Marketing

Q1 (a) Marketing as an essential task for a profit making organisation,

describe various functions of the marketing. What are the elements of growth in marketing
management.

Activities that direct the flow of goods and services from producers to consumers. In advanced
industrial economies, marketing considerations play a major role in determining corporate policy.
Once primarily concerned with increasing sales through advertising and other promotional
techniques, corporate marketing departments now focus on credit policies (see credit), product
development, customer support, distribution, and corporate communications. Marketers may look
for outlets through which to sell the company's products, including retail stores, direct-mail
marketing, and wholesaling. They may make psychological and demographic studies of a potential
market, experiment with various marketing strategies, and conduct informal interviews with target
audiences. Marketing is used both to increase sales of an existing product and to introduce new
products. See also merchandising.

Marketing is a general term used to describe all the various activities involved
in transferring goods and services from producers to consumers. In addition to
the functions commonly associated with it, such as advertising and sales
promotion, marketing also encompasses product development, packaging,
distribution channels, pricing, and many other functions. The modern
marketing concept, which is applied by most successful small businesses, is
intended to focus all of a company's activities upon uncovering and satisfying
customer needs. After all, an entrepreneur may come up with a great product
and use the most efficient production methods to make it, but all the effort will
have been wasted if he or she is unable to consummate the sale of the
product to consumers.

The importance of marketing in the modern business climate cannot be

overstated. In fact, management guru Peter F. Drucker has claimed that
marketing "is so basic it cannot be considered a separate function…. It is the
whole business seen from the point of view of its final result, that is, from the
customer's point of view." Marketing is the source of many important new
ideas in management thought and practice—such as flexible manufacturing
systems, flat organizational structures, and an increased emphasis on service
—all of which are designed to make businesses more responsive to customer
needs and preferences. This suggests that small business owners must master
the basics of marketing in order to succeed.
In the Macmillan Small Business Handbook, Mark Stevens discussed four main
areas of marketing in which entrepreneurs should concentrate their efforts:1)
determining the needs of customers through market research; 2) analyzing
their own competitive advantages and developing an appropriate market
strategy; 3) selecting specific target markets to serve; and 4) determining the
best marketing mix to satisfy customer needs. The first three tasks are most
appropriately performed when a start-up business is preparing to enter a
market, or when an existing business is considering entering a new market or
promoting a new product. The marketing mix, on the other hand, includes the
main decision areas that an entrepreneur must consider on an ongoing basis.
Some elements of the market environment, such as the general economic
conditions, are beyond a small business owner's control. But he or she can
adjust elements of the company's marketing mix—which consists of the "four
Ps": product, place, price, and promotion—to better fit the market
environment.

The Four Ps

The different elements of a company's marketing mix can be divided into

four basic decision areas—known as the "four Ps": product, place, promotion,
and price—which marketing managers can use to devise an overall marketing
strategy for a product or group of goods. These four decision groups represent
all of the variables that a company can control. But those decisions must be
made within the context of outside variables that are not entirely under the
control of the company, such as competition, economic and technological
changes, the political and legal environment, and cultural and social factors.

Marketing decisions related to the product (or service) involve creating the
right product for the selected target group. This typically encompasses
research and data analysis, as well as the use of tools such as focus groups, to
determine how well the product meets the wants and needs of the target
group. Numerous determinants factor into the final choice of a product and its
presentation. A completely new product, for example, will entail much higher
promotional costs to raise consumer awareness, whereas a product that is
simply an improved version of an existing item likely will make use of its
predecessor's image. A pivotal consideration in product planning and
development is branding, whereby the good or service is positioned in the
market according to its brand name. Other important elements of the complex
product planning and management process may include selection of features,
warranty, related product lines, and post-sale service levels.
Considerations about place, the second major decision group, relate to
actually getting the good or service to the target market at the right time and
in the proper quantity. Strategies related to place may utilize middlemen and
facilitators with expertise in joining buyers and sellers, and they may also
encompass various distribution channels, including retail, wholesale, catalog,
and others. Marketing managers must also devise a means of transporting the
goods to the selected sales channels, and they may need to maintain an
inventory of items to meet demand. Decisions related to place typically play
an important role in determining the degree of vertical integration in a
company, or how many activities in the distribution chain are owned and
operated by the manufacturer. For example, some larger companies elect to
own their trucks, the stores in which their goods are sold, and perhaps even
the raw resources used to manufacture their goods.

Decisions about promotion, the third marketing mix decision area, relate to
sales, advertising, public relations, and other activities that communicate
information intended to influence consumer behavior. Often promotions are
also necessary to influence the behavior of retailers and others who resell or
distribute the product. Three major types of promotion typically integrated into
a market strategy are personal selling, mass selling, and sales promotions.
Personal selling, which refers to face-to-face or telephone sales, usually
provides immediate feedback for the company about the product and instills
greater confidence in customers. Mass selling encompasses advertising on
mass media, such as television, radio, direct mail, and newspapers, and is
beneficial because of its broad scope. A relatively new means of promotion
involves the Internet, which combines features of mass media with a unique
opportunity for interactive communication with customers. Publicity entails the
use of free media, such as feature articles about a company or product in a
magazine or related interviews on television talk shows, to spread the word to
the target audience. Finally, sales promotion efforts include free samples,
coupons, contests, rebates, and other miscellaneous marketing tactics.

Determination of price, the fourth major activity related to target marketing,

entails the use of discounts and long-term pricing goals, as well as the
consideration of demographic and geographic influences. The price of a
product or service generally must at least meet some minimum level that will
cover a company's cost of producing and delivering its offering. Also a firm
would logically price a product at the level that would maximize profits. The
price that a company selects for its products, however, will vary according to
its long-term marketing strategy. For example, a company may underprice its
product in the hopes of increasing market share and ensuring its competitive
presence, or simply to generate a desired level of cash flow. Another producer
may price a good extremely high in the hopes of eventually conveying to the
consumer that it is a premium product. Another reason a firm might offer a
product at a very high price is to discount the good slowly in an effort to
maximize the dollars available from consumers willing to pay different prices
for the good. In any case, price is used as a tool to achieve comprehensive
marketing goals.

The societal function of marketing

In modern society production and consumption are apart from each

other. Marketing connects them. From the societal point of view,
marketing is a philosophy which shows how to create effective
production systems and consequently prosperity.

Business is a subsystem of society, which has both a social and an

economic role. Thus, a company must operate in a way that will make
possible the production of benefits for society and, at the same time,
produce profits for the company itself. (Davis, K. et al. 1980) The role
of marketing in society means also responsibilities. In addition to
economic and social responsibility, ecological responsibility is
nowadays emphasized. According to some definitions, environmental
responsibility is part of social responsibility. Improvement of
marketing is related to the changing emphases of economic, social
and environmental responsibility.

Goodpaster and Matthews (1982) analyse three patterns of thought

which can be distinguished for a company's social responsibility:

1. The invisible hand;

2. The hand of government; and

3. The hand of management.

1. The invisible hand view (promoted by e.g. Milton Friedman)

concludes that the only social responsibilities of business
organizations are to make profits and to obey laws. Free and
competitive market-place will ensure the moral behaviour of
companies. The common good is best served when individuals and
organizations pursue competitive advantage.

2. The hand of government view (promoted by e.g. John Kenneth

Galbraith) concludes that companies are to pursue rational and
purely economic objectives. It is the regulatory hand of the law and
political process which guides these objectives towards common
good.

3. The hand of management view (presented by Goodpaster &

Matthews) would put the responsibility of a company's actions into
the hands of the company itself. It is concluded that the moral
responsibilities of an individual may be projected into an
organization, and that the concepts of an individual's responsibility
and a company's responsibility are largely parallel. Therefore,
organizations should be no less or no more responsible than ordinary
persons.
The development of marketing is clearly related to adopted values
which may be seen in the patterns of thought mentioned above.

The traditional and integrating functions of marketing

Traditionally, marketing has been seen as a link between production

and customer. The situation could be captured better by using the
term selling. Selling is associated to the so- called "Production and
Sales Eras of Marketing". Slogans: "Make what you can make" and
"Get rid of what you have made" describe the traditional view of
marketing/sellingzperiodz

The following figure shows the role of traditionally oriented

marketing in (traditionally oriented) management.

Marketing was born out of a need to take better into consideration

the demand factors in production planning. The function of marketing
is to channel information of consumer needs to the production and
satisfaction of needs to consumers. The basic power of marketing is
the aspiration to produce and sell only that kind of products which
have demand. Marketing integrates the whole company to serve this
demand. Marketing aims at effective production systems, where
information is transmitted effectively between production and
consumption.

(b) What is marketing organisation and how it is formed in an organisation, also

explain the responsibilities of a marketing manager.

Market Organisation in Manipur

The level of market organisation is largely determined by the new imperatives of the
rising level of economic development. In the non-monetised barter economy there is,
perhaps, no necessity of modern market-organisation as such. The "money economy"
grows with the separation of production, consumption and distribution. In the exchange
economy there is structured processes of production, distribution and delivery. The article
of interdependence is fairly high. All economic activities get increasingly market-
determined and market-oriented.

Secondly it may also be noted that the generation of "marketable surplus"

(commercial surplus) marks a fountainhead of the development of market organisation.
Greater the marketable surplus higher the market organisation. The changing composition
of the marketable surplus is another added impetus. Diversification is really inspiring. The
rising market-interaction becomes a fertile ground for higher per capita income (greater
purchasing power), faster change in the composition of output and taste and preference of
the consumers. Because, Supply acts on Demand. The availability of efficient physical
facilities such as road, transport, communication, housing, electricity, water supply, health,
drainage and place for disposal of solid waste etc. strengthens the foundation of the
market organisation. The primary services are followed by the secondary services. The
primary services include assembling, processing and dispersion. The secondary services
cover grading, packing, transporting, storing, financing and selling.

In addition we come across a chain of agents, hawkers and middlemen with the
growth of the sophistication of the market. Obviously "market-information" becomes a
critical input. Perhaps all market-related activities are undertaken depending upon the so-
called market-information. Remember, market rewards the strongest while market
punishes the weakest also. To that extent market information is important. Today we have
"market-player", "market-developer" and "market- changer" etc. Really interesting. There
is, indeed, a market for market information in the sophisticated economy. Globalisation is
in a sense, the Global Market - largely characterized by free entry and free exist and
largely operating beyond traditional geographical frontiers.

Thus market organisation essentially implies the system of networking of the

apparatus of various entities and institutions in a market-region. Rules are required.
Regulation is required. Incentives are called for. Distortion must be stopped. Unfair trade
practices are to be guarded against. Security of scale and purchase is the religion of a
strong market organisation. Credibility is a strong inner force. Quality is part of greater
asset. Competition is a way of life. Commercial achievement strengthens the new sense
of professionalism and specialisation. Innovation is the essence.

The growth of Central Market (Terminal Market) is a sign of greater tempo and
larger volume of trade-activities. The two important activities namely- Concentration
(Assembly) and Dispersion are primary functions of the central market. In fact, market
prices get largely formalised in this market. Other markets such as district markets and
local markets depend upon the efficiency of the central market. The petty and isolated
producers look to the behavior of the central market.
 We have, perhaps, the Khwairamband Market in the heart of Imphal City as a
central market in Manipur. A few district markets are;

1) Kakching Market
2) Moirang Market
3) Bishnupur Market
4) Nambol Market
5) Thoubal Market
6) Churachandpur Market

These markets are operating in response to the changing behavior of the

Khwairamband Central Market where all concentration activities and dispersion activities
are being undertaken.

Another form of marketing organisation is co-operative market, which is getting into

trouble because of "inbreeding" and "vested-interest". Very few are found operating
successfully.

