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Marketing Management

MB0030 Marketing Management - 4 Credits

Assignment Set- 1 (60 Marks)Master of Business


Administration-MBA Semester 2
Q.1 Explain the meaning of marketing and its importance in business.

→ Marketing is a set of business activities that facilitate movement of goods and services from
producer to consumer. It is an ongoing process of discovering and translating consumer needs into
products and services, creating demands for them, serving the customer and his demand through a
marketing programme of promotion and distribution to fulfill the company’s marketing goals in a
competitive environment.
It is evident that customer, his needs and wants are very important aspects of today’s marketing.
Customer focus is the very essence of marketing and his viewpoints should be taken into account
while making marketing decisions.
In this era of rapid changes, it is marketing which keeps the business in close contact with its
economic, political, social and technological environment and informs it of events and changes that
can influence its activities.
American Marketing Association (AMA) offers the following definition of Marketing.( AMA 2004)

Definition: Marketing is an organization function and a set of process for creating, communications
and delivering value to customers and for managing customer relationships in ways that benefit the
organization and its stake holders.

The Chartered Institute of Marketing defines Marketing as:


Marketing is the management process responsible for identifying, anticipating and satisfying customer
requirements, profitably.

Importance Of Marketing In Business.


Peter Drucker, the famous management thinker in one of his classic articles has said “Marketing is
everything”. All other activities in the organization are support services to the marketing strategy that
the company pursues. Marketing is important not only to the company but to the consumers and
society and to the economy.

For a company in any business, marketing is considered to be the most important activity. It helps an
organization to keep abreast of changes taking place in the market and consumer tastes and
preferences through market research. Based on this reliable data, it responds to these changes by
rectifying any drawbacks in its products or changing its competitive strategy. Thus the company’s
decision- making and planning are not based on just hunches but on sound market information. The
firm that follows such practices is sure to prosper under all conditions. Marketing provides an
effective channel of communication to the company with its consumers by way of advertising and
sales promotion. Marketing thus brings revenue and earns goodwill for the company.

Successful operation of marketing activities creates, maintains and increases the demand for goods
and services in the economy. It results in the increased level of production. This, in turn, increases the
national income, which is beneficial to the economy. Marketing operations require the services of
intermediaries
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such as wholesalers, retailers, transporters, and service provides for storage, finance, insurance and
advertising. These services provide employment in large numbers.

Q.2 Explain the relevance of BCG matrix and GE matrix with examples

Ans- BCG matrix: This model is used to identify company’s SBU’s position in the market. This
model identifies the SBU’s strength, weaknesses, opportunities and threats on the basis of market
growth rate and relative market share. This model is also known as growth share matrix.

Axis components:
1. Market growth rate: The rate at which market is growing
2. Relative market share: Market share of the SBU divided by the market share of the largest
competitor.

Model components:
Star: This category represents the high market share and high industry growth. SBU’s in this category
require large investment to defend their position. SBU will turn as cash cow after some time.
Cash cows: This category represents the low growth rate and high market share which is the
characteristic of SBU operating in mature industry. Here company needs less investment to hold their
position. Hence it generates more cash or in management terms we say cash cow can be milked.
Question Mark: This category represents high market growth and low market share. SBU’s in this
category has two options, either to invest heavily and bring them to star position or divest / liquidate
from that position.
Dogs: SBU’s in this category generates less cash for the company as it operates in low growth and low
market share. Usually companies will not invest in this category and try to liquidate or divest.

BCG matrix for ITC

1. SBU: FMCG
Industry growth rate: 24% (AC Nielson retail audit report 2007)
Company growth rate: 50% (the Hindu business line 19 th January 2008)
Company’s market share : 8% (outlook business)
Largest competitor share: HUL: 54% (outlook business)
Relative market share= 0.14

2. SBU: Paper board


Industry growth rate: 7.2% (the Hindu business line 27 th May 2007)
Company growth rate: 11% (the Hindu business line 19 th January 2008)
Company’s market share: 55%
Largest competitors share: BILT 35%

ITC’s FMCG segment analysis shows that though it is market leader in some categories their overall
relative market share is 0.14. Company is in the high growth low relative market share area i.e.
question mark position. ITC should invest heavily to convert its SBU position into star. ITC’s
Paperboard industry is in low growth and high market share category i.e. in cash cow segment. It
should plan for investing the cash generated from this position into other businesses.

