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MARKETING MANAGEMENT

MBA (203)
ASSIGNMENT
WINTER 2018-2019

NAGESHWAR SINGH
1802000398

Q1. Enumerate the differences between Selling and Marketing Concepts.

Ans:

Selling Marketing

Emphasis is on the product Emphasis is on the needs and wants of the


consumer

Company first manufactures the product and Company first determines customer’s needs
then decides to sell and wants and then decides on how to deliver a
product to satisfy these needs and wants

Management is sales-volume oriented Management is profit-oriented

Planning is short-run oriented, in terms of Planning is long-run oriented, in terms of new


today’s products and markets products, tomorrow’s market and future growth

Stresses on the needs of the seller. Stresses on the needs and wants of the buyer.

Views business as a goods producing process. Views business as a customer satisfying


process.
Emphasis is on staying with existing technology Emphasis is on innovation in every sphere, on
and reducing costs providing better value to the customer by
adopting a superior technology.

Different departments work in highly separate All departments of business operate in an


departments integrated manner, the sole purpose being
generation of consumer satisfaction.

Costs determine price Consumer determines price, price


determines cost

Views customer as the last link in business Views customers as the main purpose of
business

Q2. What do you mean by Environmental Scanning? Explain the various Micro
environmental factors of an Organization.

Ans:

Environment Scanning

Environmental scanning refers to the careful monitoring of an organization's internal and


external environment for detecting early signs of opportunities and threats that may influence its
present and future marketing plans. It helps the marketer in taking decisions regarding where to
compete, how to compete, and on what to compete.

Micro environmental factors

Micro environment is the immediate environment in which marketers have to take decisions. The
players of this environment are called actors as they have a direct bearing on the marketing
decisions.
1) The Company :
 Culture and value system – Organizational culture can be viewed as the system of
shared values and beliefs that shape a company’s behavioural norms. A value is an
enduring preference as a mode of conduct or an end state. The value system of the
founders of the organization has a lasting impact on it. The value system not only
influences the working of the company and the attitude of its people but also the choice
of its business.
 Mission and objectives – The mission and objectives of the company guide the
priorities, direction of development, business philosophy, and business policy.
 Management structure and nature – Structure is the manner in which the tasks and
sub-tasks of the organization are related. Structure is concerned with the hierarchical
relationship and the relationship between the management of different functional areas
like the structure of the top management and the pattern of shareholding.
 •Human resource – This concerns factors like manpower planning, recruitment and
selection, compensation, communication, and appraisal.
2) Intermediaries: Intermediaries are independent business units and they carry the
company’s products and services to the customers. Prominent intermediaries include
wholesalers, retailers, merchants, selling agents, brokers, etc. Their objective of being in
business is different than being in a firm, so the intermediaries will be interested in
maximizing their profits.
3) Public: Positive and favourable public opinion is crucial to marketing success since the
public is the authority that permits the existence and operation of competitive marketing
systems.This environmental factor includes the general public, its support, the government,
and the set of public who have a direct bearing on business.

4) Competitors: Success or failure of an offer largely depends on how competitors react to


the company’s offer. Godrej was a successful refrigerator manufacturer. Once competition
intensified, the company started losing market share. Today, though there is a growth in
refrigerator industry, Godrej as a brand is not growing as fast as its competitors.
5) Suppliers : Increase in the price of raw materials will have a bang on effect on the
marketing mix strategy of an organisation. As a result, the prices may be forced up. This is
the impact that the suppliers can have. Closer relationship with suppliers is one way of
ensuring competitive and quality products for an organisation.

Q3. Write Short notes on:

i. Types of Buying Motives

ii. Engel-Kollat-Blackwell model

Ans: 1) Types of buying motives

 Inherent and learned buying motives – These are the basic need of the customer.
Inherent buying motives arise from the basic needs of the consumers such as sex,
comfort, and safety. These are more instinctive in nature and influence the consumer the
maximum.

