A
Book on
Basics of Marketing
[Useful for Semester - I of F. Y. M. B. A of Savitribai Phule Pune University
as well as for other institutes and Universities]
First Edition
August 2016
Authors
Dr. Sandeep Pachpande
Dr. S. B. Mathur
(M.B.A., PhD.)
(M.P.M., PhD.)
Chairman(ASM Group of Institutes),
Research Guide, Savitribai Phule Pune University, Pune.
Director General,
ASM’s IIBR, Pune.
Prof. Prakash Singh
(M. B.A., PhD. Scholar)
Assistant Professor, ASM’s IIBR, Pune.
Price : 250/-
Success Publications, Pune
-i-
Published by
Mr. Rajesh M. Patne
Success Publications
Radha Krishna Apartment, 535, Shaniwar Peth,
Appa Balwant Chowk, Opp. Prabhat Talkies, Pune - 411 030.
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Success Publications
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Edition
August, 2016
Edited By
Mr. Ajay N. Bangad
Typesetting, Layout
Mr. Vikas Satpute, Miss. Varsha Lokhande, Ms. Pallavi Pawar
Cover Designing
Mr. Amol Satghare
ISBN NO. - 978-93-5158-557-2
No part of this book may be reproduced or copied in any form or by any means [graphic, electronic
or mechanical, including photocopying, recording, taping, or information retrieval systems] or
reproduced on any disc, tape, perforated media or other information storage device, etc., without
the written permission of the publishers.
Every effort has been made to avoid errors or omissions in this book. In spite of this errors may
creep in. Any mistake, error or discrepancy noted may be brought to our Notice which shall be taken
care of in the next edition. It is Notified that publisher shall not be responsible for any damage or
loss of action to anyone of any kind in any manner, therefrom. It is suggested to all the readers,
always refer original references wherever necessary.
∼ ii ∼
Preface
It is a matter of great pleasure for us to present this book to our esteemed readers. This book is
basically designed to meet the requirement of MBA students on the subject Basics of Marketing
but we have made it a comprehensive knowledge bank for the scholars of marketing. Therefore
though students of MBA of Savitribai Phule Pune University will get benefited by the contents of
this book, it will also help students of MBA of other universities and courses like PGDM in Marketing.
This book covers the entire syllabus of M.B.A Course of Savitribai Phule Pune University
effective from June 2016 onwards It has been written to meet the requirements of students of M.B.A.
Some of the special features of the book are as follows:
1. Full coverage of the revised syllabus of M.B.A.
2. Chapter outline at the beginning of each chapter to give a bird's eye view of the topics covered
in the chapter.
3. Point wise explanation of each topic in the chapter.
4. Multiple Choice Questions Bank, Model Questions Bank and Last Three Years University
Question Paper at the end of the book
5. Topics are logically arranged in numbered, paragraphs exactly according to the modified syllabus.
6. Class assignment at the end of every chapter for activity based learning concept.
7. Extensive use of diagrams, tables and various forms to give visual view of key concepts and
techniques.
8. Conversational, lucid and simple language.
9. Every effort has been made to provide the readers with most up-to-date and authentic material on
the subject in pictorial form.
We are thankful to almighty GOD for showering kindness on us.
We would like to acknowledge here the valuable support received from our family members and
students. We are very grateful to our publisher Mrs. and Mr. Rajesh Patne who has rendered all
possible assistance in bringing out this book. We wish to express our deep gratitude to Dr. Asha
Pachpande, Dr. Santosh Dastane and Dr. K. C. Goyal who has guided and helped us in preparing
this book. We are also thankful to our students who helped in book review, suggestions as per
student's perceptive, to make this book a valuable asset. We will consider our efforts amply rewarded
in case the book proves useful to the students and teachers of the subject.
We are fully conscious of the fact that a number of gaps might have been left uncovered and we
would feel sincerely obliged if such deficiencies are pointed out to us by the students as well as
colleagues in the profession. Suggestions are welcome and shall be acknowledged with gratitude.
Dr. Sandeep Pachpande
With best wishes.
Dr. S. B. Mathur
Prof. Prakash Singh
∼ iii ∼
Syllabus
M.B.A. (Sem. - I)
Basics of Marketing
Unit
No.
1.
Topic
No. of
Lectures
Introduction to Marketing :
10+2
1.1 Definition & Functions of Marketing :
Scope of Marketing, Core concepts of marketing such as Need, Want,
Demand, Customer Value, Exchange, Customer & Consumer, Customer
Satisfaction, Customer Delight, Customer Loyalty, Marketing v/s Market.
1.2 Markets :
Definition of Market, Competition, Key customer markets, Marketplaces,
Market spaces, Metamarkets.
1.3 Company Orientation towards Market Place :
Product, Production, Sales, Marketing, Societal, Transactional,
Relational,Holistic Marketing Orientation. Selling versus Marketing.
Concept of Marketing Myopia.
1.4 Introduction to the Concept of Marketing Mix :
Origin & Concept of Marketing Mix and Definitions of 7Ps.People,
Processes & Physical Evidence.
1.5 New Marketing Realities :
Major Societal Forces, New Consumer Capabilities & New Company
Capabilities.
2.
Consumer Behaviour :
6+2
2.1 Meaning & importance of consumer behaviour, Comparison between
Organizational Buying behaviour and consumer buying behaviour, Buying
roles.
2.2 Five steps buyer decision process.
3.
Marketing Environment :
8+2
3.1 Concept of Environment :
Macro and Micro, Need for analyzing the Marketing Environment.
3.2 Macro Environment :
Analyzing the Economic, Socio-cultural, Demographic, Political - Legal
- Regulatory, Technical, Envionmetal environments.
∼ iv ∼
Unit
No.
Topic
No. of
Lectures
3.3 Linkage of Marketing with all functions in the organization.
3.4 Concept of Market Potential & Market Share.
4.
Segmentation, Target Marketing and Positioning :
8+2
4.1 Marketing as Value Delivery Process :
Traditional & modern approaches.
4.2 Segmentation :
Definition, Need for segmentation, Benefits of segmentation to marketers,
Bases for market segmentation of consumer goods & industrial goods,
Criteria for effective segmentation.
4.3 Levels of Market Segmentation :
Segment Marketing, Niche Marketing, Local Marketing, Mass Marketing.
4.4 Target Market :
Concept of Target Market and criteria for selection of target market
4.5 Positioning :
Concept of Differentiation & Positioning, Introduction to the concepts of
Value Proposition & USP.
5.
Product : The First Element of Marketing Mix :
5.1 Product :
Meaning of product, Goods & Services Continuum, Classification of
consumer products - Convenience, Shopping, Specialty, Unsought,
classification of industrial products - material & parts, capital items,
supplies & services
5.2 Product Levels :
The customer Vafue hierarchy.
5.3 Product Mix :
Width, Depth, Consistency & Product line.
∼v∼
5+2
M. B. A. – Sem. I / P.G.D.B.M. – Sem. - II
Basics of Marketing
INDEX
No.
Topic
Page No.