GE matrix:
1 Management can use the GE business matrix to classify SBU’s on the basis of two factors
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a. Market attractiveness: Market size, entry barriers, competitors, technology and profit margin are
some factors used to analyze the market attractiveness.
b. Business position can be determined on the basis of market share, SBU size, R&D capabilities and
cost controls
Each cell in the model represented by the particular strategy namely, invest strategy, protect strategy,
harvest strategy and divest strategy

2 Invest strategy: In this position SBU


a. Should receive ample resources
b. Should support by well financed marketing efforts.

3 Protect strategy: SBU’s in this position should


a. Allocate the resources selectively.
b. Develop strategies which help in maintain its market position.
c. Generate cash needed by other SBU’s.

4. Harvest strategy: SBUs should not receive substantial new resources and if required, sell them.

5. Divest strategy: SBUs which falls into this category should not receive any resources and sell i or
shut it as early as possible.

Q.3. What do you mean by MIS? Explain its benefits, types and components.
Ans: Philip Kotler defines MIS as “a system that consists of people, equipment and procedures to
gather, sort, analyze, evaluate and distribute needed, timely and accurate information to marketing
decision makers.
Its characteristics are as follows:
1. It is a planned system developed to facilitate smooth and continuous flow of information.
2. It provides pertinent information, collected from sources both internal and external to the company,
for use as the basis of marketing decision making.
3. It provides right information at the right time to the right person.

A well designed MIS serves as a company’s nerve centre, continuously monitoring the market
environment both inside and outside the organization. In the process, it collects lot of data and stores
in the form of a database which is maintained in an organized manner. Marketers classify and analyze
this data from the database as needed.

Benefits of MIS

Various benefits of having a MIS and resultant flow of marketing information are given below:
1. It allows marketing managers to carry out their analysis, planning implementation and control
responsibilities more effectively.
2. It ensures effective tapping of marketing opportunities and enables the company to develop
effective safeguard against emerging marketing threats.
3. It provides marketing intelligence to the firm and helps in early spotting of changing trends.
4. It helps the firm adapt its products and services to the needs and tastes of the customers.
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5. By providing quality marketing information to the decision maker, MIS helps in improving the
quality of decision making.

Types of Marketing Information

A Marketing Information System supplies three types of information.


1. Recurrent Information is the data that MIS supplies periodically at a weekly, monthly, quarterly,
or annual interval. This includes data such as sales, Market Share, sales call reports, inventory levels,
payables, and receivables etc. which are made available regularly. Information on customer awareness
of company’s brands, advertising campaigns and similar data on close competitors can also be
provided.

2. Monitoring Information is the data obtained from regular scanning of certain sources such as trade
journals and other publications. Here relevant data from external environment is captured to monitor
changes and trends related to marketing situation. Data about competitors can also be part of this
category. Some of these data can be purchased at a price from commercial sources such as Market
Research agencies or from Government sources.
3. Problem related or customized information is developed in response to some specific requirement
related to a marketing problem or any particular data requested by a manager. Primary Data or
Secondary Data (or both) are collected through survey Research in response to specific need. For
example, if the company has developed a new product, the marketing manager may want to find out
the opinion of the target customers before launching the product in the market. Such data is generated
by conducting a market research study with adequate sample size, and the findings obtained are used
to help decide whether the product is accepted and can be launched.

Components of MIS

The following diagram shows a typical Marketing Information System with its components. Which
are?
1. Internal Records System
2. Marketing Intelligence System
3. Marketing Research System
4. Analytical Marketing System

The Marketing Information System


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Internal Records System


This includes information on (i) Order to payment cycle and (ii) sales information systems.

