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BA7203 Marketing Management

UNIT I
Par t A
1. Differentiate between Selling and Marketing (May / June 2006)
Marketing
Focuses on customer needs
Customer enjoys supreme importance
converting customer needs into product
Profits through customer satisfaction
Principle of caveat vendor is followed

Selling
Focuses on seller needs
Product enjoys supreme Importance
Converting product into cash
Profits through sales volume
principle of caveat emptor is followed

2. What do you mean by marketing process? (MAY/JUNE 2006)

It is a process that a firm should find a way to discover unfulfilled customer needs
and bring to market products that satisfy those needs. The process of doing so can be
modeled in a sequence of steps which includes situational analysis, marketing strategy,
marketing mix elements and implementation and control.
3. What is marketing? (NOV/DEC 2006)
Marketing is a social and managerial function that attempts to create, expand and
maintain a collection of customers. It attempts to deliver demand satisfying output
through profitable exchanges.
Marketing is the process of raising the standards of living, by identifying the existing
problems and unsatisfied needs of people and then satisfying that need with a
product/service that delivers value to the customer.
4. What are the factors affecting marketing environment? (NOV/DEC 2006)
Size and Growth
Profitability
Cost structure
Distribution systems
Market trends
Key Success factors
5. What is global environment? (MAY/JUNE 2007)

Global firms plan, operate and coordinate their activities on a worldwide

basis, for which they need to study global environment. Global environment has
such factors as political, legal, social, cultural and economic forces that
fundamentally affect the strategic business positions at global level.
6. Define introduction stage of PLC. (MAY/JUNE 2007)
Introduction is the early stage, when product is introduced in market, sales
revenue begins to grow but the rate of growth is very slow.Profits may not be
there as there is low sales volume, large production and distribution costs. It may
require heavy advertising and sales promotion. Products are brought cautiously
on a trail basis.
7. What are the socio-economic factors in segmentation? (MAY/JUNE 2007)
Socio-economic factors in segmentation include social class, lifestyle,
occupation, income, density, and family life cycle and investment trends of
buyersZ
8. Define the Marketing Concept. (NOV/DEC 2007)
Marketing is a societal process that is needed to discern consumers' wants;
focusing on a product/service to those wants, and to mould the consumers towards the
products/services. Marketing is fundamental to any businesses growth. The marketing
teams (Marketers) have the task to create the consumer awareness of the
products/services through marketing techniques; if a business does not pay attention to
their products/services and their consumers' demographics, the business would not be
able to endure longevity.
9. What is Marketing? (May / June 2008)
Refer Question Number 3 (Nov / Dec 2006)
10. What is production concept? (NOV/DEC 2008)
The production concept is the philosophy that consumers will favor products that
are available and highly affordable.This philosophy states that any amount of goods
produced will sell if it is available and affordable to customers.When firms adopt this
concept, generally they produce goods on a mass production level, to be able to produce
large quantities, therefore make it more available; investing in technology is essential, to

reduce the costs of production and make it more affordable.The management is required
to focus mostly on improving the production and distribution of a part
11. What is selling concept? (NOV/DEC 2008)
Selling concept's aim is to convert the product into cash.Firms adopting this
philosophy do not produce goods and services in line with people's need and wants
because they try to create demand for that particular product themselves.The management
should concentrate on finding ways to increase production. Also firms adopting this
concept must invest a lot financially, in conducting research and in building relationships
with their customers.The achievement of sales and marketing objectives of the firm by the
salesperson by providing services and solutions to customers' problems in addition to
taking orders
12. What is a market? What are the types of market? (MAY/JUNE- 2009)
In marketing, the term market refers to the group of consumers or organizations
that is interested in the product, has the resources to purchase the product, and is
permitted by law and other regulations to acquire the product.A public place where buyers
and sellers make transactions, directly or via intermediaries. Also sometimes means the
stock market.
Types of Market:
Niche market
Farm market
Stock market
Commodity market
Currency market
Black market
13. Define marketing. (June 2010)
The process of planning and executing conception, pricing, promotion and
distribution of ideas, goods and services to create exchanges that satisfy individual and
organizational goals. - The American Marketing Association
14. What are the factors affecting marketing environment? (June 2010)
Micro-Environment:

The micro-environment of an organization can best be understood as comprising

all those Other organizations and individuals who directly or indirectly affect the
activities of the Organization. The following key groups can be identified:
Customers
Intermediaries
Suppliers
Other stakeholders
Macro-Environment
The macro-environment comprises general trends and forces which may not
immediately affect the relationships that a company has with its customers, suppliers and
intermediaries but sooner or later, macro-environmental change will alter the nature of
these relationships.

The Political Environment

The Social and Cultural Environment

The Demographic Environment.

The Technological Environment

15. What are objectives of Marketing? (June 2011)

1. To satisfy the customer,
2. To achieve organizational goals and objectives
3. Delivering the desired satisfactions.
4. Anticipate the needs and wants of consumers and
5. To satisfy these more effectively than competitors.
16. What is meant by Micro environment? (June 2011)
Micro-Environment:
The micro-environment of an organization can best be understood as comprising
all those Other organizations and individuals who directly or indirectly affect the
activities of the Organization. The following key groups can be identified:
Customers
Intermediaries

Suppliers
Other stakeholders
17. List any two difference between consumer and industrial market
characteristics(Nov / Dec 2010)

18.

Industrial Market

Consumer Market

Number of buyers are Few and limited.

Number of buyers are large

Market research is more useful and

Market research is not reliable in

reliable in the pricing of the industrial

analyzing the price of the goods.

goods
Define Mass customization.
It is the ability of the company to prepare on a mass basis individually designed
products, services, programs and communications. (DeBeers)
19. What is kiosk marketing?
A kiosk is a small building or structure that might house a selling or information unit.
It describes newsstands, refreshment standing catrs, computer linked vending
machines
20. What is synchromarketing?
It is to find ways to alter the pattern of demand through flexible pricing, promotion
and other incentives.

Part B
1. Why is it necessary for a marketer to study the marketing environment. What
arc the environmental variables to be taken into consideration? (MAY/JUNE
2006).
Marketing does not occur in a vacuum. The marketing environment consists of
external forces that directly and/or indirectly impact the organization. Changes in the
environment create opportunities and threats for the organizations. To track these external
forces a company uses environmental scanning. Continual monitoring of what is going
on. Environmental scanning collects information about external forces. It is conducted
through the Marketing Information System.

Environmental analysis determines environmental changes and predicts future

changes in the environment. The marketing manager should be able to determine possible
threats and opportunities from the changing environment; This will help avoid crisis
management
Six Environmental Forces

Societal
Regulatory
o Political
o Legal
o Regulatory
Competitive
Technology
Natural

Environmental variables:
The Internal Analysis of strengths and weaknesses focuses on internal factors that
give an organization certain advantages and disadvantages in meeting the needs of its
target market. Strengths refer to core competencies that give the firm an advantage in
meeting the needs of its target markets.Any analysis of company strengths should be
market oriented/ customer focused because strengths are only meaningful when they
assist the firm in meeting customer needs.
Weaknesses refer to any limitations a company faces in developing or
implementing a strategy. Weaknesses should also be examined from a customer
perspective because customers often perceive weaknesses that a company cannot see.
Being market focused when analyzing strengths and weaknesses does not mean that nonmarket oriented strengths and weaknesses should be forgotten. Rather, it suggests that all
firms should tie their strengths and weaknesses to customer requirements. Only those
strengths that relate to satisfying a customer need should be considered true core
competencies.
The following area analyses are used to look at all internal factors affecting a company:

Customer analysis: Segments, motivations, unmet needs

Competitive analysis: Identify completely, put in strategic groups, evaluate
performance, image, their objectives, strategies, culture, cost structure, strengths,
weakness

Market analysis: Overall size, projected growth, profitability, entry barriers, cost

structure, distribution system, trends, key success factors

Environmental analysis: Technological, governmental, economic, cultural,

demographic, scenarios, information-need areas

Goal: To identify external opportunities, threats, trends, and strategic uncertainties

An environmental analysis is the four dimension of the External Analysis. The interest
is in environmental trends and events that have the potential to affect strategy. This
analysis should identify such trends and events and the estimate their likelihood and
impact. When conducting this type of analysis, it is easy to get bogged down in an
extensive, broad survey of trends. It is necessary to restrict the analysis to those areas
relevant enough to have significant impact on strategy.This analysis is divided into five
areas: economic, technological, political-legal, socio-cultural, and future.

2. Choose a company of your choice and explain how micro environmental factors
affecting its operations. (NOV/DEC 2006)
Micro Environmental Factors:
These are internal factors close to the company that have a direct impact on the
organizations strategy. These factors include:
Customers
Organizations survive on the basis of meeting the needs, wants and providing
benefits for their customers. Failure to do so will result in a failed business strategy.
Employees
Employing the correct staff and keeping these staff motivated is an essential part
of the strategic planning process of an organization. Training and development plays an
essential role particular in service sector marketing in-order to gain a competitive edge.
This is clearly apparent in the airline industry.
Suppliers
Increase in raw material prices will have a knock on affect on the marketing mix
strategy of an organization. Prices may be forced up as a result. Closer supplier
relationships are one way of ensuring competitive and quality products for an
organization.

Shareholders
As organization require greater inward investment for growth they face increasing
pressure to move from private ownership to public. However this movement unleashes
the forces of shareholder pressure on the strategy of organizations. Satisfying shareholder
needs may result in a change in tactics employed by an organization. Many internet
companies who share prices rocketed in 1999 and early 2000 have seen the share price
tumble as they face pressures I mm shareholders to turn in a profit. In a market which has
very quickly become overcrowded many will fall.

Media
Positive or adverse media attention on an organizations product or service can in
some cases makes or breaks organizations. In the UK the adverse publicity the
Millennium Dome has received has had impact on projected sales figures. Wharf dale
who recently entered the DVD market has received many awards from industry magazine
resulting in an increased demand for this product and most importantly an increased
awareness of the Wharf dale brand.
Consumer programmes on TV like the BBC's Watchdog with a wider and more
direct audience can also have a very powerful and positive impact, forcing organizations
to change their tactics.
Competitors
The name of the game in marketing is differentiation. What benefit can the
organization offer which is better then their competitors? Can they sustain this
differentiation over a period of time from their competitors? Competitor analysis and
monitoring is crucial if an organization is to maintain its position within the market.
3. Discuss the role and importance of marketing department with other functional
areas in an organization. (NOV/DEC 2006)
The marketing department must act as a guide and lead the company's other
departments in developing, producing, fulfilling, and servicing products or services for
their customers. Communication is vital. The marketing department typically has a better
understanding of the market and customer needs, but should not act independently of

product development or customer service. Marketing should be involved, and there

should be a meeting of the minds, whenever discussions are held regarding new product
development or any customer-related function of the company.
It is very important that the marketing department get input from many people within
the company. Not only does providing input help the rest of the company understand and
support the marketing efforts, it also provides some invaluable insights into what
customers want and new ideas that may have slipped past the rest of the company.
Because the goals and guidelines set by the marketing department should, by design,
be in line with the vision and mission of the company, upper management should be
involved in and endorse cooperation by all departments in following and implementing
the plan and integrating a consistent message into all communication channels.So, the
marketing department studies the market and the customers, determines the best way to
reach those customers, and works with the rest of the company to help determine the new
product needs of the market and represent the company in a consistent voice.
Marketing is perhaps the most important activity in a business because it has a direct
effect on profitability and sales. Larger businesses will dedicate specific staff and
departments for the purpose of marketing. It is important to realize that marketing cannot
be carried out in isolation from the rest of the business. For example:
The marketing section of a business needs-to work closely with operations, research
and development, finance and human resources to check their plans are possible.
Operations will need to use sales forecasts produced by the marketing department to plan
their production schedules.Sales forecasts will also be an important part of the budgets
produced by the finance department, as well as the deployment of labor for the human
resources department.A research and development department will need to work very
closely with the marketing department to understand the needs of the customers and to
test outputs of the R&D section.
4. Explain marketing concept and compare with selling concept. Give
examples. (MAY/JUNE 2007)
The marketing concepts holds that the key to achieving organizational!
goals consists of the company being more effective than competitors j in creating,
delivering, and communicating superior customer value to its chosen target
markets. The basic difference between marketing .and selling lies in the attitude towards
business. The selling concept hikes an inside-out perspective.

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It starts with the factory, focuses on the company's existing products, .and calls for
heavy selling and promoting to produce profitable sales. The marketing concept takes an
outside-in perspective. It starts with n well-defined market, focuses on customer needs,
coordinates all the activities that will affect customers, and produces profits through
Creating customer satisfaction.

Marketing
Focuses on customer needs
Customer enjoys supreme importance
converting customer needs into product
Profits through customer satisfaction
Principle of caveat vendor is followed

Selling
Focuses on seller needs
Product enjoys suprem Importance
Converting product into cash
Profits through sales volume
principle of caveat emptor is followed

5. Discuss marketing environment on today's competitive world. (MAY/JUNE

2007)
The organization operates within the larger framework of the external
environment that shapes opportunities and poses threats to the Organization. The external
environment is a set of complex, rapidly changing and significant interacting institutions
and forces that affect the organization's ability to serve its customers. External forces are
uncontrolled by an organization, but they may be influenced or it fleeted by that
organization. It is necessary for organizations to understand the environmental conditions
because they interact with Strategy decisions. The external environment has a major
impact on the determination of marketing decisions. Successful organizations can in their
external environment so that they can respond profitably id unmet needs and trends in the
targeted markets.Organizations closely monitor their customer markets in order to adjust
to changing tastes and preferences. A market is people or organizations with wants to
satisfy, money to spend, and the willingness to spend it. Each target market has distinct
needs, which need to be monitored. It is imperative for an organization to know their
customers, how to reach them and when customers' needs change in order to adjust its
marketing efforts accordingly. The market is the focal point for all marketing decisions in
an organization.
Consumer markets are individuals and households that buy goods and services for
personal consumption. Business markets buy goods and services for further processing or
for use in their production process. Reseller markets buy goods and services in order to

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resell them at a profit. Government markets are agencies that buy goods and services in
order to produce public services or transfer them to those that need them. The federal
government is the largest buyer in the United States. International markets consist of
buyers in other countries.
The marketing environment surrounds and impacts upon the organization. There
are three key perspectives on the marketing environment, namely the 'macroenvironment,' the 'microenvironment' and the 'internal environment'.
The micro-environment
This environment influences the organization directly. It includes suppliers that
deal directly or indirectly, consumers and customers, and other local stakeholders. Micro
tends to suggest small, but this can be misleading. In this context, micro describes the
relationship between firms and the driving forces that control this relationship. It is a
more local relationship, and the firm may exercise a degree of influence.
The macro-environment
This includes all factors that can influence and organization, but that are out of
their direct control. A company does not generally influence any laws (although it is
accepted that they could lobby or be part of Trade organization). It is continuously
changing, and the company needs to be flexible to adapt. There may be aggressive
competition and rivalry in a market. Globalization means that there is always the lineal of
substitute products and new entrants. The wider environment is also ever changing, and
the marketer needs to compensate for changes in culture, politics, economics and
technology.
The internal environment
All factors that are internal to the organization are known as the 'internal
environment'. They are generally audited by applying the Five Ms' which are Men,
Money, Machinery, Materials and Markets. The internal environment is as important for
managing change as The external. As marketers we call the process of managing internal
change 'internal marketing. Essentially we use marketing approaches to aid
communication and change management.
The external environment can be audited in more detail using other approaches
such as SWOT Analysis, Michael Porter's Five Forces Analysis or PEST Analysis.

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6. Factors considered under environment analysis to a business. (NOV/DEC 2007)

Refer to Question Number 1 (May/ Jun 2006)
7. Explain marketing environment for the business enterprise of consumer goods.
(MAY/JUNE 2008)
Refer to Question Number 1 (May/ Jun 2006)
8. How does the subject marketing has interface with other functional areas?
(MAY/JUNE 2008)

The relationship between marketing and other functional areas of the business is
important for everyone to understand in order to facilitate the coordination of

firms business.
For non-marketing people the understanding is important to ensure the

interactions flow smoothly and effectively.

In the financial area, decisions made on credit, accounts receivables and accounts

payable have an effect on the scope of marketing.

The engineering area similarly makes strategic decisions affecting marketing. The

quality of the final product is of course directly related to engineering decisions.

Marketing may also work with personnel department particularly in areas as
establishing appropriate job descriptions and communicating the firms need to the

people most qualified to fill positions.

Marketing and legal departments must interact on issues as the price of the
product, terms of sale, content of advertising messages, wording of patents and
warranties.

9.

The Market place isnt what it used to be Discuss (Nov / Dec 2008)
A Market place is the space, actual or metaphorical in which a market operates the

term is also used in a trademark law context to denote the actual consumer environment.
i.e the real world in which products and services are provided and consumed.A
Marketplace is a location where goods and services are exchanged. The traditional market
square is a city square where traders set up stalls and buyers browse the merchandise.
This kind of market is very old and countless such markets are still in operation around
the whole world.
By becoming a member of a marketplace companies get instant access to thousands of
prospective buyers and supplier. An average marketplace has over 100 thousand
members. This gives an opportunity to expand business by findings new customers and

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suppliers from this new community. Workings closely with the members of the new
community companies get every chance to increase their business dramatically.
For buyer participants a marketplace offers:

Lower transaction costs streamlined processing

Access to new suppliers Marketplace participants removes geographical barriers

and provides access to new suppliers

Time Savings provides for faster approval , ordering processes and delivery
tracking.

For Suppliers

Reduced inventory cost-Clearer visibility and forecasting ability allow companies

considerably reduce inventory cost

Access to new buyers and markets - Marketplace provides new sales channel

which opens up many new opportunities for suppliers

Increased sales-Wider Market indicates Increase in Sales. Which results in

increased revenue.
Reduced overhead costs
Reduced order processing cost
Reduced sales and support costs

10. Explain the Marketing Environment in detail Refer to Question Number 1 (May /
June 2006)
11. Marketing planning and control can be considered as the nerve center for
Marketing Management. Elaborate. (MAY/JUNE- 2009)
The process of defining the action steps, priorities and schedules by which the
marketing strategy will be implemented and making . sure that the company is achieving
the objectives that are stated in the marketing plan within the determined budget.
The following steps and activities of Marketing planning and control can be
distinguished and considered most important for Marketing Management.
Research of marketing mix and control:
Like the strategic marketing planning process, this process also begins with research and
analysis of the marketing and consumer environment. Besides, research for the marketing
mix is necessary, which is focused on sensitivity analysis to various elements of the
marketing mix, analysis for reseller satisfaction, market response, goal achievement.
Financial forecasting:

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Before the annual objective can be determined, the financial situation has to be
forecasted. On the revenue side it shows forecasted sales volume and average realized
price, on the expense side it shows the forecasted cost of production, physical distribution
and marketing. The difference is the expected profit.
Objectives setting:
The annual objectives can be stated for the one year strategy (for example, increase
market share by x% or improve brand awareness by y% in that year) as well as for
specific statements concerning marketing activities. An example of a specific statement
is: decrease cost of sales force as a percentage of sales, improve advertising awareness or
improving company image. These statements have to be quantified and a time horizon has
to be set.
Marketing strategy and action program:
When the objectives have been set, the marketing managers have to refine the strategic
marketing plan to the annual marketing plan. Specific marketing tactics have to be
developed besides the action programs. The action programs contain the marching orders
in response to the question How will we get there?, and the actual steps by which
strategies will be implemented to reach the established objectives.
Control
The last step of the marketing planning & control process is control, which forms a
distinct process itself. The control of the annual marketing plan will be handled by the
management of the PMC.
To implement the marketing strategy, marketing management has to decide what level
of marketing expenditures is necessary to achieve the marketing objectives. The total
budget has to be allocated among the several marketing activities and tools in the
marketing mix. During the implementation of activities, the company has to review the
process of marketing and sales activities regularly throughout the year. These reviews
provide an opportunity to listen to weak signals and to redirect any parts of the planned
action program that are off target.
12. Choose a company of your choice and explain how internal environmental
factors affect the marketing operations. (June 2010)
Refer to question Number 1 (May/ June 2006)

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13. Explain the Core Concept of Marketing (June 2011)

CORE CONCEPTS OF MARKETING
Needs, wants, and demands; products (goods, services and ideas); value, cost and
satisfaction: exchange and transaction: relationships and networks: markets: and
marketers and prospects.
a) Needs
Describe basic human requirements such as food, air, water, clothing, and shelter.
b) Want
Needs become wants when they are directed to specific objects that might satisfy the
need.

c) Demand
Are wants for specific products backed by an ability to pay.
d) Product
Is any offering that can satisfy a need or want, such as one of the 10 basic offerings of
goods, services, experiences, events, persons, places, properties, organizations,
information, and ideas.
e) Value
As a ratio between what the customer gets and what he gives. The customer gets benefits
and assumes costs, as shown in this equation:
Value

Benefits
=

---------Costs

Functional benefits + emotional benefits

----------------------------------------------------------------------------------Monetary costs + time costs + energy costs + psychic costs

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F) Exchange

Exchanges are carried out by business firms, and also by no business

organizations and even individuals.

Four conditions must exist for an exchange to be able to occur:

Two or more people or organizations must be involved.

The parties must be involved voluntarily.

Each party must have something of value to exchange, and the parties
must believe they will each benefit from the exchange.

The parties must be able to communicate with each other.

g) Marketing Channels:
To reach a target market, the marketer uses three kinds of marketing channels.
Communication channels deliver messages to and receive messages from target
buyers.They include newspapers, magazines, radio, television, mail, telephone,
billboards,posters, fliers, CDs, audiotapes, and the Internet. Beyond these,
communications are conveyed by facial expressions and clothing, the look of retail stores,
and many other media. Marketers are increasingly adding dialogue channels (e-mail and
toll-free numbers) to counterbalance the more normal monologue channels (such as ads)
The marketer uses distribution channels to display or deliver the physical product
or service(s) to the buyer or user. There are physical distribution channels and service
distribution channels, which include warehouses, transportation vehicles, and various
trade channels such as distributors, wholesalers, and retailers. The marketer also uses
selling channels to effect transactions with potential buyers. Selling channels include not
only the distributors and retailers but also the banks and insurance companies that
facilitate transactions. Marketers clearly face a design problem in choosing the best mix
of communication, distribution, and selling channels for their offerings.
h) Supply Chain
Whereas marketing channels connect the marketer to the target buyers, the supply
chain describes a longer channel stretching from raw materials to components to final
products that are carried to final buyers. For example, the supply chain for womens

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purses starts with hides, tanning operations, cutting operations, manufacturing, and the
marketing channels that bring products to customers. This supply chain represents a value
delivery system. Each company captures only a certain percentage of the total value
generated by the supply chain. When a company acquires competitors or moves upstream
or downstream, its aim is to capture a higher percentage of supply chain value.

i) Competition
Competition, a critical factor in marketing management, includes all of the actual and
potential rival offerings and substitutes that a buyer might consider.
1. Brand competition: A company sees its competitors as other companies that offer
similar products and services to the same customers at similar prices. Volkswagen might
see its major competitors as Toyota, Honda, and other manufacturers of medium price
automobiles, rather than Mercedes or Hyundai.
2. Industry competition: A company sees its competitors as all companies that make the
same product or class of products. Thus, Volkswagen would be competing against all
other car manufacturers.
3. Form competition: A company sees its competitors as all companies that manufacture
products that supply the same service. Volkswagen would see itself competing against
manufacturers of all vehicles, such as motorcycles, bicycles, and trucks.

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4. Generic competition: A company sees its competitors as all companies that compete
for the same consumer dollars. Volkswagen would see itself competing with companies
that sell major consumer durables, foreign vacations, and new homes.
5. Marketing Myopia :Sellers who concentrate their thinking on the physical product
instead of the customers need are said to suffer.
6. Opportunity Cost:The products value and price before making a choice. According to
Derose, value is the satisfaction of customer requirements at the lowest possible cost of
acquisition, ownership, and use.
14. Critically analyse the importance of marketing department relationships with
other functional departments in the organization. (June 2010)
MARKETING AND OTHER FUNCTIONS
All marketing decisions whether related to products, pricing, distribution, or
promotion are affected by other business functions. Similarly, most other business
decisions ( R&D, Production) and the overall corporate strategy are strongly influenced
by a variety of marketing consideration and inputs. A comprehensive understanding of
the web of interrelationships between marketing and the other business requires
predominantly a recognition of the importance of identifying and understanding the
nature and magnitude of these sets of interrelationships.
Finance & Marketing
All well conceived marketing plans include major financial dimensions. Cost and
profit history for the business (a brand, a product, product line) and a financial statement
and budgets of each business and its related marketing strategies are components of any
marketing plan. Profitability analysis & budgeting are key aspects of market planning.
Marketing decisions to be viewed as Investment decisions. Financial concepts and tools
are integral part of marketing programs (Credit sales) The finance function of the
business usually controls the cost, money going in and out of the business. They would
keep a record of cost going out the business, and calculate whether the business is making
a profit or loss. The finance department is responsible for sending invoices to customers,
clearing Cheque which is received, and also preparing payrolls so they can pay staff
salaries. Anything to do with money is dealt by the finance department in any
organization. The finance department work with the marketing department to help them
with their finances. The finance department allocates the budget to support various

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activities of the marketing department carry out So for example, if the marketing
department at Tescos want to carry out a promotion through direct mail, they would ask
the finance department first; from there the finance department will decide if they are able
to fund this type of direct mail promotion. Tescos would not be able to carry out this
activity without consulting the finance department, because the money only goes in and
out of the finance department. Furthermore when the marketing departments need money
for researching and development to design new products to attract potential customers,
they would again consult the finance department who would allocate suitable funds, so
that the marketing department can carry out this activity efficiently. The marketing
department at Tescos may also need money if they want to distribute materials such as
posters with special offers, if they dont consult the finance department about this activity,
then the marketing department at Tescos could be losing money . Marketing approach to
financial documents offers a new perspective often lacking in the financial community.
For example
1. Utilization of the annual report and other financial for marketing
2. Measurement of management tradeoff between risk and expected return utilizing
conjoint analysis
3. Assessment of the market response functions to changes in prices, mode of
payment , type and level of discount and credit.
4. Application of financial performance measures to relevant market segments and
products.
5. Impact of marketing activities on investors expectations
Production & Marketing
Production capabilities determine the number and type of products to be marketed
Accurate sales forecast is also possible. When uncertainties & fluctuations are predicted
Change the current production capacity
Influence the nature, level or timing of demand
The strategy can be achieved by appropriate use of marketing strategies such as
advertising, consumer and trade promotion and deals and deletion or addition of products.

