SIKKIM MANIPAL UNIVERSITY INTERNAL ASSIGNMENT MBA (Revised) SEMESTER-4 INDEX SL. NO. SUBJECTS CODE PAGE N0 1. Strategic Management & Business Policy MB0036 03 – 29 2. International Business Management MB0037 30 – 49 3. Service Marketing And Customer Relationship Management MK0006 50 – 68
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SIKKIM MANIPAL UNIVERSITY
INTERNAL ASSIGNMENT
MBA (Revised)
SEMESTER-4
INDEX
SL.
NO.SUBJECTS CODE PAGE N0
1.Strategic Management & Business
PolicyMB0036 03 – 29
2. International Business Management MB0037 30 – 49
3.Service Marketing And Customer
Relationship ManagementMK0006 50 – 68
4.Advertising Management Sales
PromotionMK0007 69 – 80
5. E-Marketing MK0008 81 – 97
6. International Marketing MK0009 98 – 114
STRATEGIC MANAGEMENT & BUSINESS POLICY
(MB-0036)
ASSIGNMENT-1
Q.1 What do you understand by the term Strategy in the context of Business
Management and Policy? And what are the stages in the formulation of a
Strategy?
Ans. A strategy is an operational tool to achieve the goals, and thus, the corporate mission.
Strategies do not attempt to outline exactly how the enterprise is to accomplish its
objectives. A company may view downsizing as a strategy in a competitive market to
render cost-effective services. Thus, strategy provides a framework to guide thinking
and action. Strategies are very much useful in organisations for guiding, planning and
control.
Strategy is a way of life both at the macro as well as micro levels for everyone, whether
it is a nation or a company. To win over in a given complex situation, the organisations,
even trans-nationals adopt strategies. They make changes, if necessary, even to their
global strategies. An individual company may formulate its own strategy to bring out the
desired results. The eventual success of the organisation depends upon strategy
formulation and implementation.
The recently initiated moves such as globalisation, privatisation and liberalisation are
strategies to attain a globally competitive economy. Business management must focus
on following issues
a. Vision- For proper growth of the company.b. Mission – What the company wants to achieve.c. Goals – To achieve the above mission.d. Objectives – To achieve the set goalse. Strategies – To achieve the above objectivesf. Policies – To control strategiesg. Programmes – For implementation of objectives
The above list outlines some of the key issues at every stage of action illustrating how:
a. The mission springs out from vision statements b. Goals from the missionc. Objectives from goalsd. Strategies from objectivese. And programmes from objectives
It is the crux of the strategic management process. Strategy refers to the course of
action desired to achieve the objectives of the enterprise. Formulation, together with its
implementation, constitutes an integral part of the management activity. Managers use
strategies for different purposes such as to overcome competition, to increase sales, to
increase production, to motivate the employees to provide their best, and so on.
Implementation of a strategy is a crucial task as the formulation of it. There may be a lot
of resistance during the implementation process. It is necessary for the manager to be
very tactful to involve the members of his group in the formulation of strategy to facilitate
the implementation process.
Stages in Strategy Formulation and Implementation
a. Identification of mission and objectivesb. Environment scanningc. Generic strategy alternativesd. Strategy variationse. Strategic choicef. Allocation of resources and formulation of organisational structureg. Formulation of plans, policies, programmes and administrationb. h) Evaluation and control
Q.2 What, in brief, are the types of Strategic Alliances and the purpose of each?
Supplement your answer with one real life example of each.
Ans. Strategic alliances constitute a viable alternative in addition to Strategic Alternatives.
Companies can develop alliances with the members of the strategic group and perform
more effectively. These alliances may take any of the following forms. Following are the
different types of strategic Alliances:
1. Product and/or service alliance: Two or more companies may get together to
synergise their operations, seeking alliance for their products and/or services. A
manufacturing company may grant license to another company to produce its
products. The necessary market and product support, including technical know-how,
is provided as part of the alliance. Example :- Coca-cola initially provided such
support to Thums Up.
Two companies may jointly market their products which are complementary in
nature. Example :- 1) Chocolate companies more often tie up with toy companies. 2)
TV Channels tie-up with Cricket boards to telecast entire series of cricket matches
live.
Two companies, who come together in such an alliance, may produce a new product
altogether. Example :- Sony Music created a retail corner for itself in the ice-cream
parlours of Baskin-Robbins.
2. Promotional alliance: Two or more companies may come together to promote their
products and services. A company may agree to carry out a promotion campaign
during a given period for the products and/or services of another company.
Example :- The Cricket Board may permit Coke’s products to be displayed during
the cricket matches for a period of one year.
3. Logistic alliance: Here the focus is on developing or extending logistics support.
One company extends logistics support for another company’s products and
services. Example:- The outlets of Pizza Hut, Kolkata entered into a logistic alliance
with TDK Logistics Ltd., Hyderabad, to outsource the requirements of these outlets
from more than 30 vendors all over India – for instance, meat and eggs from
Hyderabad etc.
4. Pricing collaborations: Companies may join together for special pricing
collaborations. Example :- It is customary to find that hardware and software
companies in information technology sector offer each other price discounts.
Companies should be very careful in selecting strategic partners. The strategy
should be to select such a partner who has complementary strengths and who can
offset the present weaknesses.
Q.3 What is a Business Plan? What purpose does it serve?
Ans. A business plan is a detailed description of how an organization intends to produce,
market and sell a product or service. Whether the business is housing, commercial or
some other enterprise, a good business plan describes to others and to your own board
of directors, management and staff the details of how you intend to operate and expand
your business.
A solid business plan describes who you are, what you do, how you will do it, your
capacity to do it, what financial resources are necessary to carry it out, and how you
intend to secure those resources. A well-written plan will serve as a guide through the
start-up phase of the business. It can also establish benchmarks to measure the
performance of your business venture in comparison with expectations and industry
standards. And most important, a good business plan will help to attract necessary
financing by demonstrating the feasibility of your venture and the level of thought and
professionalism you bring to the task.
A well-written plan will serve as a guide through the start-up phase of the business. It
can also establish benchmarks to measure the performance of your business venture in
comparison with expectations and industry standards. And most important, a good
business plan will help to attract necessary financing by demonstrating the feasibility of
your venture and the level of thought and professionalism you bring to the task. A good
business plan will help attract necessary financing by demonstrating the feasibility of
your venture and the level of thought and professionalism you bring to the task. A good
business plan serves the following purposes:
1. Revenue Generation – Your organization may hope to create a business that will
generate sufficient net income or profit to finance other programs, activities or
services provided by your organization.
2. Employment Creation – A new business venture may create job opportunities for
community residents or the constituency served by your organization.
3. Neighborhood Development Strategy – A new business venture might serve as
an anchor to a deteriorating neighborhood commercial area, attract additional
businesses to the area and fill a gap in existing retail services. You may need to find
a use for a vacant commercial property that blights a strategic area of your
neighborhood. Or your business might focus on the rehabilitation of dilapidated
single family homes in the community.
4. Establish Goals: Once you have identified goals for a new business venture, the
next step in the business planning process is to identify and select the right
business. Many organizations may find themselves starting at this point in the
process. Business opportunities may have been dropped at your doorstep.
Depending on the goals you have set, you might take several approaches to identify
potential business opportunities.
5. Local Market Study: Whether your goal is to revitalize or fill space in a
neighborhood commercial district or to rehabilitate vacant housing stock, you should
conduct a local market study. A good market study will measure the level of existing
goods and services provided in the area, and assess the capacity of the area to
support existing and additional commercial or home-ownership activity. A bad or
insufficient market study could encourage your organization to pursue a business
destined to fail, with potentially disastrous results for the organization as a whole.
Through a market study you will be able to identify gaps in existing products and
services and unsatisfied demand for additional or expanded products and services.
6. Analysis of Local and Regional Industry Trends: Another method of investigating
potential business opportunities is to research local and regional business and
industry trends. You may be able to identify which business or industrial sectors are
growing or declining in your city, metropolitan area or region. The regional or
metropolitan area planning agency for your area is a good source of data on industry
trends.
7. Internal Capacity: The board, staff or membership of your organization may
possess knowledge and skills in a particular business sector or industry. Your
organization may wish to draw upon this internal expertise in selecting potential
Large capital costs – costs are too large for a single company
Protection – LDC governments close their borders to foreign companies
Bypass protectionism. e.g.: US workers assemble Japanese parts. The finished
goods are sold to the US consumers.
The new venture increases production, lowers price to consumers.
The new business is able to enter the market that neither parent could have
entered singly.
Cost reductions (otherwise, no joint ventures will be formed)
increased market power
3. Tax Policy towards MNCs: Operating in many countries, MNCs are subject to
multiple tax jurisdictions, i.e., they must pay taxes to several countries. National tax
systems are exceedingly complex and differ between countries. Differences among
national income tax systems affect the decisions of managers of MNCs, regarding
the location of subsidiaries, financing, and the transfer prices (the prices of products
and assets transferred between various units of MNCs).
Multiple Tax Jurisdictions creates two problems, overlapping and under lapping
jurisdictions. When overlapping occurs, two or more governments claim tax
jurisdictions over the same income of an MNC. The overlapping may result in double
taxation.
Conversely, when under lapping occurs, an MNC falls between tax jurisdictions and
escape taxation. Under lapping encourages tax avoidance. National governments
may choose a territorial jurisdiction or national tax jurisdiction or both.
4. Transfer Pricing : MNCs try to reduce their overall tax burden. An MNC reports
most of its profits in a low – tax country, even though the actual profits are earned in
a high tax country.
tp = tax rate in the parent country ; th = tax rate in the host country
If tp > th, then under price its exports to the subsidiary in the host country, and
overprice its imports from the subsidiary in order to lower tax.
Purpose is to manipulate prices between headquarter and the subsidiaries so that
profits are highest in the low tax country.
Thus, a multinational company’s overall tax could be paid at the minimum of all tax
rates of the countries in which it operates.
5. Taxation and Gains from Factor Mobility : It is seen that US firms invest overseas
because the returns are higher there. Assume both countries have the same
corporate tax rates = 40%
US Canada
Pretax profits 10% 12%
Tax 4% 4.8%
Net to investors 6% 7.2%
Total Gains from domestic investment = 10% (= 4% + 6%) because tax revenues
can be used for public purposes.
Total Gains from foreign investment = 7.2% (because US government gets nothing).
The tax revenue which could have been used to build US highways would be used
by Canadian government to build their highways.
A firm has to evaluate all such kinds of complex factors to fix up any strategy before
choosing to enter a foreign market
SERVICE MARKETING AND CUSTOMER RELATIONSHIP
MANAGEMENT
(MK-0006)
ASSIGNMENT-1
Q. 1 Explain the bases of classification of services.
Ans
.
A service is an activity which has some element of intangibility associated with it, which
involves some interaction with customers or with property in their possession, and does
not result in a transfer of ownership. A change in condition may occur and production of
the service may or may not be closely associated with a physical product. Goods are
simply the objects and services are simply the provision of such information of goods by
the seller and the buyers. The goods are visible and shall be purchased by the buyers
and sold by the sellers, whereas the services are the ones received by the guests and
provided by the goods sellers.
The objective in any service classification scheme is to get a deeper understanding of
the service product. Despite the diversity in the range of service products, it is possible
to classify and explore them on the basis of certain factors. There have been more than
sixteen studies regarding the classification schemes. Naturally, some are worthwhile in
developing marketing strategies, with others suffer shortcomings.
According to Christopher Lovelock following issues should be considered for the
classification of services:
a. Service industries continue to be dominated by operations, with the service
managers insisting that their tasks and challenges in their industry are unique and
have nothing in common with those from other service industries.
b. A managerial mind set evident in many service argues that the marketing of a
service industry has nothing in common with the marketing of another service
industry. For example, the marketing of an airline service has nothing in common
with marketing of a banking service or a financial service.
c. Classification schemes should offer strategic marketing insights so as to have
managerial value. Any other simple classification would be insufficient.
As per Payne following factors determine classification of services:
a. Type of services,b. Type of seller,c. Type of purchaser,d. Demand characteristics,e. Rented versus owned services, f. Degree of intangibility,g. Buying motives,h. Equipment based versus people based,i. Amount of customer contact,j. Service delivery requirements,k. Degree of customization and l. Degree of labour intensity.
According to Kotler and Station, services classification must be equipment based or
people based. The service may meet a personal need or a business need, according to
the difference in their objectives and the ownership. The objective may either be for
profit or non-profit and the ownership may be private or public. Accordingly services
may be classified as below:
a. Housing, b. Household operations like utilities, house repairs, repairs of equipments in the
house etc.,c. Recreation, d. Personal care like laundry, beauty care etc., e. Medical and other health care, f. Private education,g. Business and other professional services, h. Insurance and financial, i. Transportation and j. Communication.