In Manipur, very peculiarly, one finds general ignorance of sensitivity of consumers

to unduly high rate of price. All forms of market imperfections are visible. The unfair trade
practices are simply ignored. Adulteration is quite open. There is market but not marketing
system. Not a single "market-authority" (such as Food Inspectors and Officers of the
Weight and Measure Departments, and Sanitary Inspectors) inspects the market
operation either in the input markets or the output markets.

Of course, there are elected members of the Municipal Councils, Small Town Committees
and Nagar Panchayats etc. Their presence is largely very nominal so far as the market-
development is concerned. What they actually do is a few works of minor nalas, approach
roads, galis, disposal of solid waste and collection of user-charges.

For the small business, there are several different organisational approaches
to marketing. The duty may lie with a single member of the team, or it could
be a group responsibility. The great thing about a small team is the ability to
quickly instill a marketing led ethos which can become the operational soul of
your business.

Depending on budget availability and the skills of the team, you may chose to
outsource certain elements of the marketing process (such as market
research) or decide to do these jobs in-house. Key responsibilities of the
marketing manager / director vary according to the business but can include:

• Instilling a marketing led ethos throughout the business

• Researching and reporting on external opportunities
• Understanding current and potential customers
• Managing the customer journey (customer relationship management)
• Developing the marketing strategy and plan
• Management of the marketing mix
• Managing agencies
• Measuring success
• Managing budgets
• Ensuring timely delivery
• Writing copy
• Approving images
• Developing guidelines
• Making customer focused decisions

The marketing role can be diverse or focused but now we'll elaborate further
on some key aspects which should be at the heart of the job.

Q2. (a) What is the need of new project planning? Name the essentials of new
products.

project management

project management, tools, process, plans and project planning tips

Here are rules, processes and tools for project planning and project
management.
While project management skills are obviously important for project managers,
interestingly the methods and tools that project managers use can be
helpful for everyone.
A 'task' does not necessarily have to be called a 'project' in order for project
management methods to be very useful in its planning and implementation.
Even the smallest task can benefit from the use of a well-chosen project
management technique or tool, especially in the planning stage.
Any task that requires some preparation to achieve a successful outcome, will
probably be done better by using a few project management methods
somewhere in the process. Project management methods can help in the
planning and managing of all sorts of tasks, especially complex activities.
Project management is chiefly associated with planning and managing change
in an organization, but a project can also be something unrelated to business -
even a domestic situation, such as moving house, or planning a wedding.
Project management methods and tools can therefore be useful far more
widely than people assume.
Project management techniques and project planning tools are useful for any
tasks in which different outcomes are possible - where risks of problems and
failures exist - and so require planning and assessing options, and organizing
activities and resources to deliver a successful result.
Projects can be various shapes and sizes, from the small and straightforward
to extremely large and highly complex.
In organizations and businesses, project management can be concerned with
anything, particularly introducing or changing things, in any area or function,
for example:

• people, staffing and management

• products and services
• materials, manufacturing and production
• IT and communications
• plant, vehicles, equipment
• storage, distribution, logistics
• buildings and premises
• finance, administration, acquisition and divestment
• purchasing
• sales, selling, marketing
• human resources development and training
• customer service and relations
• quality, health and safety,
• legal and professional
• technical, scientific, research and development
• new business development
• and anything else which needs planning and managing within organizations.

Successful project management, for projects large or small, tends to follow the
process outlined below.
The same principles, used selectively and appropriately, also apply to smaller
tasks.
Project management techniques are not just for project managers - they are
available for anyone to use.

The Essentials of Filters

The Java Servlet specification version 2.3 introduces a new component type,
called a filter. A filter dynamically intercepts requests and responses to
transform or use the information contained in the requests or responses.
Filters typically do not themselves create responses, but instead provide
universal functions that can be "attached" to any type of servlet or JSP page.
Filters are important for a number of reasons. First, they provide the ability to
encapsulate recurring tasks in reusable units. Organized developers are
constantly on the lookout for ways to modularize their code. Modular code is
more manageable and documentable, is easier to debug, and if done well, can
be reused in another setting.
Second, filters can be used to transform the response from a servlet or a JSP
page. A common task for the web application is to format data sent back to
the client. Increasingly the clients require formats (for example, WML) other
than just HTML. To accommodate these clients, there is usually a strong
component of transformation or filtering in a fully featured web application.
Many servlet and JSP containers have introduced proprietary filter
mechanisms, resulting in a gain for the developer that deploys on that
container, but reducing the reusability of such code. With the introduction of
filters as part of the Java Servlet specification, developers now have the
opportunity to write reusable transformation components that are portable
across containers.
Filters can perform many different types of functions. We'll discuss examples
of the italicized items in this paper:

•
• Authentication-Blocking requests based on user identity.
• Logging and auditing-Tracking users of a web application.
• Image conversion-Scaling maps, and so on.
• Data compression-Making downloads smaller.
• Localization-Targeting the request and response to a particular locale.
• XSL/T transformations of XML content-Targeting web application responses to
more that one type of client.
These are just a few of the applications of filters. There are many more, such
as encryption, tokenizing, triggering resource access events, mime-type
chaining, and caching.
In this paper we'll first discuss how to program filters to perform the following
types of tasks:

•
• Querying the request and acting accordingly
• Blocking the request and response pair from passing any further.
• Modifying the request headers and data. You do this by providing a customized
version of the request.
• Modifying the response headers and data. You do this by providing a customized
version of the response.

We'll outline the filter API, and describe how to develop customized requests
and responses.
Programming the filter is only half the job of using filters-you also need to
configure how they are mapped to servlets when the application is deployed in
a web container. This decoupling of programming and configuration is a prime
benefit of the filter mechanism:

•
• You don't have to recompile anything to change the input or output of your web
application. You just edit a text file or use a tool to change the configuration. For example, adding
compression to a PDF download is just a matter of mapping a compression filter to the download
servlet.
• You can experiment with filters easily because they are so easy to configure.

The last section of this paper shows how to use the very flexible filter
configuration mechanism. Once you have read this paper, you will be armed
with the knowledge to implement your own filters and have a handy bag of
tricks based on some common filter types.

Programming Filters

The filter API is defined by the Filter, FilterChain, and FilterConfig interfaces in
the javax.servlet package. You define a filter by implementing the Filter
interface. A filter chain, passed to a filter by the container, provides a
mechanism for invoking a series of filters. A filter config contains initialization
data.
The most important method in the Filter interface is the doFilter method,
which is the heart of the filter. This method usually performs some of the
following actions:

•
• Examines the request headers
• Customizes the request object if it wishes to modify request headers or data or
block the request entirely
• Customizes the response object if it wishes to modify response headers or data
• Invokes the next entity in the filter chain. If the current filter is the last filter in the
chain that ends with the target servlet, the next entity is the resource at the end of the chain;
otherwise, it is the next filter that was configured in the WAR. It invokes the next entity by calling
the doFilter method on the chain object (passing in the request and response it was called with, or
the wrapped versions it may have created). Alternatively, it can choose to block the request by not
making the call to invoke the next entity. In the latter case, the filter is responsible for filling out
the response.
• Examines response headers after it has invoked the next filter in the chain
• Throws an exception to indicate an error in processing

(b) Describe the types of Market studies, explain various stages for Research
design for a prototypical market segmentation

Marketing research is the systematic gathering, recording, and analysis of

data about issues relating to marketing products and services. The term is
commonly interchanged with market research; however, expert practitioners
may wish to draw a distinction, in that market research is concerned
specifically with markets, while marketing research is concerned specifically
about marketing processes.[1]

Marketing research is often partitioned into two sets of categorical pairs, either
by target market:

• Consumer marketing research, and

• Business-to-business (B2B) marketing research

Or, alternatively, by methodological approach:

• Qualitative marketing research, and

• Quantitative marketing research
Consumer marketing research is a form of applied sociology that concentrates
on understanding the preferences, attitudes, and behaviors of consumers in a
market-based economy, and it aims to understand the effects and
comparative success of marketing campaigns. The field of consumer
marketing research as a statistical science was pioneered by Arthur Nielsen
with the founding of the ACNielsen Company in 1923.[2]
Thus, marketing research may also be described as 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.[3] The
goal of marketing research is to identify and assess how changing elements of
the marketing mix impacts customer behavior.

Marketing 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 deliberately
biased so as to result in predetermined findings. The motto of every
researcher should be, "Find it and tell it like it is." The objective nature of
marketing research underscores the importance of ethical considerations,
which are discussed later in the chapter.
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. The next section elaborates on this definition by
classifying different types of marketing research.
Classification of marketing research

Organizations engage in marketing research for two reasons: (1) to identify

and (2) solve marketing problems. This distinction serves as a basis for
classifying marketing research into problem identification research and
problem solving research.
Problem identification research is undertaken to help identify problems which
are, perhaps, not apparent on the surface and yet exist or are likely to
company image, market characteristics, sales analysis, short-range
forecasting, long range forecasting, and business trends research. Research of
this type provides information about the marketing environment and helps
diagnose a problem. For example, The findings of problem solving research
are used in making decisions which will solve specific marketing problems.
The Stanford Research Institute, on the other hand, conducts an annual survey
of consumers that is used to classify persons into homogeneous groups for
segmentation purposes. The National Purchase Diary panel (NPD) maintains
the largest diary panel in the United States.
Standardized services are research studies conducted for different client
firms but in a standard way. For example, procedures for measuring
advertising effectiveness have been standardized so that the results can be
compared across studies and evaluative norms can be established. The Starch
Readership Survey is the most widely used service for evaluating print
advertisements; another well-known service is the Gallup and Robinson
Magazine Impact Studies. These services are also sold on a syndicated basis.

• Customized services offer a wide variety of marketing research services

customized to suit a client's specific needs. Each marketing research project is treated uniquely.
• Limited-service suppliers specialize in one or a few phases of the marketing
research project. Services offered by such suppliers are classified as field services, coding and data
entry, data analysis, analytical services, and branded products. Field services collect data through
mail, personal, or telephone interviewing, and firms that specialize in interviewing are called field
service organizations. These organizations may range from small proprietary organizations which
operate locally to large multinational organizations with WATS line interviewing facilities. Some
organizations maintain extensive interviewing facilities across the country for interviewing
shoppers in malls.
• Coding and data entry services include editing completed questionnaires,
developing a coding scheme, and transcribing the data on to diskettes or magnetic tapes for input
into the computer. NRC Data Systems provides such services.
• Analytical services include designing and pretesting questionnaires, determining
the best means of collecting data, designing sampling plans, and other aspects of the research
design. Some complex marketing research projects require knowledge of sophisticated procedures,
including specialized experimental designs, and analytical techniques such as conjoint analysis and
multidimensional scaling. This kind of expertise can be obtained from firms and consultants
specializing in analytical services.
• Data analysis services are offered by firms, also known as tab houses, that
specialize in computer analysis of quantitative data such as those obtained in large surveys.
Initially most data analysis firms supplied only tabulations (frequency counts) and cross tabulations
(frequency counts that describe two or more variables simultaneously). With the proliferation of
software, many firms now have the capability to analyze their own data, but, data analysis firms are
still in demand.
• Branded marketing research products and services are specialized data
collection and analysis procedures developed to address specific types of marketing research
problems. These procedures are patented, given brand names, and marketed like any other branded
product.

