Marketing management

Contents

bull Unit I ndash Understanding Marketing Management Assign Big Bazaar stresses the money saving aspect of shopping how is the

combination of brand name products at low prices likely to affect the consumer perception of value at big bazaar how can big bazaar use the 4prsquos of its marketing mix to enhance customers perception of the value of its total offer

bull Unit II-Analyzing Marketing Opportunities Assign-What cultural social personal and psychological factors have the

most influence on consumers buying designer fashion bull Unit III- Developing Marketing Strategies Assign-Prove with examples that there is no reason for a brand to become

obsolete no matter how long it has been in the market bull Unit IV- Shaping the Market Offering Assign- Is price discrimination desirable Discuss the question keeping in view

pricing in the apparel industry bull Unit V-Managing and Delivering Marketing Programs Assign- Do you agree with the statement TV is the most powerful advertising

medium

Unit I

Big Bazaar stresses the money saving aspect of shopping how is the combination of brand name

products at low prices likely to affect the consumer perception of value at big bazaar how can big bazaar

use the 4prsquos of its marketing mix to enhance customers perception of the value of its total offer

Is se sasta aur accha kahin nahildquo (Nowhere cheaper or better than this)

the Big Bazaar targets itself directly at the average Indians love of following the crowd and scrambling for a good discount

bull Low prices

bull Great sales and promotions

bull Wide range of products under the one roof

bull Many stores

bullBig Bazaar Positioning amp Establishment

Big Bazaar has established itself in the first quadrant of Organization Value and Customer Value Matrix The key features that have shaped in establishing of brand includes -

bullBig Bazaar ensures that no other kirana store departmental store are offering considerable discount compared to its own price This helped Big Bazaar in being the value for money store

bullBig Bazaar scores high on product mix as compared to kirana store

bullCheap and local products are heavily stocked in Big Bazaar which make it easier to attract lower middle class category of customers

Promotion of kirana is rare event but Big Bazaar used this channel efficiently to establish itself as national brand

Product=gt a large variety of products are offered in the shop so customers get so many different kind of items under one roof Thus it acts as a 1 stop family shop due to its varieties

Price=gt The price of all the items are less compared to the market Customers of all class comes to Big Bazaar and get satisfied

Place=gt The shop is usually located in the downtown areas in cities so it is very convenient for customers to visit the same

Promotion=gt sufficient promotion in local newspapers and TV channels and also the road shows certainly will enhance the customers perception of value

Consumer Insights amp Perceptions

Big Bazaar is based on 3-C theory of Kishore Biyani The 3-C symbolize Change Confidence and Consumption and according to this theory Change and confidence is leading to rise in Consumption They divided Indian customers in three categories -India OnebullConsuming class constitutes only 14 of Indian population bullThey are upper middle class and most of customers have substantial disposable income bullInitial focus of Big Bazaar India TwobullServing class which includes people like drivers house-hold helps office peons washer-men etc

India Three

bullStruggling class remaining population of India bullCannot afford to inspire for better living have hand-to-mouth existence bullNeeds cannot be addressed by current business models The potential customers of Big Bazaar are India One and India Two The customer insights were developed by close observation of the target set The insights that came out were -bullThe clean and shiny environment of modern retail stores creates the perception that such store are too expensive and exclusive and are not meant for India Two bullIndia Two finds moves and find a lot of comfort in crowds they are not individualistic They prefer to be in queues bullIndian-ness is not about swadeshi itrsquos about believing in Indian ways of doing things bullIndian customers prefer to purchase grains grams etc after touching them so itrsquos better not to sell in polythene packs Big Bazaar has counters where you can touch wheat rice sugar etc before purchasing bullAdvertisements about schemes and offers through local newspapers radio in local languages inspires customer more than the traditional ways bullThe guards salesman at the Big Bazaar outlets should not look smarter than customer so they prefer not to have tie etc in their uniform

Perception of value of an offering in the minds of customers depends on two factors Benefits and CostsV=BCThis means that more the benefits customers receive at a given cost more will be the value in their mindsHere benefit means all the benefits like functional social and emotional (as I had already explained in the previous answer)And costs does not mean only monetary costs rather it is the sum of Time (like waiting time of a shop) customers have to spend to get the product Effort they have to put in order to get those (eg traveling up to the shop searching in the shop etc) and finally Money ie monetary price of the productSo if you want to enhance the perceived value by using 4 Prsquos then you have to tune your 4 Prsquos in order to increase the perceived benefits or decrease the perceived costs (Here note that every factor ie value benefit and cost is as perceived by customers and nothing is absolute So if your customer thinks a product is not beneficial itrsquos not beneficial)

Unit II

Consumer purchases are influenced strongly by or there are four factors 01 Cultural Factor 02 Social Factor

