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Master of Business AdministrationMBA II SemesterMB0046 –Marketing Management - 4 Credits(Book ID: B1135)Assignment Set- 1

MB0046 - Q.1 Discuss the different marketing concepts with its merits anddrawbacks.

Answer:Marketing is a set of business activities that facilitate movement of goods and services from producer

to consumer. It is an ongoing process of discovering and translating consumer needs into products

and services,creating demands for them, serving the customer and his demand through a marketing programme

of promotion and distribution to fulfill the company’s marketing goals in a competitive environment.

It is evident that customer, his needs and wants are very important aspects of today’s marketing.

Customer focus is the very essence of marketing and his viewpoints should be taken into account while

making marketing decisions.

In this era of rapid changes, it is marketing which keeps the business in close contact with its economic, political,social and technologicalenvironment and informs it of events and changes that can influence itsactivities.

American Marketing Association (AMA) offers the following definition of Marketing.( AMA 2004)

Definition: Marketing is an organization function and a set of process forcreating, communications and delivering

value to customers and for managing customer relationships in ways that benefit the organization and its stake

holders.

The Chartered Institute of Marketing defines Marketing as:

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

requirements, profitably.

Having understood what a Market is and what is Marketing, we will now look what is an exchange and the

exchange process.

The Exchange Process

Today’s marketing system has evolved from the time of a simple barter of goods through the stage of a money

economy to today’s complex marketing. Throughout all these stages, exchanges have been taking place. In

small town and villages there were artisans such as carpenters, weavers, potters blacksmiths, barbers and

others such service providerswho produced goods and services not only for their own consumption but also for

exchanging with others what they could not produce but needed. This was barter system of exchange. For a

transaction to take place between two parties, it was necessary that there be needs and wants on both sides.

The development of money came to act as a common medium, and the exchange process became very easy

and convenient.Fig. below shows the exchange process under money economy in which products

and services flow to the market from the producers and sellers and money, the value of the products

and services, flow from the buyers to the sellers.

Thus, exchange is an act of obtaining a desired product or service from someone by offering something in

return. This exchange process will continue as long as human society exists because satisfying one’s needs is

the basic instinct of human beings and no one can produce everything that he /she needs. For an exchange

process to take place, between two or more parties, few conditions have to be met. They are:

1. Each party has something that could be of value to other party.

2. Each party has desire, willingness and ability to exchange.

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3. Each party is capable of communicating and delivering.

4. Each party has the freedom to accept or reject the offer.

MB0046 Q2 : a) What are the features and objectives of marketing research?b) Give a note on psychoanalytic model of consumer behaviour.

Answer :- Features of Marketing Research

1. It is a systematic process – It has to be carried out in a stepwise and systematic manner and the whole

process needs to be planned with a clear objective.

2. It should be objective – It is important that the methods employed and interpretations are objective. The

research should not be carried out to establish an opinion nor should it be intentionally suited towards

predetermined results.

3. It is multi-disciplinary – Marketing Research draws concepts from other disciplines such as Statistics for

obtaining reliable data and from Economics, Psychology and sociology for better understanding of buyers.

Objectives of Marketing Research

Marketing Research may be conducted for different purposes. Based on how organizations use Marketing

Research, objectives of Marketing Research can be summarized as follows:

1. To understand why customers buy a product

2. To forecast the probable volume of future sales or expected market share

3. To assess competitive strengths and strategies

4. To evaluate the effectiveness of marketing action already taken

5. To assess customer satisfaction of company’s products/services

The Psychoanalytical Model:

The psychoanalytical model draws from Freudian Psychology. According to this model, the individual consumer has

a complex set of deep-seated motives which drive him towards certain buying decisions. The buyer has a private

world with all his hidden fears, suppressed desires and totally subjective longings. His buying action can be

influenced by appealing to these desires and longings. The psychoanalytical theory is attributed to the work of

eminent psychologist Sigmund Freud. Freud introduced personality as a motivating force in human behavior.

According to this theory, the mental framework of a human being is composed of three elements, namely,

1. The id or the instinctive, pleasure-seeking element. It is the reservoir of the instinctive impulses that a man isborn with and whose processes are entirely subconscious. It includes the aggressive, destructive and sexual

impulses of man.

2. The superego or the internal filter that presents to the individual the behavioral expectations of society. It

develops out of the id, dominates theego and represents the inhibitions of instinct which is characteristic of man.

It represents the moral and ethical elements, the conscience.

3. The ego or the control device that maintains a balance between the id and the superego. It is the most

superficial portion of the id. It is modified by the influence of the outside world. Its processes are entirely

conscious because it is concerned with the perception of the outside world.

The basic theme of the theory is the belief that a person is unable to satisfy all his needs within the bounds of

society. Consequently, such unsatisfied needs create tension within an individual which have to be repressed. Such

repressed tension is always said to exist in the sub-conscious and continues to influence consumer behavior.

MB0046 Q3 : Silver Line Manufacturers produce several varieties of automobile components. They

have 3 to 5 suppliers who supply materials regularly. Recently, procurement manager of Silver Line

discussed in the meeting that they have to look out for new suppliers since they would be expanding

their business operations to many places. How do you think Silver Line have to go about this

situation?