UNIT 1
1.1. Introduction to Marketing
1
1.1 to 1.86
1.2. Markets
1.3. Company Orientation towards Market Place
1.4. Introduction to the Concept of Marketing
Mix
1.5. New Marketing Realities
1.6. Case Study on Nokia, Class Assignment
Request
UNIT 2
2
2.1 to 2.54
2.1. Consumer Behavior
2.2. Buyer Decision
UNIT 3
3.1 Marketing Environment
3
3.1 to 3.30
3.2 Macro Environment
3.3 Linkage of Marketing Function with function
in organization
3.4 Concept of Market Potential & Market Share
-vi-
UNIT 4
4.1. Marketing as Value Delivery Process
4
4.1 to 4.37
4.2. Segmentation
4.3. Levels of Market Segmentation
4.4. Target Market
4.5. Positioning
UNIT 5
5.1. Product-The First Element of Marketing Mix
5
5.1 to 5.30
5.2. Product Levels
5.3. Product Mix
Model Question Bank
5.31 to 5.39
University Question Papers
5.40 to 5.47
References
5.48 to 5.49
-vii-
Unit 1
Unit Preview:
1.1. Introduction to Marketing:
The word ―Marketing‖, Evolution of Marketing, Definitions of
Marketing, Modern Marketing System, Universal Function of
Marketing, Scope of Marketing, Core Concept of Marketing- such as
Need, Want, Demand, Market offering, Customer Value, Exchange,
Customer & Consumer, Customer Satisfaction, Customer Delight,
Customer Loyalty, Marketing v/s Market.
1.2. Markets:
Definition
of
Market,
Competition,
Key
Customer
Markets,
Marketplaces, Market Spaces, Metamarkets.
1.3. Company Orientation towards Market Place:
Product, Production, Sales, Marketing, Relational, Societal, Holistic
Marketing Orientation,
Selling
versus
Marketing,
Concept of
Marketing Myopia.
1.4. Introduction to the concept of Marketing Mix:
Origin and Concept of Marketing Mix, Definition of Seven P‘s of
Marketing.
1.5. New Marketing Realities:
Major Societal Forces, New Consumer & Company Capabilities
1.6. Case Study on Nokia, Class Assignment Request
Activity Based Learning
1. 1
Basic of Marketing
1.1. Introduction to Marketing:
Marketing is so basic that it cannot be considered as separate function. It is the whole
business seen from the point of view of its final result, that is, from the customer's point
of view. Marketing is indeed an ancient art; it has been practiced in one form or the
other, since the days of Adam and Eve. Today, it has become the most vital function in
the world of business. Marketing is the business function that identifies unfulfilled needs
and wants, define and measures their magnitude, determines which target market the
organization can best serve, decides on appropriate products, services and
programmes to serve these markets, and calls upon everyone in the organization to
think and serve the customer. Marketing is the force that harnesses a nation's industrial
capacity to meet the society's material wants. It uplifts the standard of living of people in
society.
1.1.1. The word “Marketing”:
We consume different products from different companies of different countries from
different parts of the world from morning to night is the result of careful planning of all
marketing activities together to market products from point of origins (Factories) to the
point of consumptions (Consumers). As per Charles Darwin‘s concept ―Survival of the
Fittest‖ which states that the strong will succeed and the weak shall perish. This
concept of 19th century is even applicable in 21st century as in this way-―Survival of
Companies with the Fittest Marketing Strategies‖ which states that companies with right
marketing strategies will succeed and that without marketing shall perish as marketing
is essential for creating, communicating and delivering value in the form of market
offerings to the customers. Hence, ―MARKETING‖ has become the basic need of
today‘s business world as marketing is everything and business world is nothing without
marketing as it is just like oxygen to the business world.
The word ―MARKETING‖ stands for
M
:
Media of
A
:
Attracting and
R
:
Retaining customers using
1. 2
Basic of Marketing
K
:
Knowledge to generate
E
:
Eagerness
T
:
Towards
I
:
Innovative and
N
:
Newly launched
G
:
Goods and Services in the market
1.1.2. Evolution of Marketing:
The world is flooded with millions of products. The taste and preferences of customers
are changing as per the change in eras. For many centuries, Barter system (in which
exchange of good/goods from another take place) was used by civilized human beings,
but is not in use today as it was not easy to know the value of goods and services which
were exchanged with each other and handling them were also a major problem.
Fig: Evolution of Marketing
Knowing the importance, the birth of currency took place and exchanges of goods were
started with currencies. Merchants started focusing on business expansion by
producing goods for selling. Merchants started setting up local markets on daily and
weekly basis to sell their goods. They also opened their shops for selling. Gradually
companies started manufacturing goods at its factories. As per the increased in
demand, the production of goods also increased. Many new concepts came like
production in which the objective was to do mass production to reduce production cost
without knowing the customer needs and wants.
1. 3
Basic of Marketing
Companies like Ford motors were doing production only without focusing customers
and their T-Model was the best example of production concept.
Fig: Images related to Production
After this concept, Product concept came into existence in which companies were
focusing on producing quality products. The customer was not in focus in this concept
too as without knowing the customer needs and wants, Producer were producing
products as per them. Bajaj and Nokia were doing this earlier with their products. Bajaj
was manufacturing its Bajaj Cheetak and Super models without doing any innovation
for a longer time due to which the product lost its charm and Brand ―Super‖ of Bajaj
became past memories for the customers.
Fig: Images related to Product
Recently, Nokia did the same mistake by producing Smartphones brand like Nokia
Lumia without knowing what the customer want in it. Nokia was more product centric
rather than customer centric. The company disconnected itself from the people and the
business too and ended with acquisition by Microsoft on 8th July, 2015.
1. 4
Basic of Marketing
After product concept, selling concept came in which companies make products and try
to sell it. As per the changes in needs and wants of the customers, there was a need for
a new concept by which customer should be in focus, not the product and the concept
which filled this gap is “Marketing Concept”.
Customers will only undertake the exchange, if they feel that their needs are being
satisfied, clearly the transactional value cannot be more than the amount customers are
prepared to pay to satisfy their need. Marketing is to know the needs and wants of
customer before producing the products and then communicate them by creating
awareness about the products using different promotional media through delivering
products as per customer i.e. customer centric product.
Fig: Images showing process of Selling and Marketing
Marketing is about communicating the value of a product, service or brand to customers
or consumers for the purpose of promoting or selling that product, service, or brand.
The oldest and perhaps simplest and most natural form of marketing is 'word of mouth'
(WOM) marketing, in which consumers convey their experiences of a product, service
or brand in their day-to-day communications with others. These communications can of
course be either positive or negative.
1.1.3. Meaning of Marketing:
Marketing is the process used to determine what products or services may be of
interest to customers, and the strategy to use in sales, communications and business
development. It generates the strategy that underlies sales techniques, business
communication, and business developments. It is an integrated process through which
1. 5
Basic of Marketing
companies build strong customer relationships and create value for their customers and
for themselves. Marketing is used to identify the customer, satisfy the customer, and
keep the customer.
1.1.4. Definitions of Marketing:
Marketing satisfies these needs and wants through the development of exchange
processes and the building of long-term relationships. Marketing can be considered a
marriage of art and applied science (such as behavioral sciences) and makes use of
information technology. Marketing is applied in enterprise and organizations via
marketing management techniques.
1) Philip Kotler Defines Marketing as:
“Satisfying needs and wants through an exchange process”.
