be a big mistake
to promote only attributes 1stly because the buyers are not as mature and
intiator in the attributes of the product as the benefits and competitors can
easily copy the attributes. 3 current attributes may became less desirable
tomorrow.
rd
2.
Brand Equity : Brand equity encompasses a set of assets linked to the

brands name and the symbols that adds to the value provided by a
product or service to the consumers. There is always underlying
expectation that the brand will deliver to satisfaction. It has promised. A
consumer expects a certain standard of quality and satisfaction which to
manufacture has to make sure and that the product line up to that
expectations, otherwise the consumer will stop buying that product.
Simply speaking that brand identities primarily exists in the mind of its
customers. A brand is his or her evaluation of performance of that brand
and if his evaluation is positive and the customer is willing to pay more for
a particular brand one another similar products. This is the strength of
brand equity. The brand equity refers to the value inherent in a well
known brand name. From the consumer prespective brand equity is the
added value bewtowed on the product.
Brand equity makes the companies to charge a price premium eg.

Reachers have estimated that because of colgate brand equity. The colgate
pamolive company is able to price colgate toothpaste about 37% higher than
competitive store brands with objectively identical attributes.
A relatively new strategy in the marketers co-branding. The basis of cobranding is in which two brand name are featured on a single product eg. Herohonda, Maruti-Suzuki to use another brand equity to enhance the primary
brand equity. Customers are ready to pay a premium because of a perceived
reliability. Trust worthiness, as well as the positive image of superior quality
that the brand commands. The major assets of brand equity are
i)
Brand Awareness : This refers to the strength of a brands presence

in the mind of the consumer. Awareness is measured according to
the Recognition and recall of brand.
ii)
Perceived Quality : Perceived quality means level of expected

quality that product holds in the mind of consumers are buying and
in that sense. It is the ultimate measure of the impact on the mind of
consumer.
iii) Brand Loyality : A brand value to the company is the measure of

customers loyality towards a brand since a company consider
loyality as a major assets which encourages and justify loyality
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building program which in turn helps creates and enhance brand

equity.
3.
Brand Personality : In totality brands holds more meaning and

importance than tangible or perceivable product somes to offer.
This is a highly promised concept both the theory and practicle revevance,
when it cames to positioning brand with non-fucntional value in terms of
feeling it Aronsis in consumers. eg. Raymond A complete men, many brand
strategy statements nowadays refers to the personality of a brand. However
brand manager using these statements often tend to define character for
several brands in the companies line in more or less identical terms.
The purpose of positioning by brand personality is lost if we are unable to
define a desired personality for our brand which is cleanly distinct from the
personalities of competing brands and sister brands in our own product line.
Now the question arises what is the brand image and brand personality.
Brand image refers to rational measurement like quality strength, flavour,
brand personality explains why people like same brands more then occurs even
then when there is not physical difference between them.
So brand image represent the totality of impressions about the brand as
selected and adopted by the consumers perception. It imbraces the brand
physical and functional aspects and also it symbolic meanings. To brand
personality on the other hand dwells mainly in these symbolic aspects. It must
match the target prospects self concept.
4.
Brand Strategies :
a) Brand Extension
c) Multi Brands
a)
b) Line Extension
d) New Brands
Brand Extension :- A successful brand is like a powerhouse containing

enough energy to illuminate distant territories such a brand name hold
enormeous appeal for consumer. It has stood the test of time and
competition. This is deriving force behind brand extension, whose the
power of one brand could be used to market other related products.
To other driving force is the present day high cost of launching an

altogether new brand with increasly competitive market and escalating costs.
It makes sound financial and marketing sense to spin out the inner force of a
respected brand for new incarnatim cycle as well as those in the prime of life.
b)
Line Extension : Line extension refers to additions to an existing

product line of a company in a given category to fill out the line. Thus
marvel was addition to the Godraj Toilet Soap Line which already included
cinthol and fresca wheel was a line extension to Hindustan liver line of
detergent bars which already has Rin.
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c)
Multi Brand : Company often introduce additional brands in the same

category. Multi branding offers a way to establish different features and
appeal to different buying motives. It also allows a company to look up
mere resellers space. Finally company may develop separate brand
names for different regions or countries perhaps to suit different cultures
of language etc. But in multi branding each brand might obtain only a
small market share and none might be very profitable.
d)
New Brands : A company may create a new brand name when it enters a
New brand category for which none of the companies current brand
names are appropriate like Japans matsuishita uses separate brand
name for its different families of product.
Q.
Discuss the various pricing strategies available to an organization.
Ans. Every product has a price, but each firm is not necessarily in a position to
determine the price at which it should sell its product when products are
undifferentited and competitors numerous. The firm has no market power and
must take the price level. Imposed by the market but when a firm has
developed strategic marketing programe and thus has gained same degree of
market power sitting the price is a key decision which conditions the success of
its strategy to a large extent. Therefore their should be proper pricing strategy.
Adopted by the company. Now we will discuss the different types of pricing
strategies in detail.
1. Value pricing strategy
3. Price leadership
5. Skimming Pricing Strategy
7. Product Line Pricing
9. Premium Pricing
2. Maximum acceptable price

4. Pricing new products
6. Penetration Price Strategy
8. Price Bundling
10. Image Pricing
1.
Value Pricing Strategy : Value pricing is a customer based pricing

procedure which is an outgrowth of the multiattribute product concept.
From the customers viewpoint a product is the total package of benefits
that is received when using the product. Therefore customer oriented
company should set its price according to customers perceptions of
produce benefits and costs. To determine the price the marketer needs to
understand the customers perception of benefits as well as their
perceptions of the costs other than the price.
2.
Maximum acceptable price : This approach is particularly useful for

setting the price of industrial products whose core benefits to the buyer is
a cost reduction. To evaluate what the customer is prepared to pay the
procedure followed is to identify and evaluate the different satisfactions or
services provided by the product as well as all the costs (other than price) it
implies. The highest price that the customers will be willing to pay to the
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Benefits Costs other than Price = Maximum Acceptable Price (MAP)