Marketing research methods

Methodologically, marketing research uses the following types of research

designs:[5]
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 time-periods) - examples include
product-use analysis and computer cookie traces. See also Ethnography and Observational
techniques.
• Experimental techniques -, by nature quantitative, 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

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 nation-wide survey (quantitative research design) in order to devise
specific recommendations for the client.
product design to prototype planning

product development from an idea to a prototype

Many people think about and formulating new and creative ideas all th times.
Unfortunately, in most cases, the value of those ideas usually worth nothing terms of money. And
so the question is what does it take from an
entrepreneur to create money value to his idea, and what is needed to make
money out of it?
This article will deal with the processes needed to build money value to an
idea and with scattering the fog surrounding them.
A scheme describing the processes detailed in this article can be found in www.b-focous.com
Four main processes are needed to transform an 'idea' into 'idea + value':
1. defensive processes – patent searching, analyzing and patent registration or sample
2. developmental processes – prototypes and concepts development in different levels and up to
stages defined in advanced
3. research processes - market surveys: qualitative and quantitative
4. business and marketing processes – business plan and the additional marketing information
needed to present the project
The main process – building value to the project – contains the four processes mentioned, when
there is a different time schedule to every process in order to make the project successful.
In order to unveil the importance and the place of the different processes in the process of building
value to the idea, let's see in general what they stand for.

Defensive processes – patents search and registration:

The defensive processes are meant primarily to found out what is already registered as a patent,
what is not, what is possible to be registered and what is worth registering as a patent in order to
make it easy to defend and provide maximum coverage. A good example I like to give
entrepreneurs I guide in projects advancement, is the patent on sawing machine, which all of its
uniqueness and registration is summed up in the registration of the machine needle (which unlike
usual needles has a hole in its bottom/down side rather than in its upper side).
In the process of building value, there are different stages to the patent process. First we have to
find out what exists and what's not; then we need to analyze the patents found and only then to start
the development stage. We must not register the patent until the project reaches the stage when it
can be registered as one!!! When that time comes' the registration should be done according to the
project's character and defense needed.

Business and marketing processes – business development:

In this stage, after analyzing the existing patents, we have to build marketing strategy and choose
the product's target audience. Choosing the strategy is a crucial point in the beginning of the
process, and must be based upon the patents analysis. Also, the developed strategy will be a guide
line to the continuous relevant activity of the project, and all additional processes will based upon

Developmental processes – product planning, designing and developing and building a prototype:
The developed processes goal is to develop the product the entrepreneur wants to develop. Those
developmental processes will be affected by the patent searches done and their analysis. Also, the
character of the development must be based upon the target audience and strategy chosen.
The development process will reveal unknowns which will be applied to the business processes,
such as the product's production cost, the product's cost to the consumer, expected expenditures,
expected income, goals, land marks etc.
Additionally, the development process will reveal new patents and innovations unknown at the
time. These innovations must be analyzed from defensive perspective, in order to examine the
patent's character needed to be registered and the amount of defense needed.

Research processes – writing and analyzing market surveys

In this stage, influences and consequences of the defensive and developmental processes will be
expressed. Additionally, the strategy chosen will be a guide line to the questionnaires written and to
the information that the market surveys are meant to provide.
The research processes are divided into two: qualitative and quantitative surveys. The survey
character and scope depends upon the project character, the chosen strategy and the requirements
regarding the needed information.
The result of the research processes will provide relevant and necessary information needed to the
project's business and marketing plan.

Business and marketing processes – business accompaniment, business council and business
development
The business and marketing processes already begins at the beginning of the value building process,
and will outline the character of the processes mentioned. Their influence will be present from the
moment of analyzing the patents and the choosing of the business and marketing strategy and up to
the point where all the business and marketing information is ready to be presented to the investor
or the strategic partner, or alternatively, to the potential client.
As part of building and gathering the business information, it will be possible to evaluate the project
worth, income expectation according to the market segment, expenditures forecast until the stage of
Return of Investment, goals, land marks etc. this information will be the base to investment
recruiting and to scatter the fog surrounding the processes needed to the continuous existence of the

To sum it up
Each of the processes mentioned is important by itself, but the value of each separately will leave
too many unknowns and will make it difficult to the entrepreneur to advance the project/
additionally, the entrepreneur must consider the fact that every process takes different time to
complete and that its integration with the other processes is essential to the advance of the general
process – building money value to the idea.
My recommendation to entrepreneurs is that previous to the beginning of any activity, they should
get a fair business council, or alternatively to go to development companies from the industry which
provides different services to entrepreneurs and which give, in addition to business accompaniment,
all four services with inter synchronization and as an integral part of the service they provide.
An example to a scheme describing the processes, their position and their importance in building
value to an idea can be seen in www.b-focus.com under the title Processes for entrepreneurs.

Enumerate the approaches used for naming a product in an Industry. Also

mention the reasons for name testing research.

The world is shifting from traditional to techno savvy. Companies are now
getting furnished with advance technology & IT services. The success of
Information Technology companies lie with the increased need of software
development services and this is reason that software development services
market is booming. Nowadays, companies are offering their services in
offshore product development. To achieve success, many companies turn to
the software application development firms to get the complete IT and
software solution for their needs. They consider that basic software are costly
and even do not fulfill their overall needs. Even the services provided by the
software development company are cheaper than buying new and exclusive
software. Several trends are emerging within the area of outsourced software
development. Some of the most important trends are as follows:

Cloud Computing – Cloud computing comes into focus only when you think
about what IT always needs: a way to increase capacity or add capabilities on
the fly without investing in new infrastructure, training new personnel, or
licensing new software. Cloud computing levels the playing field for small
companies to compete against large, established companies at a reasonable
and predictable cost. The cloud is just one example of a virtualized computing
platform, and the next generation of developer tools must enable developers
to build software that deploys and performs well in cloud and other virtual
environment.

Agile Development – Agile development helps to standardize management

and daily programmer work, enforcing a small, controllable level and also
encouraging good communication across the team. Agile development
processes, including Scrum, test-driven development, and continuous
integration are commonly used in the enterprise and smaller development
shops, often in combination with other development practices. Within
Microsoft, many teams have integrated elements of Agile development
practices to their process. Visual Studio 2010 opens the door for Agile
methodologies, offering support for some Agile processes, such as unit testing
and iteration planning. We will continue to support more Agile methodologies
as we will move forward. Agile management is not only for managers rather it
is for the whole team to have a good understanding about their own
development and management process.

Modern scripting language – These languages encourage good practices

and methods, changing our attitude towards programming and program
design. Embracing elegant and simple solutions becomes expectation with
time, thus we will be striving for elegance and quality to improve all of our
further designs and codes.

We conducted two distinct series of tests: One for a product name and the
other for a domain name.

In both cases we learned that being "intuitive," being an "expert," or just plain
guessing is not enough to tell you how your prospects will respond.

You will learn three things from this brief:

1. The name you give a product, service or web site can have a significant impact on
the number of people who click through from a link to find out more.
2. Regardless of your level of expertise, you will not and cannot identify the name
that will generate the most click-throughs, unless you test.
3. You will find out that testing product and domain names is just the first step,
giving you important insights into the words and phrases that trigger a positive response in your
readers. Step two is to apply that learning to your headings, subheads, bullet points, links and email
subject lines... and then test those as well.

Regarding the means by which we tested these names and domains, we used
Google AdWords. By changing just one element across a series of otherwise
identical ads, we were able to measure the differences in click-through rates.
Google AdWords is a simple, inexpensive way for you to conduct similar tests
for your own company.

Test #1: Testing Domain Names

In our first test, we wanted to identify the best domain name for a computer
hardware retailer. After brainstorming a list of 34 potential domain names, we
determined that these five had the most potential:

1. TechSavings.com
2. PCPavilion.com
3. BuyTech.com
4. ComputerHardwareDepot.com
5. ComputerHardwareDirect.com

We wanted to determine which of these domain names best "connects" with a

buyer's expectations. To do so, we utilized a feature of Google AdWords that
allows you to rotate a number of ad variations.

• Each Google AdWords ad was identical other than the domain name listed in the
ad. Each had the same copy, the same headline, and the same fifteen keywords.
• All five ads had the same maximum per-click bid ($0.31).
• Because all of the other elements were the same, we determined that the ad with
the best click-through rate (CTR) would indicate the best domain name.

Here are the results of that test:

Domain Name Test
Domain Name Avg. Position
ComputerHardwareDepot.com
BuyTech.com
ComputerHardwareDirect.com
TechSavings.com
PCPavilion.com
TOTAL

What You Need To UNDERSTAND: ComputerHardwareDepot.com

performed the best (0.6% CTR), followed closely by BuyTech.com (0.5% CTR).
Because these ads had a higher CTR, they tended to maintain a higher
average position for a lower average cost per click (CPC).
The implications of this simple test are quite powerful. Using Google AdWords
Select, a savvy marketing team can, in a sense, "see into the mind of the
consumer." They no longer have to rely on guesswork or "personal favorites"
to try to predict which domain name will perform the best.
KEY POINT: Personal opinions or intuitions about the best name are often
wrong. There is no substitute for actual testing.
In addition to domain names, you can successfully use Google AdWords to
help you determine:

• The best names for a new product or service offering (see below).
• The best Unique Value Proposition (UVP) for your overall business.
• The most effective sales copy.

In the balance of this report, we will focus on how to test product and service
names to determine the name with the best market potential.

Test #2: Testing Product Names

In our second test, we wanted to determine the best product name for a new
financial product.
We initially tested a broad range of product names through Google. Here, we
varied the actual title of the Google ad, while keeping the body copy, domain
name, and keyword bids the same for all 22 ads.
Here are the results of our initial micro-test:
Product Name Test
Product
Click-Through
Name Rate
StockScreener 5.0
Reuters PowerScreener
PowerInvestor
Advanced StockScreener
StockScreener
StockScreener Plus
StockScreener Enterprise
StockScreener Pro
PowerScreener 2006
ScreenPlus
StockSource
Advanced PowerScreener
FlexiScreener
Stock Filter Pro
StockFunnel
Personal Broker
PowerScreener Plus
PowerScreener Pro
Stock Genie
MarketFilter
PowerScreener Enterprise
Enterprise Stock Screener

What You Need To UNDERSTAND: The result of this micro-test showed

that "StockScreener 5.0" generated a 17% better click-through rate than the
next-best name.
"StockScreener 5.0" likely performed better for two reasons:

1. The name is highly descriptive.

2. The "5.0" suggests that it is a mature, well-developed software product.
We decided to run the test again, this time with a smaller number of names,
all of which were based around the existing product name. Here are the
results:
Product Name Test - Revised
Product Name
Click-Through Rate
PowerScreener 5.0
PowerStock Screener
PowerScreener Enterprise
PowerScreener Pro
PowerScreener Plus

What You Need To UNDERSTAND: "PowerScreener 5.0" generated a

6% higher click-through rate than the next best ad title.
Both of these tests indicate that the "5.0" placed at the end of the product
name was a significant factor contributing to increased click-through.
In our final round of testing, we focused on product description. Here, the ads
all featured the same headline, second line of copy, URL, and keyword bids.
We varied the first line of ad copy as follows:
Data on 25,000 Companies [Headline]
INSERTED LINE FROM BELOW
Unlimited Reports. Free Sample
www.ReuterseCommerce.com
Here were the four phrases used in the first line of copy under the headline:

1. Company Profile Subscription

2. Company Profile Library
3. Investment Profile Subscription
4. Investment Profile Library

In our recent online clinic, we polled our audience on which of these

descriptions they preferred. Here are the results of their voting:
Product Description Survey
Product Description
Percentage of Votes
Investment Profile Library
Company Profile Library
Investment Profile Subscription
Company Profile Subscription

What You Need To UNDERSTAND: Our live audience overwhelmingly

chose "Investment Profile Library" as their favorite name.
In actual PPC testing, the results were quite different:
Product Description Test
Product Description
Click-Through Rate
Investment Profile Subscription
Company Profile Subscription
Company Profile Library
Investment Profile Library

What You Need To UNDERSTAND: "Investment Profile Subscription"

performed 9% better than the worst phrase ("Investment Profile Library").
Both descriptions that included the word "subscription" performed better than
those that had the word "library" instead.
KEY POINT: Altering just one word can have a significant impact on the
performance of your product copy.
Our clinic audience intuitively picked the description that actually performed
the worst in PPC testing. In the process of testing, we were able to increase
performance by 9%.
What kind of an impact can a 9% increase have on your bottom line?
The following chart shows a click-through campaign with a 9% increase in CTR:
9% Increase Impact on Revenue
Domain Name
Beginning
With 9%
Campaign
Increase
Monthly Search Volume
Click-Through7.31%
Rate (CTR)
(9% increase)
Click-Throughs
Conversion Rate
Acquisitions

What You Need To UNDERSTAND: A nine percent increase in CTR

would yield 394 additional customer acquisitions in one month, assuming that
conversion rate stayed the same.
Projecting these numbers over one year shows the real impact that a 9%
increase can have on your business:
 One-Year Projection
Increase in Monthly Acquisitions
Increase in Annual Acquisitions
Lifetime Value of a Customer
Total Increase in Revenue
$1,323,840.00

What You Need To UNDERSTAND: A nine percent increase in CTR could

amount to well over a million dollars in increased revenue in one year.
KEY POINT: An increase in overall CTR or conversion rate can have a
tremendous impact on your business, especially at high volumes.
Now you can see the extraordinary impact that just a 9% increase can have for
your business, and why testing for the best-performing name is so important.
Important Domain/Product Name-Testing Guidelines:

1. If you have a strong brand already (e.g. Reuters), the test will yield more accurate
results if the ads themselves do not have a brand name in the title, URL, or copy. People see a see a
strong brand name and just click on it. It is an advantage in actual PPC campaigns, but does not
work well if you are using PPC to test the name.