2) The authors (Dr Sandeep Pachpande, Dr S. B Mathur and Prof Prakash Singh):
“Marketing is a media for attracting, acquiring and retaining customers using
knowledge to generate eagerness towards innovative and newly launched goods
and services in the market.” (January 2016)
3) Whilst American Marketing Association States:
“Marketing is the activity, set of institutions, and processes for creating,
communicating, delivering, and exchanging offerings that have value for customers,
clients, partners, and society at large”. (July 2013)
4) The Chartered Institute of Marketing (U.K) defines marketing as:
“The management process responsible for identifying, anticipating and satisfying
customer requirements profitably”.
5) P. Tailor (ww.learnmarketing.net) suggests that:
“Marketing is not about providing products or services it is essentially about
providing changing benefits to the changing needs and demands of the customer”.
6) H.L. Hansen:
"Marketing is the process of discovering and translating consumer needs and wants
into product and service specification, creating demand for those products and
services and then in turn expanding this demand."
1. 6
Basic of Marketing
7) E. Jerome Mc Gartly:
"Marketing is the response of businessman to the need to adjust production
capabilities to the requirements of consumer demands."
The management process through which goods and services move from concept to the
customer. It includes the coordination of four elements called the 4 P's of marketing:
a) Identification, selection and development of a product,
b) Determination of its price,
c) Selection of a distribution channel to reach the customer's place, and
d) Development and implementation of a promotional strategy.
Example:
New Apple products are developed to include improved applications and systems, are
set at different prices depending on how much capability the customer desires, and are
sold in places where other Apple products are sold.
1.1.5. Modern Marketing System:
A market is the set of actual and potential buyers of a product who have a particular
need or want that can be satisfied through exchange relationships. Marketing means
managing markets to bring about profitable customer relationships. The above picture
shows the main elements of marketing system. Suppliers supply raw materials to the
company and competitors. Both company and competitors further conduct market
research by interacting with customers-Kings in the market to know and understand
their needs. After identifying it, they create
and send their market offerings and
message to consumers, either directly or via marketing intermediaries like wholesaler,
distributors, retailers and agents/dealers. All of the parties in the system are affected by
major
environmental
forces
like
Demographic,
Political,
Technological, Environmental, Legal, Cultural and Physical.
1. 7
Economic,
Social,
Basic of Marketing
Company
Marketing
Intermediaries
Suppliers
Customers
Competitor
Major Environmental Force
Fig: Modern Marketing System
th
Image Source: Principle of Marketing by Philip Kotler-13 Editions (Pearson Publications)
1.1.6. Universal Function of Marketing:
The ultimate aim of marketing is exchange of goods and services from producers to
consumers in a way that maximizes the satisfaction of customer‘s needs. Marketing
functions start from identifying the consumer needs and end with satisfying the
consumer needs. The universal functions of marketing involve buying, selling,
transporting, storing, standardizing and grading, financing, risk taking and securing
marketing information.
Market
Information
Market
Planning
Exchange
Functions
Product
Designing and
development
Physical
Distribution
Standardization
and Grading
Financing
Risk Taking
Packaging,
labeling and
branding
Customer
Support
Fig: Universal Functions of Marketing
1) Market Information:
To identify the needs, wants and demands of the consumers and then analyzing the
identified information to arrive at various decisions for the successful marketing of a
1. 8
Basic of Marketing
firm‘s products and services is one of the most important functions of marketing.
The analysis involves judging the internal weaknesses and strengths of the
organization as well politico-legal, social and demographic data of the target market.
This information is further used in market segmentations.
2) Market Planning:
Market-planning aims at achieving a firm‘s marketing objectives. These objectives
may involve increasing market presence, dominate the market or increase market
share. The market planning function covers aspects of production levels, promotions
and other action programmes.
3) Exchange Functions:
The buying and selling are the exchange functions of marketing. They ensure that a
firm‘s offerings are available in sufficient quantities to meet customer demands. The
exchange functions are supported by advertising, personal selling and sales
promotions.
4) Product Designing and Development:
The product design helps in making the product attractive to the target market. In
today‘s competitive market environment not only cost matters but also the product
design, suitability, shape, style etc. matter a lot in taking production decisions.
5) Physical Distribution:
The physical distribution functions of marketing involve transporting and storing. The
transporting function involve moving products from their points of production to
locations convenient for purchasers and storing function involve the warehousing
products until needed for sale.
6) Standardization and Grading:
Standardization
involves
producing
goods at
predetermined
specifications.
Standardization ensures that product offerings meet established quality and
quantity. It helps in achieving uniformity and consistency in the output product.
Grading is classification of goods in various groups based upon certain
predetermined characteristics.
It involves the control standards of size, weight etc. Grading helps in pricing
decisions also. The higher quality goods and services attract higher prices.
1. 9
Basic of Marketing
7) Financing:
The financing functions of marketing involve providing credit for channel members
or consumers.
8) Risk Taking:
Risk taking is one of the important marketing functions. Risk taking in marketing
refers to uncertainty about consumer purchases resulting from creation and
marketing of goods and services that consumers may purchase in future.
9) Packaging, Labeling and Branding:
Packaging involves designing package for the products, labeling means putting
information required / specified on a product‘s covering. Packaging and labeling
serve as promotional tools now a days, Branding distinguishes the generic
commodity name to a brand name.
Example: Rice is a generic name of a commodity while ―India Gate‖ is a brand
name. In service industry, also branding matters a lot.
10) Customer Support:
Customer support is a very important function of marketing. It involves pre sales
counseling, after sales service, handling the customer complaints and adjustments,
credit services, maintenance services, technical services and consumer information.
Example: Water purifier comes with an onsite service warranty of 7 years helps in
marketing and is an important marketing function as well1.
1.1.7. Scope of Marketing:
Marketing is a process which has scope in the following categories which can be
marketed:
1. 10
Basic of Marketing
PLACE
GOODS
PERSON
ORGANIZATION
PROPERTY
EXPERIENCE
IDEA
EVENTS
INFORMATION
SERVICES
Fig: Images Related to Scope of Goods
The major scopes of marketing in different categories are as:
1) Study of Consumer Wants and Needs:
Goods are produced to satisfy consumer wants. Therefore study is done to identify
consumer needs and wants. These needs and wants motivates consumer to
purchase.
2) Study of Consumer Behaviour:
Marketers perform study of consumer behaviour. Analysis of buyer behaviour helps
marketer in market segmentation and targeting.
3) Production Planning and Development:
Product planning and development starts with the generation of product idea and
ends with the product development and commercialization. Product planning
includes everything from branding and packaging to product line expansion and
contraction.
1. 11
Basic of Marketing
4) Pricing Policies:
Marketer has to determine pricing policies for their products. Pricing policies differs
from product to product. It depends on the level of competition, product life cycle,
marketing goals and objectives, etc.
5) Distribution:
Study of distribution channel is important in marketing. For maximum sales and
profit goods are required to be distributed to the maximum consumers at minimum
cost.
6) Promotion:
Promotion includes personal selling, sales promotion, and advertising. Right
promotion mix is crucial in accomplishment of marketing goals.
7) Consumer Satisfaction:
The product or service offered must satisfy consumer. Consumer satisfaction is the
major objective of marketing.
8) Marketing Control:
Marketing audit is done to control the marketing activities.