Answer : Silver line manufacturers expanding their business operation to many places and they looking for new

suppliers. Following are given below the criteria for new supplier:

Supplier Selection Strategies and Criteria

Supplier selection criteria for a product or service category should be defined by a “cross-functional” team of

representatives from different sectors of your organization. In a manufacturing company, members of the team

typically would include representatives from purchasing, quality, engineering and production. Team members

should include personnel with technical/applications knowledge of the product or service to be purchased, as wellas members of the department that uses the purchased item.

Supplier selection criteria:

Previous experience and past performance with the product/service to be purchased.

Relative level of sophistication of the quality system, including meeting regulatory requirements or mandated

quality system registration (for example, ISO 9001, QS-9000).

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traits that reflect social class membership.

Psychographic segmentation bases divide markets based on differences in

lifestyles or differences in personality traits. Lifestyle segmentation is one

of the most popular and effective ways to create segments for consumer

products.

b) Personality: When Marketers use personality variables to segment the

markets, they endow their products with brand personality that corresponds to

consumer personalities. For example, Raymond advertises its fabrics with the

tag ‘The Complete Man.’

c) Social Class: It has a strong influence on the consumer preferences and

the products they buy or consume. For example, when buying cars, clothing,

home furnishings, leisure activities, reading habits etc., Social class becomes

the key factor. Many companies design products and services for specific social

classes. For example, TATA Nano was introduced in the market as a One-Lakh

Car that could be affordable by middle and lower income groups.

Consumer shopping behavior patterns include such things as the type of

store shopped in, timing of purchases (i.e. time of day, week, or year),

how much of a product is purchased on a given visit to the store, and how

often the individual frequents a particular type of retail establishment or

shopping mall.Product consumption behaviors include product consumption or usage

rates base (as discussed earlier). Other segmentation bases included in this

category are product usage occasion, product use versus non-use, and

loyalties to specific brands.

a) Occasions: According to the occasions, buyers develop a need, purchase a

product or use a product. It can help firms expand product usage. A company

can consider critical life events to see whether they are accompanied by

certain needs. For example, Tanishq a TATA enterprise offers gold schemes

and promotions for Akshaya Thrutiya (auspicious day to purchase jewellery)

b) Benefits: Buyers can be classified according to the benefits they seek from

the products. For example, Peter England, a Madhura garment brandpositioned its wrinkle free trousers on the basis of benefits.

c) User Status: Markets can be segmented into non-users, potential users,

first time users and regular users of a product. Each market segment requires

a different marketing strategy. The company’s market position will also

influence its focus. Market leaders will focus on attracting potential users,

whereas smaller firms will try to attract current users away from the market

leader. For example, Kishkinda resort near Hampi classifies its customers

according to this characteristic. Resort believes that locals falls into non- user

category, affluent class come to Hampi as potential users, foreigners as first

time users, rich people near Hampi who frequently come there as regular

users.

d) Usage Rate: Markets can be segmented into light, medium and heavyproduct users. Heavy users are often a small percentage of the market but

account for a high percentage of total consumption. Marketers prefer to attract

one heavy user rather than several light users and so, they vary their

promotional efforts accordingly.

For example, Alan Paine textile brand, offered 4 cotton trousers for Rs. 999.

Here, the Company is interested in getting profits from sales volume rather

than its selling price.

e) Loyal Status: Consumers have varying degrees of loyalty to specific

brands, stores and other entities. Buyers can be divided into four groups

according to brand loyalty status.

a) Hard-core Loyals: Consumers who buy one brand all the time. For

example, customer may be using only BSNL cellular services though there are

different options available.

b) Split Loyals: Consumers who are loyal to two or three brands. For

example, consumer may go for tax savings schemes of post offices and Life

Insurance Corporation of India

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c) Shifting Loyals: Consumers who shift from one brand to another. For

example, consumer who used Nokia cell phones starts buying Sony- Ericsson

mobiles.

Segmenting markets according to consumer predispositions essentially

entails creating segments based on differences in consumers’ wants,

needs, and attitudes. We talked at length about creating market segments

based on differences in consumers’ wants and needs (i.e. creating benefit

segments). Sometimes it is useful to segment markets based on how

knowledgeable people are of a particular product category, or whetherthey’ve experienced problems with specific products or brands. And,

finally, we also include consumers’ media viewing habits in this

category. When segmenting markets using this latter base, we are looking

for differences in the types of media consumers prefer i.e. preferences for

specific television shows, radio stations, magazines, newspapers, and the

like.

MB0046 Q5 : Mention the forces in micro and macro environment that are likely to influence an

organisation’s working and functions. Is environmental scanning necessary for all organisations?

Answer: Forces in the micro environment

The Company: Safe Express, a leader in the supply chain management solution wants to hold its number one

position in the US $ 90 billion Indian logistics market. The company plans to expand its service areas in thecoming months. To meet the targets of the marketing plan, other departments of safe express also expanding

their horizon. The above example shows that the company’s marketing plan should be supported by the other

functional departments also.

Intermediaries: Marketing intermediaries: These are firms which distribute and sell the goods of the company to

the consumer. Marketing intermediaries play an important role in the distribution, selling and promoting the goods

and services. Retailers, wholesalers, agents, brokers, jobbers and carry forward agents are few of the

intermediaries. Retailers are final link between the company and the customers.