We believe that the strength of the brand overpowers the rest of the ad,
making the subtle changes in the copy less significant. However, if you do use
a strong brand name in your name-testing ads, make sure to use it in ALL of
the ads, and expect to gather more data before accurate results become
apparent.

2. Unless you disable this feature, Google will automatically start to serve only the ad
that is performing the best. This will skew the results of your testing.
3. You may want to initially test names that vary dramatically from each other. As
you begin to learn what overall approach works best, begin to drill down to slight variations of the
best name.
4. Be aware that the search terms someone uses to find a particular ad may affect the
click-through on that ad. For example, if the term "stock picks" is driving the majority of the test's
traffic, the name "Stock Picker 2000" would naturally be more relevant. Monitor your keyword
selection closely to ensure the legitimacy of your test results.
5. Start with names that are naturally descriptive, easy to remember, and which
indicate the value proposition of the product or service. In the case of a digital product, try to create
names that denote tangible value.
6. Consider the marketing value of the name when interpreting the initial test results.
If during the PPC test one name receives a higher click-through, then one would naturally assume
that it is the best name for the product. However, make sure also to think about the offer page that
will sell each product.

In other words, keep in mind that the ad with the highest click-through rate is
not automatically the ad with the highest final conversion rate to sales.
Additional testing -- through to the point of final sales -- will tell you which is
the highest-converting ad.

7. Consider following up the initial name test with a split test using actual landing
pages for each name. Or test the product names as part of a multivariate test on your website.

For more on A/B split-testing, see our recent report on that topic:

A/B Split Testing

8. Investigate whether the domain name for your desired name is available, and
consider how it will rank in the natural search engines. A useful tool for simultaneously
brainstorming names and checking their availability is:

NameFuse

9. Think about how the product name relates to your company name or to other
products that you currently sell. Do they mesh well? Is there a natural brand connection between
your product name and your company name?

(b) How the advertising budget is planned? Narrate the series of heads under
which advertising campaign plan can be divided.

Develop A Marketing Budget

• For your advertising and promotional plan

• For costs allocated for advertising and promotions
• For advertising and promotional materials
• For a list of advertising media to be used

Operating an effective marketing plan requires money, so you will have to allocate funds from
your operating budget to cover advertising, promotional and all other costs associated with
marketing. Develop a marketing budget based on the cost for the media you will use, and the cost
for collecting research data and monitoring shifts in the marketplace.
Describe Location (Place)

• description of the location

• advantages and disadvantages of location

Again, try to describe the location of your business from your customer's perspective. Describe its
assets -- i.e., the convenience, whether or not public transportation is accessible, the safety aspects
- street lighting, well lit parking lot or facility, decor, etc. Your location should be built around
your customers, it should be accessible and should provide a sense of security.

Develop Pricing Strategy

• pricing techniques and brief description of these techniques

• retail costing and pricing
• competitive position
• pricing below competition
• pricing above competition
• price lining
• multiple pricing
• material costs
• labor costs
• overhead costs

Although your pricing strategy may be based on the strategy devised by others, you should study
this plan and the strategies used by competitors. That way you will acquire a thorough
understanding of how to price your product, and you can determine if your prices are in line with
competitors, if they are in line with industry averages and what adjustments you can make to bring
them in line.
The key to success is to have an well-planned strategy, to establish your
policies and to constantly monitor prices and operating costs to ensure profits.
Keep abreast of changes in the marketplace because these changes can affect
your bottom line.

Develop an Effective Promotional Strategy

• advertising media
• print media (newspaper, magazine, classified ads, Yellow Pages advertising,
brochure)
• radio
• television
• networking
 • business cards
• tee shirts, hats, buttons, pens

Develop a promotional strategy that uses various media for promoting your business. Monitor the
different media identifying those that most effectively promote your business. Concentrate on
developing material for these formats that clearly identifies your services, its location and price.
Since financial institutions weigh the soundness of your marketing plan when
deciding whether your business is a good risk for their money, it is important
that you prepare and present credible market data that shows there is a need
in the community for your business and that demonstrates your ability to
compete.

Q4. (a) Define basic steps used in Test Market Studies.

Basic Steps of Test Market Studies

Rahul's Noteblog Notes on Marketing Management Basic Steps of

Test Market Studies
When a new product or line extension is tested, a number of steps are
followed in order to achieve the desired results. Here are the basic steps
needed to streamline the process. Note: all these steps should be followed in
sequence.
1. Definition of the Objective:
This step involves closely analyzing and examining the product to be tested. It
should be noted that the tested product could be similar to the ones already in
the market; the product could be an improved product; the product could be
an upgraded version of a product already in the market; the product could be
a newly introduced product.
It should be noted that the type of product to be tested is related to the
market performance of the product.
Test market objectives are used to project: dollar and unit sales volume, and
dollar and unit shares. This type of testing is used to predict the market
performance at the retail level.
2. Plan Strategy:
The plan strategy consists of manufacturing and distribution, and media
selection. Different products require different types of manufacturing and
distribution techniques. For example, a "me too" product will require heavy
advertizing together with precise positioning, execution, and strategy or
marketing. On the other hand, a "never before" product will require a different
approach - which involves the use of free samples and discount coupons.
Selecting the type of advertizing media is also a very important factor. If
advertising is done in magazines, print advertisements of the product must be
readily available. Weekend magazines, TV guides, and newspapers may
precede advertisements in national magazines. Newspapers may be more
explanatory and comprehensive in their advertising approach. Last but not the
least, television advertising is crucial for product marketing.
3. Determination of Methodology
The next step in marketing function is to determine the type of test market
and identify the agency being used to do the testing and the auditing. There
are a number of methods used for this experimental process:
a. A stimulated test market: This method involves interviewing, monitoring,
and introducing the new product to a group of especially selected
respondents. The purpose of this technique is to predict the performance of
the product once it is launched in the real world.
b. A standard market test: This method involves the company's personnel who
distribute the product in certain selected experimental markets. The
company's personnel may also be involved in restocking the product and
studying its sales at the distribution center.
c. A control test market: This method involves handing over the test market
project to an external entity. This entity handles all the research parameters
such as mini-markets and controlled store panels. The controlling company
also guarantees distribution, storage in warehouses, immediate advertising
and promotion, an auditing.
4. Select Markets
This phase of testing involves determining the location to test the proposed
product. Usually, mid-sized cities that reflect national demographics are
selected. Test marketing professionals also need to ensure that respondents
are unaware that they are being tested. Here are four overriding factors to be
considered while selecting a test market.
a. Total number of markets used: generally, the more the markets used, the
better the results. With a large number of markets, the results tend to be more
accurate and reliable. Furthermore, diverse markets must be used. The
"matched market" strategy must be employed, ie., two markets with similar
factors such as climate, population, geography.
b. Size of the markets to be used: markets must be large enough, but not too
large otherwise the testing would become too expensive. Large markets tend
to give results that are more accurate and reliable. It is advisable to use multi
markets comparable to two or three percent of the population.
c. Markets with more representative demographics: it is important to use
markets that are demographically accurate in terms of age, income, etc., The
type of population being tested must be representative of the type of
population that is targeted by the product.
d. Isolated markets: it is desirable that the market in which the product is
being tested is separated from the mainstream markets. This leads to minimal
wastage and maximal security. Efforts must be made to minimize spill-in and
spill-out. Here, spill-in refers to external media entering the market, and spill-
out refers to local media published outside the city. Furthermore, isolated
markets tend to be hidden from view of competitors who would disturbed the
testing by lowering the prices of their products - a process knowing as
jamming.
Additionally, electronic test markets are the worst because they tend confine
the markets. First, electronic markets are only used in places where electronic
scanners are used. Second, the company may be "locked-out" of a city if
competition is testing in the same region.
5. Execution of the Plan
It is vital to make test marketing as legitimate as possible. There are two
important points:
a. The marketing team must not pay over-attention to the product because the
product may tend to over-perform in the test market than in the actual
market.
b. Repeat-purchase incidence must not be over-emphasized. Repeat-purchase
must be studied unto many repeat-purchase-cycles. Repeat-purchase-cycles
must be studied carefully and the cause of over-sales must be examined. It is
better to continue to study the repeat-purchase-cycles until the test is
stabilized.
6. Evaluation of Results
Four points must be noted for better evaluation of results:
a. Consumer awareness: this idea is used ensure that consumers are aware of
the product and its price, usage, and location of the distribution agency.
Consumer awareness reflects the effectiveness of the marketing tactics used;
consumer attitude reflects the consumer opinion of the product after its usage.
b. Purchase measures: it is important to evaluate the product trial and repeat-
purchase incidences. This provides feed back whether the advertising
campaign as worked effectively or not.
c. Effect on competition: the actions of the competition must be closely
followed during the product testing period.
d. Effect on other products: it should be ensured that the new product is not
taking sales away from the company's other established products. Thus,
cannibalization must be kept at a minimum.
e. Further steps: depending upon the market performance of the product, the
next level testing may involve further research and development of the
product, abortion of the entire project, or launch the product as-is.

(b) Explain the advantages of appointing selected agencies to trade your products,
what conditions can be stipulated out of it.

Introduction

Selling a product through an overseas agent is a very successful strategy. Sales agents are available
on commission basis for any sales they make. The key benefit of using an overseas sales agent is
that you get the advantage of their extensive knowledge of the target market. Sales agent also
provides support to an exporter in the matter of transportation, reservation of accommodation,
appointment with the government as and when required. It is, therefore, essential that one should
very carefully select overseas agent.

Merits of Appointing a Sales Agent

There are various types of merits associated with appointed a sales agent for export purpose are as
follow:

• Sales agent avoids the recruitment, training, time and payroll costs of using own
employees to enter an overseas market.
• An agent is a better option to identify and exploit opportunities in overseas export
market.
• An agent already have solid relationships with potential buyers, hence it saves the
time of the exporter to build own contacts.
• An agent allows an exporter to maintain more control over matters such as final
price and brand image - compared with the other intermediary option of using a distributor.

Demerits of Appointing a Sales Agent

There are also certain disadvantages associated with appointing a sales agent for export purpose
which are as follows:
• After-sales service can be difficult when selling through an intermediary.
• There is a risk for exporter to lose some control over marketing and brand image.