1.1.8. Core Concept of Marketing:
A core concept is one which has a very clear cut, definite, widely acceptable, relevant,
and verifiable to understand the very process of marketing that directs the flow of goods
and services from producers to consumers.
Need,Wants &
Demand
Market offering,
Customer Value,
Exchange,
Customer &
Consumer
Customer
Satisfaction,Custo
mer Delight &
Customer Loyalty
Marketing &
Market
Fig: Core Concept of Marketing
1. 12
Basic of Marketing
The elements of core concept of marketing are as below:
A) Needs:
Needs are the basic requirements and include food clothing and shelter. Without
these humans cannot survive.
Morality,
Creativity,
Spontaneity,
Problem
Solving, Lack
of prejudice,
Acceptance of
Facts
Self - Actualization
Esteem
Self-esteem, Confidence,
Achievement, Respect of
Other, Respect by Other
Friendship, Family
Love / Belonging
Safety
Security of body, of employment, of resource, of
morality, of the family, of health, of property
Breathing, food, water, Sex, sleep, homeostasis, excretion
Physiological
Fig: Maslow’s Hierarchy of Needs
The fundamental needs of human beings have been best described by Maslow as
above without which life may not be too easy 2.
Example:
The below items shown in the images are basic needs of human beings as they are
necessities without which a person cannot exist. A person needs water to drink,
food to eat, shelter to live, clothing to wear etc.
1. 13
Basic of Marketing
Fig: Examples of Needs
Types of Need:
Need, in terms of marketing can be divided into the following five types:
1) Stated:
If a customer wants to buy a car. When consumer says he wants something, like
an expensive car, that is his stated need.
Example: Want a burger.
2) Real:
When the consumer wants a car for rational, genuine need, like he wants a car
whose operating costs are low over a time, and not just a low initial price, this is
his real need.
Example: Consumer also expects good services with the product like he must
be faced with a smile.
3) Unstated:
In buying this car, the consumer also expects a good service from the dealer.
This is the unstated need.
4) Delight:
When the consumer doesn‘t clearly express that he would want something but
would like to have it anyway, say for example he would like the car dealer to
include an onboard GPS navigation system too; this becomes a delight for him
1. 14
Basic of Marketing
and is his Delight need. When a marketer offer something additional with the
product that cause customer delightedness.
Example: Free Sugar with the Oil Pack.
5) Secret:
There is a desire not often shown, this may be a secondary benefit of obtaining
the product, yet equally important or might as well be the main reason, but not
expressed so readily. For example, here the consumer wants a car for the status
symbol so that he can show his friends that he is a savvy consumer. This is
when he has a secret need to appear to fit in and is his Secret need. The latent
expectations of the customers can't be accessed.
Example: A customer wants such a thing that can't be possible3.
Table: Summarized details of types of need
S.No.
1
2
3
4
5
Type of Need
Stated
Real
Unstated
Delight
Secret
Definition
What the customer asks for.
What the stated needs actually mean.
What the customer also expects but does not ask for.
Needs that are not essential but would delight if met.
Needs that the customer does not express, often
intangible in nature.
B) Wants:
Wants are a step ahead of needs and are largely dependent on the needs of
humans themselves.
Example: Car, Cell phone etc.
Want is a form of needs as shaped by culture and the individual. Want is something
that we decide to get but without which we can survive and exist.
Fig: Examples of Wants
1. 15
Basic of Marketing
In the above images, we need telephone for communicating with people, but we
want cell phones as an alternative and if we are hungry we can eat Vada Pav but
we want Burger. Hence Cellophanes and Burger are the wants.
C) Demands:
A step ahead of wants is demands. When an individual wants something which is
premium, but he also has the ability to buy it, then these wants are converted to
demands. The basic difference between wants and demands is desire. A customer
may desire something but he may not be able to fulfill his desire.
Examples: Cruises, BMW‘s, 5 star hotels etc.
Types of Demand:
There are eight demand states and their details are as below:
1) Negative Demand:
Product is disliked in general. The product might be beneficial but the customer
does not want it.
Example: For dental care, for air travel and others have a negative demand.
2) No Demand:
Target consumers may be unaware and uninterested about the product.
Examples: Farmers may be not interested in new farming method. College
students may not be interested in foreign language course.
3) Latent Demand:
Consumers may share a strong need that cannot be satisfied by any existing
product.
Examples: Harmless cigarette, safer neighborhood, more fuel efficient car.
4) Declining Demand:
When the demand of the product or service becomes lower.
Examples: Private colleges have seen application falls.
5) Irregular Demand:
Demand varies on a seasonal, daily and hourly basis.
Examples: Museums are under visited in week days and overcrowded on week
days.
1. 16
Basic of Marketing
6) Full Demand:
When the organization is pleased with their volume of business.
Examples: Ideal Situation where supply is equal to demand.
7) Overfull Demand:
Demand level is higher that the organizations can and want to handle.
Examples: National park is terribly overcrowded in the summer.
8) Unwholesome Demand:
Those kinds of demands, not acceptable by the society.
Examples: Cigarettes, hard drinks, alcohol4&5.
Table: Summarize details of Needs, wants and demand
Need: State of felt deprivation including physical,
social and individual needs i.e. hunger
Want: from that a human need takes as shaped by
culture and individual personality i.e. bread
Demand: Human wants backed by buying power
i.e. money
Image Source: Google
D) Market Offering:
Combination of products, services, information or experiences that satisfy a need or
want. Offer may include services, activities, people, places, information or ideas.
E) Customer Value:
Customers form expectations regarding value. Marketers must deliver value to
consumers. This is the customer‘s evaluation of the difference between all the
benefits and all the costs of a market offering relative to those of competing offers.
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Perception of
Value
Total Cost
Buying
Fig: Customer Value
Customer Value = Perception of Value- Total Cost of Buying
The difference between perception of value and total cost of buying is known as
Customer value.
F) Exchange:
The act of obtaining a desired object from someone by offering something in return.
One exchange is not the goal; relationships with several exchanges are the goal.
Relationships are built through delivering value and satisfaction.
G) Customer Satisfaction:
It is as a judgment following a consumption experience - it is the consumer‘s
judgment that a product provided (or is providing) a pleasurable level of
consumption-related fulfillment. Customers have a certain predicted product
performance in mind prior to consumption. During consumption, customers
experience the product performance and compare it to their expected product
performance level. Satisfaction judgments are then formed based on this
comparison. A satisfied customer will buy again and tell others about their good
experience.
H) Customer & Consumer:
A Customer – purchases and pays for a product or service
A Consumer – is the ultimate user of the product or service; the consumer may not
have paid for the product or service.
Examples: A food manufacturing business makes own-label, Italian ready meals for
the major supermarkets. So far as the business is concerned, the customer is the
supermarket to whom it supplies meals & the consumer is the individual who eats
the meal.
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I)
Customer Delight:
It is a term used to describe the feeling by customers when their expectations are
anticipated in advance and fully satisfied. Customer delight attracts more customers
and also helps in keeping the customers that you already have.
J) Customer Loyalty:
It is the fact that people choose to use a particular shop or buy one particular
product, rather than use other shops or buy products made by other companies.
Customers exhibit customer loyalty when they consistently purchase a certain
product or brand over an extended period of time.