Order to payment cycle has a system which records, the timing and size of orders placed by
consumers, the payment cycle followed by consumers and the time taken to fulfill the orders, in the
shortest possible time. Customers place order through sales people and companies dispatch the goods
and receive payments directly or through bank. A proper record system pertaining to order – to –
payment cycle management helps mangers to decide on production and dispatch schedule, inventory
and accounts receivable schedule and also logistics and distribution management schedules,

Sales Information Systems record everything in the sales Department, starting from Sales Call
Reports to prospects history to Sales territory and quota information for better sales planning and
forecasting purpose.

Marketing Intelligence System


This is a set of procedures and sources used by managers to obtain everyday information about
developments in the marketing environment. This system supplies ‘happenings’ data unlike Internal
Records System which supplies ‘results’ data. Marketing managers collect data from published
sources like books, magazines and journals; by talking to customers, intermediaries and sales
personnel. Some companies appoint specialists to gather consumer and competitor information, who
does mystery shopping to monitor the performance of their own or competitor’s dealers. Competitor
information can also be obtained by buying their product, attending their press conferences, trade
shows and reading their annual reports. Companies purchase commercial information from outside
suppliers and market research agencies like IMRB, ORG – MARG to obtain competitive data on their
sales, advertising expenditures etc., besides their own.

Marketing Research System


This is the third component of MIS. Marketing Research provides information to marketing manager
when he/she encounters marketing problems. This may involve conducting Marketing Research
survey by collecting primary data. These surveys may be conducted by the marketing department
itself or a it can hire services of an external marketing research agency.

Analytical Marketing Systems


Also known as Marketing Decision Support systems (MDSS), this is a co-ordinate collection of data,
systems, tools and techniques with supporting software and hardware by which an organization
gathers and interprets relevant information from business and environment and turns it into a basis for
marketing action. All the data which is generated through the other three systems described above are
stored in a data base. The storage and retrieval capability of decision support system allows the
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collection and use of a wide variety of data throughout the company. Senior managers can access the
data base and continually and monitor sales, markets, performance of the sales people and other
marketing systems as well.

Q.4.Suppose you need to conduct a small marketing research in your neighborhood


regarding the purchase and use of toothpastes, what will be your approach in the process?

Ans- Step I – Define the problem and research objectives


It is said that ‘a problem well – defined is a problem half – solved’. A careful and precise definition of
the marketing problem will lead to useful and relevant results which can solve the marketing problem.
Each research project should have one or more objectives which form the broad frame within which
research has to be conducted. It is very important to formulate the problem properly as being the first
step in the process; any error in this can mislead the entire study towards incorrect and erroneous
results.

Step II Develop the Research Plan and Design


A Research plan is simply the framework within which collection and analysis of data is undertaken.
This step involves decisions on the data sources, research approaches, research instruments, sampling
plan and contact methods.

1. Data sources – The researcher has to decide which data sources to use – Secondary Data or
Primary Data or both. Secondary Data are data which collected for some other purpose or for
commercial purpose of selling.

2. Research Approaches – Primary Data can be collected using any of the five approaches. They are:

a. Observational Research – Fresh data can be collected by observing the situation and the people in
the situation.
b. Focus Group Research is a method of discussion in which a team of eight to twelve persons
invited for a group discussion in presence of a skilled moderator to discuss a product, service, a firm
or any marketing related activity. The proceedings are observed and recorded on videotape and
subsequently analyzed to understand consumer attitudes, beliefs and behavior.
c. Survey Research – This is the most common of the approaches wherein surveys are undertaken
with the help of a questionnaire to learn about people’s knowledge, beliefs and preferences.
d. Behavioral Research – Customer’s actual behavior in terms of actual purchases reflect their
preferences and are more reliable than responses provided in surveys which are memory based.
e. Experimental Research – The most scientific method of research is experimental research which
tries to capture cause and affect relationships. Experiments are conducted by selecting matched groups
of subjects, which are subjected to different treatments. Extraneous variables (The external variable
that affect the research process) are controlled and then responses of the two groups are observed and
checked for statistically significant differences, if any. Since the extraneous factors are eliminated or
controlled, the observed effects are related to the variations in the treatments.