3.
Price Leadership : Price leadership strategy prevails in oligopolistic

markets one member of the industry, because of its size or command over
the market, emerges as the leader of the industry.
The leading company then makes the pricing moves which are duly
acknowledged by other members of the reference market.
Initiating a price increase is typically the role of the industry leader.
The presence of a leader helps to regulate the market and avoid to many
price changes oligopolistic markets, in which the No. of competitors is
relatively low, favour the presence of a market leader who adopts an
anticipative behaviour and periodically determines prices. Other firms
than recognize the leaders role and because follower by accepting prices
the leadership strategy is designed to stave off price wars and predatory
competitions, which tends to force down prices and all competing firms.
4.
Pricing new products : The more a new product is unique and bring an
innovative solution to the satisfaction of a need the more delegate it is to
price. This price is the fundamental upon which depends the commercial
and financial success of the operation. Once the firms has analysed costs
demand and competition. It must then choose between two very
carbadictory stratgeis.
a)
b)
5.
A high initial price strategy to skim the high end of the market.
A strategy of low price from the beginning in order to achieve fast and
powerful market pentration.
Skimming Pricing Strategy : This strategy consists of selling the new

product at higher price and thus limiting oneself to the upper end of the
demand curve. This would ensure significant financial returns soon.
After the launch many considerations support this strategy to move
successful.
Pricing skimming strategy is definetly a cautious strategy which is
more financial then commercial. Its main advantages is that it leaves the
door open for a progressive price adjustment, depending on how the
market and competitions develops. From the commercial point of view it
is always easier to cut a price than to increase it.
6.
Penetration Pricing Strategy :- Penetration strategy consists of low

prices in order to capture a large share of the market/right from the
starting. It assumes the adoption of an intensive distribution system.
The use of moss advertising to develop market receptivity an especially an
adequate production capacity from the beginning.
In this case to outlook is more commercial than financial. The
penetration pricing strategy is more risky than a skimming price strategy.
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It firm plans to make the new product profitable over to long period. It may
face the situation that net lubants might later use him production
techniques which will give them a cost advantage over the innovating firm.
7.
Product Line Pricing : Strategic Marketing has led firms to adopts

segmentation and diversification strategies which have results in the
multiplication of the number of products sold by the same firm or under
the same brand. Generally a firm has several product lines and with in
each product line there are usually some products that are functional
substitutes for each other and some that are functionally complementory.
This strategy of product development bring about an inter dependency
between products, which is reflected either by a substitution effect or by a
complementary effect since the objective of the firm is to optimize to overall
outcome of its activities. It is clearly necessary to take this
interdependence into account when determining the prices.
8.
Price Bundling : When the products are related but are non-substitutes
i.e. complementary or independent one strategic option for the firm is
optional price bundling where the products can be brought separately.
But also as a package offered at a much lowered price than the sum of the
parts. Because the products are most substitutes it is possible to get
consumers to buy the package instead of only one product of the lie. This
pricing strategy is common practice. For instance, in the Automobile and
Audiovisual Markets where packages of options are offered with the
purchase of a car or of stereo equipment.
9.
Premium Pricing : This price strategy applied to different version of to

same product. A superior version and a basic or standard model. The
potential buyers for standard model are not, if economic of scale exists it is
unprofitable for the firm to limit its activities to one of the two market
segments the best solution is to exploit jointely economic of scale and
heterogeneity of demand by covering the two segments the lower end of the
market with a low price and the high end with a premium price. eg.
Airlines have used this strategy. Their market consists of both a price
insensitive business traveler and a very price sensitive holiday traveler.
10. Image Pricing : A variant of premium pricing is image pricing the

objective is the same to signal quality to uninformal buyers and use the
profit made on the higher priced vision to subsidize the price on the lower
priced version. The difference is that there is no real difference between
products and brand. It is only an image or perceptual positioning. This is
common practice in markets like customer snacies etc. whose emotional
or social values or a brand is important for the consumers.
Q.
What is the importance of distribution channel ?
Ans. In order to understand the marketing channel, it is important to know the

reasons for emergence of distribution channels. The primary justification of
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their existence is economic. There is nothing to prevent a producer from

distributing his goods or services by himself. In fact, by using intermediaries,
he loses a significant degree of control over the conditions of sale to the final
consumer and incurs the cost of margins to be paid to the middlemen. Why
then, do they use intermediaries ? The answer lies in the economy and
efficiency generated through division of labour and specialization. Channels of
distribution in any given economic system emerge because of the following
reasons:
a)
Efficiency rationale for intermediaries : Intermediaries arise in the

process of exchange and they can improve the efficiency of the process.
Marketing activities revolve around the satisfaction of needs and want
through the exchange process. In order to facilitate exchange, barriers of
exchange need to be successfully overcome. The first barrier for smooth
exchange results from the fact that sources of supply and centres for
demand are located at widely dispersed location. Since sources of supply
and centres of demand are dispersed geographically throughout the
country, there arises the need for physical movement. This need for
physical movement is further complicated by the fact that consumers, at
varying distance from the manufacturers, require intermittently only
small quantities of product which if transported to individual consumers
would make the transportation cost productive. This problem is referred
to as spatial discrepancy between production and consumption.
The second barrier to smooth exchange process arises because of time of

production and the time at which the goods are needed for consumption or use
may differ widely. Mass consumption products have to be produced and
stocked for in advance of consumption. This discrepancy, referred to as
temporal discrepancy between time of production of output and its
consumption, creates requirement of inventory stocking.
The third barrier arises from the variation in quantities and assortment
demanded. Manufacturers typically produce large quantities of an item or a
class of items while the consumers purchase only a limited quantity of a wide
variety of items at a time. While producers specialize in production of a few
products, the consumers need a very wide variety of items to fulfil their needs
and wants. Therefore, facilitate the exchange task, specific quantities and
unique assortments must be built up from the range of products produced.
This problem signifies the discrepancy of quantity and assortment in the
exchange process.
The last barrier to exchange process comes from the intention to buy. The
fact that the right products are available in the right quantities and desired
assortments at the right place is no guarantee that desired exchange would
take place. This situation necessitates that the suppliers of product offerings
and utilities try to influence the exchange process towards their own market
offerings.
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Marketing intermediaries emerge because they perform a very effective