Example: Many customers stick to a certain travel operator due to the positive
experiences they have had with their products and services.
K) Marketing vs. Market:
Marketing is all those activities that facilitate trade. These include activities that
identify consumers‘ needs such as market research and those activities that satisfy
consumers needs e.g., packaging and distribution. Marketing activities therefore
support the marketing of goods and services.
Market is any space within which trade takes place between buyers and sellers for
a well defined product. This space can be a produce market, a shop, internationally
between countries or over the internet.
Table: Summarize details of difference between Market and Marketing
Basis
Meaning
Market
Marketing
A market is any space within
which trade takes place between
buyers and sellers for a well
defined product. This space can
be a produce market, a shop,
internationally between countries
or over the internet.
Marketing is all those activities
that facilitate trade. These
include activities that identify
consumers' needs such as
market research and those
activities
that
satisfy
consumers
needs,
e.g.
packaging and distribution.
Marketing activities therefore
support the marketing of
goods and services.
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Market
Oriented
Nature
Market oriented is used in
marketing, but it more typically
describes a free enterprise
economy where businesses and
consumers are able to buy and
sell freely.
A public gathering held for buying
and selling merchandise. A place
where goods are offered for sale.
Marketing orientation means a
company operates with a
market
or
customer-first
approach.
The act or process of buying
and selling in a market. The
commercial functions involved
in transferring goods from
producer to consumer.
1.1.9. Nature of Marketing:
Buyer and seller affect the demand for products in aggregate areas, market includes
both the place and region which buyers and sellers are in a free inter course with
another.
1) Marketing is a Customer Focus:
Market intense to satisfy and delight the customer, the activities of marketing must
be directed and focused at the customer marketers can remain in customers mind,
as they are provided value for what they spend.
2) Marketing must Deliver Value:
Marketer has to track customer needs and deliver the product as per their
requirement. The co operate storage must be aimed at delivering greater customer
value than competitors.
3) Marketing is Business:
When a customer is the focus of all activities the marketer has not to search
customer to see response to his product. Customer group is decided from whom the
product is prepared and presented.
4) Marketing is Surrounded by Customer Need:
Marketing starts with identification of customer needs and requirements'. These are
termed into probable features that might satisfy the basic needs.
5) Marketing Systems Effect Companies Strategies:
Marketing has its own sub-systems which interact with each other to turn complete
marketing system that is responsible to company's marketing strategy.
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6) Marketing is a Part of Total Environment:
Total environment mainly defined as the combination of all resources and
institutions which are directly related to the production, distribution of goods,
services, ideas, places and persons for satisfaction of human needs.
7) Marketing has a Discipline:
The sub of marketing has emerged out of business which has derived its existence
from economic. These are different disciplines of marketing such as consumer
behavior, legal aspects marketing research, advertising media, pricing, promotion
method etc.
8) Marketing Creates Mutual Beneficial Relationship:
As the customer is the focus of all marketing activities. The strategies of marketing
have been shifting to different ways. Marketing is there for everything that results in
mutual benefit of the customer.6
1.1.10. Objectives of Marketing:
The basic objectives of marketing management are to achieve the objectives of the
business. A business aims at earning reasonable profits by satisfying the needs of
customers.
1) Creation of Demand:
The marketing management‘s first objective is to create demand through various
means. A conscious attempt is made to find out the preferences and tastes of the
consumers. Goods and services are produced to satisfy the needs of the customers.
Demand is also created by informing the customers the utility of various goods and
services.
2) Customer Satisfaction:
The marketing manager must study the demands of customers before offering them
any goods or services. Selling the goods or services is not that important as the
satisfaction of the customers‘ needs. Modern marketing is customer- oriented. It
begins and ends with the customer.
3) Market Share:
Every business aims at increasing its market share, i.e., the ratio of its sales to the
total sales in the economy. For instance, both Pepsi and Coke compete with each
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other to increase their market share. For this, they have adopted innovative
advertising, innovative packaging, sales promotion activities, etc.
4) Generation of Profits:
The marketing department is the only department which generates revenue for the
business. Sufficient profits must be earned as a result of sale of want-satisfying
products. If the firm is not earning profits, it will not be able to survive in the market.
Moreover, profits are also needed for the growth and diversification of the firm.
5) Creation of Goodwill and Public Image:
To build up the public image of a firm over a period is another objective of
marketing. The marketing department provides quality products to customers at
reasonable prices and thus creates its impact on the customers. The marketing
manager attempts to raise the goodwill of the business by initiating image- building
activities such a sales promotion, publicity and advertisement, high quality,
reasonable price, convenient distribution outlets, etc.7
1.1.11. Marketing Environment:
Marketing environment consists of all those internal and external forces which affect the
marketing strategies. Modern marketers realize that environmental scanning would
provide them with continuous interaction between the customers and the business they
are in. Based on interaction the marketing managers can evolve marketing strategies to
ensure effective and efficient goal achievement. It means the success of marketing
management totally depends on the study of marketing environment. This study is very
important when we take marketing as a system. Marketing environment consists of two
type of marketing which are explained below:
A) Macro Environment:
It consists of demographics and economic conditions, socio-cultural factors, political
and legal systems, technological developments, etc. These constitute the general
environment, which affects the working of all the firms.
The main elements of macro environment are as follows:
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1) Legal Forces:
Many laws influence marketing activities; for example: pro-competitive
legislation and consumer protection legislation. The EU and NAFTA are big
influences in this context.
2) Regulatory Forces:
Interpretation of laws is important, but so is an understanding of the enforcement
by the various government ministries and local government departments, plus
the non-government regulatory bodies, such as GATE or trade and professional
associations.
3) Political Forces:
Many marketers view the actions of government as beyond influence, while
others successfully lobby and influence the policy making and legislating bodies
of central and local governments. It is important to remember that the lobbying
of others can affect you.
4) Culture Forces:
These are the dynamics and workings of society: groups and individuals often
ignore the activities of companies and marketers until they infringe their lifestyles
and choices. An important current example is the Green movement and the
notion of carbon footprints which is leading consumers to pressurize companies
to produce products that are less harmful to the earth‘s environment, create less
waste and are produced in a more ecologically sensitive manner.
5) Technological Forces:
These refer to the technological expertise required to accomplish tasks and
goals. Technology is quickly evolving and changing, affecting how people satisfy
their needs and lead their lives. Technology is changing production, distribution,
and communications and selling, affecting the products marketers can bring to
the marketplace and how they are presented to customers.
6) Economic Conditions:
General economic conditions recession or boom - will impact upon any market
as will customer demand and spending behaviour. These are important
considerations for any marketer; particularly as such conditions can be volatile,
prone to dramatic changes, patterns and fashions.
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B) Micro Environment:
Consist of suppliers, consumers, marketing intermediaries, etc. These are specific
to the said business or firm and affect its working on short term basis. The elements
of the micro marketing environment are aspects which are peculiar to an individual
company/organization concerned, rather than market specific. However they are
also market factors over which the organization has little control.
The key items to consider are as follows:
1) Direct and Substitute Competition:
The nature and degree of competition in a particular product area from similar
products are important aspects. Model proliferation is a competitive weapon
used by major players such as Toshiba, IBM or HR In addition, the possibility of
competition from substitute products must be considered. Japanese-developed
tunneling robotic moles are a threat to traditional JCB or CAT diggers. A key
question to consider is whether the market is stable or whether new kinds of
competitors are emerging.