Publics: These are microenvironment groups, which help a company to generate the financial resources, creating

the image, examining the companies’ policy and developing the attitude towards the product. We can identify six

types of publics

Financial publics

Media publics

General publics

Internal publics

Advertisement regulation agencies, TRAI, & IRDA of the government

Citizen action groups

Competitors

A company should monitor its immediate competitors as its sale will be affected by the nature and intensity of the

competitors. The sale of Coca cola will be affected by Pepsi cola, or Britannia cheese by Amul cheese.

Suppliers: There are many kinds of suppliers to an enterprise or an institution. There are typically, raw material

suppliers, energy and fuel suppliers, labour suppliers, office item suppliers and so on. Suppliers are the first link in

the entire supply chain of the company.

Customers: A company may sell their products directly to the customer or use marketing intermediaries to reach

them. Direct or indirect marketing depends on what type of markets Company serves.

Forces in the macro environment

Demographic Environment: The study of population characteristics like size, density, location, gender

composition, age structure, occupation and religion. Demography statistics helps companies to forecast demand.

Demographic environment is analyzed on the basis of the following factors.

Age structure of the population

Marital status of the population

Geographic distribution of the population

Education level

Migration

Occupation.

Political and Legal Environment

Government policies, legislations, regulations, and stability will directly affect the business. Therefore it is

inevitable for the firm to closely monitor this environment. The political and legal forces are grouped into the

following four categories.

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Monetary and fiscal policies: These policies regulate government spending, money supply and tax legislations.

Social legislations and regulations

Legislations, Policies and regulations relating to industries

Legislations related to manufacturing, trading, marketing etc

Economic, Monetary and Natural Environment

The economic environment includes consumption patterns, productivity patterns, spending patterns, and sectored

growth and so on. The monetary environment consists of inflation, interest rate, exchange rate, money supply etc.

These provide vital clues for marketers to decide on product offering, incentive offerings, promotional decisions

and pricing decisions.

Natural Environment:

Environmental concerns are growing over the years. Governments are bringing in stringent regulations to

conserve and manage natural resources. Marketers should beware of such trends in the environment. Some of the

aspects/factors on which organizations should keep a vigil are;

Inadequate raw materials arising out of strict mining regulations

Global warming and pollution levels which have ushered in new legislations

Social and cultural environment

Growing urbanization, increasing participation of women in livelihood activities, advent of global cultural practices,

greater exposure to life styles practiced world wide etc has altered marketing efforts remarkably. A club house and

a swimming pool is an essential part of purchase decision for a flat in a metro. Marketers have encased this trend

during the nineteen nineties and later too. Companies like Hindustan Lever have successfully marketed their low

priced offerings of toiletries and cosmetics in the rural areas.Technological environment

There are several tumultuous changes being wrought in the technological from which is transforming the way

business is conducted. The changes are so rapid and sweeping those enterprises have found it difficult to keep

pace. Several have fallen by the wayside for failing to keep with the changes. Major public sector undertakings in

India which did not upgrade in time and closed their shutters are, ITI, HMT, and HTIF. On the other hand in the

private sector, Hindustan Motors, LML etc are examples who were known as flag bearers, collapsed once they fell

behind in the race for technology.

Environmental scanning

Environmental scanning refers to assessing the various aspects of the external and internal environment such that

the knowledge may provide information with which to make some predictions for the future. If a mobile service

provider is aware that the government is opening up the 3G spectrum it would be able to make a forecast on the

demand for cell phones with these facilities.

Need for environmental scanning: It helps in

Identifying the opportunities that company has in immediate future.

Identifying the threats faced by the company.

Demand forecasting

Developing appropriate business plans.

Adjusting the company strategy in changing competitive environment.

MB0046 Q6 : Consider the company, Maruthi Udyog Limited. Elaborate on the company’s marketing

mix and give examples related to the 4 P’s.

Answer : MUL was a joint venture created in February 1981 between Japan’s Suzuki Motor Company and the

Indian Government when the latter decided to produce small, economical cars for the masses. The intention from

the beginning was to produce a ‘people’s car’. To get the project off the ground MUL took over the assets of the

erstwhile Maruti Ltd., which was set up in 1971 and closed in 1978.

Market

The Indian car market is one of Asia’s largest and most competitive. Over 1,030,068 passenger cars, multi and

sports utility vehicles were sold during 2003/04, growing the market by 32%

With models in every segment of the automobile market, Maruti Udyog Limited (MUL), is well positioned to see

how demand is shifting. Due to drop in prices and low interest rates there has been a sharp migration of car

buyers to the compact car or ‘B’ segmentfrom the entry-level ‘A’ segment. This segment now accounts for 52% of

the total passenger car market (excluding MUVs/SUVs). Compact car sales have raced ahead in January 2004 by

82% to touch 40,649 units. This is more than 22,297 units sold in December 2003. These segments are two of the

success stories for the car industry.

Maruti Udyog Limited Company’s marketing mix

Product

MUL manufactures leading models in all segments of the car market. Maruti 800 rules the ‘A1' segment. In the

‘A2' segment, it has the Zen, WagonR and Alto, whose combined sales rose to 176,132 units in 2003/04, up 46%

as compared to 2002/03. In the ‘A3' segment, it offers the Esteem and Baleno, while Omni and Versa stake out

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MUL’s presence in the MUV market. The Gypsy King marks Maruti Suzuki’s presence in the rough-terrain sector,

and up a couple of notches in the luxury SUV market is the Grand Vitara.