role in overcoming these barriers to the exchange process.
b)
Discrepancy of Assortment and Sorting : Channel intermediaries arise

to adjust the discrepancy of assortment through the performance of the
sorting process. In addition to increasing the efficiency of transactions,
intermediaries smooth the flow of goods and services by creating
possession, place and time utilities. These utilities enhance the potency
of the consumers assortment. One aspect of this smoothing process
requires that intermediaries engage in a sorting function. The sorting
function is performed by intermediaries that include the following
activities :
Sorting Out : This involve breaking down a heterogeneous supply
into separate stocks that are relatively homogeneous.
Accumulation : It concerns bringing similar stocks from a number

of sources together into a larger homogeneous supply. Wholesalers
accumulate varied goods for retailers, and retailers accumulate
goods for their customers.
Allocation : It refers to breaking a homogeneous supply down into

smaller and smaller lots. Goods received in truck loads are sold in
case lots. A buyer of case lots in turn sells individual items. The
allocation process generally coincides with geographical dispersal
and successive movement of products from origin to end consumer.
Assorting : This is the building up of an assortment of products for

resale in association with each other. Wholesalers built assortment
of goods for retailers, and retailers build assortment for their
customers.
c)
Routinisation : Marketing agencies hang together in channel

arrangements to provide for the routinisation of transactions. Each
transaction involves ordering, valuating of, and paying for goods and
services. The buyer and user must agree to the amount, mode and timing
of payment. The cost of distribution can be minimized if the transactions
are routinised; otherwise, every transaction is subject to bargaining, with
an accompanying loss of efficiency.
Moreover, routinisation facilitates the development of the exchange
system. It leads to standardization of goods and services whose
performance characteristics can be easily compared and assessed. It
encourages production of items that are more highly valued. In fact,
exchange relationships between buyers and sellers are standardized so
that lot size, frequency of delivery and payment, and communication are
routinised. Because of routinisation, a sequence of marketing agencies
can perform more efficiently together in a channel.
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d)
Searching : Buyers and sellers are constantly engaged in search for

consummation of desired exchanges. In other words, both buyers and
sellers are engaged in double search process in the market place. The
process of search involves uncertainty because producers are not certain
of consumers needs and consumers are not certain that they will be able
to find what they want. Marketing channels facilitate the process of
searching. For example, products such as over the counter drugs are
widely available through a wide variety of outlets like general stores, drug
stores, super markets and provisional stores.
Q.
Explain the important participants of a distribution channels?

Or
Q.
Explain the role of wholesellers and retailers in distribution channel?
Ans. Participants in the Channel : There are two types of participants in the
channel. The primary participants in the channels of distribution are the
manufacturer, the middlemen i.e. the wholesalers, manufacturers agents and
retailers. The secondary participants include the facilitating agencies like the
financial institution, public warehouses, public carriers and the advertising
agencies.
a)
Primary participants :
Wholesalers : Wholesalers are defined as all establishment or places of

business primarily engaged in selling merchandise to retailers to industrial
commercial, industrial institutional or professional users, or to other
wholesalers or acting as agents in buying or selling merc merchandise to such
companies. Two classes of wholesaler establishments can be clearly
distinguished. These are the merchant wholesaler and the manufacturers
agents. The former are characterized by the fact that they take title to the goods
they distribute.
Manufacturers agents buy and sell on behalf of the
manufacturer and nowhere in the exchange process take title to goods.
Merchant wholesalers may be of several types for example commission
merchants, selling agent, buying agents cash and carry wholesalers etc.
Retailers : Retailers are all the establishments engaged in selling
merchandise for personal or household consumption. They are distinguished
from wholesalers by the fact that they sell primarily for ultimate use. Although
wholesalers may also sell to ultimate consumers, this selling activity does not
form the bulk of their operation. A variety of types of retail establishments exist
in the Indian market today ranging from sophisticated departmental stores and
supermarkets to limited time stores catering to a few customers and carrying
limited merchandise.
b)
Facilitating Participants :
Financial Institutions : Financial institutions provide the essential finances

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needed to finance primary participants of the channel system. A very

significant financing need relates to the provision of capital for inventories,
which must be financed at many levels as inventories move from production to
consumption.
Public Warehouses : The public warehouses rent space to owners of
inventory thereby eliminating the need to invest in storage facilities. For
agricultural products the both government owned or privately owned
warehouses are extensively used.
Public carriers or transport carriers :- Transportation forms a cost
centre in distribution management. To a large extend distributive effort is
dependent upon the services of public carriers like transporters and railways to
affect the transfer of physical possession of goods. The efficiency of the
transportation system influences the size of inventories which must be
maintained channel system. If a reliable transport system is readily available,
products can flow through the channel at a constant rate, thus minimizing the
need for maintaining large inventories.
Advertising agencies : These facilitating agencies help in facilitating
negotiation, by creating awareness of products and stimulating demand. They
function at each level of the channel for producers, wholesalers and retailers.
Without the kind of information given through these agencies at various levels,
seeking and selecting product sources would become a tedious task for buyers.
Advertising agencies, therefore, help in the search process.
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UNIT IV
Q.
Give an brief overview regarding Advertising.
Ans. Meaning :
Any paid form of non-personal presentation and promotion of ideas, goods, or
services by an identified sponsor
American Marketing Association.
Nature & Scope :
Paid form
Non-personal presentation & Promotion.
Identified sponsor
Anyone can be an advertiser
Knowledge to target audience
Revenue to many people

Types of Advertisement :
1)
Consumer Advertisement
Consumer durable
Consumer services
TV, Radio, Newspapers, Magazines etc.
2)
Business-to-Business Advertisement
Promote plant & machinery, raw materials, spares etc.
Technical journals, Trade exhibitions, direct mail etc.