Important Points While Appointing a Sales Agent:

Appointing right sales agent not only enhance the profit of an exporter but also avoid any of risks
associated with a sales agent. So it becomes important for an exporter to take into consideration
following important points before selection an appropriate sales agent for his product.

• Size of the agent's company.

• Date of foundation of the agent's company.
• Company's ownership and control.
• Company's capital, funds, available and liabilities.
• Name, age and experience of the company's senior executives.
• Number, age and experience of the company's salesman.
• Oher agencies that the company holds, including those of competing products and
turn-over of each.
• Length of company's association with other principal.
• New agencies that the company obtained or lost during the past year.
• Company's total annual sales and the trends in its sales in recent years.
• Company's sales coverage, overall and by area.
• Number of sales calls per month and per salesman by company staff.
• Any major obstacles expected in the company's sales growth.
• Agent's capability to provide sales promotion and advertising services
• Agent's transport facilities and warehousing capacity.
• Agent's rate of commission; payment terms required.
• References on the agents from banks, trade associations and major buyers.

Some source of Information on Agents is:

• Government Departments Trade Associations.

• Chambers of Commerce.
• Banks.
• Independent Consultants.
• Export Promotion Councils.
• Advertisement Abroad.

Agent v Distributor
There is a fundamental legal difference between agents and distributors and
an exporter should not confuse between the two. An agent negotiates on the
behalf of an exporter and may be entitled to create a legal relationship
 between exporter and the importer

A distributor buys goods on its own account from exporter and resells those
products to customers. It is the distributor which has the sale contract with the
customer not the exporter. In the case of distributor, an exporter is free from
any kinds of risks associated with the finance.

Q6. Write any Five short notes.

(a) Elements of marketing mix in service Marketing.

The services marketing mix

This part discusses the special issues concerning the marketing of services.
This is not to imply that the principles of marketing covered in the previous
chapters of this Handbook do not apply to services rather it reflects the
particular characteristic of services in addition to those typical for products.

Cowell states that what is significant about services are the relative
dominance of intangible attributes in the make-up of the “service product”.
Services are a special kind of product. They may require special understanding
and special marketing efforts.

The provision of the continuing education contains the element of the tangible
and intangible. It usually provides a learning materials (physical good) and
also numbers of the service activities (teaching processes, contact with
customers, organisation of the courses, etc.). The distinction between physical
and service offering can, therefore, be best understood as a matter of degree
rather that in absolute terms. The continuing education is service –based
since the value of this product is dependent on the design and delivery of the
CE courses rather than the cost of the physical product (teaching materials,
CDs, etc.).

The services marketing mix is an extension of the 4-Ps framework. The

essential elements of product, promotion, price and place remain but three
additional variables – people, physical evidence and process – are included
to 7–Ps mix. The need for the extension is due to the high degree of direct
contact between the CE providers and the customers, the highly visible nature
of the service process, and the simultaneity of the production and
consumption. While it is possible to discuss people, physical evidence and
process within the original-Ps framework (for example people can be
considered part of the product offering) the extension allows a more thorough
analysis of the marketing ingredients necessary for successful services
marketing.

People – because of the simultaneity of production and consumption in

services the CE 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 behaviour and trainees adopt
the best practises of the andragogy.
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 CE
includes several processes e.g. first contact with customers, administrative procedure regarding
course delivery, preparation, delivery and evaluation of the courses. The following guideline can
be useful for successful CE management:
• ensure that marketing happens at all levels from the marketing
department to where the service is provided
• consider introducing flexibility in providing the service; when
feasible customize the service to the needs of customers
• recruit high quality staff treat them well and communicate clearly
to them: their attitudes and behavior are the key to service quality and
differentiations
• attempt to market to existing customers to increase their use of
the service, or to take up new service products
• sep up a quick response facility to customer problems and
complaints
• employ new technology to provide better services at lower costs
• use branding to clearly differentiate service offering from the
competition in the minds of target customers

Team Assignment – people, physical evidence and process

Identify six most important marketing mix elements (people, psychical
evidence and process) for your selected market segments.

The differential advantage and branding

Only few products are unique. Often the challenge lays in finding a way to
differentiate your products from a rival’s near-identical offerings. The basic
question says: “How can I get an advantage over the competition?”
When your products are better than those of your competitors, and when
customers recognize this superiority, you have a real advantage. Few
organisations are in this position. Most find that there is a little or nothing to
distinguish their own products from competitor’s. To gain competitive
advantage, uncover not just differences but also attributes that customer’s
value. Make sure the differences are meaningful to customers, so that your
product is preferable to the others available.

Often it is the little things that count. Customers may choose your product
over a competitor’s identical product because they prefer your lecturers or
because you give them coffee while delivery of the courses. Pay attention to
details that could make a difference. A genuine customer-centric approach will
differentiate you from competitors. Show your commitment to customers and
ensure that staffs are emphatic. Review company systems and processes to
make them more customers focused.
Team Assignment – differentiate your product
Answering the following questions, try to identify the differential advantage of
your CE centre
1. Why should customers buy from us rather than from our
competitors?
2. What makes us different from our competitors?
3. How are we better than our rivals?
4. What strengths do we have that we can effectively capitalize on?

Strong, well-known products provide companies with a real competitive

advantage. Use the power of branding to imbue your products with personality
and meaning, ensuring they achieve a prominent position in the marketplace.

The right name helps to sell products and service. It bestows individuality and
personality, enabling customers to identify with your offerings and to get to
know them. It makes products and services tangible and real. Choose name
that enhance your company image and that are appropriate for the products
and its positioning in the marketplace.

Establish trust in your brand and customers will remain loyal.

Branding means developing unique attributes so that your products are
instantly recognisable, memorable, and evoke positive association. Some
brands have a solid and reliable personality, others are youthful and fun.
Choose your company and product name, corporate colours, logo, design and
promotional activity to help convey a personality and build a brand. Customers
should be able to look at one of your products and assimilate all that you stand
for in a second by recalling the brand values. But remember: A strong brand is
not a substitute for quality but an enhancement to it.

The service attributes are e.g. friendless, creativity, courtesy, helpfulness and
knowledgeability.

The creation of a corporate identity is a vital element of branding. Present an

integrated, strong, instantly recognisable, individual image that is regarded in
a positive way by your customers, and seize every opportunity to strengthen
your corporate identity. It is important to maintain corporate identity
consistently by issuing written guidelines for staff.

Marketing strategy

A strategy gives business a defined route to follow and a clear destination.

Build a marketing strategy and you will ensure that marketing is a long-term
way of working, not a one-off activity.

A marketing strategy provides organisation with shared vision of the future. All
too often, an organisation will perform a marketing task, such a direct mail
shot, then sit back and see what happens. A strategic approach will ensure
that you maximise returns on your marketing spending and boost the profits of
your organisation.

Strategic marketing manager

• has a clear picture of the future
• anticipates changes in the market
• works towards clear long/term goals

Non-strategic marketing manager

• lives day to day without planning
• reacts to changes in the market
• has only short-term objectives

During the creating of the marketing strategy the marketing manager should
proceed as follows:
1. create the team
2. review current situation
3. set objectives
4. plan action
5. implement strategy
6. review strategy

Create your team

The first steps during preparation of the marketing strategy are the hardest
part. It is important to bring together a strong team to help to prepare the
marketing plan. The strategic elements must be understood by every member
of team in order to assure the marketing success.
It is important to involve the people whose function touches on marketing, and
those whose job involves considerable customer contact. Before embarking on
your marketing strategy, establish common ground by agreeing definitions
and purpose. Build the team unity; perhaps by organizing an away day at a
pleasant venue to discuss shared marketing issues and concerns. Show that
you recognise the contribution each team member can offer.

Review current situation - perform a SWOT analysis

• SWOT (Strengths, Weaknesses, Opportunities and Threats)
Analysis of these four factors provides information on how to shape your
marketing strategy. Devise objectives aimed at strengthening weak areas,
exploiting strengths, seizing opportunities, and anticipating threats.
Team Assignment – Marketing SWOT analysis
Identify your 4 strengths, weaknesses, opportunities and threats answering
the questions below:
1. Do you sue your strengths to full advantage? Could you do more
to capitalise on them?
2. Are there current or future opportunities you could exploit? Are
new markets emerging or are there existing, untapped customer groups?
3. What threats do your competitors pose? What threats exist in
wider marketplace?
4. What lets you down? What are you not good at? What do your
competitors do better?

Setting objectives
Draw up your objectives carefully, because your entire marketing strategy will
be structured around them, and ensure that they are measurable so that you
can evaluate their success.
Short-term objective can be staging posts on the way towards fulfilling long-
term goals. Analyse your situation and then ask: “What if we do nothing?” Will
products become out of date? Will your competitors grow more powerful?
Spend time asking “what if?” to help you realize the effects of not keeping up
with customer needs and competitor activities. It can serve to spur action.
If you have devised a set of objectives around which to build your marketing
strategy, seek agreement for them across the organisation. Marketing is a
discipline that cuts through many departmental boundaries. Marketing activity
will have a knock-on effect in various parts of the operation so, for it to be
effective, you will need the support of colleagues. Ensure they understand the
need for these objectives and the impact they may have on their work.

Plan action - investigate constraints, such as time and money, and then
create a timetable of activity to give you a working marketing plan.
The activities on your marketing timetable should be manageable and
workable. The costs of not undertaking certain marketing activities, both in
missed opportunities and the effect on your reputation, should be taken into
consideration.
Look at your marketing ideas and work out the costs of each. Remember that
marketing involves meeting customer need at a profit. To be justified,
marketing activity should have a positive impact on the balance sheet.
Examine not only the costs but also the benefit. An advertising company may
cost a lot of money, but if it reaps profit amounting to several times its costs,
is it cheap.
The example of marketing plan:
Activity Priority Start date Completion Date
Organise lunch Medium
for top ten by the end of February
customers
Produce new brochure Mid-January end March
Update mailing list ready for end March
new brochure
Mail new brochure Early April
Implementing strategy

Some organisations invest considerable effort in developing a strategy but

enthusiasm and energy wane when it comes to implementation. Ensure that
your marketing strategy is put into the action, not let to gather dust on a shelf.
Assign each task or activity due for implementation within the next 12 months
to a named person.

Review strategy
The world is not static. Things within your organisation or within your market
are likely to change over the time. If they do, you might need to redefine your
objectives. Review your objectives six-monthly or annually to check that you
are till on track.
Answering the following questions will help you evaluate the success of your
marketing strategy:
1. Have profits increased since the strategy was implemented?
2. Have we seen an increase in our customer base?
3. Have we attracted a greater number of orders, or larger individual
orders?
4. Has the number of product/service enquiries risen?
5. Has awareness of our organisation and its products or services
increased?
Team assignment - Assess your marketing ability

Answer the questions below. If your answer is “never: , mark Option 1, and so
on. Use the Analysis at the end of the questionnaire to identify your potential
weaknesses in the area of marketing.