Pricing

The price of the Maruti car is between Rs. 210000 to Rs. 1500000. Maruti – 800 is the lowest price car of this

company. Alto, Omni, Wagonr, are also the low price car of the company. Zen and Esteem are the mid price car of

the company. But Grand Vitrara is the high price model of the company. The price of car is decided according to its

product Varity, quality, design etc.

Place

The place of the car is in the whole world. Maruti udyog Limited decides its distribution channels for selling car,like use some time on level or some time two level marketing channels. They decide areas in which they deal with

customers. They show the permanent location for selling the car. They provide the many useful inventories. They

define the transport facility of the company for company to market and market to consumers. Many showroom of

Maruti Udyog limited is in our India.

Promotion

MUL strongly believes in attribute-oriented advertising. In an attempt to reposition M800 as a choice for those

upgrading from a two-wheeler, MUL’s campaign of a child playing with a toy M800 drives home the fuel-efficiency

factor: ‘the car never stops because the fuel never finishes’. The future communication strategy that MUL has

envisioned for M800 is a snap of a typical middle-class family commuting on their two-wheeler. Next to them is

another family except that this one is comfortably ensconced in a Maruti 800.

One of MUL’s most ambitious television campaigns launched the Zen Predator. Positioning it as ‘strong, sleek and

sexy,’ the commercial showcases the variant’s new styling through the theme of predator and prey in the contextof ‘a modern jungle.’ The theme is one of a chase that ends in willing surrender, brought home in the baseline:

‘Surrender to the new Zen.’

The Zen Predator is being aggressively promoted in print. MUL bought the entire advertising space on The Week’s

first issue of 2004. Additionally, MUL is the first Indian automobile corporate to utilise the internet for a complete

branding exercise, using ‘interactive’ and ‘page domination’ techniques.

Recently, MUL has turned its marketing focus to corporate TV commercials to promote its entire range of vehicles.

The company has rolled out a new corporate TV campaign, featuring the ‘Maruti Puttar’. The rationale behind a

second TVC featuring the same child model as the M800 campaign is to leverage the brand recall of the earlier

commercial, driving home the point that ‘A Maruti Suzuki family is a happy family’.

MUL is involved in a wide range of sponsorship activities, placing particular emphasis on motor sports. It was the

founding sponsor of ‘Raid De Himalaya,’ and in its fifth year continues to be closely involved with it. The company

regularly holds car rallies for amateur drivers and aspiring rallyists. MUL now has plans to host golf and polo

events.

Brand Values

In 1983, Brand Maruti Suzuki was defined as ‘the people’s car’. These values have remained consistent ever since.

Over the years, MUL has set the stage for the successful launch of Suzuki’s international range in the Indian

market, all backed by the inherent value proposition of high quality, fuel efficiency and, compared with

competition, low price. This formula has been largely responsible for a new generation of Indian car users

swearing by the Maruti Suzuki brand name.

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i. Company which operates in high end market may come up with mid class or low class targeted products.

ii. The company which operates in lower end of market may come up with high end market products.

iii. If the company operates in mid segment and comes out with low end product as well as high end product then

it is stretching both ways.

c. Product line filling: Adding more items in the present product line. For example, in the year 2000 Maruti

Suzuki launched Alto. This product was between Maruti 800 and Maruti Zen. Here company was trying to fill the

gap existing in the segment by introducing ALTO, i.e. line filling.

d. Product line pruning: Removing the unprofitable products form the product line. Toyota Kirloskar phased out

their well known brand Quails when they thought the brand was not adding value to the product line.

MB0046 Q2 : a) Assess the factors that are involved insetting up a distribution channel. b) Give a note

on Retailing.Posted by: Nikhat S Khan on: September 23, 2011

In: Assignments | MB0046-Marketing Management Assignments | MBA (SMU) |MBA 2nd Semester | Set - 2

Comment!

a) Assess the factors that are involved in setting up a distribution channel.

b) Give a note on Retailing.

Answer: – Assess the factors that are involved in setting up a distribution channel:-

Marketers should consider various factors before deciding the particular type of channel. It may be organizational

or competitive factors. The type of goods to be transported and stored will decide the length and intensity of

channel. To decide on the particular channels, marketer will have to take into account the following factors.

1. Understanding the customer profile: Purchasing habits differ from individual to individual. Individuals who face

shortage of time would like to purchase on the net (direct channel) and those who have abundant time would like

to go through the shopping experience. Some of them would like to have variety of goods, while others want

unique or specialized products. Hence marketers should understand who are his customers? How do they

purchase and how often they purchase? For example, customers don’t like to travel half a kilometre to purchase

a shampoo sachet, but they don’t mind travelling two kilometres while purchasing durable goods.

2. Determine the objectives on which channel is to be developed.

a. Reach: Company would like to make the goods available in most of the retail outlets. So it, will adopt intensive

distribution channel.

b. Profitability: Company wants to reduce the cost in the channels and enhance their profitability. It will

restructure the channel to optimum level so that it can reduce the cost and increase the profit.

c. Differentiation: Company positions their products differently. When most of the industry players follow

conventional system, company goes with new format of channels. For example, all computer manufacturers were

adopting dealer-retailer channel to sell their products, but Dell started selling its product on the internet.