2) Supplier Influence/Power:
Companies prefer independence and the opportunity to exert control over their
suppliers. Yet control is not always possible: suppliers, particularly in situations
where there are very few or if the products supplied are innovative or unique,
can become uncomfortably strong. Cooperation may reduce the risks posed by
such suppliers, but only if such relationships are stable.
3) The company's Resource Base:
The resource base in terms of supplies and materials, finances, people, time
and goodwill is generally in the control of the business itself. There are
occasions, though, when trends in the marketplace and in the marketing
environment act to strengthen or weaken the resource base. For example, new
industry-wide working practices, legislation, altered banking policies, and
customer pressures and demands, all alter the resource base. Activities which
can affect the availability of resources must be closely monitored.
4) Customer’s Buying Power:
Customers‘ requirements and perceptions must constantly be monitored, but it is
possible for underlying trends in the market to increase or decrease customer
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buying power. The result of either change will have a significant impact on the
organization‘s performance and the likelihood of such changes in buying power
must be checked.
1.2. Market:
A market is one of many varieties of systems, institutions, procedures, social relations
and infrastructures whereby parties engage in exchange. While parties may exchange
goods and services by barter, most markets rely on sellers offering their goods or
services (including labor) in exchange for money from buyers. It can be said that a
market is the process by which the prices of goods and services are established.
1.2.1. Meaning:
Market is a network in which buyers and sellers interact to exchange goods and
services for money. Market implies the world of commercial activity where goods and
services are bought and sold. Market provides a mechanism where present and
prospective buyers and sellers interact to exchange the goods and services.
1.2.2. Definitions:
Market is a collection of buyers and sellers. It is also thought to be a set of individuals or
institutions that have similar needs that can be met by a particular product.
1) Coumot:
"Market is not any particular place in which things are bought and sold, but the
whole of any region in which buyers and sellers are in such a free intercourse with
each other that the prices of same goods tend to equality easily and quickly.”
2) Sidgwick:
"Market is a body of persons and such commercial relations that each can easily
acquaint himself with the rates in which certain kinds of exchanges of goods and
services are made from time to time by the others.”
3) Diogenes Laertius:
"The market is a place set apart where men may deceive each other.”
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4) Chapman:
"The term market refers not necessarily to a place but always to a commodity and
the buyers and the sellers who are in direct competition with one another.”
5) The authors (Dr Sandeep Pachpande, Dr S. B Mathur and Prof Prakash Singh):
"A commercial arena where buyers and sellers meet to exchange any type of
goods, services and information for money or barter.‖
Example:
The housing market is a collection of buyers and sellers of residential real estate, and
automobile market includes buyers and sellers of automotive transportation.
Fig: Examples of Markets
1.2.3. Competition:
Competition is seen as a state which produces gains for the whole economy, through
promoting consumer sovereignty. It may also lead to wasted (duplicated) effort and to
increased costs (and prices) in some circumstances. In a small number of goods and
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Basic of Marketing
services, the cost structure means that competition may be inefficient. These situations
are known as natural monopoly and are usually publicly provided or tightly regulated.
The most common example is water supplies. Competition is the rivalry between
companies selling similar products and services with the goal of achieving revenue,
profit, and market-share growth.
1.2.4. Key Customer Market:
There are four main key customer markets which are as mentioned below:1) Consumer Markets:
Companies selling mass consumer goods and services such as soft drinks,
cosmetics, air travel, and athletic shoes and equipment spend a great deal of time to
establish a superior brand image. Much of brand strength depends on developing a
superior product and packaging, ensuring its availability, and backing it with
engaging communication and reliable service. Complicating this task is the always
changing consumer market. Goods bought in consumer markets can be categorized
in several ways:
a) Fast Moving Consumer Goods (FMCG):
These are high volume, low unit value, fast repurchase. Examples include:
Ready meals, Baked Beans, Newspapers.
b) Fast Moving Consumer Durables (FMCD):
These have low volume but high unit value. Examples include: Electronic items
like television, fridge, mobile phones, washing machines etc.
Consumer durables are often further divided into:

White Goods:
White goods include major domestic appliances used such as refrigerators,
stoves, gas and electric ovens, freezers, vacuum cleaners and microwave
ovens.

Brown Goods:
Brown goods include small, light electronic goods such as radios, small
televisions, CD/DVD players, etc.
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
Grey Goods:
Grey goods include commercial IT equipment used in offices and telecom
such as computers, telephones, fax machines, printers, monitors, scanners,
routers, switches, etc.

Soft Goods:
Soft goods are similar to consumer durables, except that they wear out more
quickly and therefore have a shorter replacement cycle (e.g. include clothes,
shoes).
c) Services: Non-tangible in nature which may vary every time.
(Example- Hairdressing, Dentists, Childcare, Restaurant Service)
2) Business Markets:
Companies selling business goods and services often face well-trained and wellinformed professional buyers who are skilled in evaluating competitive offerings.
Business buyers buy goods in order to make or resell a product to others at a profit.
Business marketers must demonstrate how their products will help these buyers
achieve higher revenue or lower costs.
3) Global Markets:
Companies selling goods and services in the global marketplace face additional
decisions and challenges. They must decide which countries to enter; how to enter
each country as an exporter, licenser, joint venture partner, contract manufacturer,
or sole manufacturer and how to adapt their product and service features to each
country. The pricing of their products in different countries and adapting their
communications to fit different cultures is a prime criterion.
4) Non-profit and Governmental Markets:
Companies selling their goods to non-profit organizations such as churches,
universities, charitable organizations, or government agencies need to price
carefully because these organizations have limited purchasing power. Lower prices
affect the features and quality that the seller can build into the offering. Most of the
Government purchasing, call for bids, with the lowest bid being favored, in the
absence of extenuating factors.
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1.2.5. Market places:
Marketplaces are physical markets or shops or stores. Marketplace is the traditional
'brick' store like Big Bazaar or D-mart that we all tend to walk into, a shop with a
physical existence which displays wares for sale, for us to pick and choose from.
Marketplace is regular gathering of people for the purchase and sale of provisions,
livestock, and other goods where buying and selling occurs.
Fig: Examples of Marketplaces
There is scope for physical interaction with the seller, to try and test out new products,
to negotiate terms, get clarification on product usage and benefits.
1.2.6. Market Space:
A concept best described as an online/web-based service. This service is what would
support a Meta Market. It is in essence, where people go to buy and sell goods online,
communicate between customer and buyer via internet, web-cam, or phone and follow
up on those purchases thereby ensuring customer satisfaction.
Fig: Examples of Marketspaces
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Basic of Marketing
Fig: Examples of Marketspaces
Customers visit online sites like the above to purchase their products as per their needs
and wants.
1.2.7. Meta Markets:
A marketing solution offering that caters to an industry as a whole. For example, if you
were to build a website that related to cell phones or handheld electronics, you would
find within that site an extremely wide variety of offerings ranging anywhere from cell
phones, cell phone cases, batteries, chargers, USB connections for phone to computer
use, IPOD applications, and even a list of current service providers. This marketing
approach attempts to drive sales through the concentration on complimentary products
for the entire industry it is devoted to.