03 Personal Factor

04 Psychological Factor

1 Cultural Factor -

Cultural factor divided into three sub factors (i) Culture (ii) Sub Culture (iii) Social Class Culture-

The set of basic values perceptions wants and behaviours learned by a member of society from family and other important institutions Culture is the most basic cause of a personrsquos wants and behaviour Every group or society has a culture and cultural influences on buying behaviour may vary greatly from country to country

Sub Culture - A group of people with shared value systems based on common life experiences and situationsEach culture contains smaller sub cultures a group of people with shared value system based on common life experiences and situations Sub culture includes nationalities religions racial group and geographic regions Many sub culture make up important market segments and marketers often design products

Social Class- Almost every society has some form of social structure social classes are societyrsquos relatively permanent and ordered divisions whose members share similar values interests and behaviour

02 Social Factors -

A consumerrsquos behaviour also is influenced by social factors such as the (i) Groups (ii) Family (iii) Roles and status

Groups - Two or more people who interact to accomplish individual or mutual goals A personrsquos behavious is influenced by many small groups Groups that have a direct influence and to which a person belongs are called membership groups Some are primary groups includes family friends neighbours and coworkers Some are secondary groups which are more formal and have less regular interaction These includes organizations like religious groups professional association and trade unions

Family- Family members can strongly influence buyer behaviour The family is the most important consumer buying organization society and it has been researched extensively Marketers are interested in the roles and influence of the husband wife and children on the purchase of different products and services

Roles and Status - A person belongs to many groups family clubs organizations The personrsquos position in each group can be defined in terms of both role and status For example M amp ldquoXrdquo plays the role of father in his family he plays the role of husband in his company he plays the role of manager etc A Role consists of the activities people are expected to perform according to the persons around them

03 Personal Factors -Age and Life cycle Stage-

People changes the goods and services they buy over their lifetimes Tastes in food clothes furniture and recreation are often age related Buying is also shaped by the stage of the family life cycle

Occupation - A personrsquos occupation affects the goods and services bought Blue collar workers tend to buy more rugged work clothes whereas white-collar workers buy more business suits A Co can even specialize in making products needed by a given occupational group Thus computer software companies will design different products for brand managers accountants engineers lawyers and doctors

Economic situation - A personrsquos economic situation will affect product choice

Life Style - Life Style is a personrsquos Pattern of living understanding these forces involves measuring consumerrsquos major AIO dimensionsie activities (Work hobbies shopping support etc) interest (Food fashion family recreation) and opinions (about themselves Business Products)

Personality and Self concept - Each personrsquos distinct personality influence his or her buying behaviour Personality refers to the unique psychological characteristics that lead to relatively consistent and lasting responses to onersquos own environment

04 Psychological Factors -

Motivation -

Motive (drive) a need that is sufficiently pressing to direct the person to seek satisfaction of the need

Perception -

The process by which people select Organize and interpret information to form a meaningful picture of the world

Learning-

Changes in an individuals behaviour arising from experience

Beliefs and attitudes -

Belief is a descriptive thought that a person holds about something Attitude a Personrsquos consistently favourable or unfavourable evaluations feelings and tendencies towards an object or idea

Prove with examples that there is no reason for a brand to become obsolete no matter how

long it has been in the market

Unit III

bull Technological changes

bull Changing consumer preferences

bull Pagers were once hailed as the cheaper option to mobile phones I remember mobile calls being in the range of Rs15- per minute and handsets the size of small weapons Pagers were then useful for doctors sales force and such like The economies of the mobile phone industry changed and that put paid to the usefulness of pagers

HMT watches comes to mind as an example An interesting analysis of why HMT failed against Titan It appears that HMT failed to convert its perceived weakness of a mechanical watch into a strength It also failed to keep pace with the changing consumer trends by not projecting a modern attractive imagery through product innovation advertising merchandising etc

Polaroid is another brand that once stood for instant photography Changes in the digital photography medium made that promise irrelevant Similarly with Kodak photographic film Both these had to find newer ways to sustain the business

Brandrsquos become obsolete due to a combination of various factors

A brand can be defined as a set of images amp perceptions that a consumer has If those perceptions are not in keeping with the changing consumer the brand could be obsolete

mismanagement kills brands not time and hellip time not only ages all brand identities but kills them too In my opinion it is people who kill brands The brand management team and the advertising agency are collectively responsible for keeping pace with consumer needs irrespective of time They need to constantly tweak the brand offering and keep it relevant The reasons behind it are-

a) Factories burn downb) Machinery wears outc) Inventories get depleted d) Technology becomes obsoletee) Image of the product

Brand loyalty is the only sound foundation on which business leaders can build enduring profitable growth