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3)
Trade Advertisement
Advertisement addressed to wholesalers, distributors, agents,

importers/ exporters
Goods advertised for resale.
4)
Retail Advertisement
Local weekly newspapers, regional magazines, TV, Radio etc.
5)
Financial Advertisement
6)
Recruitment Advertisement
7)
Tenders
8)
Educational Advertisement
9)
Classified Advertisement
10) Notices
Media of Advertising :
Advertising media are the means to communicate the message of the
advertiser to the customer. Manufacturer communicates information about
their products to their present and prospective consumer through advertising
media. The various types of advertising media are shown on below with the help
of a figure:
Media of
Advertising
News
Paper
Magazines
Television
Radio
Outdoor
Internet
Functions of Advertisement :
1)
2)
3)
4)
5)
6)
7)
8)
9)
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Communication to target group.

Increase the sales.
Creation of brand image/ corporate image.
Cost effective method of communication.
Stimulate the customers to buy.
Creation of demand for the products/ services.
Enhance the market potential.
Educate the people.
Increase the profitability of the company.
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Advertisement and Economy :
Generates more employment
Fluctuations in Advertisement budget according to economic

condition ( recession, boom and recovery)
Revenue to the Government
Many industries thrive on Advertisement business

Advertisement and Society :
More employment
Educate the people
Increase the standard of living
Easy purchase decisions

Advertisement and Ethics :
The Advertising Standards Council of India (ASCI)
Set up by advertisers, agencies, media and others.
ASCI has Consumer Complaints Cell (CCC) watch dog receives

complaints
ASCI Principles :
1.
2.
3.
4.
5.
To ensure the truthfulness and honesty of representations and

claims.
No misleading of public
Maintain public decency
No advertisement for promotion of products which are hazardous to
society/ individuals
Maintain fairness in competition.
Nature of Advertisement :
1.
2.
3.
4.
Q.
Informative advertisement
Persuasive advertisement
Comparison advertisement.
Reminder advertisement
Write short note on Sales Promotion:
Ans. Meaning : Sales promotion includes several communications activities

that attempt to provide added value or incentives to consumers, wholesalers,
retailers, or other organizational customers to stimulate immediate sales.
These efforts can attempt to stimulate product interest, trial, or purchase.
Techniques or devices used in sales promotion include :
Coupons
Samples
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Premiums
Point-of-purchase (POP) displays
Contests,
Rebates
Quantity Deals
Samples
Coupans
Premiums
Techniques
of Sales
Promotion
Quantity
Deals
Rebate
Point of
Purchase
Display
Contest
Sales Promotion Techniques

Various promotional schemes are distributed in the following manner also
1.
2.
3.
1.
Consumer-promotion tools
Trade-promotion tools
Business-promotion tools
Consumer-promotion Schemes :
a)
b)
c)
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Samples : Offer a free amount of a product or service. Sampling is

the most effective and most expensive way to introduce a new
product.
Coupons : Certificates entitling the consumer to a stated saving on
the purchase of a specific product.
Cash refund offers : Provide a price reduction after the purchase
rather than at the retail shop.
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d)
e)
f)
g)
h)
2.
3.
Price packs : They can take the form of a reduced price pack or
banded pack, which is two related products banded together.
Premiums : Merchandise offered at a relatively low cost or free as an
incentive to purchase a particular product.
Prizes : For eg. Cash, free trips etc.
Free trails : Invite prospective purchasers to try the product
without cost.
Product warranties/guarantees : Explicit or implicit promises by
sellers.
Sales Promotion Schemes :

a)
Price-off : A straight discount off the list price on each case

purchased during a stated time period.
b)
Allowance : An amount offered in return for the retailers agreeing to

feature the manufacturers product in some way.
For eg.
Advertisement allowance.
c)
Free goods : Offers of extra cases of merchandise to intermediaries

who buy a certain quantity.
Business Promotion Schemes :

a)
Trade Shows : Industry associations organize annual trade shows.
b)
Sales contest : It is a contest involving the sales force or dealers

aimed at inducing them to increase their sales over a stated period,
with prizes going to those who succeed.
c)
Speciality advertising : It consists of useful, low cost items given

by salespeople to consumers without obligations and which bear the
companys name and address and sometimes an advertising
message.
Sales Promotion Strategies :

There are three types of sales promotion strategies: Push, Pull, or a
combination of the two.
A push strategy involves convincing trade intermediary channel members
to push the product through the distribution channels to the ultimate
consumer via promotions and personal selling efforts. The company promotes
the product through a reseller who in turn promotes it to yet another reseller or
the final consumer. Trade-promotion objectives are to persuade retailers or
wholesalers to carry a brand, give a brand shelf space, promote a brand in
advertising, and/or push a brand to final consumers. Typical tactics employed
in push strategy are: allowances, buy-back guarantees, free trials, contests,
specialty advertising items, discounts, displays, and premiums.
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P
U
S
H
Strategy Selected
Depends on:
Type of Product-Market &
Product Life-Cycle Stage
P
U
L
L
A pull strategy attempts to get consumers to pull the product from the
manufacturer through the marketing channel. The company focuses its
marketing communications efforts on consumers in the hope that it stimulates
interest and demand for the product at the end-user level. This strategy is often
employed if distributors are reluctant to carry a product because it gets as
many consumers as possible to go to retail outlets and request the product,
thus pulling it through the channel. Consumer-promotion objectives are to
entice consumers to try a new product, lure customers away from competitors
products, get consumers to load up on a mature product, hold & reward loyal
customers, and build consumer relationships. Typical tactics employed in pull
strategy are: samples, coupons, cash refunds and rebates, premiums,
advertising specialties, loyalty programs/patronage rewards, contests,
sweepstakes, games, and point-of-purchase (POP) displays.
Car dealers often provide a good example of a combination strategy. If you
pay attention to car dealers advertising, you will often hear them speak of
cash-back offers and dealer incentives.
Q.
Write short notes on :

A) Public relations.
B) Personal selling
Ans. A) Public Relation : Introduction :

The main goal of a public relations department is to enhance a companys
reputation. Staff that work in public relations, or as it is commonly known, PR,
are skilled publicists. They are able to present a company or individual to the
world in the best light. The role of a public relations department can be seen as
a reputation protector.
The business world of today is extremely competitive. Companies need to
have an edge that makes them stand out from the crowd, something that
makes them more appealing and interesting to both the public and the media.
The public are the buyers of the product and the media are responsible for
selling it.
Meaning : Public relations (PR) are the management of internal and
external communication of an organization to create and maintain a positive
image. Public relations involve popularizing successes, announcing changes
and many other activities.
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Advantages of Public Relations :

i)
ii)
iii)
iv)
v)
It helps in building and maintaining relations with local community.