Lovelock’s Classification Schemes is based on following factors:
a. Nature of the Service Act : In this scheme, the nature of the service act, i.e
intangibility etc., and the recipients of the services are considered. It has wide
dimensions and considers how the customer’s presence, physically or mentally,
is required during service delivery and the benefits gained by the customer. It
also considers how the customers change on receipt of the service. It leads to the
consideration of location and scheduling convenience for the presence of the
customer to utilize the service.
b. Relationship with Customer: This classification matrix contrasts the nature of
service delivery and ascertains whether there is a formal relationship between the
customer and service marketer. The knowledge of customers’ identities and
addresses gained to meet out specific offers to specify customers by targeted
direct marketing makes market segmentation easier and provides insights into
trade off between pricing and usage rates. In the absence of personal
relationship, services may be provided by continuous delivery or by discrete
transaction.
c. Customization and Judgment in Service Delivery : In this classification, the
degree of customization of service characteristics is contrasted with the degree of
judgment required by customer. The customized information is very important to
the service marketers. They have to balance the cost of custom made service
with a standard service and so the service marketers often seek to limit the
number of options while deciding the extent of customization.
d. Nature of Demand and Supply for Services: This classification contrasts the
nature of demand fluctuations over time and the extent to which the supply is
constrained. The business may be lost to another service provider if the demand
exceeds the supply of any particular service. This classification is useful to
contrast different supply demand situations which affect all service marketers. It
emphasizes in establishing demand patterns overtime, and to understand their
existence. Then development of strategies is considered to help change pattern
of demand so as to make them more favourable to the service provider.
e. Method of Service Delivery: The fifth classification focuses attention on
examination of the availability of service outlets, ranging from single to multiple
sites, and the nature of the interaction between the customer and the service
provider. Distribution issues relating to the method of delivery are focused upon
customer convenience which is of important consideration here.
These classification systems of Lovelock provide frame work for service marketers to
consider both the nature of their business and to what extent they share common
characteristics with other seemingly unrelated service businesses.
Other classification:
Thomas classified the services on the basis of type of equipment or people rendering
the services
a. Equipment based : In this case, the equipment’s or the machines being utilized
for service position are important while people play a secondary role. Some of the
examples are automatic vending machines, automatic car washes and movies. In
such services, the equipment’s may be operated automatically or by unskilled or
skilled labour.
b. Labour based : Here, the human element is primary in the production and
delivery of services. The equipments or machines, if any, are secondary. This
type of services includes counselling, legal advisory service, catering and hair
dressing service. There are services in which both the equipments and labour
have equal importance as in the case of hospitals.
According to Nickles services can also be classified as being convenience, shopping
and specialty services.
a. Convenience services are those which the customer usually purchases
frequently, immediately and with the minimum of efforts. Dry cleaning services,
and shoe repairing services are examples of convenience services. Convenience
of availability with minimum efforts determines the buying decisions. The user is
not prepared to go to any effort to secure a supply and will accept a substitute
often compromising on price and quality. So the marketer must secure a widest
possible availability if he is to maximize sales.
b. Shopping services are purchased often comparing quality and price. As
information regarding the service product is important for customer comparisons,
a marketing strategy has to be evolved providing enough information to the
customers. Word of mouth is also an important factor in the selection of shopping
services. Shopping services include banks, insurance companies, physicians and
beauticians.
c. Specialty services: Here the customer puts in special purchasing efforts. The
customers will be ready to travel distances and pay a premium for the services.
Specialty services include medical specialist and legal advisors. As the customer
is willing to take social purchasing efforts the marketing strategy will be focused
on service product and building customer satisfaction.
According to Hill the services may be classified as follows:
a. Affecting person (eg. Health) or affecting goods (eg.cargo maintenance),
b. According to the permanent or temporary effects,
c. According to the reversibility or irreversibility of those effects,
d. Physical effects or mental effects and
e. Individual or collective services.
Q.
2.
(3)Describe the stages involved in the positioning of services.
Ans
.
Positioning is concerned with the identification, development and communication of a
differentiated advantage which makes the organization’s products and service
perceived as superior and distinctive to those of its competitors in the mind of its target
customers
Services have a number of distinguishing features which have special implications for
the positioning and attributes to emphasize. Three key characteristics for service
positioning are the intangibility, the degree of variability or heterogeneity in quality of a
given service, and inseparability. Positioning can be considered at several levels such
as:
a. Industry Positioning – the positioning of the service industry as a whole.
b. Organizational Positioning – the positioning of the organization as a whole.
c. Product Sector Positioning – the positioning of a range or family of related
products and service being offered by the organisation.
d. Individual Product or Service Positioning – the positioning of specific
products.
Service positioning involves a number of steps including the following:
1. Determining Levels of Positioning: The first step in positioning is to determine
which levels(s) – service level, product sector level, corporate level-are to receive
explicit positioning attention. Some examples will illustrate the choices that are made
by some service organisations. The levels of positioning to be undertaken are
usually fairly clear cut, although some organisations have placed different emphasis
on these levels at different points of time.
2. Identification of Attributes: Once the level of positioning has been determined, it is
necessary to identify the specific attributes that are important to the chosen market
segments. In particular, the way in which purchasing decisions are made should be
considered. Individuals use different criteria for making a purchase decision of a
service.
3. Location of Attributes on Positioning Map: The positioning process involves the
identification of the most important attributes and location of various companies’
service for these attributes on a positioning map. Where a range of attributes are
identified, the statistical procedures which exist for combining these attributes are
identified. Statistical procedures are referred to by various names such as principle
components, multi-dimensional scales, factors etc. depending upon how the data
were elicited and which statistical procedures were used.
Products or service are typically plotted on a two dimensional positioning map. The
positioning map can be used to identify the position of competitor’s service in
relation to the selected attributes. The analysis can be further developed by drawing
separate positioning maps for each market segment. Customers in each market
segment may perceive the service and its benefit differently, and different maps will
show these different positions.
Positioning maps can be based on either objective attributes or subjective attributes.
Maps can also use a combination of objective and subjective attributes.
4. Evaluating Positioning Options
Strengthening current position against competitors to avoid head-on attack.
Identifying an unoccupied market position that was not filled by a competitor.
Repositioning the competition.
Once a company had identified where it is positioned at present, needs to determine
how to enhance or sustain its position relative to its competitors.
Criteria for Good Positioning are
The positioning should be meaningful.
The positioning must be believable.
The positioning must be unique.
5. Implementing Positioning and the Marketing Mix: How a company and service is
positioned, needs to be communicated throughout all of its implicit and explicit
interactions with customers. This suggests that all elements of the company; its
staff, policies and image will together convey the desired position to the market
place. This means that a company must establish strategic positioning directions,
which are followed through in all of its tactical marketing and sales activities.
A successful positioning strategy should make the service clearly distinguishable by
features which are desirable and important to the target customer segment. This
means that the positioning strategy should be examined from time to time to ensure
that it does not become outdated and that it is still relevant to the target market
segment.
Q. 3 (4)Explain in detail seven Ps of service marketing.
Ans
.
The marketing mix concept is a well established tool used as a structure by markets. It
consists of the various elements of a marketing programme which need to be
considered in order to successfully implement the marketing strategy and positioning in
the company’s markets. Essentially the marketing mix represents the factors which
need to be considered when determining a service firm’s marketing strategy. The
marketing strategy for a service company depends on seven Ps which are - product,
price, place, promotion, people, processes and physical evidence. The underlying
concept in developing each of these elements is to use them to support each other to
reinforce the positioning of the service product and to deliver appropriate service quality
to achieve competitive advantage.
1. Product:
The term ‘product’ is frequently used in a broad sense to describe either a
manufactured good or service. Thus, goods and services are two types of product. A
service product denotes an activity or activities that a service provider offers to perform,
which results in satisfaction of a need or want of predetermined customers.
In planning the offer of products and services, good marketing manager devices a
strategy whereby the offers are viewed at various levels to achieve unmatched product
differentiation and superlative customer service. Generally, four levels of service
products are identified which are as follows:
a. The Core or Generic Product It is the basic service product. Although the term
‘generics’ is the most usual descriptive term, the generic products have also been
described as brand free, no names and unbranded products. A typical example
would be a bed in a hotel room for a night.
b. The expected product: It is the minimum set of benefits expected by a customer
from a service product. It consists of the generic product and the minimal purchase
conditions which have to be met. Thus, a customer having a transaction with bank
will expect, in addition to the service, a correct transaction recording, timely service
and minimum courtesy.
c. The Augmented Product : They are the offerings what the customers expect
besides the benefit expected by them. The augmented product is described as the
complete bundle of attributes perceived by or offered to an individual buyer
incorporating:
d. The Potential Product: It consists of potentially feasible added features and
benefits to hold and attract customers. It includes the potential for redefinition of
the product to take advantage of new users and the extension of existing
applications.
A service product is a complex set of value satisfactions. People buy services to solve
problems and they attach value to them in proportion to the perceived ability of the
service to do this. Value is assessed by the buyers in relation to the receivers. But it has
to be recognized that customers differ and that their requirements for different attributes
vary by market segment.
2. Pricing
Until recently, two board strategic approaches to prices were in vogue. They are (i)
Skimming and (ii) Penetration. Skimming strategy is based on the perceived need of
the users which tend to affect their sensitivity to the prices. When they are insensitive to
the prices it could be exploited by setting a very high price to skim the cream off
market. Whereas, a penetration strategy assumes that by producing a product similar
to that of a competitor and then under pricing it and thereby some or all its market
share can be taken away. The recent trend is an alternative value-based strategy
based on the belief that the appropriate concept is the perceived value held by the
customer.
Pricing Objectives: The pricing methods being adopted should consider the pricing
objective of the service firm. The most typical pricing objectives that a company could
have are as follows:
a. Pricing to achieve a desired return on investment:b. Stabilization of pricing margin to ensure maximum profit;c. Pricing to realize the target market share; and d. Pricing to meet and prevent competition for survival.
These represent some of the more common, pricing objective.
The decision on pricing will be dependent on a range of factors including:
a. Corporate objective
b. Positioning of the service
c. The nature of competition
d. Lifecycle of the service(s)
e. Elasticity of demand
f. Cost structures
g. Shared resources
h. Prevailing economic conditions
i. Service capacity
Pricing Method: After considering the demand, cost, competitors and all the other
relevant factors in the light of the pricing objective, the service marketer should consider
the method by which the prices are fixed. There are different methods and some of
them are:
a. Cost-plus Pricing: It includes all methods of setting prices with exclusive
reference to cost. By adding an amount of money to an estimated product cost a
selling price is arrived at. This money which is added is considered as the profit
expectation, if the sale is made on the basis of adding this anticipated profit to total
or full costs.
b. Competition Pricing: Pricing based on market conditions where firms compete
with one another by undercutting others prices, rather than other forms of
competition such as product quality, product differentiation and advertising.
c. Competitive Parity Pricing: Pricing is done on the basis of those that are followed
by the competitor or market leader.
d. Loss Leading Pricing: The price of a product or service is deliberately cut to a
point below its cost, aiming to attract additional customers willing to buy profitable
items. It is usually applied on a short-term basis to establish position in the market.
e. Rate of Return Pricing: It is also referred to as target return pricing. The prices
are set to achieve a given rate of return on investments and assets.
f. Value Based Pricing: It is market driven and reinforces the positioning of the
service and the benefit the customer receives from the service. In value based
pricing, prices are based on the services perceived value to a given consumer
segment.
g. Relationship Pricing: The future potential profit streams over the lifetime of
customers, forms the basis for relationship pricing. It is considered that the
relationship pricing is the appropriate form of pricing where there is an ongoing
contact between the customer and the service provider. It is said that the
relationship pricing follows closely the market oriented approach of value based
pricing but takes lifetime value of the customer into account.
h. Prestige Pricing: The pricing above the given market price on the basis that many
buyers regard price as an indicator of quality and so will perceive enhanced quality
to products with higher than usual prices. In such cases sellers will be able to ask
prestige prices for products which have distinctive brand names and reputation.
3. Place & Location
The location and channels used to supply services to target customers are two key
decision areas. Location and channel decisions are essential to consider how and at
which place the services can be delivered to the customer. They become more relevant
to service as they cannot be stored and mostly are produced and consumed at the
same point. The environment in which the delivery of service takes place and the
manner of its delivery is important attributes of the service when its value is perceived.
Location : Service location is an important consideration in place strategy. A service
firm should decide where its operations and staff are situated, because if they are not
conveniently located, the customers may turn to rival service provider who, in their
perception, are conveniently placed. The type and degree of interaction is an important
factor involved in the location of services. Depending upon the nature of the service,
a. the customer may go to the service firm, or
b. the service firm may go to the customer or
c. the service provider and the customer may transact business at arm’s length.
In the first type of interaction mentioned above, where a customer goes to the service
provider, location selection becomes very important. For a service business such as a
restaurant, location may be one of the main reasons for patronage. In this type of
interaction, service at more than one location is called for.
In the second type of interaction, where the service provider can go to the customers,
site location becomes much less important, provided it is sufficiently close to the
customers for good quality service to be received. In some circumstances, the service
provider at the customers promises. This is the case with a wide range of maintenance
services such as lift repair, pest control and cleaning services. In other cases, service
providers have discretion in whether they decide to offer their services at the customer’s
home or office, as do hairdressers and TV repair firms. Some dry cleaning and laundry
firms have built up profitable businesses by dispensing with the need for expensive
multiple high street locations and locating their operations in a low cost area and
providing a pick-up and delivery service.
However, when the customer and service organization transact at arm’s length, location
may be largely irrelevant. The customers are not concerned with the physical locations
of suppliers of service such as electricity, telephone or insurance, provided efficient mail
or electronic communications are in place.