Johnson amp Johnson Heinz Gillette Coca-Cola Kelloggs Shell Lever Levis Schweppes Vicks Wrigleys Kodak just to name a few strong brands are all over 100 years old

Different brands place a different emphasis on these three elements For example the image of the product and the image of the user are

dominant in forming the Malbaro image IBM on the other hand emphasizes the image of the maker

But advertising is almost never the sole source of a brands image

Packaging displays sponsorship direct marketing promotion signage media coverage word-of-mouth employees and of course the product and its design are all sources of brand communication

Unit IV

Is price discrimination desirable Discuss the question keeping in view pricing in the

apparel industry

Meaning Price discrimination is the practice of one retailer wholesaler or

manufacturer charging different prices for the same items to different customer This is a widespread practice that does not

necessarily imply negative discrimination

Price discrimination as it is now understood is separated into degrees First second and third degree price discrimination exist and apply to different pricing methods used by companies Much depends on the understanding of the market in segments and

also the consumerrsquos ability to pay a higher or lower price called elasticity of demand A person who might pay more for an item is thought to have a low elasticity of demand Another person who

will not pay as much has a high elasticity of demand

Second-degree price discrimination refers to companies

charging lower prices for higher quantities In companies where a client orders in bulk and is able to purchase a high

number of the same items at once the client may get a discounted rate This rate would not apply to a client who only orders a few items at a time In retail stores second-degree price discrimination often exists A reduced price may be offered if you buy two t-shirts instead of just one This form helps to get rid of merchandise and generate

more revenue for a company

Third degree price discrimination is based on understanding the market and occurs with great frequency

This type takes many different forms but in all cases attempts to derive the most sales from each segmented ldquogrouprdquo of consumers For example senior citizens are considered a group and are often offered discounts at

movie theaters for transportation in restaurants and even in retail stores where seniors may have a ldquosenior dayrdquo each week that allows them to take a discount on merchandise

ldquoStudentsrdquo are another segmented group that may be

offered lower prices Both seniors and students have a higher elasticity of demand and can generally afford to pay

less than the average worker

Market segmentation may also evaluate the socio-economic aspects of an area when considering elasticity of

demand Itrsquos not uncommon to see retail grocery stores offer differing prices in an area where the retailer knows he

can get more money for a product Alternately where only one chain store exists in a certain location retail grocery stores might offer higher prices because people have no

alternative place to shopAnother form of third degree price discrimination is

temporary discounts for airfares that are meant to increase business These discounts could be seasonal and

designed to promote the company Those in urban areas may pay more for flights or hotel rooms than those in rural

areas

We know furthering our discussion on price discrimination in the apparel industry

The theory of price uncertainty can explain the sales and markdown practices of stores Because of the

uncertainty about the distribution of reservation price stores set high initial prices to determine which

stylescolorsdesignersbrand value are more highly valued by customers

Price discrimination is expected to be greater for fancy versus white shirts for imports- designers-branded

versus domestically produced garments

The price revolution (apparel merchandising product bulking inflation) is most vividly by the changes in the price policies Price uncertainty

identifying variables in apparel industry classified below as

bull Types of Brand ndash some brands name highlight fashion more than others eg Reidamp Taylor

bull Designers ndash Gorgi Armani Bill BlassValentino and many morebull Other fashions ndash eg Zara Laguna Bonjour and other lesser known

and younger fashion brands bull Chains ndash kapsons Ritu wearbull Other manufacturer ndash duke oswalbull Store brands ndash private label brands eg FLUbull Major ndash arrow Van- Hensen brands with large market share

Designers clothing is usually at the forefront of style and fashion changes Price uncertainty would be expected to be greater when selling designer labels than labels that emphasize more conventional designs and styles

Unit VDo you agree with the statement TV is the most

powerful advertising medium

Yes I agree with the statement To justify our answer I give an overview of TV NAV( net

advertising revenue) report because growth in NAV shows the importance of this advertising

medium for sales promotion and straight introduction of TV medium amp advantages

This report commissioned by Ofcom from PwC combines the latest econometric modeling

techniques with industry thinking and expertise to build an economic model of the television

advertising market

How strong is the TV advertising market

The TV advertising market may now have begun to follow

a new path with advertising of the traditional channels barely growing while

revenues in themulti-channel arena grow relatively briskly

How does the TV advertising market work

The TV advertising market can be characterized as a single market with two differentiated products advertising on the lsquotraditionalrsquo commercial TV

channels (Channels 3 4 and 5) And advertising on the more recent lsquomulti-channelrsquo commercial TV

channels (all other commercial channels)Commercial TV channels create opportunities for advertisers by attracting audiences and broadcasting advertisements But in the short to medium

term the commercial broadcasters have little opportunity to affect the supply of TV advertising lsquoimpactsrsquo as programmed scheduling and production decisions cannot be easily changed and the number of

advertisements broadcast per hour is controlled by Ofcom broadcaster regulation

From reviewing these four charts we might categories some long run stages in the development of TV NAR (net advertising revenue)

bull Mid 1950s to early 1960s - a period of rapid increase in the real level of total TV NARas ITV developed its national network and advertisers discovered the new medium

bull Early 1960s to mid 1970s - a period of relatively stable real NAR as gradually decliningreal prices offset gradually rising numbers of impacts demand for mainly black-and white