It helps in keeping better relations with the investors.
A good image with social groups creates word of mouth advertising.
It helps in reducing the conflicts and misconception about company
or product.
It helps in publicizing the products
Objectives of Public relations :

Public relations provide a service for the company by helping to give the
public and the media a better understanding of how the company works.
Within a company, public relations can also come under the title of public
information or customer relations. These departments assist customers if they
have any problems with the company. They are usually the most helpful
departments, as they exist to show the company at their best.
PR also helps the company to achieve its full potential. They provide
feedback to the company from the public. This usually takes the form of
research regarding what areas the public is most happy and unhappy with.
People often have the perception of public relations as a group of people
who spin everything. Spin can mean to turn around a bad situation to the
companys advantage. It is true that part of the purpose of public relations is to
show the company in a positive light no matter what. There are certain PR
experts that a company can turn to for this particular skill.
The public often think of PR as a glamorous job. Public relations people
seem to have been tarred with the image of constant partying and networking to
find new contacts. The reality is usually long hours and hard work for anyone
involved in public relations.
Personal Selling : The communication technique in which sales people builds
the personal relationship with customers to generate the value for the
organization.
Nature of personal selling : There are various types of sales jobs used to sell
the product of the organizations. They are :1.
Delivering : The job of sales executives is to reach the products to the

customer destination.
2.
Inside order taker : Sales executives in the retail stores like Subhiksha
help the customer in identifying the product.
3.
Outside order : These are field executives who go to the customer place
and get the order.
4.
Missionary selling : Sales executives provide the information and

promote the company products-medical representatives.
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5.
Sales engineer : In this position, the sales executive is technical expert

and works with non-technical sales executive to provide assistance on
technical information sought by the customer.
Personal Selling Process :

1.
Lead generation : Identification of prospects is first step in personal

selling process. Organizations generates the lead through customer
references, trade association and customer directories etc.
2.
Lead evaluation : All the methods used for lead generation may not be
genuine. Marketer should concentrate on whether the lead generated has
necessary willingness, purchasing power and authority to buy.
3.
Buyer analysis : Before approaching the customer, sales force should

understand what products prospects bought in the past, what products
he is now using and what are his attitude and buying habits towards the
products. Sales personnel should set sales objectives and prepare draft
for customer approach.
4.
Approaching the Customer : In this step sales person should know how
to meet the prospect and what is the mode to build rapport with him
(customers).
5.
Presentation and demonstration : Sales presentation starts with

briefing the product. The presentation should be simple and attracting.
6.
Providing solutions to customer : After the presentation if any queries

exists, then sales executive should handle the questions properly with lot
of attentiveness and should solve the problems of customers.
7.
Order generation : This process is very important one in the entire

personal selling process. Handling customer at this stage is also very
difficult. Sales people also face unrealistic expectation from the customer.
Sales executive should be smart enough to use order closing techniques.
8.
Follow up : Sales executives should follow up the order generated. It will

help the company to identify the customer satisfaction towards the
product. It also helps them to induce the buyer to go for repeated
purchase.
Q.
How marketing efforts can be evaluated and controlled?
Ans. Marketing Efforts : Implementation, Evaluation, and Control. How can

a country region, state, city, municipality, or other polity judge the efficacy of
its attempts to brand or rebrand itself and, consequently, to attract customers
investors, tourism operators, bankers, traders, and so on?
Marketing is not a controlled process in an insulated lab. It is prone to
mishaps, last minute changes, conceptual shifts, political upheavals, the
volatility of markets, and, in short, to the vagaries of human nature and natural
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disasters. Some marketing efforts are known to have backfired. Others have
yielded lukewarm results. Marketing requires constant fine tuning and
adjustments to reflect and respond to the kaleidoscopic environment of our
times.
But maximum benefits under the circumstances are guaranteed if the
client the country, for instance implements a rigorous Marketing
Implementation, Evaluation, and Control MIEV plan.
The first task is to set realistic quantitative and qualitative interim and
final targets for the marketing program and then to constantly measure its
actual performance and compare it to the hoped for outcomes. Even nation
branding and place marketing require detailed projections of expenditures vs.
income budget and prforma financial statements for monitoring purposes.
The five modules of MIEV are:
1.
Annual plan control : This document includes all the governments
managerial objectives and numerical goals. It is actually a breakdown of the
aforementioned proforma financial statements into monthly and quarterly
figures of sales in terms of foreign direct investment, income from tourism,
trade figures, etc. and profitability.
It comprises at least five performance gauging tools:
I.
Sales analysis comparing sales targets to actual sales and

accounting for discrepancies.
II.
Market share analysis comparing the countrys sales with those of

its competitors. The country should also compare its own sales to the
total sales in the global market and to sales within its market
segment neighboring countries, countries which share its political
ambience, same size countries, etc.
III.
Expense to sales analysis demonstrates the range of costs both

explicit and hidden implicit of achieving the countrys sales goals.
IV. Financial analysis calculates various performance ratios such as

profits to sales profit margin, sales to assets asset turnover, profits to
assets return on assets, assets to worth financial leverage, and,
finally, profits to worth return on net worth of infrastructure.
V.
Customer satisfaction is the ultimate indicator of tracking goal

achievement. The country should actively seek, facilitate, and
encourage feedback, both positive and negative by creating friendly
and ubiquitous complaint and suggestion systems. Frequent
satisfaction and customer loyalty surveys should form an integral
part of any marketing drive.
Regrettably, most acceptable systems of national accounts sorely lack the

ability to cope with place marketing and nation branding campaigns.
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Intangibles such as enhanced reputation or investor satisfaction are excluded.