On the other hand, learned motives are those motives which customers acquire or learn
from the environment in which they live or from their learning as they grow up in the
society. These motives are social status, social acceptance, economic, political
achievement, fear, and security.

 Emotional and rational buying motives – Emotional buying motives are affected by
consumer feelings and are often judged by using feelings or affective part of consumer’s
attitude. In such motives, the heart dominates head and mind. The motives are hunger,
thirst, ego, prestige, comfort, pleasure, love, and affection etc.

 Rational Buying Motives - Rational buying motives are those motives where consumers
are rational and their decisions are based on logic and justifications while taking buying
decision. In this case, the mind dominates the heart. Before making any purchase, the
consumers satisfy themselves with the price, quality, durability, reliability, and service
and then decide to purchase the goods.
 Psychological and social buying motives – Psychological motives are driven by
internal psychological processes like learning, perception, and attitude. It assumes that
the buying behaviour of an individual is influence more by his/her personality elements
and psychological drives than social environment and is guided by the Freudian school of
thought.

2) Engel-Kollat-Blackwell model

In their model of consumer behaviour, these researchers view consumer behaviour as a decision
process and identify five activities.

They are:

 Problem recognition : It refers to the process of recognizing the problem between the
actual and the ideal state. Consumers recognize a difference between their actual and
ideal state.
 Information search: It refers to the research of the information required in the
organization. Consumers’ beliefs and attitudes act as the first level information. If more
information is required, they look to friends, sales people, or media ads.
 Evaluation of alternatives: In this process the number of possible alternatives are listed
by the managers. These alternatives are now evaluated by the managers and the most
suitable alternative is selected .Consumers respond positively or negatively on the basis
of their beliefs about alternative brands.
 Choice: It refers to the preference of the customer for choosing the product. Attitude of
the consumers will influence their choice. There are other influences which comprise
normative compliance and anticipated circumstance. The normative compliance includes
the influence of friends and family members on the consumers. Availability of money
may also influence their choice. This is the anticipated circumstance.
 Outcomes: Outcome generally refers to the end results of the task. A positive outcome as
perceived will result in satisfaction. Otherwise, dissonance occurs in the individual.
Dissonance is a feeling of discord. At this stage, consumers may search for more
information to support their choice.
The researchers also take into account a number of other variables which influence the buying
decision process. They classify the variables into five general categories:

 Information input
 Information processing
 Product/brand evaluation
 Common motivating influences.
 Internalized environmental influences

SET -2

Q1 Explain Product Line. What are the major product line strategies?

Ans:

Product Line:

It generally refers to the group of the products . A product line is a group of products for
essentially similar use, and technical and marketing considerations. Colgate product line includes
Colgate Dental Cream, Colgate Gel, Colgate Total, Colgate Herbal, etc.

 Expansion of product mix: The first product line strategy is the expansion of the
product mix. Expanding may be a valid decision if it is in an area in which consumers
traditionally enjoy a wide variety of brands to choose from and are accustomed to
switching from one to another; or if the competitors lack a comparable product or have
already expanded into this area. However, the main limitation in expansion is the
availability of sufficient finance, time, and equipment.
 Contracting or dropping the product: The other strategy used by the organization is to
drop the product. This strategy is more risky as compared to the other strategy. There is a
chance of huge risk in the dropping product strategy. This is more difficult because
money has already been invested and therefore, as long as possible, products are allowed
to linger on until a loss is incurred. When a decision on contraction is taken, various
alternatives are available to the marketers. The product may be consolidated with several
others in the line so that fewer styles, sizes, or added benefits are offered. If the product
fails even after this pruning, the company may stop it altogether.
 Alteration of existing products: Sometimes experience may show that improving an
existing product may be more profitable and less risky than developing and launching a
new product. Alterations may be made in the design, size, colour, texture, flavour,
package, use of raw materials, advertising appeal, or the brand manager may bring a
change in the quality level.
 Development of new uses for existing products: It includes making new users for the
existing products .The company or people may find new uses of the existing products.
For example, a detergent being used for cleaning clothes, floors, utensils, and even glass
products.
 Trading-up and trading-down:

Trading-up – It generally refers to the products which are offered in higher price .It
refers to the adding of a higher priced, prestige product to the existing lines with the
intention of increasing sales of the existing low-priced product. Under trading-up, the
seller continues to depend upon the older, low-priced product for the major portion of the
sales. Ultimately he/she may shift the promotional emphasis to the new product so that
larger share of sales may go to the new product.