TV advertising was limited to only a few sectors of the economy restraininggrowth in expenditure on TV advertising

bull Mid 1970s to late 1980s - a period of rapidly increasing TV NAR despite general economic weakness primarily due to rising real prices demand for TV advertising grewstrongly as a wider base of sectors from the economy were attracted to this advertisingmedium (perhaps related to the growth of color TV) increased demand pushed up realprices (per impact) even though viewing (and therefore the quantity of advertising) was

also rising

Late 1980s to the late 1990s - a period of strong cyclical fluctuations in TV NAR primarily due to changes in real prices linked to the economic cycle multi-channel

channels progressively increased their audiences at the expense of traditional channels(including the Doordarsan ) and

Late 1990s to the present - the end of the Internet boom caused sharp falls in realprices particularly for multi-channel advertising that had seen strong price growth during

the boom meanwhile continued increases in multi-channel audiences has begun toreduce terrestrial advertising impacts

While TV could be described as a ldquomature mediumrdquo given the slowdown in growth sincethe late 1980s the market is characterized by quite large apparently cyclical fluctuations

and a growing alternative multi-channel market

Econometric forecasts (pooled) for two illustrative scenarios

Illustrative TV NAR forecasts Traditional Multi-channel Total

(in constant 2003 prices)

Scenario A 2003 pound2570m pound590m pound3160m

(weak digital 2014 pound2530m pound1470m pound4000m

penetration) Annual growth rate -02 +86 +21

Scenario B 2003 pound2570m pound590m pound3160m

(strong digital 2014 pound2430m pound1620m pound4050m

penetration) Annual growth rate -05 +96 +23

Source PricewaterhouseCoopers analysis

The demand for TV advertising

Demand for TV advertising comes primarily from private sector companies selling consumer products although demand from government and NGOs is also significant For companies advertising is a type of investment in future sales and therefore the value of advertising (in real terms) is determined by advertisersrsquo expectations of the future strength of consumer spending (often called ldquoanimal spiritsrdquo by economists) A strong empirical link between advertising expenditure and corporate profits has also been observed possibly reflecting the tendency for companies to be more willing to undertake discretionary spending of any sort when profits are strong

1 Introduction

Television is the most authoritative exciting influential and persuasive communication channel Consumers rely on television as the primary source of instant and timely information affecting their lives and the communities in which they live Every day television is viewed 253 minutes on average for news information and entertainment

Whether it is the presidential debates the Super Bowl an international crisis or critical weather threats more viewers access television more than any other medium to be informed and entertained Televisions combination of site sound and motion creates the most powerful and effective marketing platform for products services events and the advocacy of issues The accessibility of free over-the-air broadcast programming will continue to make television the most effective and cost efficient choice to reach consumers

Why TV Advertisement

Television is powerful The average person over the age of 18 spends over 200 minutes per day watching television which is over 4 hours a day That time an adult spends with television exceeds the combined total time spent with other media Radio 128 minutes Internet 45 minutes Newspapers 30 minutes and Magazines 19 minutes According to a recent study the public perceives television as the most influential authoritative exciting and persuasive advertising medium television was the medium where consumers were most likely to learn about products

TV Advantages Broadcast TV is free TV transmitted over the air and is most commonly

associated with large TV networks such as ABC NBC CBS and Fox TV offers the message sight sound motion color and all the special effects can be afforded TV ads are intrusive in nature TV allows for target selection based on

Geography - Where the signal reaches Time of day - Different target audiences watch TV at different times Program - Certain programs or kinds of programming will appeal to certain

groups Network - Some networks have identifiable audiences that may match the

target audience TV still has a certain prestige or glamour that can enhance the message TV is costly but because it may be targeted it may be quite cost-effective TV ads can engage the viewers emotions and empathy (Mano 1996) Most TV is viewed at home People feel safe at home and they are not exposed

to what others think Because of all the above TV advertising is especially effective in helping to create an image for a product or company Cable or Interactive TV a company can buy time on programs that have very specific audiences

The cost is lower than broadcast TV because it reaches a smaller audience Production costs may be more affordable May find more innovative production people here Often cable production teams hire young writers producers and technicians who want experience and are eager to work with