3. Identify type of channel members: Once the objectives are set on the basis of company’s policies, it will

analyze which types of channels are most suitable. Merchants, agents and resellers are some intermediaries

involved in the distribution. Merchants are those who buy the product, take title and resell the merchandise.

Agents will find the customers, negotiate with them, but do not take the title of the product. Facilitators are the

people who aid the distribution but do not negotiate or take the title of the product.

4. Determining intensity of distribution: Intensity of distribution means how many middlemen will be used at the

wholesale and retail levels in a particular territory. If the number of intermediaries is more, then the cost of the

channel will increase. However, if the number of intermediaries is less, then company will not be able to meet all

target customers. Therefore company should adopt optimum number of intermediaries. On the basis of how

many intermediaries are required, company can adopt any one of the following strategies.

a. Intensive distribution: A strategy in which company stocks goods in more number of outlets. The intention isto make the goods available near to the customer. For example, you can find Parle-G glucose biscuits available in

almost all the retail outlets in rural and urban areas.

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b. Selective distribution: A strategy in which company stocks goods in limited number of retail outlets. For

example, televisions are sold only in selected retail outlets. TVs cannot be sold like toothpaste. Onida TVs are

available in electronic retail shops like Viveks, Girias, Next, E-zone etc…

c. Exclusive distribution: In this type of channel format, marketer gives only a limited number of dealers the

exclusive right to distribute its products in their territories. For example, a Kaya skin care solution of Marico is

marketed through exclusive distribution.

5. Assigning the responsibilities to channel members. Company should define the territory in which the channel

member should operate, at what price he should sell, services he should perform, and how he should sell.

6. Selecting the criteria to evaluate the channel member: Company may have different types of channel

alternatives. It would like to choose any one of the alternatives, which meets its objectives. Channels can be

evaluated in the design phase by the method called SCPCA.

a. Sales(S): The ability of each channel member to generate the sales for company in a given period.

b. Cost(C): How much cost each channel alternative incurs? Which one of the alternatives provides the optimum

solution?

c. Profitability (P): Various channel alternatives available to the company and their profitability shall be

compared. Channel with better profitability shall be selected.

d. Control (C): Every company would like to have better control over its channel members. Alternative channels

can be evaluated on the basis of how much control each channel member desires. And how much control the

company is willing to provide.

e. Adaptability (A): Marketing is a dynamic world. Competition exerts pressure on companies to relook at their

practices and supply chain continuously. The channel alternatives should be flexible enough to meet the changing

requirements. Whichever channel alternative meets such objectives shall be selected.

Give a note on Retailing:- Retail sector has witnessed tremendous growth in the last few years. The major

factors which drive the retail boom are change in consumer profile and demographics, increase in the number of

international brands available in the Indian market, economic implications of the government, increasing

urbanization, credit availability, improvement in the infrastructure, increasing investments in technology and real

estate. The Indian retail market, which is the fifth largest retail destination globally, according to industry

estimates is estimated to grow from US$ 330 billion in 2007 to US$ 427 billion by 2010 and US$ 637 billion by

2015. Simultaneously, organized retail which presently accounts for 4 per cent of the total market is likely to

increase its share to 22 per cent by 2010.

As per Associated Chambers of Commerce and Industry of India (ASSOCHAM), the overall retail market is

expected to grow by 36%. The organized sector is expected to register growth amounting to Rs 150 billion by

2008. Retail is amongst the fastest growing sectors in the country and India ranks 1st, ahead of Russia, in terms

of emerging markets’ potential in retail.

Characteristics of retailing

i. Direct interaction with customers. Retailer is the final link between company and customer. Retailer

understands the need of the customer and provides the proper solution to him. For example, neighbourhood

grocery store person knows his customer profile better. He reminds the customer of what to purchase and

provides credit.

ii. Purchased in small quantity: Customer purchases small quantity of merchandise at the retail store. Even if

customer purchases less quantity he will purchase it frequently. This has led to better relationship between

customer and retailer.

iii. Tool of marketing communication: Companies use retailer location for point of purchase displays. They also

encourage retailer to promote the products through word of mouth communication.

Functions of retailing

i. Sorting: Retailers arrange the items in proper order so that customer can easily identify the goods or services

that he needs.

ii. Breaking bulk: The process of unpacking big packets into small packets. Retailer will perform this function as

customer may not be able to purchase large quantity of goods and services.

iii. Holding stock : Retailer works as storage facility to organizations. Retailer holds inventory to meet the day to

day needs of consumer.

iv. Channels of communication: Retailer promotes the company product through word of mouth communication.

The retailer location is also used for point of purchase display.

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v. Transportation: Retailer undertakes door delivery order in case of durable goods. This feature is now adopted

by the small grocery stores also.

Type of retailing

A. Store retailing: The mode of retailing where a store is essential in a particular location to do business. Store

retailing can be performed in different formats. They are

1) Specialty store: The stores carry large amount of merchandise but in limited product lines like Textile store or

furniture store. For example, Tanishq, ewelery retail store.