Q.5 Explain the consumer buying decision process with respect to new products. Give
examples.

Ans- Consumer Buying decision process-.


Buyer decision process for new products.
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The buyer’s decision for existing products and new products varies. You already seen in the existing
product buying decision process consumers have the option to search for the information and evaluate
them. In the new product such options don’t exist. Therefore we should understand how consumer
comes to know about the product. Kotler defined this process as adoption process. According to Philip
Kotler Adoption is ‘The mental process through which an individual passes from first hearing about
an innovation to final adoption’.

1. Awareness: the consumer became aware of the product but lacks information about it.
2. Interest: As know previous information available consumer shows interest to get the information
about the product.
3. Evaluation: After receiving the information consumer analyzes the benefits of new products over
any existing products or substitutes and decides whether to buy or not.
4. Trial: The consumer tries the new product on a small scale to improve his or her estimate of its
value.
5. Adoption: In this stage consumer decides to make full and regular use of the product.

The adoption of new product varies from individual to individual.


1. 2.5% of the consumers adopt any new product that enters to the market. These consumers are status
conscious people. Marketer should highlight how the new product will bring the esteem to the
consumer.
2. 13.5% of the customers fall into the early adopter categories. In this categories customer observed
the advantage of the new product and the moment the price of the product falls into the affordable
category they buy the product.
3. The next group is the biggest one in the adoption process. These group customers are attracted
towards the benefits of the product. They make sure that there are no technical or general problems
associated with the product. This group contains 34% of the total customers.
4. This group consist 34% of customers. The group looks for the quality product at the affordable
prices
5. The final group is called as laggards. These are traditional and price conscious people. They often
take lot of time to adoption of the product.

Q. 6. Explain the different consumer behaviour models.

Ans- Buyer behavior models.


The influence of social sciences on buyer behavior has prompted marketing experts to propound
certain models for explaining buyer behavior. Broadly, they include the economic model, the learning
model, the psychoanalytical model and the sociological model.

1) The Economic Model: According to the economic model of buyer behavior, the buyer is a rational
man and his buying decisions are totally governed by the concept of utility.

2) The Learning Model: According to the learning model which takes its cue from the Pavlovian
stimulus response theory, buyer behavior can be influenced by manipulating the drives, stimuli and
responses of the buyer. The model rests on man’s ability at learning, forgetting and discriminating.
The stimulus response learning theory states that there develops a bond between behavior producing
stimulus and a behavior response (S. R. Bond) on account of the conditioning of behavior and
formation of habits.

Drive: Drive may be defined as any strong stimulus that impels action. It arouses an individual and
keeps him prepared to respond.
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Cue: Cue or stimulus may be defined as any object in the environment perceived by the individual.
The aim of the marketing man is to find out or create the cue of sufficient importance that it becomes
the
MB0030 Marketing Management - 4 Credits
drive stimulus or elicits other
Assignment Set- 2 (60 Marks)responses appropriate to his
objective.

Response: Response is an answer to a given drive or cue. When a man feels thirsty, he attempts to get
water at any cost. Here attempt to get water is a response to the primary drive of thirst. “Response also
includes attitudes, familiarity, perception and other complex phenomena.” Responses may be
generalized or discriminatory.

3) The Psychoanalytical Model: The psychoanalytical model draws from Freudian Psychology.
According to this model, the individual consumer has a complex set of deepseated motives which
drive him towards certain buying decisions.

4) The Sociological Model: According to the sociological model, the individual buyer is influenced
by society or intimate groups as well as social classes. His buying decisions are not totally governed
by utility; he has a desire to emulate, follow and fit in with his immediate environment.

5) The Nicosia Model: In recent years, some efforts have been made by marketing scholars to build
buyer behavior models totally from the marketing man’s standpoint. The Nicosia model and the
Howard and Sheth model are two important models in this category. Both of them belong to the
category called the systems model, where the human being is analyzed as a system with stimuli as the
input to the system and behavior as the output of the system. Francesco Nicosia, an expert in
consumer motivation and behavior put forward his model of buyer behavior in 1966. The model tries
to establish the linkages between a firm and its consumer – how the activities of the firm influence the
consumer and result in his decision to buy.