OPTIONS:
1 Never
2 Occasionally
3 Frequently
4 Always

I. We research customer needs before developing new products

and services
1 2 3 4
II. Our CE centre considers customer “buying points” when
promoting products.
1 2 3 4

III. Our CE centre ensures that orders are processed swiftly as well
as accurately.
1 2 3 4
IV. Our CE center obtains customer information and use it to
influence decisions.
1 2 3 4
V. Our CE Centre set standards to ensure effective customer care.
1 2 3 4
VI. Our CE centre take action to make sure that every customer is
a satisfied customer.
1 2 3 4
VII. Our CE centre measure performance against the standards of
customer care.
1 2 3 4
VIII. Our CE center take the complains of customers very seriously.
1 2 3 4
IX. Our CE centre monitor the number of customer complaints that
we receive.
1 2 3 4
X. Our CE center tries to see if there is anything we can learn from
a customer’s complaints.
1 2 3 4
XI. Our CE center finds reasons to keep in touch with customers.
1 2 3 4
XII. Our CE center tries to turn one-off customers into regular ones.
1 2 3 4
XIII. Our CE center keeps a record of key customer contact.
1 2 3 4
XIV. Our CE centre asks customers whether they will recommend us
1 2 3 4
XV. Our CE centre shows customers that their business is value.
1 2 3 4
XVI. Our CE centre tries to find out why we have a lost a customer.
1 2 3 4
XVII. Our CE centre attempts to win back lost customers.
1 2 3 4
XVIII. Our CE centre is already looking for the new customers.
1 2 3 4
XIX. Our CE centre tries to nurture customer’s loyalty.
1 2 3 4
XX. Our CE centre seeks customer comment and feedback.
1 2 3 4
XXI. Our CE centre listens what customer say.
1 2 3 4
XXII. Our CE centre pay attention to the little details that make all
the difference.
1 2 3 4
XXIII. Our CE centre tries to add value to our services.
1 2 3 4
XXIV. Our CE center emphasizes benefits, not features.
1 2 3 4
XXV. Our CE centre use public relations techniques to boost
marketing effectiveness
1 2 3 4
XXVI. Our CE centre draws up a pricing strategy for every new
product marketed.
1 2 3 4
XXVII. Our CE centre set objectives for publicity campaigns.
1 2 3 4
XXVIII. Our CE centre carefully target mail shots.
1 2 3 4
XXIX. Our CE centre takes care to select the right envelope for direct
mail campaign.
1 2 3 4
XXX. Our CE centre tests mail shots to find the most successful
combination.
1 2 3 4
XXXI. Our CE centre measures the overall effectiveness of a publicity
campaign.
1 2 3 4
XXXII. Our CE centre keeps non-marketing colleagues informed of key
marketing activity.
1 2 3 4

ANALYSIS
32-64: try to take a more organised, planned, methodical, and measured
approach to improve your effectiveness
65-95: some of your marketing activity is a success, but you need to develop
your skills to become wholly effective
96-128: you have adopted a thoroughly professional strategic approach to
marketing and are running successful marketing campaigns. Keep up the good
work to stay ahead of the competition
Marketing in non-profit organizations
Non-profit organization attempt to achieve some other objectives than profit.
This does not mean that they are uninterested in income as they have to
generate cash to survive. However their primary goal is non – economic, e.g.
to provide education.

Marketing is of growing importance to many non-profit organizations because

of the need to generate funds in an increasingly competitive arena. Even
organization who rely on government - sponsored grants need to show how
their work is of benefit to society: they must meet the needs of their
customers. Many non-profit organizations rely on membership fees or
donations, which means that communication to individuals and organization is
required, and they must be persuaded to join or make a donation. This require
marketing skills , which are being increasingly applied.

Characteristics of non-profit marketing :

• Education versus meeting current needs
Some non-profit organizations see their role as not only meeting current needs
of their customers but also educating tem in new ideas and issues, cultural
development and social awareness. It can be done in harmony with providing
CE as an additional value of CE course.

• Multiple publics
Most non-profit organization serve several groups or publics. The two broad
groups are donors , who may be individuals, trust , companies and
governmental bodies, and clients, who include audiences and beneficiaries.
The need is to satisfy both donors and clients, complicating marketing task.
For example a community association providing also the CE courses may be
partly funded by the local authority and partly by other donors (individuals or
companies) and partly by clients. To succeed all the groups must be satisfied.

• Measurement of success and conflicting objectives

For profit oriented organizations success is measured ultimately on
profitability. For non-profit organizations measuring success is not so easy. In
universities , for example, is success measured in research terms, number of
students taught, the range of qualifications or the quality of teaching? The
answer is that it is a combination of these factors, which can lead to conflict:
more students and larger of courses may reduce the time needed for research.
Decision making is therefore complex in non-profit oriented organization.

• Public scrutiny
While all organization are subject to public scrutiny, public sector non-profit
organization are never far from public’s attention. The reason is that they are
publicity funded from taxes. This gives them extra newsworthiness as all tax-
payers are interested in how their money is being spent. They have to be
particularly careful that they do not become involved in controversy, which
can result in bed publicity.

Marketing procedures for non-profit organizations

Despite these differences the marketing procedures relevant to profit oriented

companies can also be applied to non-profit organizations. Target marketing,
differentiations and marketing mix decision need to be made. These issues will
be discussed with reference to the special characteristics of non-profit
organizations.

• Target marketing and differentiation

Non-profit organization can usefully segment their target publics into donors
and clients (customers). Within each group, sub segments of individuals and
organization need to be identified. These will be the target for persuasive
communications, and the development of services. The need of each group
must be understood. For example the donors can judge which non-profit CE
centre to give the support n the basis of awareness and reputation, the
confidence that funds will not be wasted on excessive administration, and the
perceive worthiness of the cause. That is why the CE center needs not only to
promote itself but also to gain publicity for its cause. Its level of donor funding
will depend upon both of these factors. The brand name of CE centre is also
important (it has been discussed n previous parts).

• Developing the marketing mix

Many non-profit organizations are skilled at event marketing . Events are

organized to raise the funds, including dinners, dances, coffee mornings, book
ales, sponsored walks and others.

The pricing god the services provided by non-profit organizations may not
follow the guidelines applicable to profit oriented pricing. For example the
price of CE curse organized by non-profit CE center for Gypsies may be held
low to encourage poor families to take advantage of this opportunity. Some
non-profit organization even provide free access to services.

Like most services, distribution systems for many non-profit organizations are
short, with production and consumption simultaneous. This is the case also of
education. Such organization have to think carefully about how to deliver their
services with the convenience that customers require. For example, although
the CE center is based in big city, over half of the courses for ethnic minorities
may be delivered in small villages around the city.

Many non-profit organizations are adept at using promotion to further their

needs. The print media are popular with organization seeking donations for
cases that are in common interest of whole society (education for gypsies,
raising awareness in the area of abused children or women, courses to support
and educate the political refugees …).
Direct mail is also used to raise the funds. Mailing lists of past donors are
useful here, and some organization use lifestyle geodemographic analysis to
identify the type of person who is more likely to respond to direct mailing.
Non-profit organization must be also aware of public opportunities which may
arise because of their activities.

Pubic relations has an important role to play to generate positive word-of-

mouth communications and to establish the identity of the non-profit
organization. A key objective of communications effort should be to produce a
positive assessment of the fund-raising transaction and to reduce the
 perceived risk of the donation so that donors develop trust and confidence in
the organization and become committed to the cause.

(b) Consumer Products or goods.

The noun product is defined as a "thing produced by labor or effort"[1] or the

"result of an act or a process",[2] and stems from the verb produce, from the
Latin prōdūce(re) '(to) lead or bring forth'. Since 1575, the word "product" has
referred to anything produced.[3] Since 1695, the word has referred to "thing or
things produced". The economic or commercial meaning of product was first
used by political economist Adam Smith.[4]

In marketing, a product is anything that can be offered to a market that might

satisfy a want or need.[5] In retailing, products are called merchandise. In
manufacturing, products are purchased as raw materials and sold as finished
goods. Commodities are usually raw materials such as metals and agricultural
products, but a commodity can also be anything widely available in the open
market. In project management, products are the formal definition of the
project deliverables that make up or contribute to delivering the objectives of
the project.

In general, product may refer to a single item or unit, a group of equivalent

products, a grouping of goods or services, or an industrial classification for the
goods or services.

A related concept is subproduct, a secondary but useful result of a production

process.

Dangerous products, particularly physical ones, that cause injuries to

consumers or bystanders may be subject to product liability.

Product groups

[edit] Tangible and intangible products

Products can be classified as tangible or intangible.[6] A tangible product is any

physical product that can be touched like a computer, automobile, etc. An
intangible product is a non-physical product like an insurance policy.
In its online product catalog, retailer Sears, Roebuck and Company divides its
products into departments, then presents products to shoppers according to
(1) function or (2) brand.[7] Each product has a Sears item number and a
manufacturer's model number. The departments and product groupings that
Sears uses are intended to help customers browse products by function or
brand within a traditional department store structure.[8]

[edit] Sizes and colors

A catalog number, especially for clothing, may group sizes and colors. When
ordering the product, the customer specifies size, color and other variables.[9]

[edit] Product line

A product line is "a group of products that are closely related, either because
they function in a similar manner, are sold to the same customer groups, are
marketed through the same types of outlets, or fall within given price
ranges."[10]
Many businesses offer a range of product lines which may be unique to a
single organization or may be common across the business's industry. In 2002
the US Census compiled revenue figures for the finance and insurance industry
by various product lines such as "accident, health and medical insurance
premiums" and "income from secured consumer loans".[11] Within the
insurance industry, product lines are indicated by the type of risk coverage,
such as auto insurance, commercial insurance and life insurance.[12]

[edit] National and international product classifications

Various classification systems for products have been developed for economic
statistical purposes. The North American Industry Classification System
(NAICS) classifies companies by their primary product [this is not even close to
true, NAICS is a production-oriented classification system, not a product-
oriented classification system – the NAFTA signatories are working on a system
that classifies products called NAPCS as a companion to NAICS [1]. The
European Union uses a "Classification of Products by Activity" among other
product classifications.[13] The United Nations also classifies products for
international economic activity reporting.[14]
The Aspinwall Classification System [15] [16]classifies and rates products
based on five variables:
1. Replacement rate (How frequently is the product repurchased?)
2. Gross margin (How much profit is obtained from each product?)
3. Buyer goal adjustment (How flexible are the buyers' purchasing habits with regard
to this product?)
4. Duration of product satisfaction (How long will the product produce benefits for
the user?)
5. Duration of buyer search behavior (How long will consumers shop for the
product?)

The National Institute of Governmental Purchasing (NIGP)[17] developed a

commodity and services classification system for use by state and local
governments, the NIGP Code.[18] The NIGP Code is used by 33 states within the
United States as well as thousands of cities, counties and political subdivisions.
The NIGP Code is a hierarchical schema consisting of a 3 digit class, 5 digit
class-item, 7 digit class-item-group and an 11 digit class-item-group-detail.[19]
Applications of the NIGP Code include vendor registration, inventory item
identification, contract item management, spend analysis and strategic
sourcing.

(c) Advantages/Disadvantages of branding.

According to the Heinemann AVCE in Business, ‘brand is a particular

product or characteristic that identifies a particular producer’.
Branding is one of the common methods of differentiating the product
from competitor products in the marketplace.

Business organisations will use branding to build up brand loyalty.

Brand loyalty is where consumers are satisfied with their purchase of
a specific product, and will likely to return to purchase it again in
the coming future.

Branding is often classified into three categories: manufacturer

brands, own-label brands, and generic brands. Manufacturer brands are
brands which relate the producer with the specific product. Examples
of manufacturer brands include Kellogg’s cornflakes, Nescafe coffee
and Heinz baked beans. Producers will be heavily involved with the
promotion of these products.

What are the Disadvantages of Branding?

(i) Cost

If you wish to create and maintain a strong brand presence, it can involve a lot
of design and marketing costs. A strong brand is memorable, but people still
need to be exposed to it, this often requires a lot of advertising and PR over a
long period of time, which can be very costly.

There are also costs involved with the creating of a brand image or logo
(Paying for a designer, printing new letterheads/business cards etc.), and
although most of these are only one off costs, they are still relatively large for
most small businesses.

The exposure of your brand can be left to word of mouth, this will save you
money, but will also greatly slow down the exposure your brand receives.