Trading-down – it means addition of low price goods in the line of prestige goods It
refers to the adding of low priced items to the line of prestige products, with an
expectation that the people who cannot buy the original product may buy these new ones
because they carry some status of the higher priced goods.

 Product differentiation and market segmentation:

Product differentiation – Product differentiation involves “developing and promoting


an awareness of difference between the advertiser’s product and competitor’s product.”
When product differentiation strategy is used, it enables a company to come out of price
competition so that it may compete on a non-price basis. The company may show that its
product is different from or even better than the competitor’s products. It is possible to
differentiate on quality, design, brand, or packaging. This strategy works in markets,
which are reasonably homogeneous in their wants, and the products are standardized.

Market segmentation – Under market segmentation strategy, the seller knows that the
total market is made of many smaller homogeneous units, each of which has different
wants and motivations. To meet these different demands, different products can be
developed. The product managers can tailor-make products to suit the segments.

Q2. Write short notes on:

i. Cost-plus pricing

ii. Marginal cost pricing

Ans:

i. Cost-plus pricing

As it name suggests, in this technique the cost is added to the product and then it is sold in the
market. This is the most common method used for pricing. Under this method, the price is set to
cover costs and pre-determined percentage or profit. Let us discuss the factors determining the
normal profit. Generally, margins charged are highly sensitive to the market situation. However,
they may be inflexible in the following cases:

 They may become merely a matter of common practice.


 Mark-ups may be determined by trade associations either by means of advisory price lists
or by actual lists of mark-ups distributed to members.
 Profits sanctioned under price control as the maximum profit margins remain the same
even after the price control is discontinued. These margins are considered ethical as well
as reasonable

ii. Marginal cost pricing: In this kind of pricing process the prices of the product are chosen on
the basis of the marginal cost. Under marginal cost pricing, fixed costs are ignored and prices are
determined on the basis of marginal cost. The firm uses only those costs that are directly
attributable to the output of a specific product. A pricing decision involves planning into the
future, and as such it should deal solely with the anticipated and, therefore, estimated revenues,
expenses, and capital outlays. All past outlays which give rise to fixed costs are historical and
shrunk cost. With marginal cost pricing, the firm seeks to fix its prices so as to maximize its total
contribution to fixed costs and profit. Unless the manufacturer’s products are in direct
competition with each other, this objective is achieved by considering each product in isolation
and fixing its price at a level, which is calculated to maximize its total contribution.

Q3. What do you mean by Publicity? Explain the various salient features of Publicity .

Ans:

Publicity: Publicity is defined as the non-personal stimulation of demand for a product, service,
or business unit. It is obtained by planting commercially significant news about a product,
service, or business unit in a published medium or by providing favourable presentation in the
radio, television, or on stage that is not paid for by the sponsor.

Features

 Non-personal/mass media – Like advertising, publicity also reaches a very large number
of people at the same time through mass media such as newspapers, magazines, radio,
TV, etc ( hence, non-personal ).
 Commercially significant news – This is one of the features that distinguish publicity
from advertising. When information about a product or company is considered
newsworthy, mass media tends to communicate that information free of cost.
 No sponsor – Since the information originates from the media, there is a sponsor, which
means the messages are unsigned. This is another point of difference between advertising
and publicity.
 Not paid for this – Since the sponsor is not identified in publicity and the information is
not disseminated at his/her behest, he/she does not pay for it. This is an additional feature
that differentiates publicity from advertising.
 Purpose (demand stimulation) – In some situations where publicity is properly planned,
it may lead to the creation or reinforcement of a favourable impression about the
company and its products in the minds of people receiving the message.

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