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Master of Business Administration-MBA Semester 2

Q.1 a. Give a short note on bases of Segmentation.


b. Analyze the pricing methods with relevant examples

Ans-1) Geographic segmentation: Dividing the market into different geographical units such as
nations, states, regions, cities or neighborhoods. The company can operate in one or a few Geographic
areas or operate in all but pay attention to local variations.

2) Demographic Segmentation: In demographic segmentation the market is divided into groups on


the basis of variable such as age, family size, family lifecycle, gender, income, occupation, education,
religion, race, generation, nationality and social class. Demographic variables are the most popular
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bases for distinguishing customer groups. One reason is that consumers’ wants, preferences and usage
rates are often associated with demographic variables.

3) Psychographic Segmentation: In Psychographic segmentation, buyers are classified into different


groups on the basis of lifestyle or personality and values. People within the same demographic group
can exhibit very different psychographic profiles.

4) Behavioral Segmentation or Consumer Response Segmentation: In behavioral segmentation,


buyers are divided into groups on the basis of their knowledge or attitude towards the use of, or
response to a product. Some marketers believe that behavioral variables are the best starting points for
constructing market segments.

Pricing methods-
1. Discounts and allowances- Companies offer reduction in the price for the customers on the basis
of four different conditions.
a. Cash discount is given when the customer makes early payment before the due date.
b. Quantity discount is a price reduction to buyers who buy the products in large quantities.
c. Functional discount is offered when customer carries the promotion or other marketing activities.
d. Seasonal discount is usually offered when customer purchases the product in the off season.

2. Location pricing- Location pricing is the method of setting the price of the product according to the
locations. Here company changes the price from one location to another location though other cost
remains the same.

3. Psychological pricing-According to Kotler Psychological pricing is ‘a pricing approach that


considers the psychology of prices and not simply the economics; the price is used to say something
about the product. For example, V. K. export sets Rs 299 and Rs 399 for its leather products.

4. Promotional pricing-Organizations sets the price of their product below the list price and
sometimes even below cost. The objective of such pricing is to achieve immediate sale, increase the
customer footfall, avoid the competition and introduce the product.

5. Geographical pricing -setting the price on the basis of geographies they are selling the product and
freight charges. In this strategy different options exist for the company.

6. International pricing-organizations should consider the different external factors and customer
profile in different countries. It should adopt their products and their prices according to that. For
example, CIPLA sells its AIDS medicines in Africa and America with different prices.

Q.2 Explain the benefits and demerits of the different types of advertising media. How will a
marketer decide on the suitable media for his/her products?

Ans- Broad cast media

Radio
1. Provides up to date information
2. Reaches the local audience effectively
3. After FM revolution this is one of the fastest growing media.

Television
1. Expensive medium
2. Products can be well explained and demonstrated.
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3. It provides wide geographic coverage
4. Image creation is difficult in this medium because of spontaneity.
5. Wide number of media vehicle creates the problem for media planners.

Print media

Newspapers
1. Continue to dominate local markets
2. Retail and classified advertisement are key
3. Important advantages include flexibility and community prestige
4. Newspapers offer powerful merchandising services like promotional and research support

Magazines
1. Divided into two broad categories of consumer magazines and business magazines
2. These categories are also subdivided into monthly publications and weekly publications
3. Specialty advertisements can be promoted through this media.

Outdoor Advertising
1. Includes billboards, painted bulletins or displays, and electric boards
2. The oldest and simplest media business
3. Effective in the high traffic areas.
4. Environmentalists oppose this type of advertisement.

Online advertising
1. Contains characteristics of both print and broadcast media
2. Enhances twoway communication and encourages audience participation
3. Example of this media is email.

Other Advertising Media


1. Transit advertisement: advertisements placed on the buses and moving vehicles.
2. Movie advertising: Inserting the advertisement inside the movie
3. In flight commercials: advertisements placed in the airplanes.
4. Using yellow pages and pamphlets to advertise the product.