Example:
All these are in one product segments along with its complementary products.
Similar Product Category & Deals not only in
selling properties but also in buying and
renting of properties.
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Similar Product Category &Deals not only in
ticket bookings but also in hotel bookings &
holiday.
Similar Product Category & Deals not only
searching institutes details but also in
admission procedures, career counseling and
many others.
Fig: Examples of Metamarkets
1.3. Company Orientation towards Market Place:
As the market has changed, so has the way the company deals with the marketplace.
The company orientation towards marketplace deals with the concepts which a
company may apply while targeting a market. There are basically Eight different
orientations which a company takes towards the marketplace.
Production
Concept
Product Concept
Sales Concept
Marketing
Concept
Holistic
Marketing
Concept
Societal
Marketing
Concept
Relational
Transactional
Marketing
Concept
Marketing
Concept
Fig: Company Orientation towards Market Place
1) Production Concept: (1860-1920s)
The focus of the business is not the needs of the customer, but of reducing costs by
mass production. By reaching economies of scale the business will maximize profits
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by reducing costs. This concept states that consumer will purchase those products
that are widely available and low in cost. The objective of production oriented
managers concentrate or getting high production efficiency and wide distribution
coverage. With the onset of Industrial revolution in Europe in late nineteenth
century, this concept gained popularity Statement by Henry Ford, "I can sell any car,
if it is black in color", shows the production orientation which Ford they had. During
the period the demand exceeded supply and so major aim of producers was to gain
production efficiency.
2) Product Concept: (1920-1940s)
The Company believes that they have a superior product, based on quality and
features, and because of this they feel their customers will like it also. This concept
states that consumers will purchase those products that have relatively good quality
and better features as compared to competing products. So major aim of product
oriented organizations is to provide better quality products, and improved quality
over time.
3) Sales Concept: (1940-1960s)
The focus here is to make the product, and then try to sell it to the target market.
However, the problem could be that consumers do not like what is being sold to
them. This concept states that customer will either not buy or will not buy sufficient
quantity, unless organisation either pressurizes him to buy, or undertakes an
aggressive selling and promotion efforts. Historically, after dominance of product
era, a great depression of 1929, took place, where even the good quality products
were not in demand because of worldwide recession. So as companies had large
inventories of products, for disposing them they started hiring, aggressive and smart
persons who could psych the customers, and convince them even if they did not
want the products.
4) Marketing Concept: (1960-1990s)
It puts the customer at the heart of the business. The organization tries to
understand the needs of the customers by using appropriate research methods,
appropriate processes are developed to make sure information from customers is
fed back into the heart of the organization. In essence all activities in the
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Basic of Marketing
organization are based around the customer. The customer is truly the king of the
market. The marketing concept states that companies must understand customer
needs and wants of the target market and then deliver the desired products and
satisfactions more effective, efficiently than the competitors.
5) Transactional Marketing Concept:
Transactional marketing is a business strategy that focuses on single, "point of sale"
transactions. The emphasis is on maximizing the efficiency and volume of individual
sales rather than developing a relationship with the buyer. The transactional
approach is based on the four traditional elements of marketing, sometimes referred
to as the four P's:
a) Product: Creating a product that meets consumer needs.
b) Pricing: Establishing a product price that will be profitable while still attractive to
consumers.
c) Placement: Establishing an efficient distribution chain for the product.
d) Promotion: Creating a visible profile for the product that makes it appealing to
customers.
Transactional marketing campaigns focus on the actual sales process for an item.
The emphasis is put on making the sale and may include aggressive sales
techniques that eventually alienate the customer. An applicable example of a
transactional marketing campaign is a sales presentation for a time-share vacation
home. The salesperson concentrates only on closing the sale. Transactional
marketing is most appropriately applied to one-time purchases where a hard sell is
necessary to close the sale. For a one-time sale, there is no expectation that the
customer would return for repeat business, so closing the sale with a hard sell is
possibly the best choice9&10.
6) Relational Marketing Concept: (1990-2000s)
An alternative to the transactional model, Relationship marketing, emphasizes on
customer retention and future interaction with the company. Marketing activities that
are aimed at developing and managing trusting and long-term relationships with
larger customers are termed as relational marketing. The major goal of marketing is
to develop deep, enduring relationships with all people or organizations that could
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Basic of Marketing
directly or indirectly affect the success of the firm‘s marketing activities. Relationship
marketing aim at building mutually satisfying long-term relationships with key
parties. They are - customers, suppliers, distributors and other marketing partners. It
is done to earn and retain their business. Relationship marketing builds strong
economic, technical, and social ties among the parties.
th
Source: Principle of Marketing by Philip Kotler-13 Editions (Pearson Publications)
In relationship marketing, customer profile, buying patterns, and history of contacts
are maintained in a sales database, and an account executive is assigned to one or
more major customers to fulfill their needs and maintain the relationship with
customers, partners and channel.
7) Societal Marketing Concept: (2000-2010s)
A business perspective whereby a company operates in the best interests of the
society as a whole. The societal marketing concept states the company's task is to
determine the needs, wants and interests of target customers and delivery of
desired satisfaction more effectively and efficiently than competitors in a way that it
results in long-term benefit of not only customer but society as well.
Example:
A company that sells food items with ingredients that is sustainably farmed.
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th
Source: Principle of Marketing by Philip Kotler-13 Editions (Pearson Publications)
8) Holistic Marketing Concept: (2010-Present)
The holistic marketing concept looks at marketing as a complex activity and
acknowledges that everything matters in marketing. The holistic viewpoint follows
that systems in this case marketing somehow function as wholes and that their
functioning cannot be fully understood solely in terms of their component parts.
th
Source: Principle of Marketing by Philip Kotler-13 Editions (Pearson Publications)
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Basic of Marketing
The four components that characterize holistic marketing are relationship marketing,
internal marketing, integrated marketing, and socially responsive marketing11.
1.3.1. Selling versus Marketing:
Starting
Point
Factory
Starting
Point
Starting
Point
Existing
Products
Selling &
Promoting
Starting
Point
Profit through
Volume
The Selling Concept
Market
Customer
Needs
Integrated
Marketing
Profit through
Satisfaction
The Marketing Concept
Fig: Marketing and Sales Concepts Contrasted
th
Source: Principle of Marketing by Philip Kotler-13 Editions (Pearson Publications)
The basic difference can be outlined as under:
1) Scope:
‗Marketing‘ involves the design of product acceptable to customers and transfer of
ownership between the sellers and buyers. However, ‗Selling‘ simply involves
obtaining orders from customers and supplying them the products. It is more
concerned with the sale of goods already produced.
2) Emphasis:
In case of ‗marketing‘, the focus is on satisfying the wants of customers while,
‗selling‘ emphasizes the need of the seller to convert products into cash. Marketing
is customer-oriented and seeks to earn profits through customer satisfaction. On the
contrary, selling is product- oriented and seeks to increase the sales volume.
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3) Occurrence:
‗Marketing‘ begins much before the production of goods and services. It continues
even after the sale because, ‗after-sale services‘ may be necessary for satisfying
the wants of customers. However, ‗selling‘ comes after the production has been
completed and it comes around with the delivery of the product to the customer. In
other words, marketing begins before the manufacturing cycle, whereas selling
comes at the end of this cycle.