Some of the critical factors affecting the location decision are:
a. Convenience perceived by the customer,
b. Operating cost,
c. Comparative proximity with that of the competitors,
d. Geographic and supporting systems,
e. Geographic and environmental factors,
f. Business climate in the particular location,
g. Availability of communication networks,
4. Promotion and Communication
Promotion is a set of activities designed to increase by consumers and is the through
which the service provider communicates with his target markets. The promotion of
services covers a number of areas or promotional tools which form the communications
mix or promotions mix. These include:
a. Advertising b. Personal sellingc. Sales promotion d. Public relationship e. Word of mouth, andf. Direct mail.
The use of promotional tools in service sector is a comparatively recent aspect. Now,
the fiercely competitive environment has made the service marketers use promotional
tools actively. But promotional exercise as it is done in consumer goods companies is
not the same for service industry.
A communication programme for a service organization may consist of a wide variety of
alternative communications and promotion. To communicate the target markets, the
various elements of the communication mix must be integrated within the promotion
and communication programme. This process involves many tasks among which the
following are considered important.
a. Identification of target audience,
b. Determination of promotion objectives,
c. Selection of communications mix.
The choice of the communications mix for service involves decisions on such issues as
whether to advertise, use personal selling or generate publicity through greater public
awareness by such means as through editorials, publications and press activity. The
choice of medium is determined by decisions on how to create the most favourable
awareness amongst the target audience.
Advertising is one of the main forms of impersonal communication used by service
firms. The role of advertising in service marketing is to build awareness of the service,
to add to the customer’s knowledge of the service from other service offerings. Relevant
and consistent advertising is therefore of great importance to the success of the
marketing of the service.
Selection of appropriate media and determining the balance between them is essential
to obtain the most effective return on advertising expenditure. A consideration of the
specific advertising goals to be accomplished will facilitate this process.
5. People
The success of marketing a service is tied closely to the selection, training, motivation
and management of people. There are many examples of services failing or succeeding
as a consequence of the ineffective or effective management of people.
All the people participating in the delivery of service provide cues to the customer
regarding the nature of the service itself. How these people are dressed up, their
personal appearance and their attitudes and behaviours influence the customer’s
perceptions of the service.
Kotler says that, “if the service personal are cold or rude, they can undermine all the
marketing work done to attract customer. If they are friendly and warm, they increase
customer satisfaction and loyalty”. Hence, the importance of people within the
marketing of services has gained much interest in internal marketing.
In turn, the company made employees feel wanted and cared for, building on the
principle that those who are looked after will pass on this caring attitude. The success of
this new direction for the airline brought increased profits matched by greater customer
and employee satisfaction.
6. Process
The process by which the service is created and delivered to the customer is critical to
the service operations as customer often perceive the service delivery system as part of
the service itself.
Process means all work activities. Process involve the procedures, tasks schedules,
mechanisms, activities and routines by which a product or service is delivered to the
customer. It involves policy decisions about customer involvement and employee
discretion. The customer not only thinks about the service product alone but also
attaches importance to the manner in which it is delivered. Under these circumstances,
a poorly designed service process leads to poor service quality. Banks provide a good
example of this. By reconfiguring the way they deliver service through the introduction
of automatic teller machines (ATMs) banks have been able to free staff to handle more
complex customer needs by diverting cash only customers to the ATMs.
Processes are seen as structural elements that can be engineered to help deliver a
desired strategic positioning. They can be analyzed according to the complexity and
divergence. Processes can be changed to reinforce the positioning. A clear
understanding of the configuration processes in terms of this complexity and
divergence, on a balance of marketing and operations activities are important factors for
improving service systems. Processes are thus a marketing mix element which can
have a substantial role in reinforcing positioning and in product development.
7. Physical Evidence
The environment in which the service is delivered and where the firm and customer
interact, and any tangible components that facilitate performance or communication of
the service is known as physical evidence in service.
The physical evidence of service includes all of the tangible representations of the
service such as brochures, letterhead, business cards, report formats, signage, and
equipment. In some cases, it includes the physical facility. Physical evidence cues
provide excellent opportunities for the firm to send consistent and strong messages
regarding the organization’s purpose, the intended market segments and the nature of
the service.
SERVICE MARKETING AND CUSTOMER RELATIONSHIP
MANAGEMENT
(MK-0006)
ASSIGNMENT-2
Q. 1 1. Explain the tourism marketing mix.
Ans. Tourism marketing is a process of creating a product or providing a service. It
comprises fact finding, data gathering, analyzing, communication to inform and
promote, ensuring and facilitating sales, selection of marketing planning, coordination,
control and evaluation, developing professionally sound personnel.
Tourism marketing is an integral effort to satisfy tourist and more so, it is a device to
transform the potential tourists into the actual tourists. Tourism marketing is the safest
way to generate demand, expand market and increase the market share. The concept
of tourism marketing comprises of:
a. Identifying and anticipating consumer demand and desire for tourism products and
services.
b. Developing a means of providing product and services to fulfill these needs.
c. Communicating this to the consumer, thereby motivating sales, consequently
satisfying both the consumer, and the organizations objectives.
Through market planning, segmentation and marketing research, a tourism marketing
mix can be developed to achieve the tourism origination goals through strategic
marketing.
The tourism Marketing Mix
The marketing mix refers to the blend of ideas, concepts and features which marketing
management put together to best appeal to their target market. Segments, each target
segment will have a separate marketing mix, tailored to meet to specific needs of
consumers in the individual segment.
1. Product Mix :
The tourism product is a non material intangible thing. The following services are
included in the product mix for the tourism industry.
a. Attraction
b. Accommodation: one star to five star, cottages.
c. Transportation: Airways, Railways, Road, Sea Ways.
d. Recreation: Theatre, Club, Park, Music
e. Restaurant : western, Chinese, Indian others.
f. Shopping : Artistic, handicrafts, handloom, books, Garments, jewelry.
Branding plays a very important role in tourism marketing. Car rental firms, hotel chains
and airlines, in particular employ tremendous efforts to ensure that their name is widely
recognized and synonymous with quality, value or some other characteristic. Travel
agents and tour operators depend on reputation to a large extent, and so it is
imperative that they have a strong, recognizable identity. The main reason to build
brand loyalty is to encourage repeat business.
2. Price Mix
In the tourism industry, the pricing decisions are found critical and challenging since it
is a multi segment industry. When a tourist proposes to visit a particular place, the total
cost on his / her traveling includes the expenses incurred on transportation,
accommodation, communication or so.
In the pricing decisions, the product or the service mix of the tourist organizations is
found important. This makes it essential that the tourist organizations set prices in line
with the quality of services to be made available to the customers.
The tourist professionals while making the pricing decisions are required to think in
favor of discounting price. The different forms of discount, such as discounting for cash
payment, price reduction for quality, trade discounts, trade allowances, seasonal
discount, distressed stock and similar discount tactics are the options.
3. Place Mix
Distribution management is concerned with two things availability accessibility. If
tourism marketing management is to be certain that their products and services are
both available and accessible to the target market, they must design a channel strategy
that will be effective.
Some tourist organizations deal directly with the consumers; some other organizations
utilize more than one method distribution. The middlemen are the tour operators and
the transport operators who buy services like hotel rooms, seats in the aircrafts,
railways, arrange chartered flights and sell the same either to the travel agents or even
directly to the tourists. Airlines, for example, sell tickets through travel agents, and sell
seats on flights to tour operators, whilst also operating direct marketing by offering
travelers the opportunity to make reservations through their own booking officers.
4. Promotion Mix
The tourist organization takes up the responsibility of informing, sensing and
persuading the potential tourists. The marketers need to use the various components
of promotion to increase the number of users.
The advertisement helps in providing important information to the actual and potential
tourists. Its coverage is so wide. It essentially follows the AIDA principle of attracting
the attention, arouse internet, create desire, and stimulate action. Advertising is aimed
to create the awareness of the travel offers available on a resort and its attraction to
influence their business decisions.
Sales promotion through brochures, point of sale displays and even video cassettes
plays a very important role as advertising. In a tourism industry a travel company offers
to their client’s compliments such as flight bags, wallets for tickets and foreign
exchange and covers of passport. The hotels offer a number of facilities like shoe shine
clothes, first aid sewing kits and shampoo, further, the clients also get fruits and flowers
in their rooms. There is no double that almost all the promotional measures generates
goodwill and add value to the product.
5. Personal selling:
The travel and hotel business depend considerably on the personal selling. The
developing of travel and tourism has been possible due to well educated and trained
sales personnel.
6. People:
The tourism industry depends substantially on the management of human resources.
The travel agents and travel guides plays an important role and therefore the
management of people helps in developing their credentials to deliver goods to the
tourist organizations.
Q. 2 3. Write a note on maximizing the customer value through CRM.
Ans. Customer Relationship Management (CRM) is the relationship management of a
customer by an organization. CRM means “the establishing, the developing, the
strengthening, and the trusting of good values among the customer for company’s
brand.”
Adopting CRM is business critical decision. If a company does not develop
synchronized multi – channel customer interface capabilities, it may soon lose
customers to competitors. The age of “build a better mouse trap and the customers will
come” is over. The experience of buying the mousetrap can be as important as the
product itself.
Here are key imperatives for organisations seeking to build a true e-CRM
a. Focus on Profit : A com. customer strategy focuses on customer acquisition. A
Profit strategy focuses on customer retention and profitability as well.
b. Design the total customer experience, not just the interface. Devote specialize
resources – ergonomic engineers, psychologists, focus groups and testers – to
design the total customer experience.
c. Profile customers for profitable segmentation. Intensively segmentation base to
learn about your best customer to develop special programs that remain them and
reward them with the perks they deserve. Take action to bring unprofitable
customers into the black.
d. Embed business logic into your infrastructure. Business logic is the system of
procedures and rules that underlie how the CRM system operates its technology
and the people with the customers.
e. Opportunistically outsource. Get to market with CRM capabilities faster and without
huge capital commitments and old-style systems development efforts. Implement
disposable infrastructure applications that can be added cheaply and then thrown
away.
f. Manage multi-channel performance. The performance of your company as
experienced by customer must be consistent regardless of which channel they
choose to work through. Measure performance rigorously first to understand which
channels need work and second to provide continuous feedback across multiple
channels.
g. Be trustworthy with customer’s information.
h. Staff and train for e-business.
i. Learn from the experience of ERP.
CRM has gained importance in the recent days. Developing appropriate strategy is
critical decision of a company. CRM uses the electronic media to operate and simplify
customer related business processes, reducing the cost of customer facing operations.
Q. 3 5. Describe the use of CRM in designing and delivering the services.
Ans. CRM applications, often used in combination with data warehousing, E-commerce
applications, and call centres, allow companies to gather and access information about
customers’ buying histories, preferences, complaints, and other data so they can better
anticipate what customers are looking for. The other business objectives include:
a. Increased efficiency through automation b. The ability to provide faster response to customer inquiries c. Having a deeper knowledge of customer needs d. Generating more marketing or cross-selling opportunities e. Better information for better management f. Reduced cost of sales and increased productivity of Sales Representatives g. Receiving customer feedback that leads to new and improved products or
services h. Conducting more one-to-one marketing.
Essence of a CRM solution
In many companies, sales, marketing and customer service/support organizations work
as decentralized functions. This forces customers to run from pillar to post when trying
to meet their demands, creating a good deal of dissatisfaction. CRM provides a
common platform for customer communication and interaction. The use of CRM
applications can lead to improved customer responsiveness and a comprehensive view
of the entire Customer Life Cycle. It can extend the traditional channels of interaction
such as direct sales force or tele-business to the Web by providing a framework for
managing the interactions and transactions. It also enables the customers to purchase
products or services on-line and receive web-based services and support; with
everything personalized to the individual customer.
Use Of CRM in Designing and Delivering of Services:
Currently, the CRM market is dominated by front office automation applications.
However, CRM system users realize that CRM applications are not providing an
enterprise-wide view of the customer. Because of this, today CRM embraces a range
of technologies including Data Warehousing, ERP and SCM applications.
The integration framework is becoming even larger as a result of the web-based
initiative. In fact, the web will become so important that analysts feel it may overshadow
the category as a whole. Stan Dolberg, a Senior CRM Analyst at Forrester Research
Inc., Cambridge, calls CRM a dead end that will be replaced by Enterprise Relationship
Management (ERM) – a class of applications that uses the Web to place the Customer
at the centre of trading relationships.
The ongoing consolidations and mergers across the ERP, CRM and other technology
vendors further highlight this point. (Vantive has been taken over by PeopleSoft and
Clarify has merged with Nortel).
ERM, which takes CRM to the next level, is the current hot topic of the industry. CRM
automates certain functions in certain departments within the organization.
ERM attempts to align the entire enterprise to provide a single view to the customer.
The ERM technology framework will generate a universal business application covering
everything from CRM to ERP, and SCM applications as well as Data Warehousing and
OLAP. It will present a cohesive set of analytical models that will take into the account
the cross departmental functions and interdependencies.
Maintaining relationship by using CRM models
Most companies truly believe they are customer-focused, but in fact they are still very
product centred – they still develop products and services and then search for
customers. The challenge, then, is to shift their thinking to a more customer-focused
world – where they create new products and services that follow the customer’s lead.
To make that shift, however, companies will have to change their core-operating
model. The biggest challenge about implementing a CRM application is that to ensure
you have a system, which is able to reach to the existing as well as potential customers
and cater to their individual needs.