Points to remember before Selecting advertising media:


· Assess how many target customers should view the communication message.
· Point out how many times a target customer will expose to the advertisement.
· Evaluate the impact of advertisement message on the target audience.
· List out the media habits of the target customers.
· Find the suitable media for type of product organization have.
· Prepare cost sheet and choose optimum media.
· Choose particular media vehicle (Zee channel, Times now, Prajavani, Hindu etc…)
· Decide how many times advertisement should be given in the year and also decide the continuity of
advertisement.
· Allocate the media execution strategy on the basis of prime time and non prime time or seasonal and
non seasonal decisions.

Q.3 Write a note on new product development and product mix.


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Ans-New products are essential for existing firms to keep the momentum and for new firms they
provide the differentiation. New product doesn’t mean that absolutely new to the world. It may be
modification, or offered in the new market, or differentiate from existing products. Therefore it is
necessary to understand what are new products?

New Products are


a. They are really innovative: Google’s Orkut a networking site which revolutionized social
networking. In this site people can meet like minded people; they can form their own groups and
many more.
b. They are very different from the others: Haier launches path breaking 4-Door Refrigerators First
time in India
c. They are imitative; these products are not new to the market but new to the company. For example,
cavin Kare launched ruche pickles. This product is new to cavin kare but not to the market.

Product mix: The number of product line and items offered by marketer to the consumer
A company’s product mix has four different dimensions. They are product mix width, product mix
length, and product mix depth and product mix consistency.
For example, Jyothy laboratories’ Jeeva Natural is offered in three versions i.e. Coconut Milk with
Milk Protein, Coconut Milk with Jasmine and Coconut Milk with Kasturi Manjal, and is presented in
75gm packs.
Product mix consistency: If company’s product lines usage, production and marketing are related then
product mix is consistent else it is unrelated. Incase of Jyothy laboratories, all six product lines are
FMCGs. Hence it is having consistent product mix. But ITC Company’s cigarette and cloth product
line are totally unrelated.

Q.4. Select any brand of toilet soap and evaluate its positioning strengths or weaknesses in
terms of attributes, benefits, values, brand name and brand equity. Also, examine how
competitive brands influence the marketing strategies of the selected soap.

Ans- In the case Superia Beauty soap of ITC, favorable brand image of the product created in the
minds of consumer. To achieve this brand managers used three levels of positioning strategies to get
the mind share of the customer. 1) Product Attributes i.e. Ingredients: the product speaks about the
innovative ingredients that company offers in the product. 2) Taste 3) Benefits, beliefs & values.

Manufactureres successfully used strategy of Brand equity to influence consumer's commitment to


repurchase the brand and demonstrated repeated buying of a product or service or other positive

behaviors such as word of mouth advocacy. True brand loyalty implies that the consumer is willing, at
least on occasion, to put aside their own desires in the interest of the brand. This will help organization
to reduce the promotion cost. Organization put all the effort in the introduction stage of the product to
create awareness among the customers. Created customer perception about the actual quality level of
the product. Successfully made attribute of the brand that customer associates with his/ her belief.
Competitors like Hindustan Unilever uses different brand names for their home and personal care
category. The above example shows us that HUL have breeze, Dove, Liril Lux, Lifebuoy and Pears in
the bath soap segment itself. It helps company to come out with new features in the product or product
category. Organizations adopt this strategy to avoid brand cannibalization in the given category. The
major disadvantage of this strategy is none of the brands will enjoy major market share and result in
lesser profitability. In case of Hindustan Unilever company had more than 100 brands and was forced
to reduce it to 30 power brands. Other brands were not adding enough profit for the company.
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Q. 5 As a salesperson in a fast moving consumer goods company, what kind of training
and development methods do you feel are required? How important is training for sales
force and how can it be evaluated?