There is no clear definition as to what constitute the assets of a country, its
sales, or its profits.
2.
Profitability control : There is no point in squandering scarce

resources on marketing efforts that guarantee nothing except name
recognition. Sales, profits, and expenditures should count prominently in
any evaluation and revaluation of ongoing campaigns. The country needs
to get rid of prejudices, biases, and misconceptions and clearly identify
what products and consumer groups yield the most profits have the
highest relative earnings capacity. Money, time, and manpower should be
allocated to cater to the needs and desires of these top earners.
3.
Efficiency control : The global picture is important. An overview of the

marketing and sales efforts and their relative success or failure is crucial.
But a micro level analysis is indispensable. What are the sales force doing,
where, and how well? What are the localized reactions to the advertising,
sales promotion, and distribution drives? Are there appreciable
differences between the reactions of various market niches and consumer
types?
4.
Strategic control : The complement of efficiency control is strategic

control. It weighs the overall and longterm marketing plan in view of the
countrys basic data: its organization, institutions, strengths, weaknesses,
and market opportunities. It is recommended to compare the countrys self
assessment marketing effectiveness rating review with an analysis
prepared by an objective third party.
The marketing effectiveness rating review incorporates privileged
information such as input and feedback from the countrys customers
investors, tourist operators, traders, bankers, etc., internal reports
regarding the adequacy and efficiency of the countrys marketing
information, operations, strengths, strategies, and integration of various
marketing, branding, and sales tactics.
5.
Marketing audit : The marketing audit is, in some respects, the raw
material for the strategic control. Its role is to periodically make sure that
the marketing plan emphasizes the countrys strengths in ways that are
compatible with shifting market sentiments, current events, fashions,
preferences, needs, and priorities of relevant market players. This helps to
identify marketing opportunities and new or potential markets.
Q.
Explain the concept of Web marketing and Green marketing .
Ans. Web Marketing : This is also known as online marketing means

marketing the organizations products on the virtual medium.
In this format buyers and seller exchanges the products on the internet.
Organizations sell their products directly to consumer, uses trading networks
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or auction sites to reach new customers and serves to current customers and
encourages one customer to sell the product to the another customer.
To do the business on the internet organizations create an effective
website, place the ads and promote it online, create web communities, and
uses e-mail. The other sides of E-commerce are problems of profitability and
legal and ethical issues.
If youre still struggling to finally reach your financial independence &
make a nice living from your home, then listen... The only reason why youre
failing is because you dont have a good website marketing strategy.
If you ask any successful offline world entrepreneur how its possible to
build a great business without a proper strategy, hell start laughing. But many
internet marketers are trying to make money without even realizing what on
earth theyre doing online
If you believe that you can jump in, create a website, submit it to a few
directories or blogs, sit down, relax & watch those thousands of dollars (that
youve seen in many marketers checks) to come, then you need to stop right
there. It aint gonna happen. You need to think: who you are and where do you
want to be in the future. Whether offline or online, there are only two things that
matter: Buying and Selling. Basically, to simplify, it all comes down to
this:
Who is your customer?
What is he or she specifically looking for? You
must know their problems or desires. You must be
in their shoes and find out what is that would
make them feel better (an offer).
What is your offer?
Why should they buy from you? How come
youre better than the rest? Why should they trust
you? Are you offering your own or someone elses product? How will you create
an irresistible offer so they beg you to sell it to them?
Think about it There are millions of people buying online every single
day. If theyre not buying from you then whose fault is that - theirs or yours?
Before you even start creating internet marketing strategy for your
website(s), you need to do a research. Thats where it all begins actually. Just
like in any business, you have to understand where you are and what can you
do.
1 Phase - Online Research :

In this phase, you must research your market. Who are your main
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competitors? What are they doing online? PPC, SEO, press releases, develop
their own products, do affiliate marketing or Adsense? What are their
weaknesses? Do they offer a guarantee? Is their product really good? Do they
build links constantly or not?
Who is your favourite customer? Where do they hangout: MySpace or
YouTube? Are they freebie seekers or desperate buyers? What forces them to
buy one or another product? Read reviews, forums, testimonials to find out as
much as you can about your target market.
2 Phase Data Analysis :

If youve performed a thorough online market research, its time to
systematize the data you have. Write down what are the main strengths and
weaknesses of your competitors. Maybe you have more time than your
competitors? Or maybe you know some targeted traffic source that others
dont. How might this affect your business?
Which are the places your target market usually visits? What are their
main concerns? Maybe theyre not satisfied with the products in the market.
Can offer something better, maybe in a form of a bonus? After that, you come to
the next step, which is developing your internet marketing strategy.
3 Phase Strategy Development :

When you already know your target market and your competitors, you are
able to start creating your internet marketing strategy (or strategies). Just sit
down and think about: who you are and what you can offer to the target market.
It involves a little bit of planning. What marketing methods youll use and
which ones you can afford? PPC, SEO, email, blogging, podcasting, video
blogging, webinars, viral traffic generation, link building, banner exchange or
others? You must prioritize your web marketing tactics. Find out whats
going to bring you positive ROI in the shortest time possible.
Do you have enough time to perform search engine optimization? If so,
then sit and do everything you can, day in day out, to rank at the top in search
engines. Dont have time? Then buy PPC traffic and start testing your landing
pages effectively. Or buy resell rights to products and sell them on ClickBank
with the help of JV partners.
Dont have time AND money? Then you better get one or another,
otherwise youre dead.
Seriously, you must find ways to get time or money. You need to think
about how you can exploit other peoples time and money to build your own web
business. Thats what rich people do and thats what you must do if you want to
survive in this competitive world.
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4 Phase Monitoring Performance :