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The interdependency is evident in the development of new products. The size of

new production facilities, depends on marketing research based estimates of the demand
for the new products and the likely time and space distribution. It is important to identify
the basic conflicts between the two functions. Production strives for efficient production
runs which imply long runs, few models, relatively simple, model to produce, and
reasonable quality control. Marketing would see shorter production runs with many
models, they are less concerned about the ease of production and would like to minimize
the possibility of any product failure.
Customer Service & Marketing
Customer and industrial products require pre & post purchase services. Service
department is often address for customer complaints, Number and type of complaints are
important inputs for marketing strategies, product modification, and new product
development . Regular & Explicit communication should be established between service,
marketing and other relevant functions.
Procurement & Marketing
Procurement is the broader functions of materials management. Many firms have
been modifying their products to substitute scarce raw materials with more available,
cheaper or legally acceptable ones. Marketing research on customer's acceptability for the
substituted products is vital for input for procurement planning. Procurement research
aimed at the identification and evaluation of new marketing research. Marketing plan
require input from procurement plans to introduce new materials or anticipated changes in
production output due to changes in the supply of various raw materials.
R&D and Marketing
The primary R&D and Marketing interface centre around new product
development effort of the firm. New product development stages right from idea
generation to final product development requires close interaction. Realistic expectations
and Organizational climate encourages which encourage the interface between these two
functions and stimulates innovation are essential ingredients for successful new product
development.
Personnel & Marketing

21

Personnel Hiring, training and management of appropriate marketing personnel.

Marketing need to collaborate with personnel in developing job descriptions, screening
candidates designing training programs and incentive systems.
Management Information System
Since the major implication of the independencies between marketing and the
other business functions are with respect to the required information and its role in the
firms decisions making process, the design of marketing information systems should be
undertaken as in integral part of a broader user oriented management information system.
Such a system incorporates the marketing information ( eg slaes, share, consensus,
attitudes etc) with other relevant information ( company sales, cash flow needs,
macroeconomic projections, etc) providing a single organized and timely source of
information to the relevant decision makers. To the extent that the firms management
information system includes information and models of competitive behavior, marketing
can provide the necessary vehicles for the gathering, analysis and interpretation
UNIT II
Part A
1. What is-de-marketing? (MAY/JUNE 2006)
De-marketing aimed at limiting growth; practiced, for example, by governments to
conserve natural resources, or by companies unable to serve adequately the needs of all
potential customers.Marketers attempt to reduce the demand for a product when the
demand for the product is greater than the manufacturer's ability to produce it. Demarketing strategies involve raising prices, reducing advertising or promotion activities,
or eliminating product benefits. De-marketing does not aim to destroy the demand but
only to lower it to make it level with the ability to produce the product.
2. What are the steps of consumer decision making? (MAY/JUNE 2006)
Become Aware of a Problem or Opportunity: The consumer becomes aware of an
unfulfilled need, such as replacing a regularly purchased item such as toothpaste or
buying a new SUV (sports utility vehicle) to reach remote areas - and perhaps gain peer
approval.
Search for Information: Gathering information from various sources in order to make a
better-informed decision. For example, the SUV buyer may consult with others who own

22

one and conduct research on the Web (manufacturer sites, online automobile magazines,
etc.).
Evaluate Alternatives: Once the choices have been narrowed, the consumer compares
them based on the criteria that matter most. Continuing with the SUV example, the
consumer may decide that the SUV must be both comfortable on the highway and agile in
the back country, be pleasing to look at and convenient for loading mountain bikes and
other gear.
Decide on what to buy and then purchase it. At this stage, the SUV buyer may look for
the best dealer, based on such factors as service, location and price.
Reassess the purchase. The bigger the purchase, the more the consumer will reconsider
whether or not the decision was correct. The SUV buyer may periodically think about his
or her satisfaction with the vehicle, compare it to other SUVs while driving, and tune in to
passenger comments
3. What do you understand by the term product mix? (MAY/JUNE 2006)
The product is the most important aspect of the marketing mix. The product can be a
service or even a holiday destination. Products have both tangible and intangible benefits.
Tangible benefits include benefits which can be measured such as the top speed of a car.
Intangible benefits are benefits that cannot be measured such as the enjoyment the
customer will get from the product. It is important that the product is changed as
necessary to bring it up to date and prevent it from being overtaken by competitors
4. What are the distinguishing characteristics of services vis-a-vis products?
(MAY/JUNE 2006)
Intangibility the service cannot be touched or viewed, so it is difficult for clients

to tell in advance what they will be getting;

Inseparability of production and consumption the service is being produced at
the same time that the client is receiving it (eg during an online search, or a

legalconsultation);
Perishiliility unused capacity cannot be stored for future use. For example, spare
seats on one aero plane cannot he transferred to the next flight, and query lire

time-, ii tin- iclcience desk cannot be saved up until there is n bli .y period
Heterogeneity (or variability): services involve people, and people are all
different. There is a strong possibility that the same enquiry would be answered
slightly differently by different people (or even by the same person at different

23

times). It is important to minimize the differences in performance (through

training, standard-setting and quality assurance).

5. What is service marketing? (MAY/JUNE 2007)

Services are separately identifiable, intangible activities which provide want
satisfactions when marketed to consumers and industrial users and which are not
necessarily tied to the sale of product or another service. The following are the
marketing tools used in service marketing-place, people, equipment,
communication, materials, symbols and price.
6. How does Franchising help in service marketing? (NOV/DEC 2007)
Franchising has become a popular way to expand delivery of an effective service
concept to multiple sites without the level of investment capital that would be needed for
rapid expansion of company-owned and managed sites. Franchises can often expand
faster than company operated outlets' not only for financial reasons but also because
locally based franchisers usually have established business networks and experience in
dealing with government officials.
7. Who is a customer? (MAY/JUNE 2008)
A customer, also client, buyer or purchaser is the buyer or user of the paid products of
an individual or organization, mostly called the supplier or seller. This is typically through
purchasing or renting goods or services.
8. Who is a satisfied customer? (MAY/JUNE 2008)
A delighted customer is a satisfied customer. Satisfied customer is more likely to
acquire additional product/ services, and therefore become a profitable customer. Satisfied
customer is also more likely to maintain and group the relationship over an extended
period of time.
9. State STP strategy. (NOV/DEC 2008)
To identify groups or segments of potential customers (individuals, organizations,
buying centers, etc.) whose desired values from products and services within groups are
similar and whose values between groups are different.To select one or more groups as a
target segment who respond favorably to a current or prospective marketing offering.To

24

achieve a desired positioning in the minds of potential segment customers (defined

broadly, as above) with a profitable marketing program.
10. Define reference groups. (NOV/DEC 2008)
A reference group is a sociological concept referring to a group to which another group is
compared. Reference groups are used in order to evaluate and determine the nature of a
given individual or other group's characteristics and sociological attributes. Reference
groups provide the benchmarks and contrast needed for comparison and evaluation of
group and personal characteristics.Reference groups act as a frame of reference to which
people always refer to evaluate their achievements, their role performance, aspirations
and ambitions. A reference group can be either from a membership group or nonmembership group.
11. Distinguish among five types of customer needs. (MAY/JUNE- 2009)
Functional needs: Those needs which satisfy a physical / functional purpose e.g.

Soap
Social needs: Needs that allow identification with desired group e.g. Logos
Emotional needs: Those needs which, create appropriate emotions, e.g. Joy on

getting gift
Epistemic needs: The need for knowledge / information e.g. Newspaper
Situational needs: The needs, which are contingent on time / place e.g.

Emergency repairs
12. What is the difference between company demand and a company sales forecast?
(MAY/JUNE- 2009)
Company demand is the companys share of market demand.This can be
expressed as a formula:
Company Demand= Market Demand / Companys Market Share
A companys share of market demand depends on how its products, services,
prices, brands and so on are perceived relative to the competitors. All other things being
equal, the companys market share will depend on the size and effectiveness of its
marketing spending relative to competitors.The Company Sales Forecast is the expected
level of company sales based on a chosen marketing plan and an assumed marketing
environment.

13. Explain customer perceived value (CPV). (MAY/JUNE- 2009)

25

Value of a product within the context of marketing means the relationship

between the customers expectations of product quality to the actual amount paid for it. It
is often expressed as the equation:
Value = Benefits / Price or alternatively:
Value = Quality received / Expectations
CPV is customers opinion about product value to their perception. It may have little or
nothing to do with the products market place, and depends on the products ability to
satisfy his or her needs or requirements.
14. Differentiate Pull strategy and Push strategy. (MAY/JUNE- 2009)
The pull strategy relies on the manufacturer to spend a large amount of cash on
advertising and promotion, whereas the push strategy shares some of that burden with
retailers.
A push strategy in marketing is used when there has been a development or
improvement on a new product which is unknown to the consumer. As there is no
consumer demand in the product launch, the product and the information are pushed to
the consumer by distribution and promotion. In a pull system the consumer requests the
product and pulls it through the delivery channel.
15. What are the elements of promotion mix? 15 (Nov / Dec 2010)
a. Advertising
b. Public Relations
c. Personal Selling
d. Sales Promotion
16. What is consumerism? (Nov / Dec 2010)
It is a movement or a set of policies aimed at regulating the products, services,
methods, and standards of manufacturers, sellers, and advertisers in the interests of the
buyer. "consumerism" is used to refer to the consumerists movement, consumer
protection or consumer activism.
17. Mention the factors involved in Michael.E.porter model for competitive analysis.
(June 2010)

26

18. Suggest any four strategies for services marketing (June 2010 )
Service Mix:
Tangibles to be associated with intangibles
Service Product is to be equated with the service provider
Long term- relationship
Marketing mix for services
Marketing should occur at all levels
Establish direct contact with the customers
Use high-quality personnel for marketing job
Creation of loyalty
Ensure quick resolving of problems
Brand the services offered
Provision of improved services at lower cost
19. Mention the tools in services Marketing Mix(June 2011)
The service marketing mix comprises of 7 ps.
Product
Price

27

Place
Promotion
People
Process
Physical evidence.
20. What do you mean by Frontal Attack?
This strategy is used when the challenger masses its competitive forces right up
against those of the opponent by attacking its competitors strengths rather than its
weakness. For this to succeed, the challenger needs a strength advantage over the
opponent.
21. What do you mean by Flank Attack?
This strategy is used when the challenger sets its sights on its targets weakest points.
22. What do you mean by Encirclement Attack?
It is used only by well financed firms. It involves an attempt to capture a wide slice
of the competitors market through a grand offensive on several broad fronts.
23. What do you mean by Bypass Attack?
It avoids any belligerent move directed against competitors territory. It involves
bypassing competitors and attacking easier markets.
24.What do you mean by Guerilla Attack?
It involves making small, intermittent attacks on different territories of the opponent.
A
guerilla attacker uses both conventional and unconventional means of attacking
the opponent. These might include reflective price cuts, intense promotional bursts
and occasional legal actions.

Part B
1. What key strategic issues are faced by traditional "bricks-and-mortar" retailer
such as Wal-Mart, Kmart and Office Depot when they go online to sell products?
(NOV/DEC 2006)
It is essential that different firms in the same business not attempt to compete on
exactly the same variables. If they do, competition will invariably degenerate into pricethere is nothing else that would differentiate the firms.

28

There are many obstacles these companies need to face when they go on-line for selling
their products. The following obstacles need to be avoided and accordingly proper
strategic planning need to be adopted..

Reach
Concerns about privacy
Educational issues
Costs
Language
Government Language
Cultural Obstacles
Payment Issues

Developing a proper website is also a must for online marketers before they launch a
product across borders. The various strategic issues need to be keep in mind are:

Speed vs. aesthetics

Keeping users on the site
Information collection

The Companies need to build and construct an effective channel structure and
membership issues so that ail the products manufactured by these companies would be
reached safety to the consumer's on- time without any damage and discrepancies. This is
also a major strategic issue the companies need to keep in mind.

Paths to the consumer

Potential channel structures
Criteria in selecting channel members
Piggy-backing strategy
Parallel distribution
Evaluating channel performance

ii) Providing customer service appears to be one of the primary challenges

for Internet marketers. What implications does this have for their "bricksand- mortar" companies? (NOV/DEC 2006)

Use technology to create an immediate, tangible benefit for the consumer

Make the technology easy to use
Execution matters: prototype, test, and refine.
Recognize that customers' response to technology varies.
Build systems that are compatible with the way customers make decisions.
Study the effects of technology on what people buy and on how they shop.
Coordinate all technologies that touch the customer.
Revisit technologies that failed in the past.

29

Use technology to tailor marketing programs to individual customers'

requirements
Build systems that leverage existing competitive advantages

2. What are the distinctive characteristics of services as opposed to goods? Explain

the additional three marketing mix elements in services marketing. (NOV/DEC
2006)
Distinctive characteristics of services as opposed to goods:

Intangibility the service cannot be touched or viewed, so it is difficult for clients

to tell in advance what they will be getting;

Inseparability of production and consumption the service is being produced at the
same time that the client is receiving it (eg during an online search, or a legal

consultation);
Perishibility unused capacity cannot be stored for future use. For example, spare
seats on one aero plane cannot be transferred to the next flight, and query-free

times at the reference desk cannot be saved up until there is a busy period.
Heterogeneity (or variability): services involve people, and people are all
different. There is a strong possibility that the same enquiry would be answered
slightly differently by different people (or even by the same person at different
times). It is important to minimize the differences in performance (through
training, standard-setting and quality assurance).

Additional marketing mix elements in services marketing:

The marketing mix is the combination of marketing activities that an organization
engages in so as to best meet the needs of its targeted market.
The marketing mix thus consists of four main elements:

Product
Price
Place
Promotion

In addition to the traditional four Ps it is now customary to add some more Ps to the
mix to give us Seven Ps. The additional Ps have been added because today marketing is
far more customer oriented than ever before, and because the service sector of the
economy has come to dominate economic activity in this country. These 3 extra Ps are
particularly relevant to this new extended service mix.

30

The services marketing mix is an extension of the 4Ps framework. The essential
elements of product, promotion, price and place remain but 3 additional elements people, physical evidence and process are included to the 7Ps mix. The need for the
extension is due to the high degree of direct contact between service providers and its
customers, the highly visible nature of the service process, and the simultaneity of the
production and consumption.
People - because of the simultaneity of production and consumption in services the
company's staff occupy the key position in influencing customer's perceptions of product
quality. In fact the service quality is inseparable from the quality of service provider. An
important marketing task is to set standards to improve quality of services provided by
employees and monitor their performance. Without training and control employees tend
to be variable in their performance leading to variable service quality. Training is crucial
so that employees understand the appropriate forms of behavior and trainees adopt the
best practices.
Physical evidence - this is the environment in which the service is delivered and any
tangible goods that facilitate the performance and communication of the service.
Customers look for clues to the likely quality of a service also by inspecting the tangible
evidence. For example, prospective customers may look to the design of learning
materials, the appearance of facilities, staff, etc.
Process - this means procedures, mechanism and flow of activities by which a service
is acquired. Process decisions radically affect how a service is delivered to customers.
The service in organizations includes several processes e.g. first contact with customers,
administrative procedure regarding delivery, preparation and evaluation of service
offerings.
Question Number 3 (Nov / Dec 2007)
3. Discuss service marketing with particular reference to commercial banks.
(MAY/JUNE 2007)
Service companies can try to demonstrate their service quality through physical
evidence and presentation. Suppose a commercial bank wants to position itself as the
"fast" bank. It could make this positioning strategy tangible a number of marketing tools:
Place: The exterior and interior should have clean lines. The waiting lines should not get
overly long. The layout of the desks and the traffic flow should be planned carefully.

31

People: Personnel should be busy. There should be a sufficient number of employees to

manage the workload.
Equipment: Computers, copying machines, desks should be state of art.
Communication material: Printed materials should suggest efficiency and speed.
Symbols: The name and symbol should suggest fast service.
Price: The bank could advertise that it will deposit Rs. 50 in the account of any customer
who waits in line for more than five minutes.
4. What are the distinctive characteristics of services as opposed to goods? Explain
the additional three marketing mix elements in services marketing.(NOV/DEC
2007)
Distinctive characteristics of services as opposed to goods:

Intangibility the service cannot be touched or viewed, so it is difficult for clients

to tell in advance what they will be getting;

Inseparability of production and consumption the service is being produced at
the same time that the client is receiving it (eg during an online search, or a legal

consultation);
Perishibility unused capacity cannot be stored for future use. For example, spare
seats on one aero plane cannot b6 transferred to the next flight, and query-free

times at the reference desk cannot be saved up until there is a busy period.
Heterogeneity (or variability): services involve people, and people are all
different. There is a strong possibility that the same enquiry would be answered
slightly differently by different people (or even by the same person at different
times). It is important to minimize the differences in performance (through
training, standard-setting and quality assurance).

Additional marketing mix elements in services marketing:

The marketing mix is the combination of marketing activities that an organization
engages in so as to best meet the needs of its targeted market.
The marketing mix thus consists of four main elements:
Product

Price

Place Promotion

32

In addition to the traditional four Ps it is now customary to add some more Ps to

the mix to give us Seven Ps. The additional Ps have been added because today marketing
is far more customer oriented than ever before, and because the service sector of the
economy has come to dominate economic activity in this country. These 3 extra Ps are
particularly relevant to this new extended service mix.
The services marketing mix is an extension of the 4Ps framework. The essential
elements of product, promotion, price and place remain but 3 additional elements people, physical evidence and process are included to the 7Ps mix. The need for the
extension is due to the high degree of direct contact between service providers and its
customers, the highly visible nature of the service process, and the simultaneity of the
production and consumption.
People - because of the simultaneity of production and consumption in services
the company's staff occupy the key position in influencing customer's perceptions of
product quality. In fact the service quality is inseparable from the quality of service
provider. An important marketing task is to. set standards to improve quality of services
provided by employees and monitor their performance. Without training and control
employees tend to be variable in their performance leading to variable service quality.
Training is crucial so that employees understand the appropriate forms of behavior and
trainees adopt the best practices.
Physical evidence - this is the environment in which the service is delivered and
any tangible goods that facilitate the performance and communication of the service.
Customers look for clues to the likely quality of a service also by inspecting the tangible
evidence. For example, prospective customers may look to the design of learning
materials, the appearance of facilities, staff, etc.
Process - this means procedures, mechanism and flow of activities by which a service
is acquired. Process decisions radically affect how a service is delivered to customers.
The service in organizations includes several processes e.g. first contact with customers,
administrative procedure regarding delivery, preparation and evaluation of service
offerings.
5. Explain brand management. (MAY/JUNE 2008)
Brand management is the application of marketing techniques to a specific product,
product line, or brand. It seeks to increase the product's perceived value to the customer
and thereby increase brand franchise and brand equity.

33

Marketers see a brand as an implied promise that the level of quality people have
come to expect from a brand will continue with future purchases of the same product.
This may increase sales by making a comparison with competing products more
favorable. It may also enable the manufacturer to charge more for the product. The value
of the brand is determined by the amount of profit it generates for the manufacturer.This
can result from a combination of increased sales and increased price, and/or reduced
COGS (cost of goods sold), and/ or reduced or more efficient marketing investment.All of
these enhancements may improve the profitability of a brand, and thus, "Brand
Managers" often carry line-management accountability for a brand's P&L profitability, in
contrast to marketing staff manager roles, which are allocated budgets from above, to
manage and execute.
Brand Management is often viewed in organizations a broader and more strategic
role than Marketing alone. Brand management involves the design and implementation of
marketing programs and activities to build, measure, and manage brand equity.

The brand management process is defined as involving four main steps:

Identifying and establishing brand positioning and values
Planning and implementing brand marketing programs
Measuring and interpreting brand performance
Growing and sustaining brand equity

Brand has the essential importance for the success of enterprise, having in mind that,
in contemporary business conditions, it is more difficult to realize wanted business results
without the brand. Branding process has become more important and provocative than
ever before and products without brand are fewer in market.Successful brand becomes the
symbol which provides some important functions for customers and increases the product
value in their eyes. Brand identifies source or maker of a product and allows customers to
assign responsibility to particular manufacturer or distributor. It also allows customers to
lower search costs for products.
Branding helps product differentiation and creating good image which could be used
for creating corporate image. Promotion of branded products leads to the increase of
selected demand, which helps enterprise to increase its market share. Brand could also
stimulate repeated buying and increase customer loyalty, which results in lower price
elasticity. Successful brand enables expanding the brand on other products and prestige
creation, as well as the legal protection of unique product characteristics
6.

How does marketing of services assume great significance in business?

34

(MAY/JUNE 2008)
Marketing of services is the diametrically opposed non-material counterpiece of a
physical good. A service provision comprises a sequence of activities that does not result
in ownership of the outcome, and this is what fundamentally differentiates it from
furnishing someone with physical goods. Service provision is a process that creates
predetermined benefits by effectuating either a change of service consumers, a change in
their physical possessions or a change in their (in)tangible assets.Marketing a service-base
business is different from marketing a goods-base business.
There are several major differences, including:

The buyer purchases are intangible

The service may be based on the reputation of a single person
It's more difficult to compare the quality of similar services
The buyer cannot return the service

Marketing of service is a set of singular and perishable benefits

delivered from the accountable service provider, mostly in close coaction with his
service suppliers,

generated by functions of technical systems and/or by distinct activities of

individuals, respectively,
commissioned according to the needs of his service consumers by the service

customer from the accountable service provider,

rendered individually to an authorized service consumer at his/her dedicated

request,
and, finally, consumed and utilized by the requesting service consumer for
executing and/or supporting his/her day-to-day business tasks or private activities

Marketing of service is one of the most important ingredients of the marketing mix for
products and services. High quality customer service helps to create customer loyalty.
Customers today are not only interested in the product they are being offered but all the
additional elements of service that they receive from the greeting they receive when they
enter a retail outlet, to the refund and help that they receive when they have a complaint
about a faulty product that they have paid for.
Performance of the service is not seen as a primary responsibility of marketing, but given
the importance of reputation, referrals and repeat business, the marketing function cannot
ignore this stage. Successful companies attach great importance to monitoring service

35

provision with & customer satisfaction reporting system which measures customer
satisfaction. The reporting system should include both completion review and review of
satisfaction while delivery is in process
7. Discuss product planning(MAY/JUNE 2008)
The product planning process is one of the most controversial within any company.
Everyone wants a hand in new product definition and almost everyone will have
contributions that will make a new product successful. With all these interested parties,
you are going to need a system to help you through the product planning process and a
way to decide which ideas have the most merit. This system also needs to incorporate
customer feedback, assure that important new product ideas are approved, and that
development of them initiated immediately. What follows is a product planning system
that works well for most companies.

The steps are important because they allow you to gather input from all possible
resources, evaluate the potential of each idea and gather input from all involved parties
about which ideas will work and their ease of implementation.
Input
There should be no shortage of new product ideas. If you are doing regular
customer councils and customer surveys, you should have a long list. You will also have
ideas from sales, engineering, technical support, and management. The biggest job is
narrowing down the list. A regular poll of sales, tech support, engineering, and customers
for product ideas may help you prioritize. Be sure everyone in your company knows to
feed product ideas to you. Often times the tech support organization has a unique insight
to customer requirements because they are in contact with customers who need help daily,
but no one ever bothers to ask them. When you need to narrow the list further, run it by
your customer council. You can ask them to vote on the product ideas they think are most
valuable.