Ans- In case of FMCG a suitable mix can be used of the following-

1. Group Training

(a) Lecture Method: An expert or a lecturer speaks to traineesalesmen about the various aspects of
selling. It consists of oral talk in a classroom. This system is widely used. The trainees listen to the
lectures.
(b) AudioVisual Method: In order to supplement the lecturing (telling) method, training programs
include the use of visual aids, such as films, slides, posters etc., and are capable of making, them more
interesting.
(c) Discussion Method: This is a good method. Here an actual case or an imaginary case is given as a
problem to be solved, to the different groups. The case or the problem may be typed or printed.
(d) Conference Method: Sales conferences and sales meeting are a kind of ‘get together’ of all the
concerned staff, weekly, fortnightly or monthly.
(e) Role Playing Method: Role playing is a newly developed method. The sales trainees are made to
act out roles in contrived problems. The trainer explains the situation of the problem and assigns the
role of salesman and customers of different characters to the sales trainees.
(f) Panel Method: Members in the panel group may be permanent. The members, who are experts in
the panel, discuss the problems, and solutions are passed to the salestrainee groups, who may have
further discussion.
(g) Round Table method: It is similar to the discussion method. It consists of few members. The
salesmen sit around a table along with a good discussion leader.
(h) Brain Storming Method: Under this method, more or less, similar to round table conference,
persons sit around the table. The leader presents the problems for discussion.

2. Individual Training

(a) Onthejob Training: Under this method, a new salesman is placed under an experienced or senior
salesman who trains him.
(b) Sales Manual: It is a complied textbook. It contains details of the firm and products, job
description, sales policies, opinions or reports required for reference purposes etc.
(c) Initial or Breakin Training: New recruits are given an orientation training so as to know about the
company and its products. Having trained the salesmen, the marketing manager must evaluate the
usefulness or effectiveness of training, individually and collectively on the basis of the performance of

the sales personnel. Money, effort and time have been spent on training. Therefore, it is natural to
expect returns. Evaluation can be made on the basis of performance of sales executive in terms of
sales volume, sales profitability, ordersize, expenses etc., between, before and after training periods.

Q. 6 What is International Marketing? What are the various strategies to enter International
markets? Explain.

Ans-After the globalization and liberalization of the Indian economy in the year 1991, Indian
enterprises started facing the competition from the global brands. In this context it has become
inevitable for all the companies small or big to analyze the international marketing environment and
strategies to adapt to it. The companies which were operating in the domestic market are also
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aggressively redrafting their policies and strategies to suit the global needs. Companies express their
desire to enter into the international market because of the following reasons
1. It identified potential in the foreign markets for its products.
2. The domestic market is matured.
3. Existing customers demand for the international availability of organization’s products and
services.

Companies can enter international market from any one of the following strategies. They are

a. Exporting- is the techniques of selling the goods produced in the domestic country in a foreign
country with some modifications. For example, Gokaldas textiles export the cloths to different
countries from India. Exporting may be indirect or direct. In case of indirect exporting, company
works with independent international marketing intermediaries.

b. Licensing-According to Philip Kotler licensing is a method of entering a foreign market in which


the company enters into an agreement with a license in the foreign market, offering the right to use a
manufacturing process, trademark, patent, or other item of value for a fee or royalty’.

c.Contract manufacturing-company enters the international market with a tie up between


manufacturer to produce the product or the service. For example, Gigabyte technology has contract
manufacturing agreement with Dlink India to produce and sell their mother boards.

d. Management contract-In this type a company enters the international market by providing the
know how of the product to the domestic manufacturer. The capital, marketing and other activities are
carried out by the local manufacturer hence it is less risky too.

e. Joint ownership-A form of joint venture in which an international company invest equally with a
domestic manufacturer. Therefore it also has equal right in the controlling operations. For example,
Barbara a lingerie manufacturer has joint venture with Gokaldas images in India.

f. Direct investment-In this method of international market entry Company invest in manufacturing or
assembling. The company may enjoy the low cost advantages of that country. Many manufacturing
firms invested directly in the Chinese market to get its low cost advantage. Some governments provide
incentives and tax benefits to the company which manufactures the product in their country.

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