ADVERTISING MANAGEMENT & SALES PROMOTION
(MK-0007)
ASSIGNMENT-1
Q. 1 Describe an ad that you have seen recently. Analyze the ad in terms of its
effectiveness in generating Attention, Interest, Desire and Action as per the AIDA
model.
Ans. AIDA is an acronym used in marketing that describes a common list of events that are
very often undergone when a person is selling a product or service:
A - Attention (Awareness): attract the attention of the customer.
I - Interest: raise customer interest by focusing on and demonstrating advantages
and benefits (instead of focusing on features, as in traditional advertising)
D - Desire: convince customers that they want and desire the product or service
and that it will satisfy their needs.
A - Action: lead customers towards taking action and/or purchasing.
Marketing today allows a diversty of products. Using a system like this, allows a
general understanding of how to target a market effectively. A.I.D.A however is a
acronym that is necessary to learn in marketing.
Recently I have seen the ad of film “PAA”. The analysis of this ad as per AIDA model is
as below:
A – Awareness: It demonstrated that movie goers to be aware of a product's
existence ie the new movie. R Balkrishnan, the director of the film and also the brain
behind its promotion campaign wanted to avoid the usual “razzmatazz”, he wanted it to
be executed in such a way, that people discuss Auro the character and not Amitabh
the.. Teaser ads’ was an innovation, very efficiently used in the campaign. A teaser ad
showing a bald head in a card board box increased the curiosity of the people which
multiplied exponentially, as it became the topic of discussion.
In Balki’s words, “The noise level has beaten our expectations.”
Big B’s decision to visit schools to bring about awareness regarding the disease is the
ace up his sleeve. This will contribute heavily in the promotion of the film.
With so much new coming up by ways of innovation, how could the titles lag behind.
Well for the first time in the history of Bollywood, the cast and the credits of the film will
be introduced by Jaya Bacchhan, cutting out the usual trends of titles.
And last but not the least, it is for the first time that Aishwarya Bacchhan is involved in
the marketing and promotion of a film.
With discussions on end with the marketing and creative heads of the film, she is
exploring every possible strategy, for maximum interaction with the people
A highly interactive website was just another step that has paid high dividends.
Paathefilm.com has received innumerable responses from the time it was created.
Not to mention his blogs which have become a very powerful platform for Amitabh
Bacchhan, which he has been using very effectively for the promotion of “Paa”.
It is these experiments with innovations which have made Paa the talk of the country.
Paa is a 'rare' story about a father-son, son-father relationship.
I – Interest: Raised the movie goers interest by iintroducing the hoardings all around
the city created an interest in the movie goers Also the tagline Paa is a 'rare' story
about a father-son, son-father relationship. Abhishek Bachchan playing the role of
father to Amitabh Bachchan , the biggest actor India has ever produced. A new getup,
a new look, a totally transformed Amitabh. He endured a lot for that. From shaving off
his body hair, to sitting for 5 hours at a stretch to get the makeup on and then
struggling for 2 more hours to get it off. starAuro (Amitabh Bachchan) is an intelligent,
witty 13 yr old boy with an extremely rare genetic defect that causes accelerated
ageing.
He suffers from a progeria like syndrome. Mentally he is 13, very normal, but physically
he looks 5 times older. In spite of his condition, Auro is a very happy boy. He lives with
his mother Vidya (Vidya Balan), who is a gynaecologist.
Amol Arte (Abhishek Bachchan), is young, progressive and a full of ideals, politician.
He is out to prove to the world that 'politics' is not a bad word. He is a man with a
mission. Auro is Amol's son. The promotion of Amitabh Bachchan in a extremely
different role and the hoardings all around the city created an interest in the movie
goers . The details about the disease which people have not heard created a feeling of
insecurity and public tried to find it out from internet asked doctors
D-Desire : A fresh movie with a different theme. an extremely rare genetic defect that
causes accelerated ageing.He suffers from a progeria like syndrome. Mentally he is 13,
very normal, but physically he looks 5 times older.A new story line and it created ripples
in the movie Box Office.
A-Action: A new story line and it created ripples in the movie Box Office. The people
liked the movie. The producer and director of the film were able to pull the people out of
the homes to go and see the movie, Got 3– and 4–star ratings and publicized that in
promos.
Q. 2 Select an ad of your choice and describe its creative execution. What is the
advertising strategy behind the ad in terms of a) Objective b)Target audience c)
Key consumer benefit d) Reason to believe e) Proof and f) Tone and manner?
Ans. I select ad of Vodafone mobile services for the discussion. 'Zoozoos', a new innovative
concept from mobile service provider Vodafone Essar is on its way to capture hearts of
millions of viewers similar to that of 'Hutch dog'.
Zoozoos -- stick-like figures with an egg-like heads -- feature in the latest Vodafone
Essar commercials that are aired during the Indian Premier League Twenty20 cricket
series to promote different offerings and services provided by Vodafone to its
customers.
Thes characters are named Zoozoos, and are created by O&M. These ads were
directed by Prakash Varma and were launched during the ongoing IPL 2 series.
Zoozoos aren’t Animated Characters, they are real people
The Zoozoo characters that appear in the Vodafone ads are not animated characters
but are real actors from Mumbai and Capetown theaters. The actors wore special
costumes to portray Zoozoos to create an illusion of animation. The costume is divided
into two parts, the head and the body. The body part of the costume is stuffed with
foam to create rounded shapes.
To create large heads they used a material called Perspex, which was again stuffed
with foam. Also, they casted only women and children to play the Zoozoos so that the
thin hands and legs made the heads look even bigger.
These ads were shot at a very slow frame rate to make the movements look funny.
Animation requires so much detailing and here we had to do the exact opposite. We
had to make real characters look like animated characters. It was quite challenging as
none of them could see as they were covered from head to feet.
It is not for nothing that Indian advertising is seen as coming into its own. And
Vodafone advertising campaigns have been at the forefront of it all.
First there was that dog in Hutch campaigns, which captured the imagination of
millions. It survived a $19-billion buyout and reached such levels of popularity that it
even led to kidnappings of that breed of dogs, called pugs.
And now come those nutty and entirely endearing little men in white, called Zoozoos
created by the agency O&M for Vodafone, one of the main broadcast sponsors of the
Indian Premier League. They are wowing audiences, and ZooZoo merchandise, bags,
keychains, T-shirts will be available soon.
In about 10 days, O&M completed the campaign shooting two-three films a day, each
selling a product or a service offered by Vodafone. A dozen more films are expected as
the league progresses.
The characters, which look like distant cousins of the Pillsbury dough boy, were
enacted by professional ballet artists in white body suits. What made them so
endearing was that they are innocent people living in a simple world unlike ours, who
laugh loud when they laugh. And who seem to be in an in-between world of animation
and reality.
The strategy is generating a buzz that lives up to the brand’s image of great creative
and clever marketing. The company spends about Rs 250 crore on advertising across
mediums according to industry sources.
The details of the advertisement are as follows:
1. Objective: To make the Vodafone company No.1 in the country .
2. Target Audience: To target the Indian customer during IPL Season-2. The Indian
middle class is obsessed to mobile phones and cricket. The Vodafone company
could not have asked for better time to launch an advertisement.
3. Key consumer benefits :The each selling a product or a service offered by Vodafone.
was shown each day during the match. Creating an image in the mind of audience.
The advertisement also showed the benefits in hilarious animated type form making
it more interesting Reason to believe:.
4. Reason to believe :The Zoozoo characters that appear in the Vodafone ads are not
animated characters but are real actors from Mumbai and Capetown theaters. The
actors wore special costumes to portray Zoozoos to create an illusion of animation.
The costume is divided into two parts, the head and the body. The body part of the
costume is stuffed with foam to create rounded shapes. Animation requires so much
detailing and here we had to do the exact opposite. We had to make real characters
look like animated characters. It was quite challenging as none of them could see as
they were covered from head to feet.
5. Proof: The characters, which look like distant cousins of the Pillsbury dough boy,
were enacted by professional ballet artists in white body suits. What makes them so
endearing is that they are innocent people living in a simple world unlike ours, who
laugh loud when they laugh. And who seem to be in an in-between world of
animation and reality,
6. Tone and Manner : The tone was soft and manner in which it was presented is really
fantastic. It showed a new face of Indian Advertising.
Q.3 Prepare an outline of a media plan for a newly launched soft drink. Include
a)Media objective(s) b)Media mix c) Allocation of budget among media mix and
d) Media scheduling.
Ans. In order to develop a media plan for launching a new soft drink one has to:
1. Media Objectives : The largest category in an advertising budget is the media
costs--the money one spends. The manager has to organize the day-to-day tasks of
carrying out the strategies. The tool needed to do this is a media plan that begins
with an overview and works its way down to the details. It will helps with every phase
of your advertising. The best way to go to the public for soft drink advertisement is
target audience which portion of the age group. The children, school goers, college
goers are the ones who takes the cold drinks. One must check for this. Which
medium to go and how much using TV, Radio and magazines. For air time on radio
or for ad space in newspapers, magazines, and more. Because of this, it makes
sense to have a sound plan to manage that investment. The goals must be set. Print
advertising prices are based on the circulation of the publication in question.
Publications will quote you a circulation figure based on paid subscribers. The
audited circulation figures are verified by monitoring organizations. The publications
will try to convince you that actual circulation is higher by including the free copies
they distribute and the pass-along readership they claim. Sometimes these claims of
"bonus" circulation are valid--for example, magazines distributed on airlines get at
least eight readers per copy. Audience is the equivalent of circulation when you're
talking about broadcast media. Audience size varies throughout the day as people
tune in and tune out. Therefore, the price for advertising at different times of day will
vary, based on the audience size that the day-part delivers.
2. Media Mix : Media planning is the process of choosing a course of action. Media
planners develop yearly plans that list each media outlet--print or broadcast.
Planning then gives way to buying, as each separate contract is negotiated, then
finalized. Penetration is related to circulation. Penetration describes how much of the
total market available you are reaching. If you are in a town with a demographic
count of 200,000 households, and you buy an ad in a coupon book that states a
circulation of 140,000, you're reaching 70 percent of the possible market--high
penetration. If, instead, you bought an ad in the city magazine, which goes to only
17,000 subscribers (households), your penetration would be much less--8.5 percent.
What degree of penetration is necessary for you depends on whether your strategy
is to dominate the market or to reach a certain niche within that market.
3. Allocation of Budget among media mix: The largest category in your advertising
budget is likely to be your media costs--the dollars you spend for air time on radio or
for ad space in newspapers, magazines, and more. Because of this, it makes sense
to have a sound plan to manage that investment. You'll want to set goals. You'll want
to describe strategies for achieving them. You'll have to organize the day-to-day
tasks of carrying out the strategies. The tool you'll need to do this is a media plan
that begins with an overview and works its way down to the details. It will help you
with every phase of your advertising. Set the minimum and maximum budget
constraints.
4. Media Scheduling: Reach and frequency are key media terms used more in
broadcast than in print. Reach is the total number of people exposed to a message
at least once in a set time period, usually four weeks. (Reach is the broadcast
equivalent of circulation, for print advertising.) Frequency is the average number of
times those people are exposed during that time period. To make reach go up, you
buy a wider market area. To make frequency go up, you buy more ads during the
time period. Usually, when reach goes up, you have to compromise and let
frequency go down. You could spend a lot of money trying to achieve a high reach
and a high frequency. The creative part of media planning comes in balancing reach,
frequency, and budget constraints to find the best combination in view of your
marketing goals.
ADVERTISING MANAGEMENT & SALES PROMOTION
(MK-0007)
ASSIGNMENT-2
Q. 1 Describe an ad which you feel is not so effective in terms of its creative
execution. Give suggestions on how to make the ad more effective.
Ans. LUX ad is one which I don’t like as it is a illogical. The ad depicts one male model
running after a female(wife) who baths with LUX soap. Due to its and softness due to
use of the soap and fragrance the male tries to hug her and in the next scene it is
shown that the girl slips after he catches her. Next clipping shows that the male lead
model hugs some other fat lady who does not uses LUX soap.
I consider the depiction in poor sense as this is against out moral values of Indian
society. It gives a poor taste of the thinking of director of the ad film.
The visual content must show the true realities rather than fantasy. Instead of other
lady it could have been some dirty male. The creativity is missing in the ad and may be
it is a copy of some advertisement of western country.
Advertisements for products whose advertising is prohibited or restricted by law or by
this Code must not circumvent such restrictions by purporting to be advertisements for
other products the advertising of which is not prohibited or restricted by law or by this
Code. In judging whether or not any particular advertisement is an indirect
advertisement for product whose advertising is restricted or prohibited.
Following would be my suggestion to make this ad more effective:
1. Visual content of the advertisement must depict only the product being advertised
and not the prohibited or restricted product in any form or manner.
2. The advertisement must not make any direct or indirect reference to the prohibited or
restricted products.
3. The advertisement must not create any nuances or phrases promoting prohibited
products’
Q. 2 What are some of the advantages of Advertising as compared to Sales
promotion? Which types of products lend themselves to sales promotion?