(ii) Impersonal

One of the main problems with many branded businesses is that they lose
their personal image. The ability to deal on a personal basis with customers is
one of the biggest advantages small business have, and poorly designed
branding could give customers the impression that your business is losing its
personal touch.

(iii) Fixed Image

Every brand has a certain image to potential customers, and part of that
image is about what products or services you sell. If you are known for selling
just one product, and you want to sell another product, will you be able to do
so effectively?
If you sell computers, would your brand name be suitable for selling vacuum
cleaners? If your brand is focused too strongly on one product, it can limit your
ability to sell other products.

(iv) Timescale

The process of creating a brand will usually take a long period of time. As well
as creating a brand and updating your signs and equipment (e.g. Stationary,
vehicles etc…), you need to expose it to your potential customers.
It is commonly shown that people need to see an advert at least three times
before they absorb it, which means you will need to advertise and promote the
brand for a considerable amount of time before it will become well known.
Advantages :

- more Visibility for the brand

- more awareness
- higher sales due to top of the mind brand recall
- higher aspiration towards the brand

Advantages of Brand Extension

Brand Extension has following advantages:

1. It makes acceptance of new product easy.

a. It increases brand image.
b. The risk perceived by the customers reduces.
c. The likelihood of gaining distribution and trial increases. An established
brand name increases consumer interest and willingness to try new product having the established
brand name.
d. The efficiency of promotional expenditure increases. Advertising, selling
and promotional costs are reduced. There are economies of scale as advertising for core brand and
its extension reinforces each other.
e. Cost of developing new brand is saved.
f. Consumers can now seek for a variety.
g. There are packaging and labeling efficiencies.
h. The expense of introductory and follow up marketing programs is reduced.
2. There are feedback benefits to the parent brand and the organization.
a. The image of parent brand is enhanced.
b. It revives the brand.
c. It allows subsequent extension.
d. Brand meaning is clarified.
e. It increases market coverage as it brings new customers into brand franchise.
f. Customers associate original/core brand to new product, hence they also
have quality associations.

d) Packing and Sales Promotions.

Packaging is the science, art and technology of enclosing or protecting
products for distribution, storage, sale, and use. Packaging also refers to the
process of design, evaluation, and production of packages. Packaging can be
described as a coordinated system of preparing goods for transport,
warehousing, logistics, sale, and end use. Packaging contains, protects,
preserves, transports, informs, and sells.[1] In many countries it is fully
integrated into government, business, institutional, industrial, and personal
use.

Package labelling (en-GB) or labeling (en-US) is any written, electronic, or

graphic communications on the packaging or on a separate but associated
label.

The purposes of packaging and package labels

Packaging and package labeling have several objectives[2]

• Physical protection - The objects enclosed in the package may require protection
from, among other things, shock, vibration, compression, temperature[3], etc.
• Barrier protection - A barrier from oxygen, water vapor, dust, etc., is often
required. Permeation is a critical factor in design. Some packages contain desiccants or Oxygen
absorbers to help extend shelf life. Modified atmospheres [4] or controlled atmospheres are also
maintained in some food packages. Keeping the contents clean, fresh, sterile[5] and safe for the
intended shelf life is a primary function.
• Containment or agglomeration - Small objects are typically grouped together in
one package for reasons of efficiency. For example, a single box of 1000 pencils requires less
physical handling than 1000 single pencils. Liquids, powders, and granular materials need
containment.
• Information transmission - Packages and labels communicate how to use,
transport, recycle, or dispose of the package or product. With pharmaceuticals, food, medical, and
chemical products, some types of information are required by governments. Some packages and
labels also are used for track and trace purposes.
• Marketing - The packaging and labels can be used by marketers to encourage
potential buyers to purchase the product. Package graphic design and physical design have been
important and constantly evolving phenomenon for several decades. Marketing communications
and graphic design are applied to the surface of the package and (in many cases) the point of sale
display.
• Security - Packaging can play an important role in reducing the security risks of
shipment. Packages can be made with improved tamper resistance to deter tampering and also can
have tamper-evident[6] features to help indicate tampering. Packages can be engineered to help
reduce the risks of package pilferage: Some package constructions are more resistant to pilferage
and some have pilfer indicating seals. Packages may include authentication seals and use security
printing to help indicate that the package and contents are not counterfeit. Packages also can
include anti-theft devices, such as dye-packs, RFID tags, or electronic article surveillance[7] tags
that can be activated or detected by devices at exit points and require specialized tools to
deactivate. Using packaging in this way is a means of loss prevention.
• Convenience - Packages can have features that add convenience in distribution,
handling, stacking, display, sale, opening, reclosing, use, dispensing, and reuse.
• Portion control - Single serving or single dosage packaging has a precise amount
of contents to control usage. Bulk commodities (such as salt) can be divided into packages that are
a more suitable size for individual households. It is also aids the control of inventory: selling sealed
one-liter-bottles of milk, rather than having people bring their own bottles to fill themselves.

[edit] Packaging types

Various household packaging types for foods

Packaging may be looked at as being of several different types. For example a
transport package or distribution package can be the shipping container
used to ship, store, and handle the product or inner packages. Some identify a
consumer package as one which is directed toward a consumer or
household.
Packaging may be described in relation to the type of product being packaged:
medical device packaging, bulk chemical packaging, over-the-counter drug
packaging, retail food packaging, military materiel packaging, pharmaceutical
packaging, etc.
Aluminium can with a pull tab
It is sometimes convenient to categorize packages by layer or function:
"primary", "secondary", etc.

• Primary packaging is the material that first envelops the product and holds it. This
usually is the smallest unit of distribution or use and is the package which is in direct contact with
the contents.
• Secondary packaging is outside the primary packaging, perhaps used to group
primary packages together.
• Tertiary packaging is used for bulk handling, warehouse storage and transport
shipping. The most common form is a palletized unit load that packs tightly into containers.

These broad categories can be somewhat arbitrary. For example, depending

on the use, a shrink wrap can be primary packaging when applied directly to
the product, secondary packaging when combining smaller packages, and
tertiary packaging on some distribution packs.

[edit] Symbols used on packages and labels

Many types of symbols for package labeling are nationally and internationally
standardized. For consumer packaging, symbols exist for product
certifications, trademarks, proof of purchase, etc. Some requirements and
symbols exist to communicate aspects of consumer use and safety. Examples
of environmental and recycling symbols include: Recycling symbol, Resin
identification code (below), and Green Dot (symbol).
Bar codes (below), Universal Product Codes, and RFID labels are common to
allow automated information management in logistics and retailing. Country of
Origin Labeling is often used.

"Wikipedia" encoded in Code 128

[edit] Shipping container labeling

"Print & Apply" corner wrap UCC (GS1-128) label application to a pallet load
Technologies related to shipping containers are identification codes, bar
codes, and electronic data interchange (EDI). These three core technologies
serve to enable the business functions in the process of shipping containers
throughout the distribution channel. Each has an essential function:
identification codes either relate product information or serve as keys to other
data, bar codes allow for the automated input of identification codes and other
data, and EDI moves data between trading partners within the distribution
channel.
Elements of these core technologies include UPC and EAN item identification
codes, the SCC-14 (UPC shipping container code), the SSCC-18 (Serial Shipping
Container Codes), Interleaved 2-of-5 and UCC/EAN-128 (newly designated
GS1-128) bar code symbologies, and ANSI ASC X12 and UN/EDIFACT EDI
standards.
Small parcel carriers often have their own formats. For example, United Parcel
Service has a MaxiCode 2-D code for parcel tracking.
RFID labels for shipping containers are also increasing in usage. A Wal-Mart
division, Sam's Club, has also moved in this direction and is putting pressure
on its suppliers for compliance.[8]
Shipments of hazardous materials or dangerous goods have special
information and symbols (labels, plackards, etc.) as required by UN, country,
and specific carrier requirements. Two examples are below:

With transport packages, standardised symbols are also used to communicate

handling needs. Some common ones are shown below while others are listed
in ASTM D5445 "Standard Practice for Pictorial Markings for Handling of
Goods" and ISO 780 "Pictorial marking for handling of goods".

Do Keep away
not use handfrom
Fragile
This way
sunlight up

Do notas
clamp as
indicated
Keep indicated
away from
Centre of gravity

Sales promotion is one of the four aspects of promotional mix. (The other
three parts of the promotional mix are advertising, personal selling, and
publicity/public relations.) Media and non-media marketing communication are
employed for a pre-determined, limited time to increase consumer demand,
stimulate market demand or improve product availability. Examples include:

• contests
• point of purchase displays
• rebate (marketing)
• free travel, such as free flights

Sales promotions can be directed at either the customer, sales staff, or

distribution channel members (such as retailers). Sales promotions targeted at
the consumer are called consumer sales promotions. Sales promotions
targeted at retailers and wholesale are called trade sales promotions. Some
sale promotions, particularly ones with unusual methods, are considered
gimmick by many.

Consumer sales promotion techniques

• Price deal: A temporary reduction in the price, such as happy hour

• Loyal Reward Program: Consumers collect points, miles, or credits for purchases
and redeem them for rewards. Two famous examples are Pepsi Stuff and AAdvantage.
• Cents-off deal: Offers a brand at a lower price. Price reduction may be a
percentage marked on the package.
• Price-pack deal: The packaging offers a consumer a certain percentage more of the
product for the same price (for example, 25 percent extra).
• Coupons: coupons have become a standard mechanism for sales promotions.
• Loss leader: the price of a popular product is temporarily reduced in order to
stimulate other profitable sales
• Free-standing insert (FSI): A coupon booklet is inserted into the local newspaper
for delivery.
• On-shelf couponing: Coupons are present at the shelf where the product is
available.
• Checkout dispensers: On checkout the customer is given a coupon based on
products purchased.
• On-line couponing: Coupons are available on line. Consumers print them out and
take them to the store.
• Mobile couponing: Coupons are available on a mobile phone. Consumers show the
offer on a mobile phone to a salesperson for redemption.
• Online interactive promotion game: Consumers play an interactive game
associated with the promoted product. See an example of the Interactive Internet Ad for tomato
ketchup.

Example Ad For Online Games 7'UP Dancing Allu Arjun.

• Rebates: Consumers are offered money back if the receipt and barcode are mailed
to the producer.
• Contests/sweepstakes/games: The consumer is automatically entered into the event
by purchasing the product.
• Point-of-sale displays:-
o Aisle interrupter: A sign that juts into the aisle from the shelf.
o Dangler: A sign that sways when a consumer walks by it.
o Dump bin: A bin full of products dumped inside.
o Glorifier: A small stage that elevates a product above other products.
o Wobbler: A sign that jiggles.
o Lipstick Board: A board on which messages are written in crayon.
o Necker: A coupon placed on the 'neck' of a bottle.
o YES unit: "your extra salesperson" is a pull-out fact sheet.
• Kids eat free specials: Offers a discount on the total dining bill by offering 1 free
kids meal with each regular meal purchased.

[edit] Trade sales promotion techniques

• Trade allowances: short term incentive offered to induce a retailer to stock up on a

product.
• Dealer loader: An incentive given to induce a retailer to purchase and display a
product.
• Trade contest: A contest to reward retailers that sell the most product.
• Point-of-purchase displays: Extra sales tools given to retailers to boost sales.
• Training programs: dealer employees are trained in selling the product.
• Push money: also known as "spiffs". An extra commission paid to retail employees
to push products.

Trade discounts (also called functional discounts): These are payments to

distribution channel members for performing some function .