When you have an internet marketing plan, you can start
implementing it right away. The last step is to start
monitoring your internet marketing campaigns. Which
keywords people typed into search engines to find your site?
Which keywords brought you the most money in PPC
marketing? Are you satisfied with your SEO rankings or
not? Do majority of your visitors leave your site without even
spending 30 seconds? And so on
Only with the help of close monitoring you can discover
what works and what doesnt. Testing landing pages, testing
Adwords ads against each other (A/B split testing) can show you some amazing
results. And remember you never know for sure until you TEST it!
There is no formula for an effective Internet marketing strategy. It depends
on your individual situation. When you realize your strengths and weaknesses,
youll be able to come up with a great marketing plan. No matter if youre
thinking about Adsense site, affiliate site or your own product. When you find
out what youre able to accomplish with your resources at the moment, you can
create a great web marketing strategy for your online business and finally
breakthrough on the internet.
Green Marketing : Unfortunately, a majority of people believe that green
marketing refers solely to the promotion or advertising of products with
environmental characteristics. Terms like Phosphate free, Recyclable, Ozone
friendly, and environment friendly are some of the things consumers most
often associated with green marketing. While these terms are green marketing
claims, in general green marketing is a much broader concept, that can be
applied to consumer goods, industrial goods and even services.
Thus green marketing incorporates a broad range of activities, including
product modification, changes to the production process, packaging changes,
as well as modifying advertising. The American Marketing Association (AMA)
held the first workshop on Ecological Marketing in 1975. The proceeding of
this workshop resulted in one of the first books on green marketing entitled
Ecological Marketing.
At this workshop ecological marketing was defined as the study of the
positive and negative aspects of activities on pollution, energy depletion and
non-energy depletion.
This definition has three key components :i)
ii)
iii)
It is a subset of the overall marketing activity.

It examines both positive and negative activities.
A narrow range of environmental issues are examined.
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Green or environmental marketing consists of all activities designed to

generate and facilitate any exchanges intended to satisfy human needs or
wants, such that the satisfaction of these needs and wants occurs, with
minimum impact on the natural environment. The products making green
claims should state they are less environmentally harmful rather than
Environmental friendly. Thus green marketing should look at minimizing
environmental harm, not necessarily eliminating it. Green marketing is
important because the mankind has limited resources on the earth, with which
he/she must attempt to provide for the worlds unlimited wants. Ultimately
green marketing looks at how marketing activities utilize these limited
resources, while satisfying consumers wants both of individuals and industry,
as well as achieving the selling organisations objectives.
Why are firms using Green Marketing : There are five possible reasons for
firms increased use of green marketing. These are :i)
ii)
iii)
iv)
v)
Organizations perceive environmental marketing to be an

opportunity that can be used to achieve its objectives.
Organisations believe they have a moral obligation to be more socially
responsible.
Government bodies are forcing firms to become more responsible.
Competitors environmental activities pressure firms to change their
environmental marketing activities and
Cost factors associated with waste disposal or reductions in material
usage forces firms to modify their behaviour.
Problems with green marketing : While using green marketing the firms
must overcome a number of potential problems. These are :i)
ii)
iii)
iv)
v)
Q.
The firms using green marketing must ensure that their activities are
not misleading to consumers or industry, and do not breach any of
the regulations or laws dealing with environmental marketing.
The firms who modify their products due to increased consumer
concern must contend with the fact that consumers perceptions are
sometimes not correct.
When firms attempt to become socially responsible, they may face the
risk that the environmentally responsible action of today will be
found to be harmful in future.
Reactions of competitors.
The push to reduce costs or increase profits may not force firms to
address this important issue.
What are the benefits of the going international? and what are the
different entry strategies in international marketing?
Ans. There are a variety of ways in which organizations can enter foreign
markets. The three main ways are by direct or indirect export or production in a
foreign country.
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Exporting :
Exporting is the most traditional and well established form of operating in
foreign markets. Exporting can be defined as the marketing of goods produced
in one country into another. Whils no direct manufacturing is required in an
overseas country, significant investments in marketing are required. The
tendency may be not to obtain as much detailed marketing information as
compared to manufacturing in marketing country; however, this does not
negate the need for a detailed marketing strategy.
The advantages of exporting are :
Manufacturing is home based thus, it is less risky than overseas based
Gives an opportunity to learn overseas markets before investing in

bricks and mortar
Reduces the potential risks of operating overseas.

The disadvantage is mainly that one can be at the mercy of overseas
agents and so the lack of control has to be weighed against the advantages. For
example, in the exporting of African horticultural products, the agents and
Dutch flower auctions are in a position to dictate to producers.
Foreign production :
Besides exporting, other market entry strategies include licensing, joint
ventures, , ownership and participation in export processing zones or free trade
zones.
Licensing : Licensing is defined as the method of foreign operation whereby a
firm in one country agrees to permit a company in another country to use the
manufacturing, processing, trademark, know-how or some other skill provided
by the licensor.
It is quite similar to the franchise operation. Coca Cola is an excellent
example of licensing. In Zimbabwe, United Bottlers have the licence to make
Coke.
Licensing involves little expense and involvement. The only cost is signing
the agreement and policing its implementation.
Licensing gives the following advantages :
Good way to start in foreign operations and open the door to low risk
manufacturing relationships.
Linkage of parent and receiving partner interests means both get most out
of marketing effort
Capital not tied up in foreign operation and
Options to buy into partner exist or provision to take royalties in stock.

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The disadvantages are :
Limited form of participation - to length of agreement, specific product,

process or trademark
Potential returns from marketing and manufacturing may be lost
Partner develops know-how and so licence is short
Licensees become competitors - overcome by having cross technology

transfer deals and
Requires considerable fact finding, planning, investigation and

interpretation.
Those who decide to license ought to keep the options open for extending
market participation. This can be done through joint ventures with the
licensee.
Joint ventures :
Joint ventures can be defined as an enterprise in which two or more
investors share ownership and control over property rights and operation.
Joint ventures are a more extensive form of participation than either
exporting or licensing. In Zimbabwe, Olivine industries has a joint venture
agreement with HJ Heinz in food processing.
Joint ventures give the following advantages :
Sharing of risk and ability to combine the local in-depth knowledge with a
foreign partner with know-how in technology or process
Joint financial strength
May be only means of entry and
May be the source of supply for a third country.

They also have disadvantages :
Partners do not have full control of management
May be impossible to recover capital if need be
Disagreement on third party markets to serve and
Partners may have different views on expected benefits.