Ans. Sales Promotion: A total business communications strategy includes advertising,
sales promotion and personal selling. The cohesiveness and effectiveness of these
efforts is what achieves sales and profit objectives. Promotional strategy is the function
of informing, persuading, and influencing a consumer decision. Following are the
functions of sales promotion:
1. To provide information – In the early days of promotional campaigns, when many
items were often in short supply, most advertisements were designed to tell the
public where they could find a product. Today, a major portion of U.S. advertising is
still informational. Promotional campaigns designed to inform often target specific
market segments.
2. To differentiate – Marketers often develop a promotional strategy to differentiate
their goods or services from those of competitors. This strategy is called positioning.
The idea is to communicate to customers meaningful distinctions about the
attributes, price, quality, or usage of a good or service. Market research is a valuable
tool for positioning since it helps to identify what consumers want and what attributes
are important to them.
3. To increase sales – Increasing sales volume is the most common objective of a
promotional strategy.
4. To stabilize sales – Advertising is another tool that can stabilize sales. A stable
sales pattern has several advantages: it evens out the production cycle, reduces
some management and production costs, and makes it easier to do financial,
purchasing and market planning.
5. To accentuate the product’s value – Some promotional strategies are based on
factors that add value, such as warranty programs and repair services.
Advertising: Advertising is a paid, non-personal sales communication usually directed
at a large number of potential buyers. Types of advertising include:
1. Informative advertising – Advertising approach intended to build initial demand for
a good or service in the introductory phase of the product life cycle.
2. Persuasive advertising – Used in the growth and maturity stages of the product life
cycle to improve the competitive status of a product, institution or concept.
3. Comparative advertising – Persuasive advertising approach in which direct
comparisons are made with competing goods or services.
4. Reminder-oriented advertising – Method used in the late maturity or decline states
of the product life cycle that seeks to reinforce previous promotional activity by
keeping the name of the good or service in front of the public.
The following are some of the most popular forms of advertising media:
1. Newspapers – Can be costly so you want to reach the exact audience that will buy
your product or service. Avoid using small print if possible. You may be able to place
an ad in the more affordable weekly papers where you can run your ad by zip code.
2. Television and radio – Are typically expensive. The most popular stations are
typically expensive. Be sure to know your target audience and study the media kits
to determine if the station reaches that audience.
3. Direct mail – Can be either generated by you individually or can be a part of a co-op
program such as Val-Pak.
4. Magazines and trade journals – Many have space available regionally.
5. Outdoor advertising including billboards and transit ads (buses, cabs)
6. Yellow pages – This is possibly the first type of advertising you should purchase. A
large ad is not necessary; a listing is sufficient to let your potential customer know
you are a valid company, not a fly-by-night. The downfall with Yellow page
advertising is that it takes the customer directly to your competition! Have a listing
but be careful while promoting it.
7. Internet – Website or banner advertising.
Some lower-cost advertising opportunities include co-op advertising programs where
there is a cost sharing arrangement between the manufacturer and the retailer, cable
TV advertising, and targeted direct mail postcards.
Q. 3 What are the differences and similarities between social awareness advertising
and advertising of products and servives, based on what is mentioned in the
case.
Ans. Social Awareness is consciousness shared within a society. It can also be defined as
social awareness; to be aware of the problems that different societies and communities
face on a day-to-day basis; to be conscious of the difficulties and hardships of society.
There is debate as to exactly what the term means. Some people define social
consciousness as a society's consciousness of itself. Others argue against this
definition, saying that society does not have a mind of its own, and therefore is not
conscious: rather, the people that make up society are individually conscious. Social
consciousness is similar to collective consciousness. Many studies have been done to
examine the roots of social consciousness. It is believed to arise as a response to
social injustice experienced by the individual or in the lives of others around the
individual.
There are three levels of social consciousness - acquired, awakened, and expanded. A
subject with an acquired social consciousness derives his or her viewpoint from the
mainstream culture. The person with an acquired social consciousness does not
question mainstream viewpoints, and acts accordingly, without confrontation. A subject
with an awakened social consciousness explores alternatives to the dominant cultural
viewpoint. This person might identify with a marginalized group, but the mainstream
culture is central to his or her questioning or exploration. The subject recognizes and
challenges social injustice. The person actively resists power and authority. The focus
of discontent and action is often over the right to be visible, to have choice, or to be
self-determining subject with an expanded social consciousness strongly identifies with
their marginalized group. This person views status as a continuously changing social
construct, thus viewing responses as a lifelong process. This individual has an
understanding of the complexity of the social hierarchy, and acts carefully after
weighing both sides.
Social consciousness brings moral implications. Often, people with an awakened social
consciousness become socially active. A socially conscious person tends to be
empathetic towards others regardless of race, gender, ethnicity, disability, class, or
sexual identity.
Advertising is a form of communication used to influence individuals to purchase
products or services or support political candidates or ideas. Frequently it
communicates a message that includes the name of the product or service and how
that product or service could potentially benefit the consumer. Advertising often
attempts to persuade potential customers to purchase or to consume a particular brand
of product or service. Modern advertising developed with the rise of mass production in
the late 19th and early 20th centuries.
Commercial advertisers often seek to generate increased consumption of their
products or services through branding, which involves the repetition of an image or
product name in an effort to associate related qualities with the brand in the minds of
consumers. Different types of media can be used to deliver these messages, including
traditional media such as newspapers, magazines, television, radio, billboards or direct
mail. Advertising may be placed by an advertising agency on behalf of a company or
other organization.
Organizations that spend money on advertising promoting items other than a consumer
product or service include political parties, interest groups, religious organizations and
governmental agencies. Non-profit organizations may rely on free modes of
persuasion, such as a public service announcement.
Advertising is communication used to influence individuals to purchase products or
services or support political candidates or ideas. Advertising can be displayed on
billboards, newspapers, T.V., websites, movies and more.
E-MARKETING
(MK0008)
ASSIGNMENT-1
Q. 1 How does e-marketing relate to e-business?
Ans. E-Marketing: E-marketing, also referred to as online marketing or internet marketing, is
marketing that uses the Internet. The Internet has brought many unique benefits to
marketing, including low costs in distributing information and media to a global
audience. The interactive nature of Internet media, both in terms of instant response,
and in eliciting response at all, are both unique qualities of Internet marketing. E-
marketing ties together creative and technical aspects of the internet, including design,
development, advertising and sales. E-marketing methods include search engine
Segments. They also create segments by under mentioned methods:
a. Combining bases & focus on categories (known as Geodemographics)
b. Using any combination of variables that makes sense for their industry.
c. Utilising variables that can be used to identify and reach the right people at the
right time.
d. Using any of these four bases alone or in combination plus many other variables.
e. Knowing which variables broadly identify the target segment & which simply further
describe it because marketers use identification variables to enumerate and
access the target.
1. Geographic Segments
For E-marketing segmentation, geographic location of computers is not important to
users accessing Web sites, but it is very important to organizations with an Internet
presence. Most firms target specific cities, regions, states, or countries with their product
offerings & also develop multi segment strategies based on geography.
Product distribution strategy is a driving force behind geographic segmentation.
Research has found that the following factors have been important in such strategies:
a. Companies want to reach only customers in countries where they distribute
products.
b. Firms offering services online will only sell to geographic areas where they can
provide customer service.
c. Companies examine the proportion of Net users in its selected geographic targets
before deciding to serve the Web community.
E-marketers using geographic variables for segmentation also evaluate online markets
by region, city, urban area, and so forth. While deciding on countries as a segmentation
base, the quality of a country’s market is evaluated using additional criteria like
infrastructure variables designed to predict their ability to access and absorb information
technology viz.-computer adoption, information & Internet. For example, in 2001,
Sweden and Norway held the top two positions as the world’s dominant information
economies because of a high mobile Internet access.
Another important factor is the language used on the internet web pages. English is no
longer the language of most Web pages and online bulletin boards; a major change from
just two years ago. The top Internet languages at present are:
English (42%),
Japanese (9%),
Chinese (9%),
Spanish (7%),
German (7%).
This has huge implications for e-marketers desiring to reach global markets via the
Internet. Until online text appears in local languages, users in those countries will not
able to participate in e-commerce or other online activities.
2. Demographic Segments
In the Internet’s early years, the typical user was a young male, college educated, with a
high income who was basically an innovator. Now, this is true in countries with low levels
of Internet adoption. The e-marketers study about the age, income, population of a
geographical area who have knowledge of internet. Occupation of the customers also
give an idea of internet uses. This has huge implications for e-commerce and
advertising, and big changes are still taking place. The blue-collar workers of any country
are the fastest growing online occupational group that are engaged in internet surfing
and they provide a good e-marketing segment.
3. Psychographic Segments
User psychographics include the following characteristics:
a. Personality: Traits (other-oriented / self-oriented) and habits, b. Values: Deeply held convictions (religious beliefs),c. Lifestyle: Non-product-related behaviord. Activities: (playing sports or eating out),e. Interests: Attitudes and beliefs people hold.f. Opinions:
Attitudes are internal evaluations about people, products, and other objects which can be
either positive or negative & the evaluation process occurs inside a person’s head.
Attitude segmentation can be implemented by studying the general ways that consumers
spend time. This helps e-marketers define and describe market segments so they can
better meet consumer needs & this is very important for Web page design.
4. Behavior Segments
Behavior refers to what a person physically does (calling a toll free number to order,
shopping, or purchasing a product). Product behaviors are such a vital segment
descriptor that they form an entirely separate category. Two behavioral segmentation
variables are:
a) Benefit segmentation: On the Internet, there is something for everyone: information,
entertainment, news, social meeting places, and more. Marketers form segments
based on the benefits sought by users to design products to meet those needs.* The
best way to determine benefits sought is to look at what people actually do online.
Some suggestions are to check:
which Web sites are the most popular.
sites report monthly on the top online properties displays the top Web site
parent companies.
Commonly used benefit segmentation variables are:
E-mail (8 billion e-mails flying over the Internet worldwide.)
Shop.
Information search.
Online stock trading and online banking. (Online banking has a high usage but
online stock trading is quite active.)
Streamies: People who listen to online audio.
b) Usage Segments: E-marketers identify segments according to how users behave
and use the Internet & profile the segments by user characteristics, geographical
location, and so on. When users shop online, sometimes they browse aimlessly; but
sometimes they have a specific goal.
Some of the segments which are important while doing this exercise are as follows:
Home Access: 80% of home users have slow connection speeds, making large
graphics and other files undesirable on sites frequented from home. A small but growing
number of households have more than one PC and are networking them within the
home.
Work Access: A large number of users access the Internet from work. People spend
nearly twice as much overall time online than those who access only from home. The
audiences in all countries are much more heavily male.
E-marketing strategists can use such information to target their Web site offerings.
Strategies might include special products, the language in sites, and the amount of
interactivity and multimedia possible for work users.
Industry Specific Usage Segments: Segmenting by usage vary from one business
type to the other. For example, visitors to car sites behave differently than visitors to
other e-commerce sites. Even serious car buyers tend to visit car sites only a few times.
Segmenting by Usage Occasions: Marketers identify segments based on how
consumers are using the Web at particular moments. Four key variables have been
identified for defining discrete clusters of online behavior:
Session length – the time a user stays online.
Time per page – the average time a user spends on each page during a session.
Category concentration – the percentage of time a user spends at sites belonging to
the most frequented category.
Site Familiarity – the percentage of total session time a user spends at familiar sites,
defined as those previously visited four or more times.
Q. 2 (3)Describe the eight dimensions of differentiation in e-marketing.
Ans. Differentiation is the process of adding meaningful and valued differences to distinguish
the product from the competition. The keys to differentiating online businesses are the
creation of a distinctive and superior customer experience & the development of one-to-
one relationships with consumers. The real value added by the Internet is its ability to
differentiate according to customer relationships & provide a unique experience for each
customer. Many examples of differentiated online offerings are based on the lower costs
in acquiring and retaining online customers which are then passed onto customers.
In business terms, to differentiate means to create a benefit that customers perceive as
being of greater value to them than what they can get elsewhere. It’s not enough for us
to be different a potential customer has to take note of the difference and must feel that
the difference somehow fits their need better. (Other words that mean virtually the same
thing: Competitive Advantage; Unique Selling Proposition; or Value Proposition.)
There are a number of differentiation dimensions and strategies for their
accomplishment. A firm can differentiate along eight dimensions:
1. Price Differentiation: Differentiating on price is probably the most common and
easily understood method. However, one has to be cautious while using this strategy.
On the one hand, potential customers might expect a lower price because they
perceive the e marketing firm as having less overhead, etc. On the other hand,
cheaper prices can evoke perceptions of lower quality, a less-stable business, etc.
And if we compete on price against competitors with deeper pockets, we can price
ourselves right into bankruptcy. Hence it is better to be creative with this differentiator
by competing on something other than straight price. For example, we might offer:
More value offer more products or services for the same price.
Freebies accessories, companion products, free upgrades, and coupons for
future purchases.
Free shipping, etc. convenience sells, especially when it is free!
Discounts includes offering regular sales, coupons, etc.
2. Focus Differentiation: This is the most important method of differentiation, and in
many ways, the easiest. Once we have done that, we have an automatic advantage
over other companies because we can become more of an expert in that one field
and we can build close relationships with key customers that will be hard to duplicate.
For example, we might differentiate ourselves through:
Location take advantage our closeness to prospective customers.