36

Competitive analysis is also an important part of product planning. Your

customers, sales channels, and prospects evaluating your product will tell you where you
fall short competitively. Additionally you may want to take an existing strength that you
have over your competitors and lengthen your lead with improvements to that strength.
Remember that a competitor won't release a feature that is just on par with your product,
they will be trying to exceed your strength. Also understand where your competitors are
going and what products they have in the works. You won't get this information directly
from them, but you may hear rumors or see press on their strategic directions.
Additionally listen to your prospects when they are asking you about your product
features and directions. Often times they are parroting back information that your
competitor's have given them. The World Wide Web is also an excellent place to gather
competitive information. Often times competitors will publish their strategic directions
and, for software companies, actually have beta versions of their new software releases
available.
Product Ideas Refined
After narrowing down the list of potential new products or features enhancements
for an existing product, you will want to refine some of the more promising ideas. Before
a product idea is funded, some basic information needs to be gathered about who is going
to buy the product, how much they will buy and how much it will cost to develop it. This
is the information that will eventually be expanded upon in the MRD (Market
Requirements Document) but should be gathered and presented in summarized form to
seek product approval.
Products Approved
Once you have gathered the above information for you product proposals, you
need to get the, project approved. It allows you to present all the appropriate information
to everyone at once. It is also a great forum for discussion of the merits of the product. In
some companies, you may need a full market requirements document before the project is
approved.
Market Requirements Refined
Once the product is approved you can refine the market requirements, adding
more detail on the desired features of the product and how the customers will use the
product. There will be two types of MRDs, one for new products and a second for new
releases of a current product. The new product MRD will require

37

Development Initiated
Once the MRD is complete, the developers can start to work on a functional
specification and prototypes. Some companies combine the MRD and Functional
Specification into one document to help them decrease time to market. To do this, you
must work very closely with engineering to make sure that the functional design of the
product will indeed meet customer requirements.

Running a Successful Product Planning Meeting

The meeting gives you a forum to formally add and remove products and projects
to the approved projects list and to make sure that everyone involved is clear on the
priorities. It also gives them visibility to why the priorities are what they are.
This process may seem like a lot of work, and frankly it is. By comparison, you
wouldn't just start writing code on a software product without doing the structure and
design work first. When you compare the effort of product planning to spending hundreds
of man-hours of development resource for a product that sales can't sell and customers
won't buy, the planning work is nominal.
8. Explain customer satisfaction.(MAY/JUNE 2008)
Customer satisfaction, a business term, is a measure of how products and services
supplied by a company meet or surpass customer expectation. It is seen as a key
performance indicator within business and is part of the four perspectives of a Balanced
Scorecard.
In a competitive marketplace where businesses compete for customers, customer
satisfaction is seen as a key differentiator and increasingly has become a key element of
business strategy. There is a substantial body of empirical literature that establishes the
benefits of customer satisfaction for firms.
Customer satisfaction is an ambiguous and abstract concept and the actual
manifestation of the state of satisfaction will vary from person to person and
product/service to product/service. The state of satisfaction depends on a number of both
psychological and physical variables which correlate with satisfaction behaviors such as
return and recommend rate. The level of satisfaction can also vary depending on other
options the customer may have and other products against which the customer Because

38

satisfaction is basically a psychological state, care should be taken in the effort of

quantitative measurement, although a large quantity of research in this area has recently
been developed.
Exceptional customer service results in greater customer retention, which in turn
results in higher profitability. Customer loyalty is a major contributor to sustainable profit
growth. To achieve success, you must make superior service second nature of your
organization. A seamless integration of all components in the service-profit chain employee satisfaction, value creation, customer satisfaction, customer loyalty, and profit
and growth - links all the critical dynamics of top customer service.
Sadly, mature companies often forget or forsake the thing that made them successful
in the first place: a customer-centric business model. They lose focus on the customer and
start focusing on the bottom line and quarterly results. They look for ways to cut costs or
increase revenues, often at the expense of the customer.
They forget that satisfying customer needs and continuous value innovation is the
only path to sustainable growth. This creates opportunities for new, smaller companies to
emulate and improve upon what made their bigger competitors successful in the first
place and steal their customers.
9. Explain the components of the marketing mix in detail. (Nov / Dec 2008)
The marketing mix is probably the most famous marketing term. Its elements are the
basic, tactical components of a marketing plan. Also known as the Four P's, the marketing
mix elements are price, place, product, and promotion. Read on for more details on the
marketing mix.
Price
There are many ways to price a product. Let's have a look at some of them and try
to understand the best policy/strategy in various situations.
Premium Pricing.
Use a high price where there is a uniqueness about the product or service. This
approach is used where a substantial competitive advantage exists. Such high prices are
charge for luxuries such as Cunard Cruises, Savoy Hotel rooms, and Concorde flights.
Penetration Pricing.

39

The price charged for products and services is set artificially low in order to gain
market share. Once this is achieved, the price is increased. This approach was used by
France Telecom and Sky TV.
Economy Pricing.
This is a no frills low price. The cost of marketing and manufacture are kept at a
minimum. Supermarkets often have economy brands for soups, spaghetti, etc.
Price Skimming.
Charge a high price because you have a substantial competitive advantage.
However, the advantage is not sustainable. The high price tends to attract new
competitors into the market, and the price inevitably falls due to increased supply.
Manufacturers of digital watches used a skimming approach in the 1970s. Once other
manufacturers were tempted into the market and the watches were produced at a lower
unit cost, other marketing strategies and pricing approaches are implemented.
Premium pricing, penetration pricing, economy pricing, and price skimming are the four
main pricing policies/strategies. They form the bases for the exercise. However there are
other important approaches to pricing.
Psychological Pricing.
This approach is used when the marketer wants the consumer to respond on an
emotional, rather than rational basis. For example 'price point perspective' 99 cents not
one dollar.
Product Line Pricing.
Where there is a range of product or services the pricing reflect the benefits of
parts of the range. For example car washes. Basic wash could be $2, wash and wax $4,
and the whole package $6.
Optional Product Pricing.
Companies will attempt to increase the amount customer spend once they start to
buy. Optional 'extras' increase the overall price of the product or service. For example
airlines will charge for optional extras such as guaranteeing a window seat or reserving a
row of seats next to each other.
Captive Product Pricing

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Where products have complements, companies will charge a premium price where
the consumer is captured. For example a razor manufacturer will charge a low price and
recoup its margin (and more) from the sale of the only design of blades which fit the
razor.
Product Bundle Pricing.
Here sellers combine several products in the same package. This also serves to
move old stock. Videos and CDs are often sold using the bundle approach.
Promotional Pricing.
Pricing to promote a product is a very common application. There, are many
examples of promotional pricing including approaches such as BOGOF (Buy One Get
One Free).
Geographical Pricing.
Geographical pricing is evident where there are variations in price in different
parts of the world.-For example rarity value, or where shipping costs increase price.
Value Pricing.
This approach is used where external factors such as recession or increased
competition force companies to provide 'value' products and services to retain sales e.g.
value meals at McDonalds.
Place
Another element of Neil H.Borden's Marketing Mix is Place. Place is also known
as channel, distribution, or intermediary. It is the mechanism through which goods
and/or services are moved from the manufacturer/ service provider to the user or
consumer.
There are six basic 'channel' decisions:

Do we use direct or indirect channels? (e.g. 'direct' to a consumer, 'indirect' via a

wholesaler).
Single or multiple channels.
Cumulative length of the multiple channels.
Types of intermediary (see later).
Number of intermediaries at each level (e.g. how many retailers in Southern
Spain).

41

Which companies as intermediaries to avoid 'intrachannel conflict' (i.e. infighting

between local distributors).

Selection Consideration - how do we decide upon a distributor?

Market segment - the distributor must be familiar with your target consumer and

segment.
Changes during the product life cycle - different channels can be exploited at
different points in the PLC e.g. Foldaway scooters are now available everywhere.

Once they were sold via a few specific stores.

Producer - distributor fit - Is there a match between their polices, strategies,

image, and yours? Look for 'synergy'.

Qualification assessment - establish the experience and track record of your

intermediary.
How much training and support will your distributor require?

Types of Channel Intermediaries.

There are many types of intermediaries such as wholesalers, agents, retailers, the
Internet, overseas distributors, direct marketing (from manufacturer to user without an
intermediary), and many others. The main modes of distribution will be looked at in more
detail.
Channel Intermediaries - Wholesalers

They break down 'bulk' into smaller packages for resale by a retailer.
They buy from producers and resell to retailers. They take ownership or title1 to

goods whereas agents do not (see below).

They provide storage facilities. For example, cheese manufacturers seldom wait
for their product to mature. They sell on to a wholesaler that will store it and

eventually resell to a retailer.

Wholesalers offer reduce the physical contact cost between the producer and
consumer e.g. customer service costs, or sales force costs.
A wholesaler will often take on the some of the marketing responsibilities. Many

produce their own brochures and use their own telesales operations
Channel Intermediaries - Agents

Agents are mainly used in international markets.

42

An agent will typically secure an order for a producer and will take a commission.
They do not tend to take title to the goods. This means that capital is not tied up in
goods. However, a 'stockist agent' will hold consignment stock (i.e. will store the
stock, but the title will remain with the producer. This approach is used where

goods need to get into a market soon after the order is placed e.g. foodstuffs).
Agents can be very expensive to train. They are difficult to keep control of due to
the physical distances involved. They are difficult to motivate.

Channel Intermediaries - Retailers

Retailers will have a much stronger personal relationship with the consumer.
The retailer will hold several other brands and products. A consumer will expect to

be exposed to many products.

Retailers will often offer credit to the customer e.g. electrical wholesalers, or

travel agents.
Products and services are promoted and merchandised by the retailer.
The retailer will give the final selling price to the product.
Retailers often have a strong 'brand' themselves e.g. Ross and Wall-Mart in the
USA, and Alisuper, Modelo, and Jumbo in Portugal.

4. Channel Intermediaries - Internet

The Internet has a geographically disperse market.

The main benefit of the Internet is that niche products reach a wider audience e.g.

Scottish Salmon direct from an Inverness fishery.

There are low barriers low barriers to entry as set up costs are low.
Use e-commerce technology (for payment, shopping software, etc)
There is a paradigm shift in commerce and consumption which benefits
distribution via the Internet

Promotion
Another one of the 4P's is promotion. This includes all of the tools available to the
marketer for 'marketing communication'. As with Neil H.Borden's marketing mix,
marketing communications has its own 'promotions mix.' Think of it like a cake mix, the
basic ingredients are always the same. However if you vary the amounts of one of the
ingredients, the final outcome is different.
The elements of the promotions mix are:

Personal Selling.
Sales Promotion.

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Public Relations.
Direct Mail.
Trade Fairs and Exhibitions.
Advertising.
Sponsorship.

The elements of the promotions mix are integrated to form a coherent campaign. As
with all forms of communication. The message from the marketer follows the
'communications process' as illustrated above. For example, a radio advert is made for a
car manufacturer. The car manufacturer (sender) pays for a specific advert with contains a
message specific to a target audience (encoding). It is transmitted during a set of
commercials from a radio station (Message / media).
The message is decoded by a car radio (decoding) and the target consumer interprets
the message (receiver). He or she might visit a dealership or seek further information
from a web site (Response). The consumer might buy a car or express an interest or
dislike (feedback). This information will inform future elements of an integrated
promotional campaign. Perhaps a direct mail campaign would push the consumer to the
point of purchase. Noise represent the thousand of marketing communications that a
consumer is exposed to everyday, all competing for attention.
PHYSICAL EVIDENCE
Physical Evidence is the material part of a service. Strictly speaking there are no
physical attributes to a service, so a consumer tends to rely on material cues. There are
many examples of physical evidence, including some of the following:

Packaging.
>
Internet/web pages.
Paperwork (such as invoices, tickets and despatch notes).
Brochures.
Furnishings.
Signage (such as those on aircraft and vehicles).
Uniforms.
Business cards.
The building itself (such as prestigious offices or scenic headquarters).
Mailboxes and many others

PEOPLE
People are the most important element of any service or experience. Services tend
to be produced and consumed at the same moment, and aspects of the customer

44

experience are altered to meet the 'individual needs' of the person consuming it. Most of
us can think of a situation where the personal service offered by individuals has made or
tainted a tour, vacation or restaurant meal. Remember, people buy from people that they
like, so the attitude, skills and appearance of all rtaff need to be first class.

PROCESS
Process is another element of the extended marketing mix, or 7P's.There are a
number of perceptions of the concept of process within the business and marketing
literature. Some see processes as a means to achieve an outcome, for example - to achieve
a 30% market share a company implements a marketing planning process. Another view
is that marketing has a number of processes that integrate together to create an overall
marketing process, for example - telemarketing and Internet marketing can be integrated.
A further view is that marketing processes are used to control the marketing mix, i.e.
processes that measure the achievement marketing objectives. All views are
understandable, but not particularly customer focused.
For the purposes of the marketing mix, process is an element of service that sees
the customer experiencing an organisation's offering. It's best viewed as something that
your customer participates in at different points in time. Here are some examples to help
your build a picture of marketing process, from the customer'spoint of view.
Going on a cruise - from the moment that you arrive at the dockside, you are greeted;
your baggage is taken to your room. You have two weeks of services from restaurants and
evening entertainment, to casinos and shopping. Finally, you arrive at your destination,
and your baggage is delivered to you. This is a highly focused marketing process.
10. Explain the different categories of service mix in detail. (NOV/DEC 2008)
A service is the action of doing something for someone or something. It is largely
intangible (i.e. not material). A product is tangible (i.e. material) since you can touch it
and own it. A service tends to be an experience that is consumed at the point where it is
purchased, and cannot be owned since is quickly perishes. A person could go to a cafe one
day and have excellent service, and then return the next day and have a poor experience.
So often marketers talk about the nature of a service as:

45

Inseparable - from the point where it is consumed, and from the provider of the
service. For example, you cannot take a live theatre performance home to consume it (a
DVD of the same performance would be a product, not a service).
Intangible - and cannot have a real, physical presence as does a product. For
example, motor insurance may have a certificate, but the financial service itself cannot be
touched i.e. it is intangible.
Perishable - in that once it has occurred it cannot be repeated in exactly the same
way. For example, once a 100 metres Olympic final has been run, there will be not other
for 4 more years, and even then it will be staged in a different place with many different
finalists.
Variability- since the human involvement'of service provision means that no two
services will be completely identical. For example, returning to the same garage time and
time again for a service on your car might see different levels of customer satisfaction, or
speediness of work.
Right of ownership - is not taken to the service, since you merely experience it. For
example, an engineer may service your air- conditioning, but you do not own the service,
the engineer or his equipment. You cannot sell it on once it has been consumed, and do
not take ownership of it.
11. Explain Marketing Mix. Comment in brief upon its ingredients. (MAY/JUNE2009)
The marketing mix, earlier known as the 4 ps, (but now has a few more), is a vital
part of any marketing strategy. This is a tool whereby the marketer takes decisions on
what and how a product should be, where it can be sold, how it should be priced, how it
will be promoted, how to equip the people who are responsible for selling the product...
and so on. Getting the marketing mix right is equally important for the large corporation
and the small business owner. Let us take a closer look at the 5 most important elements.

Product: A lot of thought and effort goes into designing a product offering. The most
important question that you, as a marketer, need to ask is whether there is a need for your
type of product and how your own product satisfies that need better than those of your
competitors. This will force you to think of why your product is unique, and thereby help
you evolve your products Unique Selling Proposition. At the same time, you will need to

46

analyze your companys strengths and weaknesses and the opportunities and threats posed
by the market, to understand how you are positioned versus the competition.
Price: This element of the marketing mix can be many a strategys undoing. A
complete understanding of the financial that drive a business is essential before deciding a
pricing strategy. Base your decision after considering the following- what is the perceived
value of your product in the eyes of the customer? How price elastic is the market? Do
you wish to load overheads on to the new product, if an existing product line is capable of
absorbing them? What is your objective - do you plan to gain market share on the strength
of a rock bottom price or do you wish to create a premium image targeted at niche
customers and price your product accordingly?
Place: This is probably that element of the marketing mix that has undergone a
complete change in definition. Traditional trading and distribution models have given way
to remote or virtual channels. While reaching the customer may have become simpler,
your job as a decision maker has become that much more complex. You now have a
plethora of options to choose from - do you go for brick and mortar or direct mailing, use
the phone or sell door to door? This decision should, first and foremost, be driven by
customer preference and then by other considerations like logistics and economics.
Indeed most businesses rely on a multi distribution channel strategy.
Promotion: In a commodity industry, this is what makes the essential difference.
Possibly no other marketing mix element draws as much attention from strategy makers.
Again, let consumer needs drive your efforts. Does your marketing communication
address a specific need of the target audience? Is the message memorable? Does it spur
action? Here again, the entire landscape has changed from what it was a few years ago.
Promotion has gone way beyond mere advertising and public relations - it is now a highly
evolved process, ranging from live events to Internet marketing. In these times of
information overload, promotion strategies must pack sufficient punch to cut through the
clutter.
People: Although a later entrant to the marketing mix family, the people decision is
no less important. Indeed, in service oriented businesses, it may well be the key
determinant of success. No strategy is complete unless the people who are in charge of
implementing it have the wherewithal to do so. This means investing in sales force
training, ensuring a customer relationship management system is in place and building a
customer centric culture throughout the organization.

47

12. Explain the concept of brand equity. (MAY/JUNE- 2009)

Brand equity refers to the marketing effects or outcomes that accrue to a product with
its brand name compared with those that would accrue if the same product did not have
the brand name. And, at the root of these marketing effects is consumers knowledge. In
other words, consumers knowledge about a brand makes manufacturers/advertisers
respond differently or adopt appropriately adept measures for the marketing of the brand.
The study of brand equity is increasingly popular as some marketing researchers have
concluded that brands are one of the most valuable assets that a company has.Brand
equity is an intangible asset that depends on associations made by the consumer. There
are at least three perspectives from which to view brand equity:
Financial - One way to measure brand equity is to determine the price premium that a
brand commands over a generic product. For example, if consumers are willing to pay
$100 more for a branded television over the same unbranded television, this premium
provides important information about the value of the brand. However, expenses such as
promotional costs must be taken into account when using this method in measure brand
equity.
Brand extensions - A successful brand can be used as a platform to launch related
products. The benefits of brand extensions are the leveraging of existing brand awareness
thus reducing advertising expenditures, and a lower risk from the perspective of the
consumer. Furthermore, appropriate brand extensions can enhance the core brand.
However, the value of brand extensions is more difficult to quantify than are direct
financial measures of brand equity.
Consumer-based - A strong brand increases the consumers attitude strength toward
the product associated with the brand. Attitude strength is built by experience with a
product. This importance of actual experience by the customer implies that trial samples
are more effective than advertising in the early stages of building a strong brand. The
consumers awareness and associations lead to perceived quality, inferred attributes, and
eventually, brand loyalty.
Strong brand equity provides the following benefits:

Facilitates a more predictable income stream.

Increases cash flow by increasing market share, reducing promotional costs, and
allowing premium pricing.

48

Brand equity is an asset that can be sold or leased.However, brand equity is not
always positive in value. Some brands acquire a bad reputation that results in negative
brand equity. Negative brand equity can be measured by surveys in which consumers
indicate that a discount is needed to purchase the brand over a generic product.
Alternative Means to Brand Equity
Building brand equity requires a significant effort, and some companies use
alternative means of achieving the benefits of a strong brand. For example, brand equity
can be borrowed by extending the brand name to a line of products in the same product
category or even to other categories. In some cases, especially when there is a perceptual
connection between the products, such extensions are successful. In other cases, the
extensions are unsuccessful and can dilute the original brand equity.Brand equity also can
be bought by licensing the use of a strong brand for a new product. As in line
extensions, by the same company, the success of brand licensing is not guaranteed and
must be analyzed carefully for appropriateness.
Managing Multiple Brands
Different companies have opted for different brand strategies for multiple
products. These strategies are:

Single brand identity - a separate brand for each product. For example, in
laundry detergents Procter & Gamble offers uniquely positioned brands such as

Tide, Cheer, Bold, etc.

Umbrella - all products under the same brand. For example, Sony offers many

different product-categories under its brand.

Multi-brand categories - Different brands for different product categories.
Campbell Soup Company uses Campbells for soups, Pepperidge Farm for baked

goods, and V8 for juices.

Family of names - Different brands having a common name stem. Nestle uses
Nescafe, Nesquik, and Nestea for beverages.Brand equity is an important factor in

multi-product branding strategies.

13. A new trend in marketing is towards customerization. Describe what
customerization is and how marketers are using it. (MAY/JUNE- 2009)
Customerization allows firms to adapt one-to-one marketing and personalization
strategies to the digital environment. In a sense, a firm becomes an agent of the customer
renting out to customers pieces of its manufacturing, logistics, and other resources,
thus allowing them to find, choose, design, and use what they need. Such strategies often

49

require little prior information about customers, and the product itself can be
manufactured after customers tell the marketers what they want to buy.
In developing customerization strategies, however, marketers face a number of
challenges. These include obtaining information from customers, identifying intangible
factors that may be crucial to customers, dealing with enhanced customer expectations,
limiting the complexity of options, and pricing customized offerings.
In addition, while technology makes the implementation of customerization strategies
easier and cheaper, strategic and. organizational decisions are more complex and
expensive, as the marketer determines what is the right information to send to each
customer. To be truly successful at customerization, a marketer must bring together the
value chains of the supply and demand sides of the market. In some cases, the entire
company might be reorganized around a new order generation and fulfillment process as
part of a customer-driven, integrated global supply chain.
Finally, marketers face critical decisions about where and when to customerize and
how to integrate this strategy with other marketing strategies. They must determine the
optimal portfolio of mass marketing, direct marketing to target segments, and interactive
customized marketing. In this new realm, success will depend on finessethe ability to
deploy effort into areas that generate higher customer, value than the cost of adding that
valuerather than on massive resources.
Where should a marketer begin in implementing a customerization strategy? First, by
increasing the digital content of its offerings and of the customers shopping and
consumption experience, and second, by positioning the firm to become the customerizer
of the entire industry.
14. Explain the business unit strategic planning process(June 2011)
In today's highly competitive business environment, budget-oriented planning or
forecast-based planning methods are insufficient for a large corporation to survive and
prosper. The firm must engage in strategic planning that clearly defines objectives and
assesses both the internal and external situation to formulate strategy, implement the
strategy, evaluate the progress, and make adjustments as necessary to stay on track.
A simplified view of the strategic planning process is shown by the following diagram:

50

The Strategic Planning Process

Mission &
Objectives

Environmental
Scanning

Strategy
Formulation

Strategy
Implementation

Evaluation
& Control

Mission and Objectives

The mission statement describes the company's business vision, including the
unchanging values and purpose of the firm and forward-looking visionary goals that
guide the pursuit of future opportunities.
Guided by the business vision, the firm's leaders can define measurable financial and
strategic objectives. Financial objectives involve measures such as sales targets and
earnings growth. Strategic objectives are related to the firm's business position, and may
include measures such as market share and reputation.
Environmental Scan
The environmental scan includes the following components:

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Internal analysis of the firm

Analysis of the firm's industry (task environment)

External macroenvironment (PEST Analysis)

The internal analysis can identify the firm's strengths and weaknesses and the external
analysis reveals opportunities and threats. A profile of the strengths, weaknesses,
opportunities, and threats is generated by means of a SWOT analysis.An industry analysis
can be performed using a framework developed by Michael Porter known asPorters five
forces. This framework evaluates entry barriers, suppliers, customers, substitute products,
and industry rivalry.
Strategy Formulation
Given the information from the environmental scan, the firm should match its
strengths to the opportunities that it has identified, while addressing its weaknesses and
external threats.To attain superior profitability, the firm seeks to develop a competitive
advantage over its rivals. A competitive advantage can be based on cost or differentiation.
Michael Porter identified three industry-independent generic strategies from which the
firm can choose.
Strategy Implementation
The selected strategy is implemented by means of programs, budgets, and
procedures. Implementation involves organization of the firm's resources and motivation
of the staff to achieve objectives.The way in which the strategy is implemented can have
a significant impact on whether it will be successful. In a large company, those who
implement the strategy likely will be different people from those who formulated it. For
this reason, care must be taken to communicate the strategy and the reasoning behind it.
Otherwise, the implementation might not succeed if the strategy is misunderstood or if
lower-level managers resist its implementation because they do not understand why the
particular strategy was selected.
Evaluation & Control
The implementation of the strategy must be monitored and adjustments made as
needed.Evaluation and control consists of the following steps:
1. Define parameters to be measured

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2. Define target values for those parameters

3. Perform measurements
4. Compare measured results to the pre-defined standard
5. Make necessary changes
15. Differentiate service marketing from product marketing. Suggest additional marketing
mix for services. (June 2010)
Refer to Q.No 10 Nov/Dec 2008 and Q.No.11 May/ June 2009

UNIT III
Part A
1.Explain the concept of repositioning. (MAY/JUNE 2006)
Product positioning is not limited to new products alone. It is relevant for
occasional face lifting of the existing products of almost all kinds such as toilet soaps,
shampoos, cosmetics, tooth pastes, etc. Repositioning does not mean total change. It
sometimes entails strengthening and clarifying an existing identity. Repositioning does
not always hold the key to success. In case a product has got into a very bad shape due to
prolonged neglect, repositioning effort may turn out to be an exercise in futility. In such
cases it would always be better to drop the product.
2. When is penetration pricing a good option? (MAY/JUNE 2006)
Penetration pricing involves the setting of lower, rather than higher prices in order
to achieve a large, if not dominant market share. This strategy is most often used
businesses wishing to enter a new market or build on a relatively small market share. This

53

will only be possible where demand for the product is believed to be highly elastic, i.e.
demand is price-sensitive and either new buyer will be attracted, or existing buyers will
buy more of the product as a result of a low price. A penetration pricing strategy may also
promote complimentary and captive products. The main product may be priced with a
low markup to attract sales (it may even be a loss-leader). Customers are then sold
accessories (which often only fit the manufacturer's main product) which are sold at
higher mark-ups.
3. What is Promotion Mix? Mention promotion mix elements. (NOV/DEC 2006)
Promotion involves disseminating information about a product, product line, brand, or
company. It comprises of four elements which includes:

Advertising
Personal Selling
Sales Promotion
Publicity and Public relations

4. Define Brand. (NOV/DEC 2006)

A brand is a collection of images and ideas representing an economic producer;
more specifically, it refers to the concrete symbols such as a name, logo, slogan, and
design scheme
5. What is product concept? (MAY/JUNE 2007)
The product concept holds that the consumers will favor those products
that offer the most quality, performance, or innovative features. Therefore
managers in these organizations focus on making superior products and
improving them over time.
6.Define introduction stage of PLC. (MAY/JUNE 2007)
Introduction is the early stage, when product is introduced in market, sales
revenue begins to grow but the rate of growth is very slow. Profits may not be
there as there is low sales volume, large production and distribution costs. It may
require heavy advertising and sales promotion. Products are brought cautiously
on a trail basis.
7.Define Brand positioning. (NOV/DEC 2007)
Brand positioning is the process by which marketers try to create an image or
identity in the minds of their target market for its product, brand, or organization. It is the

54

'relative competitive comparison' their product occupies in a given market as perceived by

the target market.
8. What is product? (MAY/JUNE 2008)

a product is anything that can be offered to a market that might satisfy a want or
need

a thing produced by labor or effort In manufacturing, products are purchased as

raw materials and sold as finished goods.The end result of the manufacturing
process, to be offered to the marketplace to satisfy a need or want.