2) Department store: In this retail format, apparel, home furnishing and consumables goods and services are

sold. Each of the formats is considered as a different department and managed in the retail store. For example,

Shoppers Stop of Raheja group.

3) Supermarkets: According to Philip Kotler supermarkets are a relatively large, low cost, low margin, high

volume, self service operation designed to serve the consumer’s total needs for food and household products. For

example, Food World of RPG group.

4) Convenience store: These stores are very near to customer residence; usually carry or hold day to day

products of high turnover at premium price. For example, Reliance Fresh

5) Discount store: These stores sell products at low prices with low margin. The store achieves their profit by

generating high volumes. Subhiksha, a south India based retailer follows this format.

6) Off price retailers: This type of retailer buys the goods at less than wholesale prices. These products are sold

at lesser than retail prices. For example, factory outlets in Marathahalli, Bangalore.

7) Super stores: These are very large stores where customer can purchase food and non food products. The

super store includes category killers that carry large merchandise in a particular category. For example, Nalli

sarees which carries a large variety of sarees in their stores. Another type of super store format which exists in

India is Hypermarkets. These retail outlets have huge space and carry large merchandise. For example, Reliance

Mart in Ahmadabad.

B. Non store retailing: The mode of retailing where a company uses electronic media or direct selling medium to

sell their products. For example, direct selling, Telemarketing, Automatic vending, online retailing and direct

marketing.

MB0046 Q3 : Geo Ad Agency has many corporate as their clients. Due to lack of resources, it is

planning to cut down work and reject certain clients. Further, they want to establish a concrete

system in communication development and ad structure. What would be your advice to Geo Ad

agency in this aspect?

Answer: – Geo Ad Agency can follow following points to establish a concrete system in communication

development .These points also help Geo Ad agency to sustain their clients:-

Preparing target customer profile

Effective communication starts with identifying the target customer to whom the communication is developed. In

this stage company prepares target customer profile.

Identifying promotion objectives

Target customer profile provides inputs about his/her readiness to purchase the product. Customer may be in

any of the six stages of hierarchy of effects. The six stages are awareness, knowledge, liking, preference,

conviction and purchase. Every company will like to bring their customers to the purchase stage from other five

stages. Therefore it creates different promotion program at different stage. To make it clearer, Company first

creates awareness about the product, educate them about the advantages, induce them to choose the brand,

stimulates and monitors that customer purchases the product.

Designing a message

After deciding the communication objectives, Marketer turns to develop right message which should create

attention, interest, desire or action (AIDA) by the customer. Before deciding what should be there in the

message, we will have to understand AIDA model in detail. The main objective of any message is to meet the

AIDA model although the message framed will be subject to product type/category, ad budget and creativity

skills of individuals.

I. AIDA model:

1. Attention: The marketing communication should generate attention towards the product. In this stage customer

is having the need; organization should provide solution from their communication. For example, when

advertisers use a popular film star or a celebrity to promote a perfume brand or even a soap or a toothpaste, itwill immediately catch the audience’s attention.

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2. Interest: Once the customer provides enough attention towards the communication, organization should

stimulate it to create interest. For example, if celebrities are used to endorse products, audience must be curious

enough to know what they are saying about that particular product.3. Desire: The interest created should be forced in the customer mind so that he will develop desire towards the

product. For example, when people have seen the ad and show interest, next thing would be to create a desire

for that product. People should have the willingness to buy the product and unless they don’t desire it, they will

not be eager to buy the same.4. Action: Strong desires should be turned into action. Hence company should provide the advantages of purchasing

of the product in their communication messages. For example, it is very difficult for the Insurance companies to

grab the attention of people towards insurance products, create interest and desire as to make a person buy the

same. So, it’s a challenge to the marketer to develop such a message that immediately gets the attention andmake a person to go for it. For example, it is easy to catch people’s attention towards ice-creams so that they

will have interest and desire to taste it and eventually buy it.

II. Deciding the message content.

Message content must have any one of the following appeals

1. Emotional appeal: Positive emotional appeal or negative emotional appeals are strong tools used to intensify the

purchasing activity of the customer. Positive emotions like love, pride, joy and humour are used in the message

2. The negative emotions like fear guilt and shame are also used in the advertisement to attract the customer.

3. Rational appeals highlight on the desired benefits about the products. They highlight quality, economy value or

performance of the product.

4. Moral appeal: These are concerned towards public health or environment or social responsibility. For example,Shell lubricants show its commitment towards environment in their advertisements.

III. Message format: The Right Message Format for the Right Marketing Strategyshould follow. Depending on message marketing is naturally going to have tochange. Shorter messages require different types of advertisements than longerones.Selecting the channels of communications

The communicator may use company sales people, reference groups, blogs, RSS, webinar, online communities

and social networking sites to promote their products. These media are called as personal communication

channels. The word of mouth campaigns buzz marketing and viral marketing are some examples of personal

communication channels.

Selecting the message sourceMessages communicated by the celebrities and proper sources have high credibility among the target consumers.

Many companies use well known actors and actresses, cricket players, and even cartoon characters to promote

their advertisements.