Customer specialization be very specific about what characteristics our
customers will have. For example, racing bicycle enthusiasts or companies with a
spiritual conscience.
Customer relationships know customers really well, form partnerships with them,
and get them to speak for us.
Affinity relationships associate our product/service with a well-known person or
organization.
One-stop shopping offer everything our target market needs, in our area of
expertise.
Wide selection (within our niche) although this one may seem to be the opposite
of focus the key is to be very specific in one dimension and very broad in
another.
3. Product Differentiation: The e-marketing company can differentiate itself by
providing a limitless assortment of products. Differentiation may include
customization, bundling and attractive pricing of products. E- marketing offers a
combination of products/services that the individual consumer needs at attractive
prices & also supports one-to-one relationship building with each customer, critical for
a company’s long-term success. Such sales may not rely as heavily on product
packaging as do traditional retailers. Consumers might require products with more
utilitarian packaging & the products will be shipped from the distributor directly to the
consumer and thus never appear on retailers’ shelves. Hence products don’t need the
expensive, colorful packaging for store display. Products only need a size and shape
that is functional and useful for the consumer. Packaging minimization will reduce
waste and costs. This can result in lower prices, or more reinvestment in higher-
quality, single-layer packaging enhancements.
The key to successful differentiation in this category, again, is to know the customers,
really, really well. For example, the product or service could stand out in one of these
ways:
Quality- create a product or service that is exceptional in one or more ways.
Examples: Lasts longer
Better
Easier to use
Safer
New/First be the first one to offer something in the location/field.
Features/Options offer lots of choices, unusual combinations, or solve a problem
for a customer in a way no one else does.
Customization – the firm may be able to more easily handle special orders than
big, mass-market competitors.
4. Service Differentiation: Customer service can be enhanced by 24 hour customer
feedback through e-mail & also the ability to respond more rapidly to customer
concerns. Home delivery of groceries and online banking and securities trading are
becoming increasingly popular. They are differentiated both by the features they offer
and the service consumption experiences. Excellent customer service is a great
opportunity for differentiation and another natural advantage for firms that already
know what’s important to their customers.
The firm should build the reputation on making customers feel really good about
doing business with them. This concept works great with referral marketing, too.
Some examples are:
Deliver fast , next day, or one-hour, make it faster than customers think possible.
Unique channel – offer a service over the phone or Internet instead of in person
or in their office rather than yours.
Service-delight customers! – it may seem expensive to offer exceptional service
but it pays off in word-of-mouth advertising.
Before/during/after-sales support – provide technical or other support to
customers using the product. You might use joint ventures to provide that support
but customers will perceive it as being from you!
Guarantee/warranty – offer 100% money-back, or free replacement parts.
5.Personnel Differentiation: In the past, personalized service and one-to-one
relationships required the interaction of skilled personnel. Now, the Internet allows
companies to deliver their products and services through low-cost channels that
automate the process and remove the expensive human element. Lower transaction
& marketing costs results in cost leadership advantage over offline companies & also
cost reduction for the end user & higher levels of service. But as more companies
offer products and services online, this cost advantage between online and offline
operations will gradually shrink over time.
6.Channel Differentiation: The Internet is a location-free, time-free distribution and
communication channel. The Internet serves as a transaction and distribution
channel. The Internet provides highly specialized personal services and “do it
yourself” websites. The Internet works as a distribution channel, a communication
channel & a relationship channel. Internet is the channel through which it can reach
customers, display a diversified assortment of offerings & differentiate itself.
There are multiple levels of online channel differentiation:
Product or service information online which is an advantage over companies with
no Web presence,
Exploits the Internet as a communication channel.
Commercial transactions online,
Exploits the Internets as a transaction and distribution channel.
The differentiation of competitors’ Internet-related service offerings. For example,
in the banking industry, one bank may provide a virtual pass book facility while
another bank may provide an interactive portfolio management service to key
account holders.
7. Image Differentiation: A company can differentiate itself by creating a unique
experience called “experience branding”. Experience Branding happens when a
company differentiates itself by creating a unique customer experience, increases
customer loyalty & retention which produce referral business. By this process, firms
can greatly improve their ability to retain customers, target key customer segments
and enhance network profitability. Such differentiation has to be built upon the ability
to create huge perceptual differences from other aspects of brand positioning. The
Internet’s interactivity allows companies to respond more quickly to customer
requests. Even the computer industry which was earlier focusing on product
differentiation by computing speed is now turning to image differentiation. For
example Symantec which markets system maintenance & protection software is
fostering the image of “ambulance” for the computer industry. Differentiation has to be
built upon the ability to create huge perceptual differences from other aspects of
brand position.
8. Customer Relationship: The Internet has made pricing information widely available
to suppliers, customers, and competitors. This reduces price differences between
suppliers, reduces the importance of price competition and increases the importance
of differentiation. Hence it is important to create brand loyalty and use the Internet to
build one-to-one relationships with customers.
CRM (Customer Relationship Management) System helps companies in setting up a
frontline information system for sharing information about the customers across all
interface units. eCRM is nothing but the electronic counter part of CRM. It doesn’t
replace the traditional channels of communication, such as phone or fax, but is just
another extension for the customers to interact with companies on a one-to-one
basis. It’s a more personalized and interactive form of communication and
synchronizes communications across both electronic as well as traditional channels.
Such a system has training benefits too. A new salesperson, for instance, can use the
CRM package to quickly learn about his customers or their past history.
Q. 3 (6) Discuss the building blocks of E-CRM.
Ans. Customer relationship management (CRM) is a broad term that covers concepts used by
companies to manage their relationships with customers, including the capture, storage
and analysis of customer, vendor, partner, and internal process information. A firm using
relationship marketing focuses more on wallet share than on market share.
e-CRM is the electronically delivered or managed subset of CRM. The user of an e-CRM
solution uses the resources of the internet or other digital media to deliver elements of a
marketing relationship with the customer. At its most sophisticated, eCRM can be
defined as an enterprise-wide technology driven approach to the management of all data
relating directly or indirectly to customers, in turn helping to define overall product
development and marketing strategies. The term eCRM is also be used to describe the
customer-facing, digitally-delivered portion of CRM.
The Gartner Group model of e-CRM covers following 8 building blocks:
1. E-CRM Vision: To be successful, the CRM vision must start at the top and filter
throughout the company to keep the firm customer focused. One key aspect of CRM
vision is how to guard customer privacy. The benefits of using customer data must be
balanced by the need to satisfy customers and not anger them. TRUSTe provides its
seal and logo to any Web site meeting its privacy philosophies.
2. E-CRM Strategy: E-marketers must determine their objectives and strategies before
buying CRM technology. Many CRM goals refer to customer loyalty. An important
CRM strategy is to move customers up the relationship intensity pyramid.
3. Valued Customer Experience: Consumers are constantly bombarded by marketing
communications and unlimited product choices. According to Jagdish Sheth (1995),
the basic tenet of CRM is choice reduction. Many consumers are “loyalty prone,” and
will stick with the right product as long as its promises are fulfilled. Synchronous and
asynchronous technologies can provide automated and human services that solve
customer problems.
4. Organizational Collaboration: Marketers collaborate within and outside the
organization to focus on customer satisfaction. CRM, or “front-end” operations, can
be linked with the entire supply chain management system (SCM), or “back-end”
operations. Customer service reps have access to inventories. Producers and
wholesalers constantly receive data that can be utilized for production and delivery.
The use of extranets, two or more intranet networks that share information, allows
CRM-SCM integration.
5. E-CRM Processes: Firms use specific processes to move customers through the
customer care life cycle. E-CRM processes are used to:
Identify customers.
Differentiate customers.
Customize the marketing mix.
Interact with customers.
Firms can identify high value customers by mining customer databases and profiling
customers in terms of:
Recency of purchases.
Frequency of purchases.
Monetary value of purchases.
6. E-CRM Information: The more information a firm has, the better value it can provide
to each current or prospective customer. Firms gain much information by tracking
behavior electronically, by using Bar code scanner data & also through software that
tracks online movement, time spent per page, and purchase behavior.
7. E-CRM Technology: Technology greatly enhances CRM processes. Firms use
company-side tools to push customized information to users. Client-side tools allow
the customer to pull information that initiates the customized response from the firm.
Company-side Tools include interactive point-of-sale terminals which are located on a
retailer’s counter and used to capture data and present targeted communication. A
firm may also listen to users and build community by providing a space for user
conversation on the Web site like Chat sites & Bulletin boards. The following are
some examples of how technology can be used for building up CRM.
Company side tools: Company side tools include the following:
a. e-mail databases: Marketers use e-mail databases to build relationships by
keeping in touch with useful and timely information. E-mail can be sent to
individuals or sent en masse using a distributed e-mail list.
b. Collaborative filtering: Collaborative filtering software gathers opinions of like-
minded users and returns those opinions to the individual in real time.
c. Real-time profiling: Real-time profiling occurs when special software tracks a
user’s movements through a Web site, then compiles and reports on the data at
a moment’s notice.
d. Data mining: Data mining involves the extraction of hidden predictive information
in large databases through statistical analysis.
e. Web log analysis: Every time a user accesses a Web site, the visit is recorded
in the Web server’s log file. This file keeps track of which pages the user visits,
how long he stays, and whether he purchases or not.
f. Cookies: Cookies are small files written to the user’s hard drive after visiting a
Web site. When the user returns to the site, the company’s server looks for the
cookie file and uses it to personalize the site.
Client-side Tools: Some examples of Client side tools are as under:
a. E-mail queries, complaints, or compliments initiated by customers or prospects
comprise incoming e-mail, and is the fodder for customer service.
b. Incoming e-mail
c. With fax-on-demand, customers telephone a firm, listen to an automated voice
menu, and select options to request a fax be sent on a particular topic.
d. Fax-on-demand
e. Web form (or HTML form) is the technical term for a form on a Web page that
has designated places for the user to type information for submission.
f. Web forms
g. Wireless Web portals send data to customer cell phones, pagers, and PDAs,
such as the PalmPilot.
h. Wireless data services
i. Personalized Web pages users easily configure at Web sites such as MyYahoo!
and many others.
j. Individualized Web portals
k. Programs that perform functions on behalf of the user, such as search engines
and shopping agents.
8. E-CRM Metrics: E-marketers use numerous metrics to assess the Internet’s value in
delivering CRM performance. For example:
ROI
Cost savings
Revenues
Customer satisfaction
One research study named customer retention, ROI and customer lift (increased
response or transaction rates) as the most important metrics. One very important
CRM metric is customer lifetime value (LTV).
The LTV calculation demonstrates the benefits of retaining customers over time
and the need for building wallet share.
LTV also illustrates that no matter how good customer retention is, the firm must
still focus on customer acquisition activities.
INTERNATIONAL MARKETING
(MK-0009)
ASSIGNMENT-1
Q. 1 Distinguish between international marketing, multinational marketing and global
marketing.
Ans If we talk in general, both the terms Global and International marketing are used
interchangeably nowadays. But if we are talking in terms of marketing theories,
International Marketing was a stage in the evolution of Global Marketing. Let us see how,
Stage 1 : Domestic Marketing : Companies manufacturing products and selling those
within the country itself. So, no international phenomenon at all.
Stage 2 : Export Marketing : Company starts exporting products to another countries
also. This is the very basic stage of global marketing. Approach of marketer in this stage is
said to be ‘ethnocentric’ because although he is selling goods to foreign countries, product
development is totally based upon the taste of local customer. So, focus is still on domestic
market
Stage 3 : International Marketing : Now, company starts selling products to various
countries and the approach is ‘Polycentric’ i.e. making different products for different
countries.
Stage 4 : Multinational Marketing : Now, in this stage, the number of countries in which
the company is doing business gets bigger than that in earlier stage. And so, instead of
producing different goods for different countries, company tries to identify different regions
for which it can deliver same product. So, same product for countries lying in one region
but different from product offered in countries of another region. e.g. a company may
decide to offer same product to India, Sri lanka and Pakistan if it thinks the taste of people
of these countries is same but at the same time offering different product for American
countries. This approach is called ‘Regiocentric approach’.
Stage 5 : Global Marketing : This is the final stage of evolution. In this stage company
really operates in a very large number of countries and for the purpose of achieving cost
efficiencies it analyses the requirement and taste of customers of all the countries and
come out with a single product which can satisfy the needs of all. This approach is called
‘Geocentric approach’.
So, one main difference between International and the Global marketing is the approach of
marketer. A truly global company instead of offering different products to different countries
(as in International Marketing), develops and offers a single product to the world.
We should note one more very interesting fact that in the early stage of Export marketing
also, the company was offering a single product to each of the countries as in the final
stage of Global marketing. But it was entirely different because in export marketing you
produce according to taste of your country and force that on other countries but in Global
approach, you take care of entire countries and develop a product which can satisfy the
need of all.
The distinguishing factors between international marketing, multinational marketing and
global marketing are tabled as below:
INTERANTIONAL MAKETING MULTINATIONAL
MARKETING
GLOBAL
MARKETING
If the exporting departments are
becoming successful but the costs of
doing business from headquarters plus
At the multi-national
stage, the company is
marketing its products
When a company
becomes a global
marketer, it views
time differences, language barriers, and
cultural ignorance are hindering the
company’s competitiveness in the
foreign market, then offices could be
built in the foreign countries.