9.What is Brand positioning? (MAY/JUNE 2008)

Positioning is how a brand appears in relation to other brands in the market. It is
influenced by the experiences customers have with a brand's products, services,
advertising and promotional material, and representatives over time. The development of
a brands position in the market by heightening customer perception of the brand's
superiority over other brands of a similar nature. Brand positioning relies on the
identification of a real strength or value that has a clear advantage over the nearest
competitor and is easily communicated to the consumer,
10. What is market testing? (NOV/DEC 2008)
Market testing is a geographic region or demographic group used to gauge the
viability of a product or service in the mass market prior to a wide scale roll-out. The
criteria used to judge the acceptability of a market region or group which includes:
a population that is demographically similar to the proposed target market; and
relative isolation from densely populated media markets so that advertising to the
test audience can be efficient and economical
11. State STP strategy. (NOV/DEC 2008)

To identify groups or segments of potential customers (individuals, organizations,

buying centers, etc.) whose desired values from products and services within
groups are similar and whose values between groups are different.

To select one or more groups as a target segment who respond favorably to a

current or prospective marketing offering.

55

To achieve a desired positioning in the minds of potential segment customers

(defined broadly, as above) with a profitable marketing program.

12. Define service. (MAY/JUNE 2008)

A service is the diametrically opposed non-material counterpiece of a physical
good. A service provision comprises a sequence of activities that does not result in
ownership of the outcome, and this is what fundamentally differentiates it from furnishing
someone with physical goods. Service provision is a process that creates predetermined
benefits by effectuating either a change of service consumers, a change in their physical
possessions or a change in their (in)tangible assets.
13. Define value chain. (MAY/JUNE- 2009)
A value chain is a chain of activities. Products pass through all activities of the
chain in order and at each activity the product gains some value. The chain of activities
gives the products more added value than the sum of added values of all activities. It is
important not to mix the concept of the value chain with the costs occurring throughout
the activities.
14. Define Product Positioning. (MAY/JUNE- 2009)
Product Positioning has come to mean the process by which marketers try to
create an image or identity in the minds of their target market for its product, brand or
organization. It is the relative competitive comparison their product occupies in a given
market as perceived by the target market.
Product positioning involves creating a unique, consistent, and recognized
customer perception about a firms offering and image. A product or service may be
positioned on the basis of an attitude or benefit, use or application, user, class, price, or
level of quality. It targets a product for specific market segments and product needs at
specific prices.
15. Explain Cost-plus Pricing. (MAY/JUNE- 2009)
Cost-plus pricing is a pricing method used by companies. It is used primarily
because it is easy to calculate and requires little information. There are several varieties,
but the common thread in all of them is that one first calculates the cost of the product,
then includes an additional amount to represent profit. Cost-plus pricing is often used on
government contracts, and has been criticized as promoting wasteful expenditures. The
method determines the price of a product or service that uses direct costs, indirect costs,

56

and fixed costs whether related to the production and sale of the product or service or not.
These costs are converted to per unit costs for the product and then a predetermined
percentage of these costs is added to provide a profit margin.
16. Define the concept of re-positioning mix? (Nov / Dec 2010)
Changing in brands status in comparison to that of the competing brands.
Repositioning is effected usually through changing the marketing mix in response to
changes in the market place, or due to a failure to reach the brand's marketing objectives
17.Mention the pricing strategies for the introduction stage of PLC ( June 2010)
There are three pricing strategies for new product namely
Prestige Pricing
- Setting high prices to position a product at the upper or luxury end of market
- Producing a high quality and charging the highest price.
- For example, Mercedes Benz and Rolex
Market Skimming
- Setting high prices at the launch stage and lowering slowly as the product becomes
mature.
- Most product are in high demand in the early stage of the life cycle.
- That is why using Market Skimming may lead to profit maximization.
- For example, Handphones
Market Penetration
- Setting at lower price to get maximum sales and market share.
- Increase price slightly in the future.

18.What are benefits of segmentation? (Nov / Dec 2010)

a. Adjustment of product and marketing appeals
b. Better position to analyze the marketing opportunities
c. Understanding and meeting the needs of consumers
d. Targeted marketing

19. When is the price skimming a good option? (Nov/ Dec 2010)

57

Price skimming is a pricing strategy in which a marketer sets a relatively high

price for a product or service at first , a new, innovative, or much-improved product is
launched onto a market. The objective with skimming is to skim off customers who are
willing to pay more to have the product sooner; prices are lowered later when demand
from the early adopters falls.
Mention any two basis for classification of product
1. Consumer Goods
a. Convenience Products
b. Shopping Products
c. Specialty Products
d. Unsought Products
2. Industrial Goods
a. Materials and parts
b. Capital items
c. Supplies & business services
20. What is meant by Market Segmentation ( June 2011)
A market segment is a sub-set of a market made up of people or organizations with one
or more characteristics that cause them to demand similar product and/or services based
on qualities of those products such as price or function
Examples:

Gender

Price

Interests

Location

Religion

Income

Size of Household
Part B

1. Explain the concept of product life cycle. (MAY/JUNE 2006)

58

The Product Life Cycle refers to the succession of stages a product goes through.
Product Life Cycle Management is the succession of strategies used by management as
a product goes through its life cycle.
The product lifecycle goes though many phases and involves many professional
disciplines and requires many skills, tools and processes. Product life cycle (PLC) is to do
with the life of a product in the market with respect to business/commercial costs and
sales measures; whereas Product Lifecycle Management (PLM) is more to do with
managing descriptions and properties of a product through its development and useful
life, mainly from a business/engineering point of view.
Products tend to go through five stages:
1. New product development stage
a. very expensive
b. no sales revenue
c. losses
2. Market introduction stage
a. cost high
b. sales volume low
c. no/little competition - competitive manufacturers watch for
acceptance/segment growth
d. losses
3. Growth stage
a. costs reduced due to economies of scale
b. sales volume increases significantly
c. profitability
d. public awareness
e. competition begins to increase with a few new players in establishing
market
f. prices to maximize market share
4. Mature stage
a. costs are very low as you are well established in market & no need for
publicity.

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b. sales volume peaks

c. increase in competitive offerings
d. prices tend to drop due to the proliferation of competing products
e. brand differentiation, feature diversification, as each player seeks to
differentiate from competition with "how much product" is offered
f. very profitable
5. Decline or Stability stage
costs become counter-optimal
sales volume decline or stabilize
prices, profitability diminish
profit becomes more a challenge of production/distribution efficiency than
increased sales.
2. How do marketing strategy and marketing mix strategy change across the
PLC stages? (MAY/JUNE 2006)
Marketing strategies and marketing mix changes across the PLC Stages are given below:
Introduction Stage:
Product - Offer a basic product
Price - Use cost-plus basis to set
Distribution - Build selective distribution
Advertising - Build awareness among early adopters and dealers/resellers
Sales Promotion - Heavy expenditures to create trial
Growth Stage:
Product - Offer product extensions, service, warranty
Price - Penetration pricing
Distribution - Build intensive distribution
Advertising - Build awareness and interest in the mass market
Sales Promotion - Reduce expenditures to take advantage of consumer demand
Maturity Stage:
Product - Diversify brand and models

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Price - Set to match or beat competition

Distribution - Build more intensive distribution
Advertising - Stress brand differences and benefits
Sales Promotion - Increase to encourage brand switching
Decline Stage:
Product - Phase out weak items
Price - Cut price
Distribution - Use selective distribution: phase out unprofitable outlets
Advertising - Reduce to level needed to retain hard-core loyalists
Sales Promotion - Reduce to minimal level
3. Outline the stages in new product development. (MAY/JUNE 2006)
In business and engineering, new product development (NPD) is the term used to
describe the complete process of bringing a new product or service to market. There are
two parallel paths involved in the NPD process : one involves the idea generation,
product design, and detail engineering ; the other involves market research and marketing
analysis. Companies typically see new product development as the first stage in
generating and commercializing new products within the overall strategic process of
product life cycle management used to maintain or grow their market share.
There are several stages in the new product development process...not always
followed in order:
Idea Generation

'

Ideas for new products can be obtained from customers (employing user
innovation), the company's R&D department competitors, focus groups, employees,
salespeople, corporate spys, trade shows, or through a policy of Open Innovation formal
idea generating techniques include attribute listing, forced relationships, brainstorming,
morphological analysis, problem analysis
Idea Screening
the object is to eliminate unsound concepts prior to devoting resources to them.
the screeners must ask at least three questions:
will the customer in the target market benefit from the product?

61

is it technically feasible to manufacture the product?

will the product be profitable when manufactured and delivered to the customer at
the target price?
Concept Development and Testing
develop the marketing and engineering details
who is the target market and who is the decision maker in the purchasing process?
what product features must the product incorporate?
what benefits will the product provide?
how will consumers react to the product?
how will the product be produced most cost effectively?
prove feasibility through virtual computer aided rendering, and rapid prototyping
what will it cost to produce it?
Business Analysis
estimate likely selling price based upon competition and customer feedback
estimate sales volume based upon size of market
estimate profitability and breakeven point
Beta Testing and Market Testing
produce a physical prototype or mock-up
test the product in typical usage situations
conduct focus group customer interviews or introduce at trade show
make adjustments where necessary
produce an initial run of the product and sell it in a test market area to determine
customer acceptance
Technical Implementation
New program initiation
Resource estimation
Requirement publication
Engineering operations planning

62

Department scheduling
Supplier collaboration
Resource plan publication
Program review and monitoring
Contingencies- what-if planning
Commercialization
launch the product
produce and place advertisements and other promotions
fill the distribution pipeline with product
critical path analysis is most useful at this stage
4. Explain Market Segmentation, targeting and positioning with a real life
example. (MAY/JUNE 2006)
The strategic marketing planning process flows from a mission and vision statement
to the selection of target markets, and the formulation of specific marketing mix and
positioning objective for each product or service the organization will offer. The formula segmentation, targeting, positioning (STP) - is the essence of strategic marketing."
Segmentation is a form of critical evaluation rather than a prescribed process or
system, and hence no two markets are defined and segmented in the same way. However
there are a number of underpinning criteria that assist with segmentation:
Is the segment viable? Is there a profit to be had?
Is the segment accessible? How easy is it to get into the segment?
Is the segment measurable? Is realistic data available considering its
potential?
There are many ways that a segment can be considered. For example, the auto
market could be segmented by: driver age, engine size, model type, cost, and so on.
However the more general bases include:
By geography - such as where in the world was the product bought
By psychographics - such as lifestyle or beliefs
By socio-cultural factors - such as class By demography - such as age etc

63

A company will evaluate each segment based upon potential business success.
Opportunities will depend upon factors such as: the potential growth of the segment the
state of competitive rivalry within the segment how much profit the segment will deliver
how big the segment is how the segment fits with the current direction of the Company
and its vision.

Targeting
After the market has been separated into its segments, the marketer will select a
segment or series of segments as a target. Resources and effort will be targeted at the
segment. In this case, the marketer targets a single product offering at a single segment in
a market with many segments. In the second instance, the marketer ignores the
differences in the segments, and chooses to aim a single product at all segments i.e. the
whole market. This is typical in 'mass marketing' or where differentiation is less important
than cost. In the multi-segment approach the marketer will target a variety of different
segments with a series of differentiated products. This is typical in the motor industry.
Positioning
After segmenting a market and then targeting a consumer, one proceeds to
position a product within that market. Positioning is all about 'perception'. As perception
differs from person to person, so do the results of the positioning exercise? For example,
what you perceive as quality, value for money, etc, is different to someone else's
perception.
Products or services are 'positioning map'. This allows them to be compared and
contrasted in relation to each other. Marketers decide upon a competitive position which
enables them to distinguish their own products from the offerings of their competition
(hence the term 'positioning strategy.
5. Explain the channel design process and suggest ways to resolve channel conflicts.
(MAY/JUNE 2006)
Distribution is one of the four aspects of marketing. A distributor is I the
middleman between the manufacturer and retailer. After a product is manufactured it is
typically shipped (and typically sold) to a distributor. The distributor then sells the
product to retailers or customers.

64

The other three parts of the marketing mix are product management, pricing, and
promotion.
The distribution channel
Frequently there may be a chain of intermediaries; each passing the product down
the chain to the next organization, before it finally reaches the consumer or end-user. This
process is known as the 'distribution chain' or the 'channel.' Each of the elements in these
chains will have their own specific needs, which the producer must take into account,
along with those of the all-important end-user
Channels
A number of alternate 'channels' of distribution may be available.
Selling direct, such as via mail order, Internet and telephone sales.
Agent, who typically sells direct on behalf of the producer
Distributor (also called wholesaler), who sells to retailers
Retailer (also called dealer), who sells to end customers
Distribution channels may not be restricted to physical products. They may be just as
important for moving a service from producer to consumer in certain sectors, since both
direct and indirect channels may be used. Hotels, for example, may sell their services
(typically rooms) directly or through travel agents, tour operators, airlines, tourist boards,
centralized reservation systems, etc.
There have also been some innovations in the distribution of services. For example,
there has been an increase in franchising and in rental services - the latter offering
anything from televisions through tools. There has also been some evidence of service
integration, with services linking together, particularly in the travel and tourism sectors.
For example, links now exist between airlines, hotels and car rental services. In addition,
there has been a significant increase in retail outlets for the service sector. Outlets such as
estate agencies and building society offices are crowding out traditional grocers from
major shopping areas.
Channel members

65

Distribution channels can thus have a number of levels. Kotler defined the
simplest level, that of direct contact with no intermediaries involved, as the 'zero-level'
channel.
The next level, the 'one-level' channel, features just one intermediary; in consumer
goods a retailer, for industrial goods a distributor, say. In small markets (such as small
countries) it is practical to reach the whole market using just one- and zero-level
channels.
In large markets (such as larger countries) a second level, a wholesaler for
example, is now mainly used to extend distribution to the large number of small,
neighborhood retailers.
In Japan the chain of distribution is often complex and further levels are used,
even for the simplest of consumer goods.
Channel structure
To the various levels' of distribution, which they refer to as the channel length',
Lancaster and Massingham also added another structural element, the relationship
between its members:
Conventional or free-flow - This is the usual, widely recognized, channel with a
range of middle-men' passing the goods on to the end-user. Channel' may be set
up for one transaction; for example, the sale of property or a specific civil
engineering project. This does not share many characteristics with other channel
transactions, each one being unique.
Vertical marketing system (VMS) - In this form, the elements of distribution are
integrated.
Channel management
The channel decision is very important. In theory at least, there is a form of tradeoff: the cost of using intermediaries to achieve wider distribution is supposedly lower.
Indeed, most consumer goods manufacturer? could never justify the cost of selling direct
to their consumers, except by mail order. In practice, if the producer is large enough, the
use of intermediaries (particularly at the agent and wholesaler level) can sometimes cost
more than going direct.

66

Many of the theoretical arguments about channels therefore revolve around cost.
On the other hand, most of the practical decisions are concerned with control of the
consumer. The small company has no alternative but to use intermediaries, often several
layers of them, but large companies 'do' have the choice.
However, many suppliers seem to assume that once their product has been sold
into the channel, into the beginning of the distribution chain, their job is finished. Yet that
distribution chain is merely assuming a part of the supplier's responsibility; and, if he has
any aspirations to be market-oriented, his job should really be extended, to managing,
albeit very indirectly, all the processes involved in that chain, until the product or service
arrives with the end-user. This may involve a number of decisions on the part of the
supplier:
Channel membership
Channel motivation
Monitoring and managing channels

What causes conflict?

Conflict occurs when the actions of either a manufacturer or distributor are
perceived as a threat or barrier to the accomplishment of the other party's goals.
For example, when a manufacturer establishes a direct sales relationship with a customer
in a distributor's territory, that distributor will more than likely perceive this action as a
threat to the accomplishment of its goals.
On the other hand, when a distributor joins a buying group or takes on a
competitive product line, a manufacturer will perceive this action as a threat to, the
accomplishment of its goals.
In a recently completed survey of 750 manufacturers and 500 distributors,
Industrial Performance Group discovered that excess distribution as a result of ineffective
territory management is a major concern for distributors.
On the other hand, manufacturers are concerned that distributors lack commitment
to their products because distributors carry a number of competing product lines.
There are three primary causes of conflict between manufacturers and distributors.

67

1) Incompatible goals.
Manufacturers and distributors have two entirely different business focuses.
Manufacturing is volume-focused. Manufacturers reap financial rewards for producing
large volumes of goods. Increases in volume bring about greater efficiencies, quality
improvements and cost reductions. But they also increase the need to create additional
demand for these goods in the marketplace.
2) Poorly defined roles and responsibilities.
Conflict is sure to occur in any working relationship where the roles and
responsibilities of the manufacturer and its distributors have not been clearly defined.
When roles and responsibilities are not clearly defined, uncertainty and ambiguity
quickly lead to redundancies and inefficiencies, which drive costs up and overall
performance down. Clearly defined roles and responsibilities allow manufacturers and
distributors to effectively allocate resources (time, money and people) in l lu- activities
they must perform in order to achieve the goals they have defined for the working
relationship.
To avoid this common source of conflict, manufacturers must clearly ilrlme what
is expected of their distributors and what distributors viiii expect in return.
3) No conflict resolution process.
As stated earlier, conflict is a natural occurrence in all manufacturer/ distributor
working relationships. Our research indicates that most manufacturers and distributors
take the traditional approach to conflict ignore it and it will go away. Conflict resolution
requires a high level of communication and cooperation. Yet we discovered that in most
manufacturer/distributor working relationships, cooperation levels are very low and twoway communication is virtually nonexistent.
6. What are the objectives for pricing decisions? What methods are used to
arrive at pricing decision when the market is competitive? (NOV/DEC 2006)
Objectives for pricing decisions:
Current Profit maximization
Current revenue maximization
Maximize Quantity
Maximize profit margin

68

Quality Leadership
Partial cost recovery
Survival
Status Quo
Methods used to arrive at pricing decision when the market is competitive:
Cost-plus pricing: It is a pricing method commonly used by firms. It is used
primarily because it is easy to calculate and requires little information. There are several
varieties, but the common thread in all of them is that you first calculate the cost of the
product, then include an additional amount to represent profit. Cost-plus pricing is often
used on government contracts, and has been criticized as promoting wasteful expenditures
Target return pricing - It is a pricing method used almost exclusively by
market leaders or monopolists.
Value based pricing - A pricing strategy in which a product's price is actively
dependant upon its demand. This method of pricing allows companies to take advantage
of highly demanded products by charging more. A good example is how refreshments
generally cost more at sporting events.
Psychological pricing - This pricing drives demand greater than would be
expected if consumers were perfectly rational. Psychological pricing is one cause of price
points.
Penetration pricing - It is the pricing technique of setting a relatively low initial
entry price, a price that is often lower than the eventual market price. The expectation is
that the initial low price will secure market acceptance by breaking down existing brand
loyalties. Penetration pricing is most commonly associated with a marketing objective of
increasing market share or sales volume, rather than short term profit maximization.
7. Suggest suitable strategies for Growth and Maturity stage of PLC.(NOV/DEC
2006)
Growth strategies - In this scheme we ask the question, "How should the firm
grow?". There are a number of different ways of answering this question, but the most
common gives four answers:
Horizontal integration: In microeconomics and strategic management, the term
horizontal integration describes a type of ownership and control. It is a strategy used by a
business or corporation that seeks to sell a type of product in numerous markets. To get
this market coverage, several small subsidiary companies are created. Each markets the
product to a different market segment or to a different geographical area. This is

69

sometimes referred to as the horizontal integration of marketing. The horizontal

integration of production exists when a firm has plants in several locations producing
similar products. Horizontal integration in marketing is much more common than
horizontal integration in production.
Vertical integration: In microeconomics and strategic management, the term
vertical integration describes a style of ownership and control. Vertically integrated
companies are united through a hierarchy and share a common owner. Usually each
member of the hierarchy produces a different product or service, and the products
combine to satisfy a common need. It is contrasted with horizontal integration. Vertical
integration is one method of avoiding the hold-up problem.
Diversification (or conglomeration): Diversification is a form of growth
marketing strategy for a company. It seeks to increase profitability through greater sales
volume obtained from new products and new markets. Diversification can occur either at
the business unit or at the corporate level. At the business unit level, it is most likely to
expand into a new segment of an industry in which the business is already in. At the
corporate level, it is generally entering a promising business outside of the scope of the
existing business unit.
Business Maturity
Maturity is a very dangerous time for a business. This is the point at which the
owner is comfortable with their achievements. Their business is running smoothly. While
sales have started to plateau, their profits may still be increasing, because they are getting
better at doing what they do. The owner has decided that their business is at the right size,
they don't want it to grow larger. The owner is in their comfort zone. They see
opportunities to increase their profits incrementally, but they see no need to make
significant changes in their business.
The reason this is a dangerous time is that the owner has taken their foot off the
accelerator, and is starting to coast. The success of business is dependent on constant
renewal. New products and services, new customers, new ways of delivering your
service. If the firm doesn't invest in constantly rejuvenating their business, business will
be in decline. At first it might still appear to grow (from the momentum of earlier efforts).
But after a time, the sales start to plateau. The firm starts to lose some of their older
customers. It becomes more difficult to get new customers.

70

8. Explain the new product development process with suitable examples.(NOV/DEC

2006)
There are seven stages of new product development.
1. Generating Ideas

2. Screening Ideas

3. Developing & Testing Ideas

4. Conducting a Business Analysis

5. Product Development

6. Test Market

7. Commercialization
Generating Ideas
When generating ideas you should start by brainstorming ideas and ask questions
about what you want to achieve. Consider products that will fit the company.
Creativity is a key point.
Review the customer's suggestions.
Screening Ideas
When screening ideas you should start by looking at the grand scheme of the
development process.
Then begin to narrow ideas.
In order to move into development and testing the idea must meet different
criteria.
Does the product fit the overall mission of the company?
Developing and Testing Concepts
The company must ask these questions:

Why would a customer buy this product?

What would be the benefit ?

How might this product be used ?

Test the usefulness of the new product idea with customers and have an understanding of
the product as viewed by the customer.
Conducting Business Analysis
There should be an analysis on the costs, return of investment, cash flow, fixed cost, and
variable cost in the long run.Studies have shown that high risk ideas provide the most
successful new products.

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New Product Development

In this stage your concepts begin to come together.

Develop prototypes.

Assign names and brand identity to the new product.

Formulate marketing mix.

It is critical for research and development, engineering, packaging and marketing

to use teamwork.

Test Marketing
Test marketing can be very time consuming, expensive and prone to competitive
sabotage.
Companies must plan carefully during this stage.
Commercialization

Companies need to remember to start small.

They must also plan for a modest product turnout.

Companies should also consult with other people who have gone through similar
processes.

9. Discuss the important features of skimming pricing. Give examples. (MAY/JUNE

2007)
Skimming refers to setting initially high prices, and slowly lowering them over
time to maximize profits at every price-sensitive layer in the market. As initial sales slow
down, and/or as competitors threaten to introduce similar products, the price is lowered
just enough to make it worthwhile for the next segment to buy.
Several industries use this pricing strategy very effectively. Examples include:
fashion (designer originals and beginning- of-season sales vs. copycat designs and end-ofseason sales); publishing (hard cover vs. paperback books); and sports equipment (new
golf club innovations are slowly reduced in price each season as new models are
introduced).
The objective is to achieve the highest possible contribution in a short time period.
The product has to be unique and some segment of the market must be willing to pay the
high price. As more segments are targeted and the product become more available, the

72

price is lowered. The success of this technique depends in the ability and speed of
competitive reaction.
This technique is used when you offer a unique or scarce product with few or no
substitutes. The price is set high, resulting in high margins for the seller. Buyers are those
that are willing to pay the price because of the product's prestige and/or uniqueness. In the
case of a scarce but necessary product, customers pay the price because they have no
choice. Often, price skimming is a short-term strategy as competitors enter with their own
products, bringing prices down. In the case of scarce products, either the need passes (salt
during an ice storm, for example) or the shortage is temporary. Before considering this
technique, be aware that if your customers feel you have taken advantage of them, you
could be building "bad will" for your business.
10. State the plan to carry out brand preference study with Suitable examples.
(MAY/JUNE 2007)
Brand preference not only gives separate identity and recognition to the product
but also creates special brand preference. Branding is a powerful instrument of demand
creation and demand retention.
Brand preference study is helpful in knowing the extent to which the brand has
more sticking or switching off effect. Brand preference tendency of customers can be
measured through scaling technique using opinion statements.
The views of the respondents for each statement are got in terms of their levels of
agreement or disagreement to each statement.
For example to identify brand preference of LUX soap, 25 statements are be prepared.