Target Customer Feedback

The communicator collects the feedback on the promotion campaign to assess how many of target customers are

able to see, hear or read the message. This stage helps communicator to understand how many of target

customers actually able to recall the message? And among them how many of them really purchased it. Some

companies go further and ask the customer to provide suggestion to improve the promotion campaign.

MB0046 Q4 : Discuss the objectives of training and training programme along with its significance.

Answer: – Training

Training is a continuation of selection. Having selected the salesmen, there are two options. They can be sent to

the field directly with samples, order books etc., and/or they can be sent for training programme. Some peoplethink that salesmanship is born, but there are no born salesmen like there are no born doctors, lawyer,

engineers, teachers etc. However, all these people need training to call them qualified, and so also is the case

with salespersons. A person may have interest in the profession. Thiess interest can be fully developed, through

proper training. One attains perfection, self-development etc., through training.

Training means the process of perfecting the salespersons for their work. Training programmes are organized

procedures or methods through which knowledge as well as skill, for a definite purpose, is acquired. By training,

one can increase knowledge in a particular field. The salesmanship is not born but can be made effective through

training.

Significance of Training: The present era of marketing world is full of stiff and cut-throat competition. The

world is dynamic and not static. Customers are more benefit-oriented. Producers, in order to meet the ever-

changing demands of the consumers, produce new products, new devices, and products with multiple uses and

so on. Thus, training or repeated training is essential to keep the salesmen, with up-to-date knowledge, inrespect of new or developed goods. Training gives scope for improvement.

Objectives of Training: The objectives are summed up below:

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1. To facilitate the salespersons to acquire the techniques and principles of salesmanship, process of sales,

canvassing etc.

2. To bring down the labor turnover in the sales force.

3. To facilitate better sales performance.

4. To improve the relations with the customers.

5. To increase the efficiency of sales personnel.

6. To keep the salesperson informed about the products, market, competitors etc., to face different situations.

7. To lower the selling expense so as to increase the profits.

8. To maintain sound relations between employer and employee.

9. To develop better knowledge, and the ways and means to resist all undesirable situations.

Training Programme

A firm should chalk out a programme for sales training. The training is based on the nature of the job and the

products to be sold. A planned training programme should function with the following ideas or principles, often

referred to as ACMEE.

A: Aim of Training

C: Content of Training

M: Method of Training

E: Execution of Training

E: Evaluation.

1. Aim of Training: The whole idea behind the training is to make a recruit a good salesperson.

2. Content of Training: No hard and fast rules can be laid down as to the contents of training. The content of

the training programme relates to the subject-matter of training.

3. Method of Training

For imparting training to the salespersons, different methods are being used. Broadly, these methods may be

divided into two:

4. Execution of Training

Once sales person done with training he/she should send to actual market to sale the project. A periodic

evolution is required to observe of sales person’s performance, based on that it can be decided if sales parson

needs more training.

5 . Evaluation of Training

Having trained the salespersons, the marketing manager must evaluate the usefulness or effectiveness of

training, individually and collectively on the basis of the performance of the sales personnel. Money, effort and

time have been spent on training. Therefore, it is natural to expect returns. Evaluation can be made on the basis

of performance of sales executive in terms of sales volume, sales profitability, order-size, expenses etc.,

between, before and after training periods.

MB0046 Q5 : Management of Sai Systems Pvt. Ltd. has decided to enter international marketing

scenario. What methods are applicable to the company to enter international markets and what

should be the approach?

Answer: – Sai Systems Pvt. Ltd. should follow an International Market Entry Strategies:-

To enter international marketing Sai Systems Pvt. Ltd. know the answers for some basic questions like –

a. In how many countries would the company like to operate?

b. What are the types of countries it plans to enter?

That’s why companies evaluate each country against the market size, market growth, and cost of doing business,

competitive advantage and risk level.

Once the market is found to be attractive, Sai Systems Pvt. Ltd. should decide how to enter this market. Sai

Systems Pvt. Ltd. can enter the international market by adopting any one of the following strategies. They are

a. Exporting

b. Licensing

c. Contract manufacturing

d. Management contract

e. Joint ownership

f. Direct investment

Exporting is the technique of selling the goods produced in the domestic country in a foreign country with some

modifications. For example, Gokaldas textiles export the cloth to different countries from India. Exporting may be

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indirect or direct. In case of indirect exporting, company works with independent international marketing

intermediaries. This is cost effective and less risky too. Direct exporting is the technique in which organization

exports the goods on its own by taking all the risks. Maruti Udyog Limited, India’s leading car manufacturer

exports its cars on its own. Company can also set up overseas branches to sell their products. Adani Exports,

another leading exporter from India has international office in Singapore.

Licensing: According to Philip Kotler, licensing is a method of entering a foreign market in which the company

enters into an agreement with a license in the foreign market, offering the right to use a manufacturing process,

trademark, patent, or other item of value for a fee or royalty. For example, Torrent Pharmaceuticals has license

to sell the cardiovascular drugs of Chinese manufacturer Tasly. Licensing may cause some problems to the

parent company. Licensee may violate the agreement and can use the technology of the parent company.

Contract manufacturing: Company enters the international market with a tie up between manufacturer to

produce the product or the service. For example, Gigabyte Technology has contract manufacturing agreement

with D- link India to produce and sell their mother boards.