Sometimes companies buy firms in the
foreign countries to take advantage of
relationships, storefronts, factories, and
personnel already in place.
and services in many
countries around the
world and wants to
benefit from economies
of scale.
the world as one
market and creates
products that will
only require minor
modifications to fit
into any regional
market place.
Most of the marketing mix decisions are
made in the individual countries since
that staff is the most knowledgeable
about the target markets.
Consolidation of
research, development,
production, and
marketing on a regional
level is the next step.
Marketing
decisions are made
by consulting with
marketers in all the
countries that will
be affected.
Local product development is based on
the needs of local customers. These
marketers are considered polycentric,
because they acknowledge that each
market/country has different needs.
At the multi-national
stage, consolidation, and
thus product planning,
does not take place
across regions; a
regiocentric approach.
The goal is to sell
the same thing the
same way
everywhere. These
marketers are
considered
geocentric.
Q. 2 Explain P-Time and M-Time. How do the high-context or low-context cultures affect
P-Time and M-Time?
Ans
.
Hall (1959) first proposed the handling of time as one of the key components of culture. He
used the terms Monochronic and Polychronic to describe two basic orientations to
time.
Mononchronic Time (M- Time): The Monochronic orientation (or "M-Time") views time
as sequential and linear. Time is seen as being a limited resource which is constantly
being used up, and thus scheduling tends to be "tighter," more rigid, with great importance
placed on promptness. M- Time typifies most North Americans, Swiss, Germans, and
Scandinavians. These Western cultures tend to concentrate on one thing at a time. They
divide time into small units and are concerned with promptness. M-time is used in a linear
way and it is experienced as being almost tangible in that we save time, waste time, bide
time, spend time, and lose time. Most low-context cultures operate on M-time.
From the Monochronic perspective, late arrival for a meeting is viewed as rudeness, and
events and activities are scheduled sequentially, one after another, to avoid overlapping.
This perspective is oriented to the future.
Poltphonic Time (P- Time): The Polychronic orientation (or "P-Time") views time in a
more "circular" fashion, as the turning of the seasons, and time is seen as renewing itself
each year. Scheduling tends to be "loose" and flexible, with many last-minute changes to
even highly significant events and activities. Often many activities are juggled
simultaneously, and promptness is not considered important. This perspective is oriented
to the past and/or present.
P-time, or polyphonic time, is more dominant in high-context cultures where the completion
of a human transaction is emphasized more than holding to schedules. P-time is
characterized by the simultaneous occurrence of many things and by "a great involvement
with people." P-time allows for relationships to build and context to be absorbed as parts of
high-context cultures.
High-Context / Low-Context Cultures: Most low-context cultures operate on M- Time
and High- context cultures operate on P- Time. Monochronic people are more likely to be
task-oriented than relationship-oriented, and may be viewed bypolychronic observers as
"valuing things over people." In contrast, polychronic people are more relationship-oriented
than task-oriented and thus may be viewed by monochronic observers as not taking their
work and goals seriously.
Monochronic people are likely to feel insulted when a polychronic acquaintance or
colleague is late for a meeting. Polychronic people are likely to be offended when a
monochronic acquaintance or colleague seems too focused on their work to swap stories
about their families or what is going on in the world around them."
One study comparing perceptions of punctuality in the United States and Brazil found that
Brazilian timepieces were less reliable and public clocks less available than in the United
States. Researchers also found that Brazilians more often described themselves as late
arrivers, allowed greater flexibility in defining early and late, were less concerned about
being late, and were more likely to blame external factors for their lateness than were
Americans. The American desire to get straight to the point, to get down to business, and
other indications of directness are all manifestations of M-time cultures.
The P-time system gives rise to looser time schedules, deeper involvement with
individuals, and a wait-and see-what-develops attitude. For example, two Latins
conversing would likely opt to be late for their next appointments, rather than abruptly
terminate the conversation before it came to a natural conclusion. P-time is characterized
by a much looser notion of on time or late. Interruptions are routine; delays to be expected.
It is not so much putting things off until manana, but the concept that human activity is not
expected to proceed like clockwork.
Most cultures offer a mix of P-time and M-time behavior, but have a tendency to be either
more P-time or M-time in regard to the role time plays. Some are similar to Japan, where
appointments are adhered to with the greatest M-time precision, but P-time is followed
once a meeting begins. The Japanese see U.S. businesspeople as too time bound and
driven by schedules and deadlines, which thwart the easy development of friendships. The
differences between M-time and P-time are reflected in a variety of ways throughout a
culture.
When businesspeople from M-time and P-time meet, adjustments need to be made for a
harmonious relationship. Often clarity can be gained by specifying tactfully, for example,
whether a meeting is to be on Mexican time or American time. An American who has been
working successfully with the Saudis for many years says he has learned to take plenty of
things to do when he travels. Others schedule appointments in their offices so they can
work until their P-time friend arrives. The important thing for the U.S. manager to learn is
adjustment to P-time, in order to avoid the anxiety and frustration that comes from being
out of synchronization with local time. As global markets expand, however, more
businesspeople from P-time cultures are adapting to M-time.
Q. 3 List down alternative market entry strategies available to enter the international
market. Briefly analyze market entry strategy for any MNC in India.
Ans
.
The decision to enter a foreign market is one of the most daunting strategic challenges a
manager must face. What makes this so is the magnitude of the financial commitment the
firm must assume and the degree of complexity and, correspondingly, the uncertainty that
attaches to most efforts to enter foreign markets.
There are a variety of ways in which organizations can enter foreign markets. The three
main ways are by direct or indirect export or production in a foreign country. The various
alternative market entry strategies available to enter the international market are listed
below:
Exporting on either a direct (in-house) or indirect (export agent) basis.
Piggybacking
Countertrade
Barter
Direct investment (FDI) through a wholly owned subsidiary.
Joint venture (JV) structured around an equity investment.
Strategic (SA) structured around an alliance agreement.
Franchising agreement
Licensing agreement
Patent Licensing
Turnkey operation
Co-production Agreement
Management contract
Licensing of intangibles.
Management agreement (MA)
Contract manufacturing agreement (CMA)
Build-operate-transfer (BOT) agreement.
Participation in Export Processing zones or Free Trade Zones.
Internet investment
Market Entry Strategy For Any MNC In India:
Riding the success of economic reforms, the Indian Market as a whole is presenting ample
opportunities of growth to its foreign investors. India owes much of its credit to the policies
encouraging Foreign Direct Investment (FDI) that have been formulated by the present
government.
In order to make a successful entry into the Indian Market, the following steps should be
taken care of:
Development of a basic understanding of the potential of the Indian Market.
Formulation of a sound strategy before entering Indian Market.
Successful implementation of such a strategy.
Potential of the Market of India
India is being seen as a most deserving place for investment by the developed countries of
the world. The economic ambiance of the nation is favoring the entrance of a number of
foreign players into her market. Rated as one of the fastest emerging economies of the
world, India is no longer being ignored by even her strongest critic of yesteryears.
A company's success in India will depend on the correct estimation of the nation's
potential. Overestimation of possibilities and underestimation of complexities that a
company might face may lead to its failure. Due consideration needs to be given to the
inherent difficulties and functional hazards that a company might encounter while working
in the Indian system. The entry into the market of India necessitates the formulation of a
well-designed plan which in itself should be a product of thorough research. Above all, the
company's should bear in mind the objective of growth in the long run and not profit in the
short run in order to make their stay in India a permanent one.
The real worth of the Indian Market can be illustrated in the following manner:
India is the fifth largest economy in the world (ranked above France, Italy, the
United Kingdom and Russia).
The Gross Domestic Product (GDP) of India is the third largest in Asia.
India ranks second among the emerging nations of the world.
Besides, the Indian Market is also one of the few in the world that offers high opportunities
for growth and earning potential in virtually all areas of business activity.
In spite of all such positive attributes, investment in India has been hindered by the
following forces:
Highly complex and inelastic social structure.
Bureaucratic impediments.
Infrastructural limitations.
Since her independence in 1947, India has evolved as a highly protective, semi-socialist
economy. Because of its diversified cultures, no change in social structure or financial
reform has been accepted unanimously. All such alterations had been subjected to time by
the authorities implementing them.
All business activities in India have encountered the inefficiency and corruption prevalent in
the Indian bureaucracy. Lately, the government is addressing the issue with strict
supervision.
The rapid economic growth in the past few years has revealed the India's deficiency in
providing infrastructural facilities to investors. The most significant areas of such
shortcomings include poor network and conditions of roads, shortfall in availability of power
and mismatch among port traffic capacity.
The market of India is also diversified by the presence of consumers having a wide variety
of tastes and preferences. It is therefore advisable to every investor before undergoing
Indian Market Entry, to undergo a thorough introspection of what exactly the company is
willing to achieve in India, to what extent and in what time. The introspection should be
backed by a detailed investigation to know the possible pros and cons that a company
might face in the process. In this regard there a number of firms who assist foreign
investors from beginning to end.
INTERNATIONAL MARKETING
(MK-0009)
ASSIGNMENT-2
Q. 1 Describe product standardization versus adaptation in international marketing.
Ans
.
A product can be defined as a collection of physical, service and symbolic attributes which
yield satisfaction or benefits to a user or buyer. A product is a combination of physical
attributes say, size and shape; and subjective attributes say image or "quality". A customer
purchases on both dimensions.
A product’s physical properties are characterized the same the world over. They can be
convenience or shopping goods or durables and non-durables; however, one can classify
products according to their degree of potential for global marketing:
a. Local products – seen as only suitable in one single market.
b. International products – seen as having extension potential into other markets.
c. Multinational products – products adapted to the perceived unique characteristics of
national markets.
d. Global products – products designed to meet global segments.
Quality, method of operation or use and maintenance (if necessary) are the catchwords in
international marketing. A failure to maintain these will lead to consumer dissatisfaction.
Changes in design are largely dictated by whether they would improve the prospects of
greater sales, and this, over the accompanying costs. Changes in design are also subject
to cultural pressures. The more culture-bound the product is, for example food, the more
adaptation is necessary. Most products fall in between the spectrum of "standardization" to
"adaptation" extremes.
Standardization: The factors encouraging standardization are:
a. Economies of scale in production and marketing
b. Consumer mobility – the more consumers travel, the more is the demand
c. Technology
d. Image, for example "japanese", "made in".
The latter can be a factor both to aid or to hinder global marketing development.
Nagashima1 (1977) found the "made in USA" image has lost ground to the "made in
Japan" image. In some cases "foreign made" gives advantage over domestic products. In
Zimbabwe one sees many advertisements for "imported", which gives the product
advertised a perceived advantage over domestic products. Often a price premium is
charged to reinforce the "imported means quality" image. If the foreign source is negative
in effect, attempts are made to disguise or hide the fact through, say, packaging or
labelling. Mexicans are loathe to take products from Brazil. By putting a "made in
elsewhere" label on the product this can be overcome, provided the products are
manufactured elsewhere, even though its company may be Brazilian.
On the down side, there may also be significant differences in desires between cultures
and physical environments – e.g., software sold in the U.S. and Europe will often utter a
“beep” to alert the user when a mistake has been made; however, in Asia, where office
workers are often seated closely together, this could cause embarrassment.
Adaptation: The factors encouraging adaptation are:
a. Differing usage conditions – These may be due to climate, skills, level of literacy,
culture or physical conditions. Maize, for example, would never sell in Europe rolled and
milled as in Africa. It is only eaten whole, on or off the cob. In Zimbabwe, kapenta fish
can be used as a relish, but will always be eaten as a "starter" to a meal in the
developed countries.
b. General market factors – incomes, tastes etc. Canned asparagus may be very
affordable in the developed world, but may not sell well in the developing world.
c. Government – taxation, import quotas, non tariff barriers, labelling, health
requirements. Non-tariff barriers are an attempt, despite their supposed impartiality, at
restricting or eliminating competition. A good example of this is the Florida tomato
growers, who successfully got the US Department of Agriculture to issue regulations
establishing a minimum size of tomatoes marketed in the United States. The effect of
this was to eliminate the Mexican tomato industry, which grew a tomato that fell under
the minimum size specified. Some non-tariff barriers may be legitimate attempts to
protect the consumer, for example, the ever stricter restrictions on horticultural produce
insecticides and pesticides use may cause African growers a headache, but they are
deemed to be for the public good.
d. History – Sometimes, as a result of colonialism, production facilities have been
established overseas. Eastern and Southern Africa is littered with examples. In Kenya,
the tea industry is a colonial legacy, as is the sugar industry of Zimbabwe and the
coffee industry of Malawi. These facilities have long been adapted to local conditions.
e. Financial considerations – In order to maximize sales or profits, the organization may
have no choice but to adapt its products to local conditions.
f. Pressure – Sometimes, as in the case of the EU, suppliers are forced to adapt to the
rules and regulations imposed on them if they wish to enter into the market.