For the positive statement strongly agree response gets 5 marks, agree response
gets 4 marks and so on.

For negative statements the scoring order is reversed.

If a particular respondent for a particular brand gets a high score, he has high brand
preference and vice-versa. Based on the opinion of respondents, the level of brand
preference can be ascertained
11. What are the approaches in selecting brand names? Bring out the various
options in branding. (NOV/DEC 2007)
Approaches in selecting brand names:

73

Easy for customers to say, spell and recall (inc. foreigners)

Indicate products major benefits
Should be distinctive
Compatible with all products in product line
Used and recognized in all types of media
Single and multiple words
Availability, already over 400 car "name plates", this makes it difficult to select a
new one.
Use words of no meaning to avoid negative connotation, Kodak, Exxon
Can be created internally by the organization, or by a consultancy
Legal restrictions
Various options in branding
Line Extensions: Existing brand name extended to new sizes or flavors in the existing
product category.
Brand Extensions: Brand names extended to new product categories
Multi-Brands: New brand names introduced in the same product category
New Brands: New brand name for a new category product
Co-Brands: Brands bearing two or more well-known brand names.

12. How do physical distribution and marketing logistics practices suit a systems
approach. (NOV/DEC 2007)
Logistics management is expressed as the management of all activities providing
the coordination of supply-demand and product movement in order to create the time and
place benefits in enterprises. When the logistics management is analyzed with respect to
system approach it is composed of two subsystems called physical supply and physical
distribution. In both subsystems database marketing techniques is applied and thanks to
the electronic communication medium that enterprises are got rid of unnecessary costs
and desired distribution service level is accomplished.
Physical supply deals with the transportation of the goods from the supplier to the
manufacturer and the storage of raw material used for work in progress.Physical
distribution is concerned with transportation and storage of the finished goods from the

74

manufacturer to the customer, Cost is an important aspect in the logistics function. Every
sub-function of logistics is associated with some cost and the logistics function as a whole
proves to be effective only when its total cost is minimized.
This is the concept behind the application of the total cost approach to logistics.
Customer service plays an important role in the overall fulfillment of the logistics
function. Elements of customer service in logistics include lead time, inventory
availability, order fill rate, and order status information. ;
Physical distribution system in logistics management is analyzed with regard to
the relations between production and customers. Physical distribution sub-system defined
as the activities carried out after the production stage of goods till to the deliveries of
goods ensures the harmony of production and consumption in an electronic market
medium.
Systematic

information

concept

in

logistics

management

explains

the

communications between the parties implementing logistics functions in the management,

market and industry data level. Systematic information is a cornerstone of logistics as a
result of logistics activities that involve the efforts providing place and time utility in
enterprises, for the aim of products being presented in the right place, at the right time and
in the right amount.
An integrated systems approach would help in managing and coordinating the
logistics function. Many firms find it difficult to manage logistics on their own and
outsource the function to other third party and fourth party service providers.
13. Explain the stages in the Product Life Cycle. (MAY/JUNE- 2009)
Refer to Q.No:1 May/June 2006
14.Explain the concept of brand equity. (MAY/JUNE- 2009)
Brand equity refers to the marketing effects or outcomes that accrue to a product
with its brand name compared with those that would accrue if the same product did not
have the brand name. And, at the root of these marketing effects is consumers
knowledge. In other words, consumers knowledge about a brand makes
manufacturers/advertisers respond differently or adopt appropriately adept measures for
the marketing of the brand. The study of brand equity is increasingly popular as some
marketing researchers have concluded that brands are one of the most valuable assets that
a company has.

75

Brand equity is an intangible asset that depends on associations made by the

consumer. There are at least three perspectives from which to view brand equity:
Financial - One way to measure brand equity is to determine the price premium
that a brand commands over a generic product. For example, if consumers are willing to
pay $100 more for a branded television over the same unbranded television, this premium
provides important information about the value of the brand. However, expenses such as
promotional costs must be taken into account when using this method in measure brand
equity.
Brand extensions - A successful brand can be used as a platform to launch related
products. The benefits of brand extensions are the leveraging of existing brand awareness
thus reducing advertising expenditures, and a lower risk from the perspective of the
consumer. Furthermore, appropriate brand extensions can enhance the core brand.
However, the value of brand extensions is more difficult to quantify than are direct
financial measures of brand equity.
Consumer-based - A strong brand increases the consumers attitude strength
toward the product associated with the brand. Attitude strength is built by experience with
a product. This importance of actual experience by the customer implies that trial samples
are more effective than advertising in the early stages of building a strong brand. The
consumers awareness and associations lead to perceived quality, inferred attributes, and
eventually, brand loyalty.
Strong brand equity provides the following benefits:
Facilitates a more predictable income stream.
Increases cash flow by increasing market share, reducing promotional costs, and
allowing premium pricing.
Brand equity is an asset that can be sold or leased.
However, brand equity is not always positive in value. Some brands acquire a bad
reputation that results in negative brand equity. Negative brand equity can be measured by
surveys in which consumers indicate that a discount is needed to purchase the brand over
a generic product.
Alternative Means to Brand Equity

76

Building brand equity requires a significant effort, and some companies use
alternative means of achieving the benefits of a strong brand. For example, brand equity
can be borrowed by extending the brand name to a line of products in the same product
category or even to other categories. In some cases, especially when there is a perceptual
connection between the products, such extensions are successful. In other cases, the
extensions are unsuccessful and can dilute the original brand equity.
Brand equity also can be bought by licensing the use of a strong brand for a new
product. As in line extensions, by the same company, the success of brand licensing is not
guaranteed and must be analyzed carefully for appropriateness.
Managing Multiple Brands
Different companies have opted for different brand strategies for multiple
products. These strategies are:
Single brand identity - a separate brand for each product. For example, in laundry
detergents Procter & Gamble offers uniquely positioned brands such as Tide, Cheer, Bold,
etc.
Umbrella - all products under the same brand. For example, Sony offers many different
product-categories under its brand.
Multi-brand categories - Different brands for different product categories. Campbell
Soup Company uses Campbells for soups, Pepperidge Farm for baked goods, and V8 for
juices.
Family of names - Different brands having a common name stem. Nestle uses Nescafe,
Nesquik, and Nestea for beverages.
Brand equity is an important factor in multi-product branding strategies.
15.Explain customer satisfaction.(MAY/JUNE 2008)
Customer satisfaction, a business term, is a measure of how products and
services supplied by a company meet or surpass customer expectation. It is seen as a key
performance indicator within business and is part of the four perspectives of a Balanced
Scorecard.
In a competitive marketplace where businesses compete for customers, customer
satisfaction is seen as a key differentiator and increasingly has become a key element of

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business strategy. There is a substantial body of empirical literature that establishes the
benefits of customer satisfaction for firms.
Customer satisfaction is an ambiguous and abstract concept and the actual
manifestation of the state of satisfaction will vary from person to person and
product/service to product/service. The state of satisfaction depends on a number of both
psychological and physical variables which correlate with satisfaction behaviors such as
return and recommend rate. The level of satisfaction can also vary depending on other
options the customer may have and other products against which the customer Because
satisfaction is basically a psychological state, care should be taken in the effort of
quantitative measurement, although a large quantity of research in this area has recently
been developed.
Exceptional customer service results in greater customer retention, which in turn
results in higher profitability. Customer loyalty is a major contributor to sustainable profit
growth. To achieve success, you must make superior service second nature of your
organization. A seamless integration of all components in the service-profit chain employee satisfaction, value creation, customer satisfaction, customer loyalty, and profit
and growth - links all the critical dynamics of top customer service.
Sadly, mature companies often forget or forsake the thing that made them
successful in the first place: a customer-centric business model. They lose focus on the
customer and start focusing on the bottom line and quarterly results. They look for ways
to cut costs or increase revenues, often at the expense of the customer.
They forget that satisfying customer needs and continuous value innovation is the
only path to sustainable growth. This creates opportunities for new, smaller companies to
emulate and improve upon what made their bigger competitors successful in the first
place and steal their customers.
16. Explain brand management. (MAY/JUNE 2008)
Brand management is the application of marketing techniques to a specific
product, product line, or brand. It seeks to increase the product's perceived value to the
customer and thereby increase brand franchise and brand equity.
Marketers see a brand as an implied promise that the level of quality people have
come to expect from a brand will continue with future purchases of the same product.

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This may increase sales by making a comparison with competing products more
favorable. It may also enable the manufacturer to charge more for the product. The value
of the brand is determined by the amount of profit it generates for the manufacturer.
This can result from a combination of increased sales and increased price, and/or
reduced COGS (cost of goods sold), and/ or reduced or more efficient marketing
investment.
All of these enhancements may improve the profitability of a brand, and thus,
"Brand Managers" often carry line-management accountability for a brand's P&L
profitability, in contrast to marketing staff manager roles, which are allocated budgets
from above, to manage and execute.
Brand Management is often viewed in organizations a broader and more strategic
role than Marketing alone,
Brand management involves the design and implementation of marketing
programs and activities to build, measure, and manage brand equity.
The brand management process is defined as involving four main steps:
1. Identifying and establishing brand positioning and values
2. Planning and implementing brand marketing programs
3. Measuring and interpreting brand performance
4. Growing and sustaining brand equity
Brand has the essential importance for the success of enterprise, having in mind that,
in contemporary business conditions, it is more difficult to realize wanted business results
without the brand. Branding process has become more important and provocative than
ever before and products without brand are fewer in market.
Successful brand becomes the symbol which provides some important functions for
customers and increases the product value in their eyes. Brand identifies source or maker
of a product and allows customers to assign responsibility to particular manufacturer or
distributor. It also allows customers to lower search costs for products.
Branding helps product differentiation and creating good image which could be used
for creating corporate image. Promotion of branded products leads to the increase of
selected demand, which helps enterprise to increase its market share. Brand could also
stimulate repeated buying and increase customer loyalty, which results in lower price

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elasticity. Successful brand enables expanding the brand on other products and prestige
creation, as well as the legal protection of unique product characteristics.
17. Write short notes on the following. (Nov/Dec 2008)
a. What is Brand Equity
Brand equity is a set of assets and liabilities linked to a brands name and symbol
that add to subtract from the value provided by a product or service to ad firm and / or
that firms customers.
There are many ways to measure a brand. Some measurements

approaches are at

the firm level , some at the product level and still others are at the consumer level
Firm level
Firm level approaches measures the brand as an financial asset.
For Example
If you were to take the value of the firm, as derived by its market capitalization
and then subtract tangible assets and measurable intangible assets the residual would be
the Brand Equity.

Product level
The classic product level brand measurement example is to compare the price of a no
name or private label product to an equivalent branded product. The difference in price
assuming all things equal is due to be the brand.
Consumer level
This approach seeks to measure the awareness (recall and recognition) and brand image
(the overall associations that the brand has.)
b. What is Brand Portfolio
Brand Portfolio planning is a periodic discrete event that allows managers to step
back from the crush of daily problems and chart the course ahead.
There are multiple Brand Portfolio Planning
1. These range from simple organizational charts called brand architecture
2. The problem with either type of approach is that the former leaves mangers
uncertain about what they should do next while the latter leaves them wondering
how to get started.

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Brand positioning
When a new brand appears in the market, the consumer gets acquainted with it
and starts collecting information about it. On the basis of this information the consumer
creates an opinion of the brand and establishes a brand image. For a stable market
position of a brand, consumer awareness of the new brand on the market is not sufficient.
The consumer must prefer a brand and have a positive assessment of it as well as
considering it in its purchasing decisions. The target position means deciding on the target
image of a brand and how the consumers should compare it to other competitive brands.
The market position of a brand shows where a specific brand is located. It also
shows the relationship to competitive brands. We can determine the market position of a
brand on the basis of the answers to the following four questions:
1. Why (which benefits and advantages does the new brand bring to the consumer)
2. When (determining the opportunities for which the brand is /most suitable)
3. For whom (it is about the determination of the consumer of a brand or target
group)
4. Against whom (determining the main competitive brand
Brand Extension
Brand stretching is applying an existing brand to a completely different business
area or a new product or service- such as Cadburys entry into cola market. The risk
attached to brand stretching is that failure in the new field may affect the core product
18. Explain the concept of brand equity. (MAY/JUNE- 2009)
Brand equity refers to the marketing effects or outcomes that accrue to a product
with its brand name compared with those that would accrue if the same product did not
have the brand name. And, at the root of these marketing effects is consumers
knowledge. In other words, consumers knowledge about a brand makes
manufacturers/advertisers respond differently or adopt appropriately adept measures for
the marketing of the brand. The study of brand equity is increasingly popular as some
marketing researchers have concluded that brands are one of the most valuable assets that
a company has.
Brand equity is an intangible asset that depends on associations made by the
consumer. There are at least three perspectives from which to view brand equity:
Financial - One way to measure brand equity is to determine the price premium that a
brand commands over a generic product. For example, if consumers are willing to pay
$100 more for a branded television over the same unbranded television, this premium
provides important information about the value of the brand. However, expenses such as

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promotional costs must be taken into account when using this method in measure brand
equity.
Brand extensions - A successful brand can be used as a platform to launch related
products. The benefits of brand extensions are the leveraging of existing brand awareness
thus reducing advertising expenditures, and a lower risk from the perspective of the
consumer. Furthermore, appropriate brand extensions can enhance the core brand.
However, the value of brand extensions is more difficult to quantify than are direct
financial measures of brand equity.
Consumer-based - A strong brand increases the consumers attitude strength toward the
product associated with the brand. Attitude strength is built by experience with a product.
This importance of actual experience by the customer implies that trial samples are more
effective than advertising in the early stages of building a strong brand. The consumers
awareness and associations lead to perceived quality, inferred attributes, and eventually,
brand loyalty.
Strong brand equity provides the following benefits:
Facilitates a more predictable income stream.
Increases cash flow by increasing market share, reducing promotional costs, and
allowing premium pricing.
Brand equity is an asset that can be sold or leased.
However, brand equity is not always positive in value. Some brands acquire a bad
reputation that results in negative brand equity. Negative brand equity can be measured by
surveys in which consumers indicate that a discount is needed to purchase the brand over
a generic product.
Alternative Means to Brand Equity
Building brand equity requires a significant effort, and some companies use
alternative means of achieving the benefits of a strong brand. For example, brand equity
can be borrowed by extending the brand name to a line of products in the same product
category or even to other categories. In some cases, especially when there is a perceptual
connection between the products, such extensions are successful. In other cases, the
extensions are unsuccessful and can dilute the original brand equity.

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Brand equity also can be bought by licensing the use of a strong brand for a new
product. As in line extensions, by the same company, the success of brand licensing is not
guaranteed and must be analyzed carefully for appropriateness.
Managing Multiple Brands
Different companies have opted for different brand strategies for multiple
products. These strategies are:
Single brand identity - a separate brand for each product. For example, in laundry
detergents Procter & Gamble offers uniquely positioned brands such as Tide, Cheer, Bold,
etc.
Umbrella - all products under the same brand. For example, Sony offers many different
product-categories under its brand.
Multi-brand categories - Different brands for different product categories. Campbell
Soup Company uses Campbells for soups, Pepperidge Farm for baked goods, and V8 for
juices.
Family of names - Different brands having a common name stem. Nestle uses Nescafe,
Nesquik, and Nestea for beverages. Brand equity is an important factor in multi-product
branding strategies.
19. A manufacturer is contemplating introducing a product that is inferior to its
competition in its performance design and functionality. However, the manufacturer
believes that good brand marketing can overcome these shortfalls. Why is this
thinking incorrect? (MAY/JUNE- 2009)
Brand marketing focuses on making the right impression on prospective
consumers. A company will discover and develop different strategies to convey the right
image for the company.
Brand marketing will include various areas before it finally presents itself on the
Internet or in a magazine. There are two aspects of a good brand, a psychological aspect
and the experiential aspect.
The psychological aspect of a brand is the brand image. It is the symbol that is left
in peoples minds.

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The brand on its own demonstrates what the brand owner is offering to its
consumers. Good marketers have learned how to create a brand that has its own
characteristics that make it special or unique.
Brand recognition is acquired when a brand builds enough trust among the
marketplace and it then enjoys a positive sentiment in the marketplace.
Brands like Nike have achieved what is referred to as a brand franchise. Anything
they slap their brand on will achieve some level of success because of the trust they have
built with their consumers.
Branded products and services generally demand higher prices. Consumers often
select the branded products based on its reputation and quality.
Brand marketing is important to some degree because manufacturers want their
prospects to know about them and eventually give them their business because they are
the one that they have in mind when they are thinking about getting a mortgage.
However, the downside of brand marketing is that it often takes way too much
money to even begin to penetrate a market. The other negative part of brand marketing is
the fact that you cant really track manufacturers true ROI, or return on investment for
their marketing dollar.
Manufacturers quickly learned to build their brands identity and personality such
as youthfulness, fun or luxury.
Manufacturers began to recognize the way in which consumers were developing
relationships with their brands in a social/psychological/anthropological sense.
20.Discuss the merits of Customer relationship marketing. Describe in detail a
company who is in business today that models relationship marketing. (MAY/JUNE2009)
Merits of Customer Relationship Marketing:
a) To give enterprise a 360 view of each customer for consistent and unified^
contact with that customer whenever anyone anywhere in the-enterprise deals with
that customer. < b) This knowledge increases the opportunities for sales and the effectiveness of
customer service.

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c) To enable firm customers to have a consistent view of your enterprise, regardless

of the way the customer contacts them. This improves customer satisfaction and
customer retention.
d) To enable front office staff to perform sales, service and marketing tasks more
efficiently as a team, increasing expertise and reducing costs.
e) CRM describes a strategy used to manage and report customer/
prospect/partner/contact interactions with enterprise contacts including inside and
outside sales, marketing, billing, shipping and customer service and support.
f) CRM is an enterprise-wide corporate strategy for presenting a single face,
sometimes called a unified marketing message, to the customer. It responds to
issues relating to sharing customer data and providing a seamless contact and
fulfillment experience for the customer.
g) CRM front-end applications usually integrate with backend systems such as
accounting and manufacturing for a true enterprise-wide cost reduction solution.
h) Provide better customer service
i) Increase customer revenues
j) Discover new customers
k) Cross sell/Up Sell products more effectively
l) Help sales staff close deals faster
m) Make call centers more efficient
n) Simplify marketing and sales processes
Modeling Relationship Marketing in todays business:
In todays competitive business environment, a successful CRM strategy cannot
be implemented by only installing and integrating a software package designed to support
CRM processes.
A holistic approach to CRM is vital for an effective and efficient CRM policy.
This approach includes training of employees, a modification of business processes based
on customers needs and an adoption of relevant IT-systems. (including soft- and maybe
hardware) and/or usage of IT- Services that enable the organization or company to follow
its CRM strategy. CRM-Services can even redundantize the acquisition of additional
hardware or CRM software-licences. The basic technology compartments of a CRM

85

strategy involve firstly a database for customer life-cycle information, including orders,
requests, complaints and so on.
Next, customer needs and profitability projection are made into plans which are then
tracked through software. Another aspect is business modeling of whether goals were met
and models of customer segments worked as fore-casted. Learning systems are put in
place that train staff and improve processes to more effectively achieve goals.
a) Voice recognition, video pattern matching, statistical analysis are used to
determine profitability of customer relationship policies.
b) Profiling technology is used to form networks that allow customers to
interact with the business, fellow customers, prospective customers, and so
on.
c) The ongoing alignment of these basic building blocks distinguishes an
elegant seamless- CRM implementation which successfully builds
mutually valuable relationships.
21 Explain the new Product development process with suitable examples(June 2010)
Refer to Q.No 3 (May/June 2006)
22. Describe the strategies suitable Growth & Maturity stage of PLC (June 2010)
Refer to Q.No 7(May/June 2006)
23.Outline the stages of new Product development(Nov / Dec 2010)
Refer to Q.No. 3 (MAY/JUNE 2006)
24.Explain the channel design process. (Nov/Dec 2010)
CHANNEL MANAGEMENT
According to Philip Kotler, Every producer seeks to link together the set of
marketing intermediaries that best fulfill the firms objectives. This set of marketing
intermediaries is called the marketing channel (also called as trade channel or channel of
distribution.)
A system of marketing institutions that promotes the physical flow of goods and
services, along with ownership title, from producers to consumer or business user; also
called a distribution channel. For marketers the distribution decision is primarily
concerned with the supply chains front-end or channels of distribution that are designed

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to move the product (goods or services) from the hands of the company to the hands of
the customers
Characteristics of Distribution channel:
1) Route or pathway:
2) Flow:
3) Composition:
4) Functions:
5) Remuneration:
6) Time Utility:
7) Convenience Value:
8) Possession Value:
9) Marketing tools:
10) Supply-demand Linkage:

Channel Functions:
1) Information Provider
2) Price stability.
3) Promotion
4) Financing
5) Title
6) Help in Production Function
7) Matching demand and supply.
- Contractual: Finding out buyers and sellers.
- Merchandising: Producing goods that will satisfy market requirements.
- Pricing: Process of attaching value to the product in monetary terms.
- Propaganda: Sales promotion activities.
-

Physical Distribution: Distribution activities.

- Termination: Settlement of contract, i.e., paying the value and receiving the goods.
8) Pricing

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9) Standardizing Transactions.
10) Matching Buyers and Sellers.

Concepts of Channel Management:

1. The Ex Ante phase: The ex ante phase involves all the activities that are associated
with the design and establishment of the distribution channel actually starts functioning.
i) Designing channel structure.
ii) Establishing the channel.
a) Appointing processing Entities.
b) Infrastructure Development.
c ) Miscellaneous Functions.

2. The Ex-paste Phase:

While these activities are just preparatory activities, the main task of a channel
manager starts only after the channel is set up and starts functioning. It comprises
following two set of activities:
i) Motivating Channel Members:
ii) Resolving Conflicts among Channel Members.
The Role of Marketing Channels in Marketing Strategy

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Channels provide the means by which the firm moves the goods and services it produces
to ultimate users

Facilitate the exchange process by cutting the number of contacts

necessary

Adjust for discrepancies in the markets assortment of goods and services

via sorting

Standardize exchange transactions

Facilitate searches by both buyers and sellers

Factors Influencing Channel Decisions

1. Relating to Product Characteristics
Perishability
Industrial / consumer products
Unit values
Style obsolescence
Weight & technicality
Standardized Products
Purchase Frequency
Newness & Market Acceptance
Seasonally
Product Breadth
II Relating to Company Characteristics
Financial Strength
Marketing Policies
Size of the company
Past Channel Experience
Product Mix
Reputation

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III Factors relating to Market or consumer Characteristics

Consumer Buying habits
Location of the market
Number of customer
Size of orders
IV Factors relating to middleman consideration
Sales volume potential
Availability of middleman
Middlemens Attitude
Service provided by middlemen
Cost of channel
V Factors relating to environmental characteristics
Economic conditions
Legal restriction
Competitors channel
Fiscal structure

Channels Using Marketing Intermediaries

Wholesaler / Stockist/ Distributor

Retailer

Sole Selling Agent

C & F Agents

Semi- Wholesaler

Value added resellers

Types of Marketing Channels

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Hybrid/Multi/Dual Distribution: Network that moves products to a firms target market

through more than one marketing channel
Reverse Channels: Channels designed to return goods to their producers
Determining Distribution Intensity
Number of intermediaries through which a manufacturer distributes its goods
Intensive distribution: channel policy in which a manufacturer of a convenience
product attempts to saturate the market
Selective distribution: channel policy in which a firm chooses only a limited number of
retailers to handle its product line
Exclusive distribution: channel policy in which a firm grants exclusive rights to a single
wholesaler or retailer to sell its products in a particular geographic area
Channel Management

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The administration of existing channels to secure the cooperation of channel members in

achieving the firms distribution objectives.
Emergence of distribution channel could be attributed to the need for facilitating
exchanges by speeding up the time consuming matching process between buyers and
sellers.
Channel Management Decisions
1. Selecting Channel Members
During the selection process, producers should determine what characteristics
distinguish the better intermediaries. They will want to evaluate number of years in
business, other lines carried, growth and profit record, solvency, cooperativeness, and
reputation. If the intermediaries are sales agents, producers will want to evaluate the
number and character of other lines carried and the size and quality of the sales force.
2. Training Channel Members
Companies need to plan and implement careful training programs for their
distributors and dealers because the intermediaries will be viewed as the company by end
users. Microsoft, for example, requires third-party service engineers who work with its
software applications to complete a number of courses and take certification exams.
Those who pass are formally recognized as Microsoft Certified Professionals, and they
can use this designation to promote business.
3. Motivating Channel Members
The most successful firms view their channel members in the same way they view
their end users. This means determining their intermediaries needs and then tailoring the
channel positioning to provide superior value to these intermediaries. To improve
intermediaries performance, the company should provide training, market research, and
other capability-building programs. And the company must constantly reinforce that its
intermediaries are partners in the joint effort to satisfy customers.