Management contracting: In this case, a company enters the international market by providing the knowhow

of the product to the domestic manufacturer. The capital, marketing and other activities are carried out by the

local manufacturer.

Joint ownership: A form of joint venture in which an international company invests equally with a domestic

manufacturer. Therefore it also has equal right in the controlling operations. For example, Barbara, a lingerie

manufacturer has joint venture with Gokaldas Images in India.

Direct Investment: In this method of international market entry, Company invests in manufacturing or

assembling. The company may enjoy the low cost advantages of that country. Many manufacturing firms

invested directly in the Chinese market to get its low cost advantage. Some governments provide incentives and

tax benefits to the company which manufactures the product in their country.

Approaches to International Marketing

The three common approaches used in the international market are -

a. Domestic market extension approach.

b. Multi domestic market orientation.

c. Global market orientation.

Domestic market extension approach: Companies that adopt this strategy think international markets are

secondary to its domestic markets. For example, HSBC advertises its banking services with a tag line “the world’s

local bank”.

Multi domestic market orientation: In the international market each country has its uniqueness. Their preference

varies. The consumer profile is different from domestic operation. Companies develop different market plans for

such markets. For example, in France, men use more cosmetics than the women, whereas in India women use

more cosmetics than men. A cosmetics company should change the product positioning differently.

Global market orientation: In this approach, company thinks that products’ needs are universal in nature

irrespective of country where they work. Here company tries to standardize their products or services. For

example, Sony Walkman is same across the world. The product information brochure contains explanation in

different languages of different countries. The final product is same in all the countries.

MB0046 Q6 : a) Give a note on Product mix pricing strategies.

b) What is Brand development? How is it done?

Answer: –

Note on Product mix pricing strategies

The product mix is the collection of products and services that a company chooses to offer its market. When the

product is a part of product-mix, there are five kinds of strategies involved

1. Product Line pricing: Strategy of setting the price for entire product line. Marketer differentiates the price

according to the range of products, i.e. suppose the company is having three products in low, middle and high

end segment and prices the three products say at Rs 10 Rs 20 and

Rs 30 respectively.

The three levels of differentiation create three price points in the mind of consumer. The task of marketer is to

establish the perceived quality among the three segments. If the customers do not find much difference between

the three brands, he/she may opt for low end products.

2. Optional Product pricing: this strategy is used to set the price of optional or accessory products along with a

main product.

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Organizations separate these products from main product so that customer should not perceive products are

costly. Once the customer comes to the show room, organization explains the advantages of buying these

accessory products.

3. Captive product pricing: Setting a price for a product that must be used along with a main product. For

example, Gillette sells low priced razors but make money on the replacement cartridges.

4. By-product pricing: It is determining the price for by-products in order to make the main product’s price more

attractive. For example, L.T. Overseas, manufacturers of Dawaat basmati rice, found that processing of rice

results in two by-products i.e. rice husk and rice brain oil. If the company sells husk and brain oil to other

consumers, then company is adopting by-product pricing.

5. Product bundle pricing: It is offering companies several products together as a bundle at the reduced price.

This strategy helps companies to generate more volume, get rid of the unused products and attract the price

conscious consumer. This also helps in locking the customer from purchasing the competitors’ products. For

example, Anchor toothpaste and brush are offered together at lower prices.

Brand development

Company can develop the brand on the basis of product category and brand name. Some of the different

strategies adopted by companies to develop the brands are as follows:

1. Line extension: Company uses its well known brand name to introduce additional items in a given product

category such as new forms, flavours, ingredients or package sizes.

For example, Karnataka Milk Federation, uses its top brand name Nandini, to introduce new items like toned

milk, full cream milk , curd and milk powder.

It is less risky and requires fewer investments to introduce the product. In the above example Nandini used the

extension to meet the excess capacity that it has. The milk procurement was more than the demand from the

customer. Hence it started producing the milk powder. But all the products introduced need not to be successful

in the market. In case of KMF, Nandini ice creams didn’t click in the market. Another risk of line extension is

brand cannibalization, i.e. company’s brand/items compete with each other.

2. Brand extension: A strategy in which company uses one of its familiar brand names for new product

category’s items. For example, United Breweries (UB) Limited group used its flagship brand Kingfisher to

different categories. Kingfisher was originally a beer brand extended to airlines.

Brand extension gives instant recognition to the brand. In the above example, people required very little time to

know Kingfisher airline brand, because parent brand was very well known. Brand extension may hurt the parent

brand reputation in the market if it fails.

3. Multi brands: The technique of introducing the product or items in existing product category with a new

brand name.

For example, Hindustan Unilever uses different brand names for their home and personal care category. The

above example shows us that HUL have Breeze, Dove, Liril, Lux, Lifebuoy and Pears in the bath soap segment

itself. It helps the company to come out with new features in the product or product category. Organizations

adopt this strategy to avoid brand cannibalization in the given category. The major disadvantage of this strategy

is that none of the brands will enjoy major market share and result in lesser profitability.

4. New brands: The strategy indicates coming out with new brands for new category products. In this strategy,

company believes that existing brands cannot be extended to the new category. The new brand strategy requires

huge resources to build it. The new category, if it already has some brands of other companies, investment

requirement will go up. For example, Hindustan Unilever launched Pure-It in the water purifier category. The

category and brand are new to the company.

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