Forms Of Adaptation: Adaptations can also come in several forms.
a. Mandatory adaptations: Mandatory adaptations involve changes that have to be made
before the product can be used – e.g., appliances made for the U.S. and Europe must
run on different voltages, and a major problem was experienced in the European Union
when hoses for restaurant frying machines could not simultaneously meet the legal
requirements of different countries.
b. Discretionary changes: These changes are changes that do not have to be made
before a product can be introduced (e.g., there is nothing to prevent an American firm
from introducing an overly sweet soft drink into the Japanese market), although
products may face poor sales if such changes are not made. Discretionary changes
may also involve cultural adaptations – e.g., in Sesame Street, the Big Bird became the
Big Camel in Saudi Arabia.
c. Physical product vs. communication adaptations: In order for gasoline to be
effective in high altitude regions, its octane must be higher, but it can be promoted
much the same way. On the other hand, while the same bicycle might be sold in China
and the U.S., it might be positioned as a serious means of transportation in the former
and as a recreational tool in the latter. In some cases, products may not need to be
adapted in either way (e.g., industrial equipment), while in other cases, it might have to
be adapted in both (e.g., greeting cards, where the occasions, language, and
motivations for sending differ).
d. Lack of equivalent at home: Finally, a market may exist abroad for a product which
has no analogue at home – e.g., hand-powered washing machines.
There are ten basic criteria for adaptation that all who wish to deal with individuals, firms,
or authorities in foreign countries should be able to meet. They are:
1. open tolerance,
2. flexibility,
3. humility,
4. justice/fairness,
5. ability to adjust to varying tempos,
6. curiosity/interest,
7. knowledge of the country,
8. liking for others,
9. ability to command respect, and
10. ability to integrate oneself into the environment.
Q. 2 What is direct marketing? Give example of any MNC practicing direct marketing in
India. What are the advantages of direct marketing?
Ans
.
Direct marketing is a sub-discipline and type of marketing. There are two main definitional
characteristics which distinguish it from other types of marketing.
The first is that it attempts to send its messages directly to consumers, without the use
of intervening media. This involves commercial communication (direct mail, e-mail,
telemarketing) with consumers or businesses, usually unsolicited.
The second characteristic is that it is focused on driving a specific "call-to-action." This
aspect of direct marketing involves an emphasis on trackable, measurable positive
(but not negative) responses from consumers (known simply as "response" in the
industry) regardless of medium.
Direct marketing is a system of marketing that integrates ordinarily separate marketing mix
elements to sell directly to both consumers and other businesses, bypassing retail stores
and personal sales calls. It is used by virtually every consumer and business to-business
category, from banks to airlines to nonprofit organizations. Because the customer
responds directly to the company making the offer, international considerations that apply
to communications, distribution, and sales have to be considered. Direct marketing uses a
wide spectrum of media, including direct mail; telephone; broadcast, including television
and radio; and print, including newspapers and magazines.
Direct marketing is a sometimes controversial sales method by which advertisers approach
potential customers directly with products or services. The most common forms of direct
marketing are:
Telephone sales, solicited or unsolicited emails, catalogs, leaflets, brochures and
coupons.
Successful direct marketing also involves compiling and maintaining a large database
of personal information about potential customers and clients. These databases are
often sold or shared with other direct marketing companies.
The different channels of direct marketing are:
a. Direct Mail: The most common form of direct marketing is direct mail sometimes
called junk mail, used by advertisers who send paper mail to all postal customers in
an area or to all customers on a list.
b. Telemarketing : The second most common form of direct marketing is telemarketing
in which marketers contact consumers by phone.
c. Email Marketing: Email Marketing may have passed telemarketing in frequency at
this point and is a third type of direct marketing. A major concern is spam, which
actually predates legitimate email marketing.
d. Door To Door Leaflet Marketing: Leaflet Distribution services are used extensively
by the fast food industries, and many other business focusing on a local catchment
Business to consumer business model, similar to direct mail marketing.
e. Broadcast Faxing : A fourth type of direct marketing, broadcast faxing, is now less
common than the other forms. This is partly due to laws in the United States and
elsewhere which make it illegal.
f. Voicemail Marketing: A fifth type of direct marketing has emerged out of the market
prevalence of personal voice mailboxes, and business voicemail systems.
g. Direct Response Television Marketing : Direct marketing on TV (commonly referred
to as DRTV) has two basic forms: long form (usually half-hour or hour-long segments
that explain a product in detail and are commonly referred to as infomercials) and
short form which refers to typical 0:30 second or 0:60 second commercials that ask
viewers for an immediate response (typically to call a phone number on screen or go
to a website).
h. Direct Selling : Direct selling is the sale of products by face-to-face contact with the
customer, either by having salespeople approach potential customers in person, or
through indirect means such as Tupperware parties.
Advantages Of Direct Marketing:
1. For many companies or service providers with a specific market, the traditional forms of
advertising (radio, newspapers, television, etc.) may not be the best use of their
promotional budgets. For example, a company which sells a hair loss prevention
product would have to find a radio station whose format appealed to older male
listeners who might be experiencing this problem. There would be no guarantee that
this group would be listening to that particular station at the exact time the company's
ads were broadcast. Money spent on a radio spot (or television commercial or
newspaper ad) may or may not reach the type of consumer who would be interested in
a hair restoring product.
2. This is where direct marketing becomes very appealing. Instead of investing in a
scattershot means of advertising, companies with a specific type of potential customer
can send out literature directly to a list of pre-screened individuals.
3. Direct marketing firms may also keep email addresses of those who match a certain
age group or income level or special interest. Manufacturers of a new dog shampoo
might benefit from having the phone numbers and mailing addresses of pet store
owners or dog show participants. Direct marketing works best when the recipients
accept the fact that their personal information might be used for this purpose. Some
customers prefer to receive targeted catalogs which offer more variety than a general
mailing.
4. There are certain circumstances when direct marketing may be more useful – e.g.,
when absolute margins are very large (e.g., computers) or when a large inventory may
be needed (e.g., computer CDs) or when the customer base is widely dispersed (e.g.,
bee keepers).
5. Direct marketing offers exceptional opportunities for segmentation because marketers
can buy lists of consumer names, addresses, and phone-numbers that indicate their
specific interests. For example, if we want to target auto enthusiasts, we can buy lists of
subscribers to auto magazines and people who have bought auto supplies through the
mail. We can also buy lists of people who have particular auto makes registered.
MNC’s Practicing Direct Marketing In India:
Multinational companies are the organizations or enterprises that manage production or
offer services in more than one country. And India has been the home to a number of
multinational companies. In fact, since the financial liberalization in the country in 1991, the
number of multinational companies in India has increased noticeably. Though majority of
the multinational companies in India are from the U.S., however one can also find
companies from other countries as well.
There are a number of reasons why the multinational companies are coming down to India.
India has got a huge market. It has also got one of the fastest growing economies in the
world. Besides, the policy of the government towards FDI has also played a major role in
attracting the multinational companies in India.
For quite a long time, India had a restrictive policy in terms of foreign direct investment. As
a result, there was lesser number of companies that showed interest in investing in Indian
market. However, the scenario changed during the financial liberalization of the country,
especially after 1991. Government, nowadays, makes continuous efforts to attract foreign
investments by relaxing many of its policies. As a result, a number of multinational
companies have shown interest in Indian market.
List Of MNC’s Doing Direct Marketing In India:
The list of multinational companies in India is ever-growing as a number of MNCs are
coming down to this country now and then. Following are some of the major multinational
companies operating their businesses by Direct Marketing in India:
a. British Petroleum
b. Vodafone
c. Ford Motors
d. LG
e. Samsung
f. Hyundai
g. Accenture
h. Reebok
i. Skoda Motors
j. ABN Amro Bank
k. Pepsi
l. Coco- Cola
A majority of multinational corporations operating in India have rated the country as a
better investment destination on various parameters than China, Brazil, the UK, France,
Australia and Singapore.
India scores over China on skilled labour force and its market growth prospects are
brighter than the UK and Singapore, according to a perception survey conducted by
Federation of Indian Chambers of Commerce & Industry (Ficci) among 135 MNCs in India.
These include
a. Procter & Gamble,
b. Nestle,
c. Hyundai,
d. Ford
e. Colgate Palmolive.
Q. 3 What are various challenges that marketer faces while doing international
advertising?
Ans
.
When organizations advertise across international boundaries, a number of important
factors have to be taken into consideration. Whilst the process is ostensibly
straightforward, that is someone (seller) says something (message) to someone (buyer)
through a medium) the process is compounded by certain factors.
International advertising entails dissemination of a commercial message to target
audiences in more than one country. Target audiences differ from country to country in
terms of how they perceive or interpret symbols or stimuli; respond to humor or emotional
appeals, as well as in levels of literacy and languages spoken. How the advertising
function is organized also varies. In some cases, multinational firms centralize advertising
decisions and budgets and use the same or a limited number of agencies worldwide.
International advertising can, therefore, be viewed as a communication process that takes
place in multiple cultures that differ in terms of values, communication styles, and
consumption patterns. International advertising is also a business activity involving
advertisers and the advertising agencies that create ads and buy media in different
countries. The sum total of these activities constitutes a worldwide industry that is growing
in importance. International advertising is also a major force that both reflects social
values, and propagates certain values worldwide.
Various challenges that marketer faces while doing international advertising are:
1. The advertising paradigm : These mitigating factors can be called "noise" and have
an effect on the decision to "extend", "adapt" or "create" new messages. Language
differences may mean that straight translation is not enough when it comes to message
design. Advertising may also play different roles within developed, between developed
and underdeveloped and within underdeveloped countries. In developing countries
"education" and "information" may be paramount objectives. In developed countries,
the objectives may be more persuasive.
Cultural differences may account for the greatest challenge. However, many experts
challenge the need to adapt messages and images, as they argue that consumer
differences between countries are diminishing. Changes may be needed only in
translation. However, this is only one point of view, as there is no doubt that cultural
differences do exist across the world. For example, it would be quite unacceptable to
have swim suited ladies advertising sun care products in Muslim countries.
Three major difficulties occur in attempting to communicate internationally:
The message may not get through to the intended recipient, due to lack of media
knowledge;
The message may get through but not be understood, due to lack of audience
understanding and:
The message may get through, be understood but not provoke action. This may be
due to lack of cultural understanding.
2. Campaign design: Before embarking on a promotion campaign, the following
questions, among many others, must be answered.
What can be said about the product?
Which audience is being reached?
What resources does the organization have?
Can someone do it better, say an agency?
Basic steps in conducting an advertising campaign:
3. Objectives : Advertising must only be undertaken for a specific purpose(s) and this
purpose must be translated into objectives. Whilst difficult to directly attribute to
advertising, persuasive advertising’s ultimate objective is to obtain sales. Other
objectives include building a favorable image, information giving, stimulating distributors
or building confidence in a product. Whatever objective(s) are pursued, these must be
related to the product life cycle and the stage the product is in.
4. Budgets: Budgets can be set in a variety of ways. Many budgets use a percentage of
past or future sales, objective and task methods, or rule of thumb. "Scientific" methods
include sales response methods and linear programming.
5. Agency: Agencies can be used or not, depending on the organizations’ own abilities,
confidence in the market and market coverage. Many organizations, like Lintas and
Interpublic, are worldwide and offer a wide range of expertise.
6. Message selection: Message selection is probably where the most care has to be
taken. Decisions hinge on the standardization or adaptation of message decision,
language nuances and the development of global segments and customers. Message
design has three elements, illustration, layout and copy.
Advertising appeals should be consistent with tastes, wants and attitudes in the market.
Coke and Pepsi have found universal appeal. With the "post-modern age" now affecting
marketing, message design is becoming particularly crucial. It is not just a question of
selling, but of crafting images. It is often the image, not the product, which is
commercialized. Products do not project images, products fill the images which the
communication campaign projects. Coke’s "Life" theme is a classic in this regard.
In illustrations and artwork, some forms are universally understood. Coke, again, with
its "life" theme is applicable anywhere. Cheese and beer advertisements would go well
together in Germany, but it would have to be cheese and wine in France.
Copy, or text, has been the subject of much debate. Effective translation requires good
technical knowledge of the original and translated language, the product and the
objectives of the original copy. Care has to be taken that the meaning does not get lost
in translation.
7. Media selection : There is a great difference in variety and availability of media across
the world. The choice of media depends on its cost, coverage, availability, character
(national or local or international) and its "atmosphere".
In advertising the choice is television, radio, press, magazines, cinema, posters, direct
mail, transport and video promotion. In promotion the choice is wide between money-off
offers, discounts, extra quantities, and so on. Other forms of promotion include
exhibitions, trade missions, public relations, selling, packaging, branding and sponsored
events. Governments can be a very powerful promotion source, both by providing
organizations like Horticultural Promotion Councils and by giving information and
finance.
8. Campaign scheduling : Scheduling international campaigns is difficult, especially if
handled alone rather than with an agency or third party. Scheduling decisions involve
decisions on when to break the campaign, the use of media solely or in combination,
and the specific dates and times for advertisements to appear in the media.
9. Evaluation : Advertising campaign evaluation is not very easy at the best of times.
Whilst it would be nice to say that "X" sales had resulted from "Y" advertising inputs, too
many intervening factors make the simple tie-up difficult. Evaluation takes place at two
levels – the effectiveness of the message and the effectiveness of the media. Few
African developing countries, except Kenya, have any sophisticated methods for
campaign evaluation. Measures include message recall tests, diary completion, and
brand recall.
10. Organization and control : Whilst companies like Nestle may have centrally
organized and controlled advertising campaigns, many are devolved to local
subsidiaries or agencies. The degree of autonomy afforded to local subsidiaries
depends on the philosophy of the organization and the relative knowledge of the local