4. Evaluating Channel Members

Producers must periodically evaluate intermediaries performance against such
standards as sales-quota attainment, average inventory levels, customer delivery time,
treatment of damaged and lost goods, and cooperation in promotional and training

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programs. A producer will occasionally discover that it is paying too much to

particularintermediaries for what they are actually doing

5. Modifying Channel Arrangements

Channel arrangements must be reviewed periodically and modified when
distribution is not working as planned, consumer buying patterns change, the market
expands, new competition arises, innovative distribution channels emerge, or the product
moves into later stages in the product life cycle.

Channel Conflict
Horizontal Conflict
Most often, horizontal conflict causes sparks between different types of marketing
intermediaries that handle similar products.
Sometimes results from disagreements among channel members at the same level.
Vertical Conflict
Channel members at different levels find many reasons for disputes
Example: when retailers develop private brands to compete with producers brands or
when producers establish their own retail outlets or WWW Sites.
Multichannel conflict
Exists when the manufacture has established two or more channels that sell to the same
market
Causes of channel conflict
Goals incompatibility
Unclear roles & rights

Managing Channel conflict

Super ordinate goals
Exchange persons
Cooptation
Mediation

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Diplomacy
25.Explain the new Product development process with suitable examples (June 2011)
Refer to Q.No 3 (May/June 2006)
UNIT IV BUYER BEHAVIOUR
Part A
1. What is consumerism? (MAY/JUNE 2006)
Consumerism is a term used to describe the effects of equating personal
happiness with purchasing material possessions and consumption. It is used to describe
the tendency of people to identify strongly with products or services they consume,
especially those with commercial brand names and obvious status-enhancing appeal.
It can also refer to economic policies that place an emphasis on consumption, and, in an
abstract sense, the belief that the free choice of consumers should dictate the economic
structure of a society.
2. What are the different types of buying behavior? Mention the parameter used to
classify these types. (NOV/DEC 2006)
Routine Response/Programmed Behaviorbuying low involvement frequently
purchased low cost items; need very little search and decision effort; purchased almost
automatically. Examples include soft drinks, snack foods, milk etc.
Limited Decision Making-buying product occasionally. When you need to obtain
information about unfamiliar brand in a familiar product category, perhaps. Requires a
moderate amount of time for information gathering. Examples include Clothes-know
product class but not the brand.
Extensive Decision Making/Complex high involvement, unfamiliar, expensive and/or
infrequently bought products. High degree of economic/performance/psychological risk.
Examples include cars, homes, computers, education. Spend a lot of time seeking
information and deciding.
Information from the companies MM; friends and relatives, store personnel etc. Go
through all six stages of the buying process.
Impulse buying, no conscious planning.

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3. Who is an industrial buyer? (MAY/JUNE 2007)

An industrial buyer is one who acquires goods and services used in The
production of other products or services that are sold, rented, or supplied to
others
Question Number :4 (May / June 2007)
4. Who is a satisfied customer? (MAY/JUNE 2007)
A satisfied customer is one who experiences the feeling of pleasure
resulting from comparing a product perceived performance in relation to his
expectations. Whenever the performance matches the expectations the customer
is satisfied.
5. How does the concept of Value-Cost Gap facilitate customer? (NOV/DEC 2007)
There was a growing gap between cost and value, account for highly leveragable
opportunity to extract unprecedented value. Adding new business functions places a
relatively small cost burden on the customer. Much of the infrastructure is in place and a
sunk cost, with much of the additional required infrastructure purchases available at low
commodity prices.
The value that can be derived from incremental functionality added to current
infrastructure has non-linear multiplier (interaction) effect. The old, pre-network, model
of layering marketing on isolated systems had a relatively simple, and comparatively
small, additive effect on a system's value. The current network model, however, allows
new marketing components which leverage the network to increase business value
exponentially.
6. How does Margin-Turnover framework operate in retailing? (NOV/DEC 2007)
This framework is based on the intricate relationship between retail margin and retail
turnovers. Margin is a percentage markup at which the inventory in the store is sold, and
the turnover is the number of times the average inventory is sold in a given year. On the
basis of the margin-turnover relationship, retail establishments can be subdivided into
four categories:

High Margin - High turnover

High Margin Low turnover
Low Margin - High turnover
Low Margin - Low turnover

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7. How does 'Psychoanalytic model' explain buying behavior? (NOV/DEC 2007)

This model is well known in at least some of its aspects and is widely used by
advertisers. Its basic thesis is that the individual human being is a divided kingdom,
where behavior rarely allows of a simple explanation. The individual maintains a
precarious balance between emotion and rationality, between instinctive drives and
socially acceptable behavior.
Using this model, the marketer can construct his message so that it appeals to the parts
of the psyche which are not accessible to the consciousness but which are still likely to
determine behavior. One disadvantage of this model, of course, is that it is difficult to
make generalizations about any particular market segment. However, very effective
advertising campaigns have been devised which appeal to the customer's private world of
hopes, fears and dreams.
8. What is the scope of customer database? (NOV/DEC 2007)
Understanding customers
Managing customer service
Understand the market
Understanding competitors
Managing marketing campaigns
9.Define buying-out' brands. (NOV/DEC 2007)
"Buying Out" brands are the brands that will no longer be available in the market.
This ensures that the buyer's product will not be sold to another person from that point on.
Previous purchases of the product will continue to be honored, but no future transaction
will not be there.
10.Who influences individual buyer? (MAY/JUNE 2008)

An individual buyer is one that is not purchasing goods for their business or

institution.
An individual buyer does not buy according the specifications he or she prepares.
Buyer must buy subject to the rules and prescriptions under which the seller
operates.

11.What is demand estimation? (MAY/JUNE 2008)

Demand estimation is used for performance planning and in making policy
decisions, managers must have some idea about the characteristics of the demand for their

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product(s) in order to attain the objectives of the firm or even to enable the firm to
survive.
12. What is post purchase behavior? (NOV/DEC 2008)
Post-purchase behavior is very significant for first-time users (First time use is
defined as consumption not purchase as it is not usually linked with direct purchase by
the final user). This phenomenon decreases as use become more prevalent, though no
specific dividing timeline or use could be identified where such evaluation loses
significance.
13. What are the steps in consumer decision making? (May / June 2009)
e. Problem Recognition
f. Information search
g. Evaluation of alternatives
h. Purchase Decision
i. Post-purchase behavior
14. What are the different types of buying behavior?

15. State the bases of Customer Relationship Management (June 2010)

1. to identify and target their best customers, manage marketing campaigns and
generate quality leads for the sales team.
2. to improve telesales, account, and sales management by optimizing information
shared by multiple employees, and streamlining existing processes (for example,
taking orders using mobile devices)
3. with the aim of improving customer satisfaction and maximizing profits

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4. information and processes necessary to know their customers, understand and

identify customer needs and effectively build relationships between the company,
its customer base, and distribution partners.
16. What is Consumerism? (Nov /Dec 2010)
Refer to Question Number :1 (May / June 2006)
17. What do you mean by consumer demographics? (June 2011)
The set of attributes that describe a specific population, such as average age, life
expectancy, and reproductive characteristics so that consumers may be targeted for
marketing and advertising based on these characteristics.
1.
2.
3.
4.
5.
6.
7.
8.

gender,
race,
age,
disabilities,
mobility,
home ownership,
employment status, and
location

18.What is database marketing?

It is the process of building, maintaining and using customer databases and other
databases (products, suppliers, resellers) for the purpose of contacting, transacting and
building relationships.
19. What is customer mailing list?
It is simply a set of names, addresses, and telephone numbers, which contains much
more information.
20.Who is a decider in buying centre role?
Organizational members who have decision making power and who decide about the
purchase e.g., engineer deciding specification or vice- president finance.
21.Who is an influencer in buying centre role?
Individuals in the organization influence the decision making process by providing
information on criteria for buying consultants. E.g. Inside the organization R&D
specialist, outside the organization - consultants
Part B
1.Discuss the factors affecting the consumer buying behavior in Indian context.
(NOV/DEC 2006)

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Consumers do not make their decisions in a vacuum. Their purchases are highly
influenced by cultural social, personal, and psychological factors. For the most part, they
are "non controllable" by the marketer but must be taken in to account. We want to
examine the influence of each factor on a buyer's behavior.
Cultural Factors
In a diversified country like India cultural factors exert the broadest and deepest
influence on consumer behavior; we will look at the role played by the buyer's culture,
subculture, and social class.
Culture: Culture is the most fundamental determinant of a person's wants and behavior.
Whereas lower creatures are governed by instinct, human behavior is largely learned. The
child growing up in a society leans a basic set of values, perceptions, preferences and
behaviors through a process of socialization involving the family and other key institution
.Thus a child growing up in America is exposed to the following values: Achievement and
success, activity, efficiency and practicality, progress, material comfort, individualism,
freedom, external comfort, humanitarianism, and youthfulness.
Subculture:
Each culture contain smaller group of subculture that provide more specific
identification and socialization for its members. Four types of subculture can be
distinguished .Nationality groups such as the Irish, polish, Italians, and Puerto Ricans are
found with in large communities and exhibits distinct ethnic tastes and Jews represent
subculture with specific culture preference and taboos.
Social Class:
Virtually all human societies exhibit social stratification. Stratification sometimes
takes the form of a caste system where the member of different caste is reared for certain
roles and cannot change their caste membership .More frequently, stratification takes the
form of social classes.
Social Classes have several characteristics. First, Person with in each social class
tend to behave more alike than persons from two different social classes. Second, persons
are perceived as occupying inferior or superior positions according to their social class.
Third, a person's social class is indicated by a number of variables, such as occupation,
income, wealth, education, and value orientation, rather than by any single variable ,
fourth, individuals are able to move from one social class to another up or down during

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their lifetime. The Extent of this mobility varies according to the rigidity of social
stratification a given society.
Social Factors:
A consumer's behavior is also influenced by social factors, such as the consumer's
reference group, family, and social roles and statuses.
Reference Group:
A person's behavior is strongly influenced by many group .A persons reference
group are those groups that have a direct (face to face) or indirect influence on the
person's attitudes or behavior. Group having a direct influence on a person are called
membership group, These are group to which the person belongs and interacts. Some are
primary groups. With which there is fairly continuous interaction, such as family, friends,
neighbors, and co-workers. Primary group tend to be informal. The person also belong to
secondary group, which tend to be more formal and where there is less continuous
interaction: they include religious organizations, professional associations, and trade
unions.
Family Group:
Members of the buyer's family can exercise a strong influence on the buyer's
behavior. We can distinguish between two families in the buyer's life. The family of
orientation consists of one's parents. From parents a persons acquires an orientation
towards religious, politics, and economics and a sense of personal ambitions, self -worth,
and love. Even if the buyer no longer interacts very much with his or her parents, the
parents influence on the unconscious behavior of the buyer can be significant. In
countries where parents continue to live with their children, their influence can be
substantial.
In case of expensive products and services, husband and wives engage in more
joint decision making. The market needs to determine which member normally has the
greater influence in the purchase of a particular products or services. Either the husband
or the wife , or they have equal influence . The following products and services fall under
such: Husband - dominant: life insurance, automobiles, television Wife - dominant:
washing machines, carpeting, non -living - room furniture, kitchenware Equal: Living room furniture, vacation, Housing, outside entertainment

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2. Explain CRM with suitable examples. Why is it important in modern day

business context? (NOV/DEC 2006)
Customer Relationship Management:
It covers methods and technologies used by companies to manage t h e i r relationships
with clients. Information stored on existing customers (and potential customers) is
analyzed and used to this end. Automated CRM processes are often used to generate
automatic personalized marketing based on the customer information stored in the
system.
Operational CRM

Analytical CRM

Contact Centers

Business intelligence

Data aggregation tools

Data mining

Transactional/self-service web sites

Customer tiering strategies

Customer-centric business processes

Incentive/loyalty drivers

Measures (cost, cycle time, satisfaction)

Triggers for cross sell & up sell

CRM is commonly defined in two broad categories: Operational CRM and

Analytical CRM. Operational CRM generally refers to those products, services and
operational capabilities that enable an organization to "take care of its customers."
Contact centers, data aggregation systems and Web sites are just a few examples.
Analytical CRM refers to the strategies and tools that drive customer- centric business
decisions. Business intelligence systems, data mining tools and customer-tier strategies
fall roughly into this category.
Technology vendors, for example, tend to define CRM as whatever they have to
offer. Here are some examples of systems and technologies that have been co-opted into
"CRM" solutions:

A "mailing list" is now known as a "CRM system"

"Home page" has become "e-CRM"
The "call center" is now referred to as a "CRM channel"
"Research and analysis" is now called "analytical CRM"

Why CRM is important in modern day business context? (NOV/DEC 2006)

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Providing online access to product information and technical assistance around the

clock.
Identifying what customers value and devising appropriate service strategies for

each customer
Providing mechanisms for managing and scheduling follow-up sales calls
Tracking all contacts with a customer
Identifying potential problems before they occur
Providing a user-friendly mechanism for registering customer complaints
Providing a mechanism for handling problems and complaints
Providing a mechanism for correcting service deficiencies
Storing customer interests in order to target customers selectively
Providing mechanisms for managing and scheduling maintenance, repair, and ongoing support

Technical Considerations
The following factors need to be considered:
Scalability: the system should be highly scalable, as the volume of data stored in the
system grows over time.
Communication channels: CRM can interface with a variety of different channels
(phone, WAP, Internet etc.)
Workflow - a company's business processes need to be represented by the system with
the ability to track the individual stages and transfer information between steps
Assignment - the ability to assign requests, such as service requests, to a person or group.
Database - the means of storing customer data and histories (in a data warehouse)
Customer privacy considerations, such as data encryption and legislation

Improving Customer Relationships

CRM applications often track customer interests and requirements, as well as their
buying habits. This information can be used to target customers selectively. Furthermore,
the products a customer has purchased can be tracked throughout the product's life cycle,
allowing customers to receive information concerning a product or to target customers
with information on alternative products once a product begins to be phased out. repeat
purchases rely on customer satisfaction, which in turn comes from a deeper understanding

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of each customer and their individual needs. CRM is an alternative to the "one size fits
all1' approach. In industrial markets, the technology can be used to coordinate the
conflicting and changing purchase criteria of the sector.
Privacy and Ethical Concerns
The data gathered as part of CRM raises concerns over customer privacy and
enables persuasive sales techniques. However, CRM does not necessarily involve
gathering new data, but also includes making better use of customer information gathered
as a result of routine customer interaction.
The privacy debate generally focuses on the customer information stored in the
centralized database itself, and fears over a company's handling of this information. For
example, there is virtually no way a consumer can determine if the company shares
private (personally identifiable) data with third parties. Furthermore, companies may not
always accurately declare to the consumer the types of information collected by CRM
systems and the specific purposes for which the information is used.
3. Explain Brand management practices in India. (MAY/JUNE 2007)
Brand is defined as a name, term, sign, symbol, or design, or a combination of
them, intended to differentiate goods and services of a seller from those of competitors.
Brand Management practices in India:
Branding poses several challenges to the marketer. The key decisions are listed below:

Branding Decision:

Brand

No Brand

Brand sponsor Decision:

Manufacturer brand
Licensed brand

Distributor brand

Brand Name Decision:

Individual names
Separate family name
Blanket family name
Company individual name

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Brand Strategy Decision

Line extension
Multi-brands
Co-brands
Brand extension
New brands

Brand Repositioning Decision

Repositioning
No - Repositioning

4.What are the factors that determine customer satisfaction? Explain. (MAY/JUNE
2007)
Customer satisfaction, a business term, is a measure of how products and services
supplied by a company meet or surpass customer expectation. It is seen as a key
performance indicator within business and is part of the four perspectives of a Balanced
Scorecard.
In a competitive marketplace where businesses compete for customers, customer
satisfaction is seen as a key differentiator and increasingly has become a key element of
business strategy.
Organizations are increasingly interested in retaining existing customers while
targeting non-customers; measuring customer satisfaction provides an indication of how
successful the organization is at providing products and/or services to the marketplace.
Factors used to determine customer satisfaction on products/
Services:
I.Capability
2. Usability
3. Performance
4.Reliability
5. Installability
6. Maintainability
7. Documentation

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If a company wants to investigate it themselves, look at firm specific factors like

business contacts, reputation, advertising, and brand name can help determine customer
satisfaction.
5. Describe the value-creation and value delivery process in the present day context.
Value Creation(NOV/DEC 2007)
Companies create the value that they offer to customers in a five- stage process
that spans offer-market development, demand creation, sales conversion, satisfaction
fulfillment, and strategic development. Value creation thus integrates product
development, marketing, sales, service, and training.
Value Creation Consists of a Five-Phase Process
Offer-Market Development
In this stage, the brand firm develops a relevant offering (a product or service that
meets a need) and through research identifies a market for it. The firm also develops the
market infrastructure (field sales organization, repair depots, customer help desks, etc.)
necessary to support the offering. This stage ends and the next stage begins when brand
managers have defined a pre-emptive positioning.
Demand Creation
With an un-served customer need, a world-beater product, and service now locked
and loaded in the branding machine, brand managers must now generate demand. This
generally corresponds to traditional marketing and product management activities:
packaging, distribution, advertising, direct mail, publicity, point of purchase
merchandising, and training of support staff, field operations, and distribution partners.
But the principal task remains development of the unique selling proposition, at which
point brand managers exit this stage.
Sales Conversion
In this stage, the firm converts demand into sales to paying customers. Brand
managers identify points of market presence (retail outlets, field sales force, channel
partners, catalogs and direct mail, and other sales locations), work hard to achieve
maximum visibility in each venue, and develop programs for the ongoing care and
feeding of the people who staff these points of market presence. Customers then begin to
buy the branded product or service.

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Satisfaction Fulfillment
In this stage, the customer transforms the offering into a satisfaction by
successfully buying and using it. The offering meets expectations, solves a problem, or
otherwise satisfies the customer. In addition to excellent product or service design, ease of
use, training, and peer group support play an important role. At this point, it becomes
evident whether or not brand managers have anticipated problems that might arise and
have made appropriate contingency plans.
Strategic Development
In this fifth stage of value creation, brand managers must evaluate the future and
the brand's place in it.
Value Delivery Process
The delivery process consists of three parts. The first phase, choosing the value,
represents the "homework marketing must do before any product exists. The marketing
staff must segment the market, select the appropriate market target, and develop the
offering's value positioning. The formula "segmentation, targeting, positioning (STP) is
the essence of strategic marketing. Once the business unit has chosen the value, the
second phase is providing the value, Marketing must determine specific product features,
prices, and distribution. The task in the third phase is communicating the value by
utilizing the sales force, sales promotion, advertising and other communication tools to
announce and promote the product. Each of these value phases has cost implications.
6. Briefly explain the specialty in business buying due to characteristics of
market/product. (NOV/DEC 2007)
For many business products, there exist only a small number of users. For
example, for a product like automobile testing equipment, only a few large buyers are
there, like General Motors, Bavarian Motor works, Telco, Bajaj, Ashok Leyland and
many other large car manufacturers.
This enhances the business clout of the business buyers as a class. The seller has
to cultivate every buyer in his product category and maintain close and continuous
contact so that no sales opportunities are overlooked.'
Concentration of Buyers

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The buyers for a given industrial product are not only few in number, they are also
usually concentrated in certain geographic areas. It gives them a special bargaining power
over the sellers.

Direct, One-to-One Relationship with seller

In the consumer market, direct contact between the producer and the consumer is
rare, whereas in the business market, one-to-one contact between producer and the buyer
is the normal practice, especially when the products involved are special and technology
based.
Technical Support for Buying
The business buyer needs considerable technical service and assistance throughout
the purchase process, especially when the purchase involves complex products. Any error
the business buyer makes can prove to be very costly for his firm. This makes his task
very responsible as well as sensitive.
Business Buyer may also buy through Intermediaries
Though in most product categories, direct producer-to-user distribution is the
practice, there are situation in business buying that need intermediaries.
Sometimes, the buyers are widely distributed geographically demanding a
relatively large sales force, which may be uneconomical for a producer. Some
manufacturer may not have enough financial and manpower resources to perform all the
distribution tasks; such situation requires the involvement of middlemen.
Sometimes, the business market is a 'thin' market from both geographic and sales
angles. In order to save costs, manufacturers use wholesale middlemen. The middlemen
may be handling competing or non-competing lines of products.
There are situations where the business buyers place frequent orders consisting of
many items needing rapid delivery service. Such situations are better handled by
middlemen.
Sometimes there exist large numbers of small business buyers who place smaller
orders more frequently. Such situations too are better left to intermediaries.
Business Buying is Partnering

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Today, business buying has become a crucial management task. For any firm, the
stakes here are quite high. The funds involved are huge, and any savings is precious.
From the quality and end product performance angle too, it is buying that attracts full
attention. The best raw material, equipment and other inputs have to be obtained at the
most competitive prices. That is why supply chain management has emerged as a key
concept today. Closer relationships between the buyer and supplier are no longer enough;
it has yielded place to integration of the resources and facilities of the buyer with those of
the supplier. The concept that is in vogue in business buying is partnership, i.e. partnering
between the buyer and suppliers.

7. Discuss about the market based and process based methods of assessing
competitive advantage. (NOV/DEC 2007)
Market based methods of assessing competitive advantage

''Unique way to meet the needs of a niche market

Brand recognition in the market
Proprietary Or trade secrets for operations
Customized or proprietary software or technology
Patents and trademarks
Unique combination of products/services
Access to leading or scientific research
Highly skilled and Creative staff
Reputation for quality and innovation

Process-based methods for accessing Competitive Advantage

Because of continuing changes, in the business environment, .organizations have
to adapt themselves to new challenges. One 'solution is the development of organizational
operations base on the enhancement and integration of business processes. Process vation,
and process-based Organization development enhances the speed, transparency arid
efficiency of organizational' activities, and provides the possibility of tighter management
control. The firms provide art effective process analysis, business impact analysis,
process development and implementation, with the support of newly developing
modeling solutions for attaining competitive advantage. Process management and process
redesign are the requirements of several IT implementations, e.g. ERP systems, but
clearly defined processes can be supported by automated workflow systems and Other IT
solutions.

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8. How does market-driven quality approach evolve? Explain(NOV/DEC 2007)

Market-driven quality (MDQ) is defined as letting the market, meaning the price,
determine the quality standards a business applies to its products.
There are three key aspects of a market-driven quality approach: .
Capturing the voice of the market
Aligning product development and corporate strategy, and
Enabling visibility into the product planning process
That combines to help Companies deliver better quality products to market, faster.
Capturing the Voice of the Market
One of the key ways to improve the product design and development process
across an entire product portfolio is to incorporate data, gathered from many sources, that
clearly highlights market needs and competitive dynamics. This "voice of the market"
data provides the insight necessary to significantly improve strategic product decisionmaking, and also makes it easier to prioritize product requirements.
It touches all audiences with a stake in the product or a say in the market "sales
prospects, partners, analysts, competitors, etc. Voice- of-the-market data also takes into
account consumer and economic trends that are shaping the market.
Aligning Corporate Strategy and Product Development
Portfolios driven by the demands of the market in combination with alignment to
strategic company goals dramatically improve product success in the market. ,
When the needs of each customer are viewed in the larger context of the business,
it's easier to determine whether the enhancements the product team is building are
consistent with overall corporate strategic goals and objectives. It's also easier to ensure
that every development resource is engaged in supporting an identified market' demand.
Product managers and strategists can also ensure strategic alignment by
prioritizing requirements based on assigned weightings. For instance, you may base a
potential new feature oh a need identified in an industry analyst report; youd weight that
new feature differently depending on how much influence that analyst wielded.
It is also valuable to weight available development resources against market
impact tradeoffs, and performs scenario and alternative planning to see how different

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combinations of requirements best help you address the market trends identified as most
significantly affecting the business.
Gaining Visibility into the Product Development Lifecycle
In a market-driven approach to portfolio planning, all product requirements,
initiatives, and voice-of-the-market data are stored in a centralized single system of
record repository that provides an easily-accessible view into all aspects of product
creation.
Without such a view, it's a significant challenge to forecast the effects that an
unplanned development change might have on market demand, customer satisfaction,
hidden dependencies, or overall competitive position.
With this visibility, however, across product lines and throughout the product
development cycle, development team managers and executives can prioritize and
manage complex requirements and interdependencies across the complete portfolio, no
matter how diverse the product set.
With a market-driven approach, every product requirement is traceable all the way
through to its underlying attributes. Development can define and trace relationships
between multiple levels of hierarchical requirements, down to the lowest level of
engineering or systems, and back up.

9.Explain the factors influencing consumer behavior. (NOV/DEC 2008)

Refer to Q.No 1. (NOV/DEC 2006)

10.Using the automobile market, describe automotive buying behavior for a: Market
Place. (MAY/JUNE- 2009)
Consider the purchase an automobile. Consumers generally will not consider
different options until some event triggers a need, such as a problem needing potentially
expensive repair. Once this need has put the consumer on the market, and begin to ask
their friends for recommendations regarding dealerships and automobile models.
After visiting several dealerships, consumer test drive several automobile models
and finally decide on a particular model.