[edit] Political issues

Sales promotions have traditionally been heavily regulated in many advanced

industrial nations, with the notable exception of the United States. For
example, the United Kingdom formerly operated under a resale price
maintenance regime in which manufacturers could legally dictate the
minimum resale price for virtually all goods; this practice was abolished in
1964.[1]
Most European countries also have controls on the scheduling and permissible
types of sales promotions, as they are regarded in those countries as
bordering upon unfair business practices. Germany is notorious for having the
most strict regulations. Famous examples include the car wash that was
barred from giving free car washes to regular customers and a baker who
could not give a free cloth bag to customers who bought more than 10 rolls.[2]

e) New Product Development Strategy

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.

The process

1. Idea Generation is often called the "fuzzy front end" of the NPD process
o Ideas for new products can be obtained from basic research using a SWOT
analysis (Strengths, Weaknesses, Opportunities & Threats), Market and consumer trends,
company's R&D department, competitors, focus groups, employees, salespeople, corporate spies,
trade shows, or Ethnographic discovery methods (searching for user patterns and habits) may also
be used to get an insight into new product lines or product features.
o Idea Generation or Brainstorming of new product, service, or store concepts
- idea generation techniques can begin when you have done your OPPORTUNITY ANALYSIS to
support your ideas in the Idea Screening Phase (shown in the next development step).
2. Idea Screening
o The object is to eliminate unsound concepts prior to devoting resources to
them.
o The screeners should ask several questions:
 Will the customer in the target market benefit from the product?
 What is the size and growth forecasts of the market segment/target
market?
 What is the current or expected competitive pressure for the product
idea?
 What are the industry sales and market trends the product idea is
based on?
 Is it technically feasible to manufacture the product?
 Will the product be profitable when manufactured and delivered to the
customer at the target price?
3. Concept Development and Testing
o Develop the marketing and engineering details
 Investigate intellectual property issues and search patent data bases
 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?
o Testing the Concept by asking a sample of prospective customers what they
think of the idea. Usually via Choice Modelling.
4. Business Analysis
o Estimate likely selling price based upon competition and customer feedback
o Estimate sales volume based upon size of market and such tools as the
Fourt-Woodlock equation
o Estimate profitability and breakeven point
5. Beta Testing and Market Testing
o Produce a physical prototype or mock-up
o Test the product (and its packaging) in typical usage situations
o Conduct focus group customer interviews or introduce at trade show
o Make adjustments where necessary
o Produce an initial run of the product and sell it in a test market area to
determine customer acceptance
6. Technical Implementation
o New program initiation
o Finalize Quality management system
o Resource estimation
o Requirement publication
o Publish technical communications such as data sheets
o Engineering operations planning
o Department scheduling
o Supplier collaboration
o Logistics plan
o Resource plan publication
o Program review and monitoring
o Contingencies - what-if planning
7. Commercialization (often considered post-NPD)
o Launch the product
o Produce and place advertisements and other promotions
o Fill the distribution pipeline with product
o Critical path analysis is most useful at this stage
8. New Product Pricing
o Impact of new product on the entire product portfolio
o Value Analysis (internal & external)
o Competition and alternative competitive technologies
o Differing value segments (price, value, and need)
o Product Costs (fixed & variable)
o Forecast of unit volumes, revenue, and profit

These steps may be iterated as needed. Some steps may be eliminated. To

reduce the time that the NPD process takes, many companies are completing
several steps at the same time (referred to as concurrent engineering or
time to market). Most industry leaders see new product development as a
proactive process where resources are allocated to identify market changes
and seize upon new product opportunities before they occur (in contrast to a
reactive strategy in which nothing is done until problems occur or the
competitor introduces an innovation). Many industry leaders see new product
development as an ongoing process (referred to as continuous development)
in which the entire organization is always looking for opportunities.
For the more innovative products indicated on the diagram above, great
amounts of uncertainty and change may exist, which makes it difficult or
impossible to plan the complete project before starting it. In this case, a more
flexible approach may be advisable.
Because the NPD process typically requires both engineering and marketing
expertise, cross-functional teams are a common way of organizing projects.
The team is responsible for all aspects of the project, from initial idea
generation to final commercialization, and they usually report to senior
management (often to a vice president or Program Manager). In those
industries where products are technically complex, development research is
typically expensive, and product life cycles are relatively short, strategic
alliances among several organizations helps to spread the costs, provide
access to a wider skill set, and speeds the overall process.
Also, notice that because engineering and marketing expertise are usually
both critical to the process, choosing an appropriate blend of the two is
important. Observe (for example, by looking at the See also or References
sections below) that this article is slanted more toward the marketing side. For
more of an engineering slant, see the Ulrich and Eppinger, Ullman references
below.[1][2]
People respond to new products in different ways. The adoption of a new
technology can be analyzed using a variety of diffusion theories such as the
Diffusion of innovations theory.
A new product pricing process is important to reduce risk and increase
confidence in the pricing and marketing decisions to be made. Bernstein and
Macias describe an integrated process that breaks down the complex task of
new product pricing into manageable elements.[3]

(f) Screening a new product.

New product screening is the process of filtering or screening new product

developments before they enter the stage-gate process and start to consume
significant resources. The Stage-Gate process was created by Dr. Robert
Cooper and is a method described by Cooper and Kleinshmidt of a systematic
moving of a new product through various stages from the screening process to
product launch.

The screening stage is one that permits new product opportunities to be

rejected early in the stage gate process. Most research on new product
development has focussed on large organisations according to Huang, Soutar
and Brown 2002. Little research exists on the methods used by managers,
particularly those managing smaller organisations, on how the screening
process is undertaken.

What screening criteria is your company using to separate ideas into good and
bad? Are you satisfied with their ability to predict product success? Most likely,
you are not satisfied because only few of the ideas which pass these screening
tests ever become market and profitability hits.

The purpose of screening is to spot and drop poor ideas as early as possible.
The cost of product development rises substantially at each successive
development stage. When products reach later stages, management feels that
it has invested so much in development that the product should be launched
to recoup some of the investment. But this is letting good money chase bad
money. The practical solution is to prevent poor product ideas from getting
this far.
Even if a given idea appears to have potential, a company has to decide
whether it fits well with its mission, objectives, strategies, core competencies
and resources. A product-idea rating device might include a checklist of
specific factors and their relative weight, the company's competence level in
each of these factors, and an overall rating for the company's ability to
develop and launch a new product successfully.
In the screening stage, companies need to devise and implement effective
methodologies for avoiding two types of errors.
A DROP-error occurs when the company dismisses an otherwise good idea.
Too many DROP-errors suggest that an organization is too conservative.
A GO-error occurs when the company fails to catch a poor idea before it
moves into development and commercialization.

Our Idea Screening Criteria: A Key to Your Success

You can screen and qualitiatively determine the technical and business merit
of your new product idea by providing answers to the following questions for
each of the products that you would like to develop and commercialize.

1. What compelling evidence do you have which clearly demonstrates that you
are the sole inventor of the subject new product idea? Please provide copies of
the recorded idea from your notebook and/or other document.
2. Which Unmet needs is the product going to satisfy? Why should a customer
buy this product and not that of competition (if it exists)?
3. Is there sufficient data to substantiate that these are truly Unmet needs for
the customer?
4. Are there any barriers to entry for the new product, i.e. utility or design
patents; trademarks, etc., etc.? If not, how easy it might be for someone to
reverse engineer and copy the new product?
Note: Please provide us with complete copies of any patents or Provisional
Patent Applications (PPA) you might have.
5. Which product features will satisfy these unmet needs? How?
6. What product claims will be made? Can these claims be substantiated
through scientific and other compelling evidence?
7. Are design criteria established for the product?
8. Have preliminary product, component and packaging specifications been
developed? Do you have any product models or prototypes made?
9. What type of testing will be done in order to evaluate the soundness of the
product design?
10. How long should the product be expected to last?
11. Does the new product have sales potential in the targeted market? If so,
provide numbers, etc.
12. Who is the competition?
13. How can they affect the new product's sales?
14. What are the most effective channels of distribution?
15. What are the prices of own and competitive, similar products? What is the
expect net profit (after taxes) per each product sold?

(g) Break Even Point.

In economics

Main articles: Break-even (economics) and Break-even analysis

In economics & business, specifically cost accounting, the break-even point
(BEP) is the point at which cost or expenses and revenue are equal: there is no
net loss or gain, and one has "broken even". A profit or a loss has not been
made, although opportunity costs have been paid, and capital has received
the risk-adjusted, expected return.[1]

[edit] In other fields

The break even point is also the point on a chart indicating the time when
something has broken even, and is a general term for not having gained or
lost something in a process.
In nuclear fusion research, the term breakeven refers to a fusion energy gain
factor equal to unity, this is also known as the Lawson criterion.
The notion can also be found in more general phenomena, such as percolation,
and is rather similar to the critical threshold. In energy, the breakeven point is
the point where usable energy gotten from a process exceeds the input
energy.
In computer science, the (less usual) term refers to a point in the life cycle of a
programming language where the language can be used to code its own
compiler or interpreter. This is also called self-hosting.
In medicine, it is a postulated state when the advances of medicine permit
every year an increase of one year or more of the life expectancy of the living,
therefore leading to medical immortality[2](barring accidental death).

The break-even point for a product is the point where total revenue received
equals the total costs associated with the sale of the product (TR = TC).[1] A
break-even point is typically calculated in order for businesses to determine if
it would be profitable to sell a proposed product, as opposed to attempting to
modify an existing product instead so it can be made lucrative. Break even
analysis can also be used to analyze the potential profitability of an
expenditure in a sales-based business.

break even point (for output) = fixed cost / contribution per unit

contribution (p.u) = selling price (p.u.) - variable cost (p.u)

break even point (for sales) = fixed cost / contribution (pu) * selling price (pu)

Margin of Safety

Margin of safety represents the strength of the business. It enables a business

to know what is the exact amount he/ she has gained or lost and whether they
are over or below the break even point.[2]
margin of safety = (current output - breakeven output)
margin of safety% = (current output - breakeven output)/current output x 100
If P/V ratio is given then profit/ PV ratio
== In unit Break Even = FC / (SP − VC)
where FC is Fixed Cost, SP is Selling Price and VC is Variable Cost

[edit] Internet research

By inserting different prices into the formula, you will obtain a number of break
even points, one for each possible price charged. If the firm changes the
selling price for its product, from $2 to $2.30, in the example above, then it
would have to sell only (1000/(2.3 - 0.6))= 589 units to break even, rather
than 715.
To make the results clearer, they can be graphed. To do this, you draw the
total cost curve (TC in the diagram) which shows the total cost associated with
each possible level of output, the fixed cost curve (FC) which shows the costs
that do not vary with output level, and finally the various total revenue lines
(R1, R2, and R3) which show the total amount of revenue received at each
output level, given the price you will be charging.
The break even points (A,B,C) are the points of intersection between the total
cost curve (TC) and a total revenue curve (R1, R2, or R3). The break even
quantity at each selling price can be read off the horizontal, axis and the break
even price at each selling price can be read off the vertical axis. The total cost,
total revenue, and fixed cost curves can each be constructed with simple
formulae. For example, the total revenue curve is simply the product of selling
price times quantity for each output quantity. The data used in these formulae
come either from accounting records or from various estimation techniques
such as regression analysis.

[edit] Limitations

• Break-even analysis is only a supply side (i.e. costs only) analysis, as it tells you
nothing about what sales are actually likely to be for the product at these various prices.
• It assumes that fixed costs (FC) are constant. Although, this is true in the short run,
an increase in the scale of production is likely to cause fixed costs to rise.
• It assumes average variable costs are constant per unit of output, at least in the
range of likely quantities of sales. (i.e. linearity)
• It assumes that the quantity of goods produced is equal to the quantity of goods
sold (i.e., there is no change in the quantity of goods held in inventory at the beginning of the
period and the quantity of goods held in inventory at the end of the period).
• In multi-product companies, it assumes that the relative proportions of each
product sold and produced are constant (i.e., the sales mix is constant).