If the partners carefully map out in advance what they expect to achieve and
how, then many problems can be overcome.
Ownership : The most extensive form of participation is 100% ownership
and this involves the greatest commitment in capital and managerial effort. The
ability to communicate and control 100% may outweigh any of the
disadvantages of joint ventures and licensing. However, as mentioned earlier,
repatriation of earnings and capital has to be carefully monitored. The more
unstable the environment the less likely is the ownership pathway an option.
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Export processing zones (EPZ)

Whilst not strictly speaking an entry-strategy, EPZs serve as an entry
into a market. They are primarily an investment incentive for would be
investors but can also provide employment for the host country and the
transfer of skills as well as provide a base for the flow of goods in and out of the
country.
Organizations are faced with a number of strategy alternatives when
deciding to enter foreign markets. Each one has to be carefully weighed in order
to make the most appropriate choice. Every approach requires careful
attention to marketing, risk, matters of control and management..
Having done all the preparatory planning work (no mean task in itself!),
the prospective global marketer has then to decide on a market entry strategy
and a marketing mix. These are two main ways of foreign market entry either by
entering from a home market base, via direct or indirect exporting, or by foreign
based production. Within these two possibilities, marketers can adopt an
aggressive or passive export path.
Entry from the home base (direct) includes the use of agents, distributors,
Government and overseas subsidiaries and (indirect) includes the use of
trading companies, export management companies, piggybacking or counter
trade. Entry from a foreign base includes licensing, joint ventures, contract
manufacture, ownership and export processing zones.
Various strategies used in international marketing
To develop an effective global marketing strategy, companies need to
divide it into four parts. They are product, promotion, price and place.
1.
Product Strategies : The product is one of the most important

components of a marketing program. A company is usually known by the
products it offers in the market. In the global market place, companies
need to develop products which meet global standards. However, product
features and characteristics can be customized depending on the
requirements of a local market. Once the brand value of a product is
developed, the same kind of positioning and marketing efforts can be
utilized through out the global market. Product process design should
also take into consideration the legal restrictions of local markets. For eg.
Himalaya Drug company entered the US market in 1996 with products
modified to suit local requirements. It sold various products in the US
market such as a daily health and digestive capsules, laxative syrup,
antiseptic cream etc.
2.
Promotion Strategies : The promotion strategies of a global marketing

organization include advertising, sales, promotion, publicity, public
relations, direct marketing and personal selling. As the cultures of
different countries differ significantly, it is always a challenging task for
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companies to design an effective promotional strategy for global

customers. Communication is an essential form of the promotional
process. Another factor that also affects the designing of a promotional
strategy is the different set of cost constraints in different countries. For
eg. Media cost and sales force cost differ significantly from one country to
another. Therefore companies need to be very careful in the selection of
communication mix in different countries. Different promotional
strategies should be developed for different markets. One of the
promotional strategies should be developed for different markets. One of
the important promotional strategies for industrial markets is
participation in international trade fairs. Sponsoring locally popular
games and events can also be effective promotion strategies.
3.
Pricing Strategies : While developing pricing strategies for the global

market, one must consider the internal and external environments of a
company. It is very difficult to asses the impact of these factors on the price
of a product because these factors work in various combinations in
various countries. A company needs to decide whether to adopt a common
pricing strategy for the entire global market or to adopt a pricing strategy
that suits individual nations. It is normally suggested that it is better to
adopt individual pricing strategies for different markets in which the
company is operating. Global companies need to continuously review
their pricing strategies because uncontrollable factors such as exchange
rates and inflation change continuously.
4.
Place Strategies : Economic, efficient and reliable transportation and

distribution of goods and services has played a significant role in the
development of world trade. In the total cost of a product, over 50% is
related to material and around 10% is labour cost. Distribution of the
product accounted for the remaining 40%. Therefore, the selection of an
appropriate distribution medium is critical to the success of the global
marketing efforts of a company place or distribution strategies are
dependent on the type of product a company offers. Generally a company
has access to two major types of distribution channels domestic
intermediaries and foreign intermediaries. Apart from these channels, the
company can also use its own personnel for distribution. A global
distribution strategy has to be developed considering the economic,
cultural, legal and political environment. The distribution strategies must
be consistent with the product, pricing and promotional strategies. For
eg. McDonalds recently opened its outlet in Delhi Agra highway to cater to
the increasing tourist traffic on the highway.
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Define marketing. Also explain its nature in brief.

Marketing is Customer focused :

Marketing tends to satisfy and delight customer. The activities of

Marketing must deliver value :

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Marketing is surrounded by customer needs :

and customer needs

Marketing is a part of total environment :

Total environment may be defined as the combination of all the resources

Marketing System affects company strategy :

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Marketing creates mutually beneficial relationship :

Explain the scope of marketing .

Ans. The scope of marketing can be understood in terms of functions that a

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A2. Product planning and development :

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Marketing is an indispensable activity for any organization. Do

Ans. Marketing is an indispensable activity for any organization. I am agree

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needs and wants to ensure customer satisfaction. The extent to which a

Time Utility : Marketers provide time utility to their customers by

Possession Utility : Possession utility allows a buyer to use the product

Marketing Dynamics : Products and markets are constantly changing due to

Be customer led, not product oriented.

Ans. Marketing is the delivery of satisfaction at a profit. It is a social and

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lowering the cost of production by means of mass production and

Societal Marketing Concept :

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competitors in a way that maintains or improves the consumers and

Discuss in detail the Holistic Marketing approach of marketing. How

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Relationship Marketing : Increasingly, a key goal of marketing is to develop

Internal Marketing : Holistic marketing incorporates internal marketing,

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Focal point of Marketing is building and delivering customer value

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Effective marketing focuses on two activities: retaining existing customers

Satisfaction Measurement: Affective Measures of Customer Satisfaction

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Satisfaction Measurement: Cognitive Measures of Customer Satisfaction

Ans. Introduction : Apart from managing value chain and maintaining

Define and measure the retention rate.

Identify the cause of attrition.

Estimate the amount of profit lost by losing the customer.

Figure out the cost of retaining a customer.

Listen to the customer as it helps in retaining and overcoming

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On an average, companies lose 10% of customers every year.

A 5% reduction in customer attrition may increase the profit rate by 25 to

A firm accrues several benefits by retaining its customers like

Increased Revenue : If a customer stays with a company for longer time,

Decrease in Cost of Selling : A loyal set of customers keeps the selling

Advertising : Customers usually influence other members of their

Cross Selling Possibilities : A regular customer can be a potential

Explain Marketing Environment with its concept.

Ans. The Marketing Environment

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