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After picking up new automobile, the consumer have doubts on the way home,
wondering if they can afford the monthly payments, but then begin to wonder if instead
they should have purchased a more expensive but potentially more reliable model.
Over the next five years, the automobile has several unexpected breakdowns that
lead them to want to purchase a different brand, but they have been very happy with the
services of the local dealership and decide to again purchase their next automobile there.
Market Space
Traditionally, auto manufacturers have tried to exert close control over the sales
and distribution channels in order to be able to execute their marketing strategies,
including price policy, and to guarantee a high service level for their customers. The
networks of dealers with various contractual relationships (from subsidiaries to
independent multi-manufacturer dealers) are instrumental in this process and they usually
cover a huge array of functions from sales of new and used cars, financing, repairs etc.
However, new types of dealership have emerged that are independent from the car
companies and try to leverage on loopholes or weaknesses of the existing dealer
networks.
Mercedes-Benz like other car companies needs to transform themselves into
assemblers of complex mobility services by coordinating networks of service providers
and integrating Web services. They have to carefully manage the emerging multi-channel
distribution network and face the challenges and risks of intra-channel conflicts, failure to
reach critical mass with the new channel, and the sheer complexity of such systems.
While the car companies have learn to coordinate complex supplier networks they have to
learn in the future to apply this competence to the configuration and management of
complex distribution and service networks with (more) independent service providers,
assembling and coordinating complex and computer-enabled networks of intermediaries
(service organizations with different contractual obligations) in order to provide mobility
services.
Meta-market
The increasing use o f the Internet has given automotive consumers an edge in the
vehicle buying process, making them less dependent on dealers. This has resulted in a
significant shift in the balance of power as dealers fail to keep pace with the changing
consumer dynamics. Automotive companies must gain a better empirical understanding

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of consumer behavior in order to improve the customer/ dealer relationship and in the
process drive increased sales and strengthen brand and dealer loyalty.
Consumer change has accelerated rapidly, due to consumers increasingly
sophisticated buying behavior and the availability of information on the Internet, which is
helping to delay their moment of entry into the dealership.
Improved customer intelligence was found to be a critical success factor in
responding to the changing dynamics of the customer/dealer relationship. Since customer
intelligence, and in fact customer behavior, evolves, its critical that automotive
companies always keep their finger on the pulse. Best practices include sales training
seminars that incorporate intelligence about customer research tactics, as well as careful
and constant observation of consumer behavior through the entire vehicle buying process.
Companies must move away from the traditional asymmetrical customer/dealer
relationship so often characterized by negative preconceptions and stereotypes on the part
of both parties. The key is to move toward a more balanced relationship where there is
transparency of information and mutual trust, thereby improving sales and beginning to
build customer loyalty.
11.Why do new products fail? What are the critical forces influencing the
management of products? (MAY/JUNE- 2009)
The new product largely depends on the product quality and the marketing tactics
of the firm, there are many occasions were the product failed miserably even after using
the best technology and quality the reason is that the new product is not worth for the
customers. The prime factor for the new product success is - customer value. Value is
what the customer thinks is value. The major reasons for new product failure are:'
Faulty product idea: The product often fail because faulty of product idea. A good idea
can revolutionize the market but a bad idea may prove bitter to the firm or it may backfire
Eg: Polar industries in 1991 launched COOL CATS fan - decorated with cartoon
characters meant primarily for children. The fan was priced at premium; the idea was that
childrens were increasingly becoming influencer in purchase decisions and to attract the
kids with the cartoon creatures and to position the product exclusively for kids. The
product failed miserably in spite of its huge advertising budget because when the fan was
put on it didnt have any color effect and the customer did not justify its premium price.

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Distribution related problems: The new product fails if the product is unable to meet
the channel requirements. While developing the product the channel requirements must
be given adequate consideration. Eg: when NESTLE launched its new chocolates the
product and promotion was OK but the product failed in the distribution side because the
company stipulated the product to be stored in refrigerators. The product faced two
problems in the distribution side because it meant excluding a number of retail outlets as
they didnt have this facility and secondly the chocolate was not picked by the customers
as it was not seen upfront in the retail shops. Finally .Nestle had to reformulate the
product according to channel requirements.
Poor timing of launch: Too early or late entry into the market is a common cause of
failure. Kinetic Merlin was launched in Pune in 1991. It was a 3 in 1 set consisting of a
color television, a stereo with detachable speakers and a home computer. The product was
targeted at the Indian consumers who are fond of sophisticated gadgets to immediately
adopt such an innovative idea but in reality the idea was too advanced for the customers
to digest at that time because they were not exposed to such type of products before.
Improper Positioning: Positioning means putting the product into the predetermined
orbit. Improper positioning may affect the product success. Eg: Titan Tanishq introduced
their 18 carat jewelry and the product was positioned at elite segment but there was a
contradiction as to why these elite segment should go in for a low carat gold because the
norms for gold in India at that time was 22 carat. The product failed miserably in
retrospect Titan had to introduce 22-carat jewelry.
Critical forces influencing the management of products:
The failure to effectively launch a product can be a contributing factor to its
failure in the market. If a product has been carefully researched and developed, an
effective launch should contribute to its success. The most successful product launch,
however, cannot rescue a bad product.
New product launches are a pivotal time for businesses, and they require
meticulous planning. A product launch is the culmination of months or even years of
effort, from across the organization, in readying a product for market. It constitutes a high
profile activity that can signal corporate success or failure. Product launches also require
and displaya considerable amount of investment. Thus, an intensive effort is required
to execute the launch program successfully. A product launch progresses through a
number of important stages:

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internal communications (or internal launch), to guarantee high levels of

awareness and commitment to the new product;
pre-launch activity, to secure distribution and ensure that the sales channel
(including resellers, retailers, etc.) have the skills, resources, and knowledge to
market the product;
launch events at the national, regional, and/or local level;
post-event activity to help the sales force and other channels make the most of the
event;
launch advertising and other forms- of customer communication.
12.Explain Consumer Buying Behavior Process. (MAY/JUNE- 2009)
The 6 stages of Consumer Buying Behavior Process are:
Problem Recognition(awareness of need)difference between the desired state and the
actual condition. Deficit in assortment of products. HungerFood. Hunger stimulates
your need to eat. Can be stimulated by the marketer through product informationdid not
know you were deficient? I.E., see a commercial for a new pair of shoes, stimulates your
recognition that you need a new pair of shoes.
Information search
Internal search, memory.
External search if you need more information. Friends and relatives (word of
mouth). Marketer dominated sources; comparison shopping; public sources etc.
A successful information search leaves a buyer with possible alternatives, the evoked set.
Hungry, want to go out and eat, evoked set is
Chinese food Indian food
burger king Klondike Kates etc
Evaluation of Alternatives - Need to establish criteria for evaluation, features the buyer
wants or does not want. Rank/ weight alternatives or resume search. May decide that you
want to eat something spicy, indian gets highest rank etc.. If not satisfied with your choice
then return to the search phase. Can you think of another restaurant? Look in the yellow
pages etc. Information from different sources may be treated differently. Marketers try to
influence by framing alternatives.
Purchase decisionChoose buying alternative, includes product, package, store, method
of purchase etc.

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PurchaseMay differ from decision, time lapse between 4 & 5, product availability.
Post-Purchase

Evaluationoutcome:

Satisfaction

or

Dissatisfaction.

Cognitive

Dissonance, have you made the right decision. This can be reduced by warranties, after
sales communication etc.
13. Explain the factors influencing consumer behavior. (June 2010)
Refer to Question Number : 9 (Nov / Dec 2008)
14.Elaborate the factors influencing consumer behavior. Explain the buyer behavior
models (June 2011)
Refer to Question Number : 9 (Nov / Dec 2008)

15. Explain CRM with Suitable examples , why is it important in modern day
business context. Discuss (June 2010)
Refer to Question Number : 2 (Nov / Dec 2006)

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16. Explain CRM what is it importance in present marketing environment. (June

2011)
Refer to Question Number : 2 (Nov / Dec 2006)

UNIT V
Part A
1. Expand MIS and MDSS. (NOV/DEC 2006)
MIS - Marketing Information Systems
MDSS - Marketing Decision Support Systems
2. What are the applications of marketing research? (NOV/DEC 2006)
Advertising testing research,
Branding research,
Pricing research,
Product positioning research, and
Segmentation research.
3. What are the stages in marketing research process? (NOV/DEC 2006)
Problem Definition
Research Design
Data Collection Procedure
Sample Design
Data analysis and Interpretation
Research Report
4. What is a worldwide information system? (NOV/DEC 2006)
A worldwide information system is a system for capturing, storing, analyzing and
managing data and associated attributes which are spatially referenced to the earth. In the
strictest sense, it is a computer system capable of integrating, storing, editing, analyzing,
sharing, and displaying geographically-referenced information. In a more generic sense,
worldwide information system is a tool that allows users to create interactive queries
(user created searches), analyze the spatial information, and edit data.
5. Name any four companies involved with web-based marketing programmes.
(NOV/DEC 2006)

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Microsoft
Yahoo
Time Warner
Real Networks

6. What is marketing research? (May / June 2007)

Market research is the systematic design, collection, analysis and reporting of data
and findings relevant to a specific marketing situation facing the company
7. What is on-line marketing? (MAY/JUNE 2007)
On-line marketing is described as the company's effort to inform, communicate,
promote and sell its products and services over the internet.
8. What is marketing challenge? (MAY/JUNE 2007)
The marketplace isn't what is used to be. It is changing radically as j a result
of major societal forces such as technological advances, j globalization,
heightened competition, customer empowerment and deregulation. These major
forces have created new behaviors and challenges
9. What are syndicated research services? (NOV/DEC 2007)
A wide variety of syndicated research services, especially in areas like market
measurement and media planning. They include:

The National Readership Survey (NRS)

Businessmen's Readership Survey (BRS)
Television Rating Points System (TRP)
Market Pulse - household purchase panel
Rural Market Probe.

10. What are the different types of web-sites cited in marketing? (NOV/DEC 2007)
Static Website
Dynamic Website
Content Managed Website
E-commerce Website
Flash Website

11. What is information technology? (MAY/JUNE 2008)

In the broadest sense, information technology refers to both the hardware and
software that are used to store, retrieve, and manipulate information. At the lowest level

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you have the servers with an operating system. Installed on these servers are things like
database and web serving software. The servers are connected to each other and to users
via a network infrastructure. And the users accessing these servers have their own
hardware, operating system, and software tools.
12. What are the advantages of web based marketing? (MAY/JUNE 2008)
Web based marketing is relatively inexpensive when compared to the ratio of cost
against the reach of the target audience.With the help of this companies can reach a wide
audience for a small fraction of traditional advertising budgets.It allows consumers to
research and purchase products and services at their own convenience.
13. What is Ad-hoc research? (NOV/DEC 2008)
A single, one-time piece of research designed for a particular purpose, as opposed to
continuous, regularly repeated, or syndicated research.Ad-hoc research provides the
penetrating analysis needed to address issues of strategy and to make well-informed
decisions about customers, competitors and markets.
14. Define internet marketing. (NOV/DEC 2008)
Internet marketing, also referred to as web marketing, online marketing, or
eMarketing, is the marketing of products or services over the Internet.Internet marketing
is sometimes considered to have a broader scope because it refers to digital media such as
the Internet, e- mail, and wireless media; however, Internet marketing also includes
management of digital customer data and electronic customer relationship management
(ECRM) systems.
15. What are B2B exchanges?(NOV/DEC 2008)
Business-to-business

(B2B)

exchanges

or

marketplaces

provide

dramatic

opportunities to automate collaborative business processes with customers and suppliers,

generate internal efficiencies, and reach new markets at minimal cost.B2B Exchange
would make it easier for companies to find the goods they needed, to complete
transactions, and to save money through the added competition or large amount of goods
being sold or bought.
16. Write short notes on on-line marketing. (MAY/JUNE- 2009)
On-line marketing provides instant response and eliciting responses, is a unique
quality of the medium.On-line marketing is sometimes considered to have a broader

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scope because it not only refers to digital media such as the Internet, e-mail, and wireless
media.On-line marketing also includes management of digital customer data and
electronic customer relationship management (ECRM) systems.
17. What do you mean by pilot study? (NOV/DEC 2008)
A pilot, or feasibility study, is a small experiment designed to test logistics and gather
information prior to a larger study, in order to improve the latter's quality and efficiency.A
pilot study can reveal deficiencies in the design of a proposed experiment or procedure
and these can then be addressed before time and resources are expended on large scale
studies.A pilot study is normally small in comparison with the main experiment and
therefore can provide only limited information on the sources and magnitude of variation
of response measures.The pilot study may, however, provide vital information on the
severity of proposed procedures or treatments.
18. What is on-line marketing? (Nov/Dec- 2009)
Refer to Q.No: 16 (MAY/JUNE- 2009)
19. Highlight some of the online marketing trends(June 2010)

Display Advertising
Search Engine Marketing (SEM)
Search Engine Optimization (SEO
Social Media Marketing

Email Marketing
Referral Marketing
Affiliate Marketing
Content Marketing

20. What are the practical applications of marketing research(June 2010)

Refer to Question Number :2 (Nov / Dec 2006)

Part B
1. Discuss the contents of marketing research report. (MAY/JUNE 2006)
Preparatory Information
Letter of Transmittal
TitlePage
Authorization Statement
Executive Summary
Table of Contents

Introduction
Problem Statement
Research Objectives
Background

Methodology
Sampling Design

Findings

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Research Design
Data Collection

Conclusions
Summary & Conclusion

Data Analysis

Recommendations

Limitation

Recommendations

2. Explain the different types of marketing research. How would you compare
consumer marketing research with industrial marketing research? (MAY/JUNE
2006)
Different types of Marketing Research
Types
Reporting

Description
Provides an account or summation of
some marketing phenomenon

Descriptive

Discovers and reports the who,

what,when, when or how related to a
specific marketing decision

Explanatory

Attempts to explain the reasons for a

marketing phenomenon

Predictive

Attempts to forecast a marketing

phenomenon

Comparison:
Aspect

Industrial Marketing Research

Consumer Marketing Research

Market Size

Very large value-wise

Very large Volume-wise

Structure

Oligopolistic, Geographically concentrated

Monopolistic - Geographically Dispersed

Demand

Derived, Joint, Fluctually demand, price

inelastic

Mostly autonomous and price elastic

Nature

Technical complexity Customized

Technically less complex standardized

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Motives

Rational / Task motives

Socio-psychological

Factors

Quality, Service and Price in that order

Price, Quality and service are important

Channels
Logistics

Mostly direct, fewer linkages, SCM for

efficient physical distribution

Indirect, Multiple linkages, simple

planning and lime management

Management

Top management, Closely related to

corporate strategy

Functional management, aligned with

corporate strategy.

3. Discuss the different online advertising options for a marketer. (MAY/JUNE

2006)
The Internet is a powerful and far-reaching tool for business promotion. Internet
advertising gives even small businesses the opportunity to reach out to customers from all
over the world. Whether you use the Internet to promote your business, sell a product or
connect with new customers, it is important to understand some of the basic techniques
used on online advertising and marketing.
Text Ads
Text ads are one of the most common ad types used in online advertising.
Googles AdWords program has made text advertising .in easy, accessible, and affordable
option for many businesses. One of the greatest advantages is that they can be matched to
highly sped lie keywords and appear on sites where they are the most likely to reach
potential customers.

Banner Ads
Banner ads are large, rectangular advertisements intended to capture the attention
of online viewers. These ads often feature images or animations designed to catch the eye
and inspire the reader to click mi the banner. One problem with this type of online
advertising is that it has become so prevalent that many users experience what lias been
called banner blindness, where commonly viewed ads are ignored and disregarded.
Advertorials

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Advertorials are a combination of an editorial and an advertisement. T h i s type of

online advertising is common on e-commerce websites, l-'or example, a business selling
entertainment media might write an advertorial review of a product and then provide an
affiliate link where the customer can purchase the item.
E-mail
E-mail offers an excellent opportunity to make direct contact with potential
customers. However, customers do not want to be inundated with unwanted e-mail. The
key to using e-mail as and online advertising tool is to encourage customers to sign up for
a mailing list or newsletter. By providing valuable information to potential customers,
they will be more receptive to your marketing message.
Online Marketing Techniques
Over the years, different companies have generated a number of tried and tested
advertising techniques. These methods increase the profile of your business on the Web,
draw potential customers to your website, and increase sales. Use some of these proven
and tested marketing methods to rev up the companys online advertising.
Search Engine Marketing (SEM)
Search engine marketing involves advertising your website through search engine,
often through search results, paid listings, or pay-per- click campaigns. By using effective
search engine optimization (SEO) techniques, businesses can achieve top results in search
engine results. Many businesses have found that search marketing dramatically improves
site traffic and sales.
Affiliate Programs
Allowing other websites to advertise and promote your product and service is a
great way to significantly expand your customer base and increase your online sales. In
exchange for marketing your business, affiliates earn a commission on the sales they
produce. Affiliate programs are an ideal solution for product-based websites that need to
reach out to a targeted audience.
Reciprocal Links
Exchanging links with other websites is another important Internet advertising
tool-. When you place a reciprocal link on your website, the other business will place a
corresponding link on their side leading back to your Web location. The advantage of

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reciprocal links is that they are relatively easy way to reach more customers and improve
search engine rankings. A potential drawback of this marketing techniques is that it can
be time consuming and difficult to determine the effectiveness.
B LOGS
Blogs are one of the latest tools used in Internet advertising. While t h e y a r e
often thought of as personal journals, many businesses have discovered ways of
successfully using blogs to promote products, services, and other business-related news.
Blogs are a great way t o a d d interactivity and liveliness to your website. Syndicating
your blor, with an RSS feed is another way to promote your website and r.ive readers a
chance to access all of the latest updates and news about your business.
The Internet has opened up a world of advertising opportunities for many
businesses. Unlike traditional advertising, which is often expensive and limited in scope,
online advertising is a relatively affordable way to promote your business and service. By
understanding some of the basic principles and techniques of Internet advertising,
business can take advantage of this powerful marketing tool.
4. Has marketing changed in the Connected World? Discuss the strategy
implications of the Internet for marketing? (MAY/JUNE 2006)
In the current scenario marketing changed a tremendous growth in the Connected
World by inventing more innovations. A relatively new form of marketing uses the
Internet and is called internet, marketing or more generally e-marketing, affiliate
marketing or online marketing. It typically tries to perfect the segmentation strategy used
in traditional marketing. It targets its audience more precisely, and is sometimes called
personalized marketing or one-to-one marketing.
The purpose of any marketing plan is to communicate the vision of the marketing
department to the rest of the organization while providing a roadmap and compass for the
implementation of marketing initiatives. An Internet marketing plan is similar, but focuses
on the online portion of the organizations business, and while there are no set formulas
for the specific contents of an Internet marketing plan, or any marketing plan, there are
useful elements. These are discussed briefly below.
Executive Summary
The Executive Summary provides a quick review (one or two pages) of the
objectives, strategies and forecasted results of the proposed Internet Marketing Plan. It

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gives others (employees, financers) a concise picture of what you are going to do and how
you are going to achieve it.
Situation Analysis
Provides a historical look and current analysis of the companys Internet
operations, including an analysis of the successes and failures. The Situation Analysis can
contain as many of the following topics as appropriate to your business.
Business Analysis
Reviews the current status of the business including an analysis, of existing and
potential internal and external internet resources. Industry Analysis.Analyses long term
and short term Internet trends that are likely to change the online marketplace you are
doing business in.
Sales and Marketing Analysis
This is an intensive study and review of online product sales strategies and the
record of success (or failure) on the Internet.
Competitor Analysis
This section defines the criteria for online competitors, what they are doing online
and what will them likely doing next.
Customer Analysis
Analyzes your current online customers and how they are using your site
Planning Assumptions
Sets out the companys assumptions about the future
Forecasts
Forecasts of industry and product sales based on objective analysis of market research
data.
5. Explain

the

marketing

research

process

with

suitable

examples.

(NOV/DEC 2006)
The marketing research process includes the systematic identification, collection,
analysis and distribution of information for the purpose of knowledge development and

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decision making. The reasons and times at which your company or organization might
consider performing marketing research varies, but the general purpose of gaining
intelligence for decision making remains constant throughout. As a company or
organization, the overwhelming majority of research you are currently considering likely
revolves around your customers:

Current customers
Prospective customers
Lost customers
Members
Community
Employees (internal customers)
Shareholders (internal customers)

Whether you are creating a new marketing research program or perhaps revising an
existing marketing research program, what are the steps you should take? While there are
dozens of little steps along the way, each of those steps fits into one of the 6 major steps
of the marketing research process. They are:
Step 1: Identifying and defining your problem: This step is always the start of the
marketing research process. At this point, the problem will have been recognized by at
least one level of management, and internal discussions will have taken place. The most
common tools are internal and external secondary research. Secondary research
intelligence consists of information that was collected for another purpose, but can be
useful for other purposes. Examples of internal secondary research are sales revenues,
sales forecasts, customer demographics, purchase patterns, and other information that has
been collected about the customer. Most external secondary information is produced via
research conducted for other purposes, financial performance data, expert opinions and
analysis, corporate executive interviews, legal proceedings, competitive intelligence
firms, etc.
Step 2: Developing your approach: Once your problem is better defined, you can move
onto developing your approach, which will generally be around a defined set of
objectives. Clear objectives developed in Step 1 will lend themselves to better approach
development. Developing your approach should consist of honestly assessing you and
your team's market research skills, establishing a budget, understanding your environment
and its influencing factors, developing an analysis model, and formulating hypotheses.
Step 3: Establishing research design and strategy: Based upon a well-defined approach
from Step 2, a framework for the designing your marketing research program should be

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apparent. This step is the most encompassing of all steps in the research process,
requiring the greatest amount of thought, time and expertise - and is the point at which
those less experienced with market research will obtain assistance from an internal market
research expert or perhaps partner with an external marketing research provider. Research
design includes secondary information analysis, qualitative research, methodology
selection, question measurement & scale selection, questionnaire design, sample design &
size and determining data analysis to be used.
Step 4: Collecting the data: Often called data collection or survey fielding, this is the
point at which the finalized questionnaire (survey instrument) is used in gathering
information among the chosen sample segments. There are a variety of data collection
methodologies to consider such mail survey, internet panel, mail panel, in-home panel etc.
Step 5: Performing data analysis: Any questionnaire data analysis will depend on how
the questionnaire was constructed. Less complex questionnaire data analysis can be
handled with any of a number of office suite tools, while more complex questionnaire
data analysis u-quires dedicated market research analysis programs. Types of statistical
data analysis that might be performed are simple frequency distributions, cross tab
analysis, multiple regressions (driver analysis), cluster analysis, factor analysis,
perceptual mapping (multidimensional ruling), structural equation modeling and data
mining.
Step 6: Reporting and presentation: Market research reporting mid presentation is easily
the second most important step, if not the first Any business critical information and
knowledge that comes from your market research investment will be limited by how it is
presented to decision makers.
6. Explain the contents in marketing research report with subdivisions.
(MAY/JUNE 2007)
Refer to Q.no : 1 (May/June 2006)
7. Discuss online marketing process and its future in India. (MAY/JUNE 2007)
Marketing can do online marketing by creating an:

Electronic presence on the Internet

Placing ads on-line
Participating in forums, newsgroups, bulletin boards
Web communities
E-commerce: e-purchasing, e-marketing
E-mail and web casting

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Online marketing future in India:

Outsourcing
E-commerce
Benchmarking
Alliance
Partner-suppliers
Global and local
Integrated marketing communications

8. What are the emerging opportunities and challenges to a marketer of consumer

durables? (MAY/JUNE 2007)
Changing technology
Globalization
Deregulation
Privatization
Customer empowerment
Customization
Heightened competition
Industry convergence
Retail transformation
Disintermediation
9. What are the benefits of web-marketing? Illustrate the tasks in establishing webmarketing. (NOV/DEC 2007)
Benefits of web-marketing

Far Cheaper and Much More Flexible Than Print Advertising

Market Expansion
Diversify Revenue Streams
Offer Convenience
Add Value and Satisfaction
Standardize Sales Performance
Improve credibility
Promote your "Brick 'n' Mortar" Presence
Growth Opportunity
Cheap Market Research

Tasks in establishing web-marketing

The site needs to be indexed by a large search engine such as Yahoo or Google.
Advertise on other people's sites, using the pay per click method.
If you have a strong command of the English language, and can write great
articles, this may be the most beneficial to your site in general. This will increase
the popularity of your site, as well as save you money in the long run by having to
hire someone else to write for you.

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Do not confuse or bore a potential client by having long dragged out statements or
even poor grammatical structure to your pages.
Keeps it looking professional and they will in turn give you business. The idea is
to be straight forward, and direct with clear understandable flow in your site. This
eliminates any confusion and generally will bring you repeat business.
Many times when a site is done well word of mouth in the market starts to flow,
the next thing you know you have a large client base and the hits just keep
coming.
In making a great, web page it is always a good idea to incorporate a box for
recourses, this way there are no worries about plagiarism in your page content. If
your work is great, there is a good possibility that some one else may want to have
your pieces published on their sites too, this will give you great exposure as well.
Giving someone else the opportunity to generate hits will in turn be sent back to
you anyways. This is a back scratching process where everyone wins.

10. Examine the marketing challenges of the new economy to the marketers.
(NOV/DEC 2007)
Increased specialization of customer needs. The days of mass marketing and "one
size fits ail" products and services are long gone. Today's consumers want products,
services and information tailored to their specific interests, circumstances and needs.
Marketers need to balance the cost-benefits achieved through large-scale processes with
those achieved only by customized or personalized communications.
New communication channels. While broadcast television and the U.S. postal
service remain marketing staples, they've been augmented, if not replaced, by new modes
of communication. Today's consumers may tune out national TV or radio stations in favor
of more focused programming available only through satellite or cable stations. Many
turn to the internet for news and entertainment, instead of newspapers and magazines,
while others favor e-mail or instant messaging over so-called "snail mail."
Increased competition for customer dollars. The growing global economy and
deregulation have created a flood of new competitors in just about every industry.
Marketers have to work harder to gain new customers and retain existing ones.
Shorter product life and sales cycles. With today's new technologies and
breakthrough discoveries, no sooner does a product hit the market than a new, better or
enhanced version is introduced. Marketers must get current materials into prospects'
hands quickly and reliably.

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Legislation and regulatory restrictions. Some regulations, like HIPAA (Health

Insurance Portability and Accountability Act), affect specific industries- such as
pharmaceutical manufacturers, health insurers and their business partners. But
telemarketers in every industry have to work with barriers created by the national "do not
call" list, and e-mail marketers must avoid practices that could be considered
"spamming," while still getting their messages to the largest possible number of
prospects.
11. Explain marketing research.(MAY/JUNE 2008)
Marketing research, or market research, is a form of business research and is
generally divided into two categories: consumer market research and business-to-business
(B2B) market research, which was previously known as industrial marketing research.
Consumer marketing research studies the buying habits of individual people while
business-to-business marketing research investigates the markets for products sold by one
business to another.
Consumer market research is a form of applied sociology that concentrates on
understanding the behaviours, whims and preferences, of consumers in a market-based
economy, and aims to understand the effects and comparative success of marketing
campaigns.Thus marketing research is the systematic and objective identification,
collection, analysis, and dissemination of information for the purpose of assisting
management in decision making related to the identification and solution of problems and
opportunities in marketing.
Market Research Characteristics
First, marketing research is systematic. Thus systematic planning is required at all
the stages of the marketing research process. The procedures followed at each stage are
methodologically sound, well documented, and, as much as possible, planned in advance.
Marketing research uses the scientific method in that data are collected and analyzed to
test prior notions or hypotheses.
Marketing research is objective. It attempts to provide accurate information that
reflects a true state of affairs. It should be conducted impartially. While research is always
influenced by the researcher's research philosophy, it should be free from the personal or
political biases of the researcher or the management. Research which is motivated by
personal or political gain involves a breach of professional standards. Such research is

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deliberately biased so as to result in predetermined findings. The motto of every

researcher should be, "Find it and tell it like it is."
Marketing research involves the identification, collection, analysis, and
dissemination of information. Each phase of this process is important. We identify or
define the marketing research problem or opportunity and then determine what
information is needed to investigate it., and inferences are drawn. Finally, the findings,
implications and recommendations are provided in a format that allows the information to
be used for management decision making and to be acted upon directly. It should be
emphasized that marketing research is conducted to assist management in decision
making and is not: a means or an end in itself.
Methodologically, marketing research uses the following types of research
designs:
Based on questioning
Qualitative marketing research - generally used for exploratory purposes - small
number of respondents - not generalizable to the whole population - statistical
significance and confidence not calculated - examples include focus groups, in- depth
interviews, and projective techniques
Quantitative marketing research - generally used to draw conclusions - tests a
specific hypothesis - uses random sampling techniques so as to infer from the sample to
the population - involves a large number of respondents - examples include surveys and
questionnaires. Techniques include choice modelling, maximum difference preference
scaling, and covariance analysis.
Based on observations:
Ethnographic studies -, by nature qualitative, the researcher observes social
phenomena in their natural setting - observations can occur cross-sectionally
(observations made at one time) or longitudinally (observations occur over several timeperiods) - examples include product-use analysis and computer cookie traces.
Experimental techniques -, by nature quantitative, the researcher creates a quasiartificial environment to try to control spurious factors, then manipulates at least one of
the variables - examples include purchase laboratories and test markets

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Researchers often use more than one research design. They may start with
secondary research to get background information, then conduct a focus group
(qualitative research design) to explore the issues. Finally they might do a full nationwide survey (quantitative research design) in order to devise specific recommendations
for the client.
12. Discuss the contents in a marketing research report. (MAY/JUNE 2008)
Title Page
Table of Contents
Executive Summary
Introduction Body
Conclusion
Recommendations
Bibliography
Appendices
Title Page: This shows the title or subjects of the report, which the report is for, the
name of the writer and date of submission.
Table of Contents: This details all sections and sub-sections of the report with page
numbers.
Executive Summary or Abstract: This summarizes the main points and findings.
(This is not always required, particularly if it is a short report).
An Introduction: This includes the scope and background to the work including:The
aims and objectives and the terms of reference. The context of the report and its purpose.
Sometimes included are details of the organization requesting the report and the
question(s) they are hoping will be answered.
The Methodology - how the information presented in the report will be obtained and
what procedures will be used, for example: interviews or postal questionnaires.
Sometimes an explanation is included explaining why a particular investigative
approach / methodology was chosen.The topics covered - giving a broad outline of
content and scope and indicating any limitations of the project.
Body of the Report: This is where information is presented, explanations provided
and questions answered. It deals with what, how, where and why? The findings of the
report are broken down into discrete sections and sub-sections. Each section and subsection should have a title/heading, and be numbered.

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Conclusion: The conclusion sums up the main points raised in the report and arrives
at conclusions, which clearly relate to the objective(s) of the report. This is the place to
draw together key points made in the report . However, nothing new should appear here.
Recommendations: These should provide practical and viable proposal(s) and may
offer solutions to problems investigated in the report. (You will not always be asked to
include recommendations). Each recommendation should be listed and discussed
separately.
Bibliography: This should detail all: books, articles, journals, websites, and any other
sources consulted when writing the report.
Appendices: These should be placed at the end of the report. They detail relevant
information, which is too lengthy or detailed to include in the body of the report. Each
appendix should contain different information.These should refer to within the Report
(Appendix 1) and so on.
13. Explain the features of online marketing. (MAY/JUNE 2008)
Internet marketing, also referred to as web marketing, online marketing, or
eMarketing, is the marketing of products or services over the Internet.The Internet has
brought many unique benefits to marketing, one of which being lower costs for the
distribution of information and media to a global audience. The interactive nature of
online marketing, both in terms of providing instant response and eliciting responses, is a
unique quality of the medium. Online marketing is sometimes considered to have a
broader scope because it refers to digital media such as the Internet, e-mail, and wireless
media; "however, Online marketing also includes management of digital customer data
and electronic customer relationship management (ECRM) systems.
Online marketing ties together creative and technical aspects of the Internet, including
design, development, advertising, and sales. Internet marketing does not simply entail
building or promoting a website, nor does it mean placing a banner ad on another website.
Effective online marketing requires a comprehensive strategy that synergizes a given
company's business model and sales goals with its website function and appearance,
focusing on its target market through proper choice of advertising type, media, and
design.
Online marketing is associated with several business models:
e-commerce - goods are sold directly to consumers or businesses, .

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publishing - the sale of advertising,

lead-based websites - an organization generates value by acquiring sales leads
from its website, and
affiliate marketing - a business rewards one or more affiliates for each visitor or
customer brought about by the affiliate's marketing efforts.

Advantages of online Marketing

Your store is open, 24 hrs a day, 7 days a week. Further, your customers are
worldwide in reach, and can shop anytime that they want to
The cost of spreading your message is next to nothing. Emailing your subscription
base is more often cheaper than sending a letter through the mail
Updating your subscribers can be done almost instantly through email. Visitors to
your website can get up to the minute information on each visit. If you are having
a sale, your customers can start shopping at the discounted prices literally as soon
as they open their email
if you have an information sensitive business, such as a law firm, newspaper or
online magazine, you can deliver your products directly to your customers without
having to use a courier
Disadvantages of online Marketing
Online marketing is not free. The cost of software, hardware, wed site design,
maintenance of your site, online distribution costs and of course, time, all must be
factored into the cost of providing your service or product.
Slightly over 50% of households shop online. While that number will continue to
grow, you are reaching less than two out of three households.
The internet is still regarded as a source of information gathering for the majority
of your customers. Of the number of visitors to your site, the vast majority of
visitors who are motivated to buy will do so in person. Many people prefer the
live interaction when they buy. If you have a small business with one location, this
may deter customers from buying.
easier to have outdated information on your site, thus timing of updates is critical
There is no replacement for good old fashioned customer service. The majority of
internet marketers lack customer service and inquiry response programs. As a result,
many online visitors lo your site will already have painted your site as poor service before

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they have even contacted you. The majority of websites also have poor navigation, which
makes it difficult for your visitor to find what they are looking for. Many sites were
created with a marketing view, not a customer service point of view.

14. Describe web-based marketing programs. (MAY/JUNE 2008)

An affiliate program, sometimes referred to as web-based marketing programs, is
a system that allows web site owners to earn residual income, passive income and
generate multiple income streams by offering services or products on their web site with
no risk, overhead, inventory, shipping costs, employees, rent or maintenance. There is no
charge to become an affiliate:
Web-based marketing programs provide you an excellent opportunity to earn
multiple income streams and residual income. Whether you are new to internet marketing
or an experienced professional, these web based marketing programs will provide a
win-win situation for you and your customers - by delivering superb products and
services, and provides you the highest payouts on the web!.
Web-based marketing programs offer the following incentives:
Superb quality products and services with residual income
The highest commission payouts on the internet that offers passive income
Two-tiered commission structure that pays you for each affiliate you recruit who
makes a sale
Long commission tracking period
Excellent training programs to ensure you reach your highest earnings potential
possible with multiple income streams
Joining web based marketing programs is one of the most profitable ways in earning
money online, and a lot of people nowadays have become web based marketers since this
avenue provides an easy way in generating profit. But joining an web based program is
not enough to make it big in the industry; you must know which ones to be part of.
Hence, here are the top web based affiliate marketing programs based on credibility and
profitability:
Card Offers
One of the most profitable affiliate programs you can find today is Card Offers.
Card offers is among the biggest and most trusted programs mainly because their niche
provides something people consider a necessity: credit cards. With Card Offers you can

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promote Visa and Master card towards your audiences, without putting much effort in the
marketing, since credit cards are a "need". Card Offers can build you your own website
through their in house resources. Moreover, you can earn as much as $160 base
commission per sign up.
Pepper Jam
Another hip and trendy web based marketing program where you can earn as
much as $65 CPA is Paper Jam. In Paper Jam you will be provided with all the
promotional tools you need in marketing their site, ranging from text links, banners and
ads which you can add into your site. What's great about Paper Jam is that it blends with
all niche topics hence you don't have to conform to its subject matter. Also, you get an
instant $10 sign up bonus upon joining the program
Link Share
Meanwhile the third top affiliate program you can take part of nowadays is Link
Share. Link Share has partnerships with some of the biggest names in business and trade
such as American Express, so you won't have much trouble promoting their programs.
You will also benefit from the educational tools provided by the site as well as the
strategies which you can ask from their research and development team. Base
commission from Link Share ranges from $1-100 or 1-65%.
Easy Date
If you want to venture on the world of dating, then Easy Date is the program you
should be part of. Among the benefits of Easy Date are customizable landing pages,
ability to send traffic to multiple different URLs, and a variety of payment options. You
can earn as much as $60 per sale, or around $9 per confirmed sign up.
15. Describe the different types of research methods in detail. (NOV/DEC 2008)
. Qualitative marketing research: Generally used for exploratory purposes small number of respondents - non generalizable to the whole population statistical significance and confidence not calculated - examples include focus
groups, depth interviews, and projective techniques
Quantitative marketing research: generally used to draw conclusions - tests a
specific hypothesis - uses random sampling techniques so as to infer from the
sample to the population - involves a large number of respondents - examples
include surveys and questionnaires

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Observational techniques: the researcher observes social phenomena in their

natural setting - observations can occur cross- sectional (observations made at one
time) or longitudinally (observations occur over several time-periods) - examples
include product-use analysis and computer cookie traces
Experimental techniques: the researcher creates a quasi- artificial environment
to try to control spurious factors, then manipulates at least one of the variables examples include purchase laboratories and test markets
16. Explain the key elements in report writing. (NOV/DEC 2008)
Refer to Q.No:12 (MAY/JUNE 2008)
17. Discuss the techniques of acquiring the customers on the web. (NOV/DEC 2008)
Marketers today are under more pressure than ever to find new customers in our
highly competitive marketplace. No longer relying on mass-market efforts alone, smart
marketers are increasing their online initiatives, using more targeted, measurable
strategies that leverage the power of customer data to provide relevant, compelling
communications that speak to consumers one-to-one. After all, winning new customers
today means understanding and anticipating their needs, interests and behaviors, and
weaving relevant messaging into multiple media channels to reach them at every
available touch point.
Techniques of acquiring customers on the web:

Social Networks
Pay Per Click
Blogs & Wikis
Instant Messaging
Forums & Guestbooks
Search Engine.Optimization
Viral Marketing

Social Networks
Social networks make viral marketing and word-of-mouth marketing much easier
than before. The best use out of social networks is not to make money directly off them,
but to harness their marketing potential and to use them to market your own business. The
main goal of any search engine marketer is to drive more traffic to their site. The best way
to do that is to optimize your website (including the process of link building) for your
target keywords. Online social networks present an efficient platform for you to use in the

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spread of your marketing message. In addition, it is also a great tool for getting tons of
visitors and thousands of page views to your site.
Pay per Click
Pay per click (PPC) is an Internet advertising model used on search engines,
advertising networks, and content websites, such as blogs, where advertisers only pay
when a user actually clicks on an advertisement to visit the advertisers' website. With
search engines, advertisers typically bid on keyword phrases relevant to their target
market. When a user types a keyword query matching an advertiser's keyword list, or
views a webpage with relevant content, the advertisements may be displayed. Such
advertisements are called sponsored links or sponsored ads, and appear adjacent to or
above the "natural" or organic results on search engine results pages, or anywhere a
webmaster or blogger chooses on a content page. Content websites commonly charge a
fixed price for a click rather than use a bidding mechanism.
Blogs & Wikis
Blogs and wikis are flexible practices and technologies that are increasingly being
used within companies and organizations to ease the creation and dissemination of
information, as well as making it easier for companies to communicate effectively with
customers, partners, and the public. Blogs, or web logs, are the latest in hyped
technologies. Like any new technology (although blogs have been around for more than a
few years), they have the potential to change the technology landscape in ways that are
not yet clear. Blogs are best thought of as a way to present information to the world or to
a select group. The traditional blog is written in the form of an online diary and includes
the writer's thoughts on a. subject, links to interesting information, and often pictures. The
writer may post a new item several times a day, or a few times a year.
There are blogs on every conceivable subject and in most human languages.
Traditionally blogs have been created by one author and represent one author's views,
although there are some group blogs. Wikis are a different method of publishing and
presenting online information.The most famous wiki is the Wikipedia, an online
collaborative encyclopedia that illustrates the common wiki features, namely
collaborative authoring with lightweight content management features such as lists of
changed pages, author tracking, and locking. Some wiki systems also have version
control and rollback. All wikis make it easy to add new pages and create links.
Instant Messaging

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Instant messaging (IM) is a form of real-time communication between two or

more people based on typed text. The text is conveyed via devices connected over a
network such as the Internet. Instant messaging (IM) are technologies that create the
possibility of real-time text-based communication between two or more participants over
the internet or some form of internal network/ intranet. It is important to understand that
what separates chat and instant messaging from technologies such as e-mail is the
perceived synchronicity of the communication by the user - Chat happens in real-time
before your eyes. Some systems allow the sending of messages to people .not currently
logged on (offline messages), thus removing much of the difference between Instant
Messaging and e~ mail.
Guestbooks
A guestbook is a place where visitors can leave comments about your site. Good
hosting companies have part loaded Guestbook software which you can easily add to your
account such as the Viper Guestbook. Guestbook enables you to vet all the new entries
before they are posted. You may find, as we did for one of our sites that this gets to be so
arduous that you end up taking the Guestbook down. It is a real shame, but you have to
weigh up the amount of extra time going through the entries is taking you against the
number of bona fide and useful comments you are getting.
Forums
Good web hosting companies allow you to use forum software for free. Forums do
not develop overnight. They take time. Sometime-, it is months before you get the first
few members. But again, dont be disheartened. Expect' it to take time, start off some
interesting threads yourself and wait to see what happens. Forums are great ways of
letting others generate content for your website - a successful forum will grow into a
community where people chat to, share information with and help each other. Search
engines spider forums, and can help bring traffic to your site.
Search Engine Optimization
Search engine optimization (SEO) is the process of improving the volume and
quality of traffic to a web site from search engines via "natural" ("organic" or
"algorithmic") search results. Usually, the earlier a site is presented in the search results,
or the higher it "ranks," the more searchers will visit that site. SEO can also target
different kinds of search, including image search, local search, and industry- specific
vertical search engines.As an Internet marketing strategy, SEO considers how search

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engines work and what people search for. Optimizing a website primarily involves editing
its content and HTML coding to both increase its relevance to specific keywords and to
remove barriers to the indexing activities of search engines.
Viral Marketing
Viral marketing and viral advertising refer to marketing techniques that use preexisting social networks to produce increases in brand awareness or to achieve other
marketing objectives (such as product sales) through self-replicating viral processes,
analogous to the spread of pathological and computer viruses. It can be word-of-mouth
delivered or enhanced by the network effects of the Internet. Viral marketing is a
marketing phenomenon that facilitates and encourages people to pass along a marketing
message voluntarily. Viral promotions may take the form of video clips, interactive Flash
games, advergames, ebooks, brandable software, images, or even text messages. The
basic form of viral marketing is not infinitely sustainable.It is claimed that a customer
tells an average of three people about a product or service they like, and eleven people
about a product or service which they did not like. Viral marketing is based on this natural
human behavior.
Question Number :18 (May / June 2009)
18. Explain marketing information system. From what sources is the
marketing information system developed? (MAY/JUNE- 2009)
A marketing information system is a continuing and interacting structure of people,
equipment and procedures to gather, sort, analyze, evaluate, and distribute pertinent,
timely and accurate information for use by marketing decision makers to improve their
marketing planning, implementation, and control. A marketing information system (MIS)
is intended to bring together disparate items of data into a coherent body of information.
An MIS is, as will shortly be seen, more than raw data or information suitable for the
purposes of decision making. An MIS also provides methods for interpreting the
information the MIS provides.
The explanation of this model of an MIS begins with a description of each of its four
main constituent sources:

The internal reporting systems,

Marketing research system,
Marketing intelligence system and
Marketing models.

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It is suggested that whilst the MIS varies in its degree of sophistication - with many in
the industrialized countries being computerized and few in the developing countries being
so - a fully fledged MIS should have these components, the methods (and technologies)
of collection, storing, retrieving and processing data notwithstanding.
Internal reporting systems: All enterprises which have been in operation for any
period of time nave a wealth of information. However, this information often remains
under-utilized because it is compartmentalized, either in the form of an individual
entrepreneur or in the functional departments of larger businesses. That is, information is
usually categorized according to its nature so that there are, for example, financial,
production, manpower, marketing, stock holding and logistical data. Often the
entrepreneur, or various personnel working in the functional departments holding these
pieces of data, do not see how it could help decision makers in other functional areas.
Similarly, decision makers can fail to appreciate how information from other functional
areas might help them and therefore do not request it.
The internal records that are of immediate value to marketing decisions are: orders
received, stock holdings and sales invoices. These are but a few of the internal records
that can be used by marketing managers, but even this small set of records is capable of
generating a great deal of information. Below, is a list of some of the information that can
be derived from sales invoices.
Marketing research systems: The general topic of marketing research has been the
prime subject of the textbook and only a little more needs to be added here. Marketing
research is a proactive search for information. That is, the enterprise which commissions
these studies does so to solve a perceived marketing problem. In many cases, data is
collected in a purposeful way to address a well- defined problem (or a problem which can
be defined and solved within the course of the study). The other form of marketing
research centers not around a specific marketing problem but is an attempt to
continuously monitor the marketing environment. These monitoring or tracking exercises
are continuous marketing research studies, often involving panels of farmers, consumers
or distributors from which the same data is collected at regular intervals. Whilst the ad
hoc study and continuous marketing research differs in the orientation, yet they are both
proactive.
Marketing intelligence systems: Whereas marketing research is focused, market
intelligence is not. A marketing intelligence system is a set of procedures and data sources
used by marketing managers to sift information from the environment that they can use in

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their decision making.Marketing intelligence is the province of entrepreneurs and senior

managers within an agribusiness. It involves them in scanning newspaper trade
magazines, business journals and reports, economic forecasts- and other media. In
addition it involves management in talking to producers, suppliers and customers, as well
as to competitors. Nonetheless, it is a largely informal process of observing and
conversing.Some enterprises will approach marketing intelligence gathering in a more
deliberate fashion and will train its sales force, after-sales personnel and district/area
managers to take cognisance of competitors actions, customer complaints and requests
and distributor problems. Enterprises with vision will also encourage intermediaries, such
as collectors, retailers, traders and other middlemen to be proactive in conveying market
intelligence back to them.

Marketing models: Within the MIS there has to be the means of interpreting
information in order to give direction to decision. These models may be computerized or
may not.
Typical tools are:

Time series sales modes

Brand switching model
Linear programming
Elasticity models (price, incomes, demand, supply, etc.
Regression and correlation models
Analysis of Variance (ANOVA) models
Sensitivity analysis
Discounted cash flow
Spreadsheet what if models

These and similar mathematical, statistical, econometric and financial models are the
analytical subsystem of the MIS. A relatively modest investment in a desktop computer is
enough to allow an enterprise to automate the analysis of its data. Some of the models
used are stochastic, i.e. those containing a probabilistic element whereas others are
deterministic models where chance plays no part. Brand switching models are stochastic
since these express brand choices in probabilities whereas linear programming is
deterministic in that the relationships between variables are expressed in exact
mathematical terms.
19. Explain the impact of the Internet on Markets. (MAY/JUNE- 2009)

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The Internet has brought many unique benefits to marketing, one of which being
lower costs and greater capabilities for the distribution of information and media to a
global audience. The interactive nature of Internet marketing, both in terms of providing
instant response and eliciting responses, is a unique quality of the medium. Internet
marketing is sometimes considered to have a broader scope because it not only refers to
digital media such as the Internet, e-mail, and wireless media; however, Internet
marketing also includes management of digital customer data and electronic customer
relationship management (ECRM) systems. Internet marketing ties together creative and
technical aspects of the Internet, including design, development, advertising, and sale.
Internet marketing and geo-marketing places an emphasis on marketing that appeals
to a specific behavior or interest, rather than reaching out to a broadly-defined
demographic. On- and Off-line marketers typically segment their markets according to
age group, gender, geography, and other general factors. Marketers have the luxury of
targeting by activity and geolocation. For example, a kayak company can post
advertisements on kayaking and canoing websites with the full knowledge that the
audience has a related interest.
Internet marketing differs from magazine advertisements, where the goal is to appeal
to the projected demographic of the periodical: Because the advertiser has knowledge of
the target audience people who engage in certain activities (e.g., uploading pictures,
contributing to blogs) the company does not rely on the expectation that a certain group
of people will be interested in its new product or service.Internet marketing is relatively
inexpensive when compared to the ratio of cost against the reach of the target audience.
Companies can reach a wide audience for a small fraction of traditional advertising
budgets. The nature of the medium allows consumers to research and purchase products
and services at their own convenience. Therefore, businesses have the advantage of
appealing to consumers in a medium that can bring results quickly. The strategy and
overall effectiveness of marketing campaigns depend on business goals and cost-volume
profit analysis.
Internet marketing requires customers to use newer technologies rather than
traditional media. Low-speed Internet connections are another barrier: If companies build
large or overly-complicated websites, individuals connected to the Internet via dial-up
connections or mobile devices experience significant delays in content delivery.

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From the buyers perspective, the inability of shoppers to touch, smell, taste or try
on tangible goods before making an on-line purchase can be limiting. However, there is
an industry standard for e-commerce vendors to reassure customers by having liberal
return policies as well as providing in-store pick-up services.
20. Explain marketing research process in detail with suitable examples (June 2010)
Refer to Q.no 5. (NOV/DEC 2006)
21. Has marketing changed in the connected world. Discuss the strategy implications
of the internet for marketing. (Nov 2010)
Refer to Question Number : 4 (May / June 2006)
22. Discuss the different online advertising options for a marketer. (Nov 2010)
Refer to Question Number : 3(May / June 2006)
23.What are the ethical issues in Marketing research (June 2011)
Ethics in marketing: The American Marketing Association commits itself to
promoting the highest standard of professional ethical norms and values for its
members.
Norms: are established standards of conduct that are expected and maintained by
society and / or professional organization.
Values represent the collective conception of what people find desirable,
important and morally proper.
Framework of analysis for Marketing Ethics:
1) Value-oriented Framework: It analyses ethical problems on the basis of the
values which they infringe (e.g: Honesty, autonomy, privacy, transparency).
2) Stakeholder Oriented Framework: It analyses ethical Problems on the basis of
whom they affect.(e.g: Consumers, competitors.)
3) Process-Oriented Framework: It analyses ethical Problems in terms of the
categories used by marketing specialists (e.g: research, price, promotion, and
placement.)

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