4) Philosophy:
‗Marketing‘ has philosophical and strategic implications. It is directed towards the
long-term objectives of growth and stability. On the other hand, ‗selling‘ is mere
tactical routine activity with a short-term perspective, under which customers are
taken for granted as one homogeneous unit.
5) Semantics:
‗Marketing‘, as a word, has wider connotation which includes selling in its fold.
‗Selling‘ is a part of marketing which covers many other activities like marketing
research, product-planning and development, pricing, promotion, distribution and
the like. Thus, marketing means selling but selling does not mean marketing11.
Fig: Images related to Selling versus Marketing
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Basic of Marketing
The major differences between selling and marketing are as mentioned below:
Table: Selling versus Marketing
S.No.
Selling
Marketing
1
Emphasis is on the product.
Emphasis on consumer needs wants.
2
Company manufactures the
Company first determines customers
product first.
needs and wants and then decides out
how to deliver a product to satisfy
these wants.
3
Management is sales volume
Management is profit oriented.
oriented.
4
Management is sales volume
Planning is long-run-oriented in today‘s
oriented.
products and terms of new products,
tomorrow‘s markets and future growth.
5
Stresses needs of seller.
Stresses needs and wants of buyers.
6
Views business as a good
Views business as consumer producing
producing process.
process satisfying process.
Emphasis on staying with existing
Emphasis on innovation on every
technology and reducing costs.
existing technology and reducing every
7
sphere, on providing better costs value
to the customer by adopting a superior
technology.
8
Different departments work as in
All departments of the business
a highly separate water tight
integrated manner, the sole purpose
compartments.
being generation of consumer
satisfaction.
9
Cost determines Price.
Consumer determine price, price
determines cost.
10
Selling views customer as a last
Marketing views the customer last link
link in business.
in business as the very purpose of the
business.12
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1.3.2. Concept of Marketing Myopia:
American Professor Theodore Levitt in the year 1960 developed the concept of
‗Marketing Myopia.‘ According to him, Marketing Myopia is a short sighted, narrow
minded view of marketing and its environment; it must be avoided at all costs.
Marketing Myopia is an inefficient marketing approach. Those firms that focus on
production orientation tend to develop a narrow view of market which sees consumers
as a homogenous group that will satisfied with the basic function of a product. In short
Marketing Myopia concept state that firms which are suffering from it have adopted a
goods producing process.
Example:
Nokia Cellular had marketing myopia due to which the company was only focusing on
producing products without knowing the needs and wants of the customer.
Nokia was the market leader in its category and companies like Samsung, Apple were
new entrants. Nokia assumed itself as the supreme authority above the customer and
became product centric rather than customer centric and this symptom was the
indicator of marketing myopia.
Fig: Nokia Logo and Office
Nokia did not shifted its approach and kept on disconnecting itself from the people and
indirectly to the business too which resulted in the downfall of Nokia with a pathetic end
in the form of acquisition by Microsoft.
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On 8th July 2015.The management learning from the Nokia chapter can be summarized
in the following one line as pet the authors:
“Innovate your business or be ready to die from the market.”
Hence we can say that only those companies, who are keeping itself fit, may survive in
today‘s competitive business world as the nature itself is saying “Survival for the
fittest.”
1.4. Marketing Mix:
The business firm usually develops a marketing plan to achieve its various marketing
objectives. Developing a plan is becoming more and more important keeping in view the
ever expanding global scenario, tight competition, changing needs and wants of the
customers, technological changes etc. The marketing mix is a business tool used in
marketing and by marketing professionals. The marketing mix is often crucial when
determining a product or brand's offering. The concept of ‗Marketing Mix‘ is an important
development in the marketing field. For sound marketing programme, the determination
of marketing mix is the base. It is useful for marketing of certain specific products. It is
done for the marketing research. Thus, marketing mix is related to pricing, advertising,
selling, physical distribution etc. It is also related to the environmental elements such as
economy, competition, culture and technology.
1.4.1. Origin and Concept of Marketing Mix:
Neil Borden in the year 1953 introduced the term Marketing mix, an extension of the
work done by one of his associates James Culliton in 1948.
Product
Promotion
Marketin
g Mix
Price
Place
Fig: Origin and Concept of Marketing Mix
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1.4.2. Meaning of Marketing Mix:
The Marketing Mix is a marketing tool used by marketing professionals. It is often
crucial when determining product or brand's offering and it is also called as 4P's
(Product, Price, Promotion, and Place) of marketing. However, in case of services of
different nature the 4 P's have been expanded to 7P's. In recent times, giving more
importance to customer a new concept have been introduced, i.e. Concept of 4C's.The
Concept of 4C's is more customer-driven replacement of 4P's. According to
Lauterborn's the 4C's are - Consumer, Cost, Communication, and Convenience.
According to Shimizu's the 4C's are -Commodity, Cost, Communication and
Channel.
1.4.3. Definition of Marketing Mix:
Following are the some definitions of the marketing mix:
1) According to Philip Kotler:
"Marketing Mix is the combination of four elements, called the 4P's (product, Price,
Promotion, and Place), that every company has the option of adding, subtracting, or
modifying in order to create a desired marketing strategy.”
2) According to Principles of Marketing, 14e, Kotler and Armstrong, 2012:
"The Marketing Mix is the set of tactical marketing tools - Product, Price, Promotion,
and Place - that the firm blends to produce the response it wants in the target
market."
3) According to Prof. R. S. Davar:
―The policies adopted by manufacturers to attain success in the market constitute
marketing mix.”
4) Keeley and Lazor:
“Marketing mix is composed of a large battery of devices which might be employed
to induce consumer to buy a particular product.”
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1.4.4. Elements of Marketing Mix:
The elements of marketing mix are often called the four P‘s of marketing.
1) Product:
Goods manufactured by organizations for the end-users are called products.
Products can be of two types - Tangible Product and Intangible Product
(Services).An individual can see, touch and feel tangible products as compared to
intangible products. A product in a market place is something which a seller sells to
the buyers in exchange of money. Product is the actual offering by the company to
its targeted customers which also includes value added stuff.
Fig: Example of Good and Service
Product may be tangible (goods) or intangible (services).
While formulating the marketing strategy, product decisions include:
a) What to offer?
b) Brand name
c) Packaging
d) Quality
e) Appearance
f) Functionality
g) Accessories
h) Installation
i)
After sale services
j)
Warranty
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2) Price:
The money which a buyer pays for a product is called as price of the product. The
price of a product is indirectly proportional to its availability in the market. Lesser its
availability, more would be its price and vice a versa. Retail stores which stock
unique products (not available at any other store) quote a higher price from the
buyers.
Fig: Images related to Price
Price includes the pricing strategy of the company for its products. How much
customer should pay for a product? Pricing strategy not only related to the profit
margins but also helps in finding target customers. Pricing decision also influence
the choice of marketing channels. Price decisions include:
a) Pricing Strategy (Penetration, Skim, etc)
b) List Price
c) Payment period
d) Discounts
e) Financing
f) Credit terms
3) Place:
Place refers to the location where the products are available and can be sold or
purchased. Buyers can purchase products either from physical markets or from
virtual markets.
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Fig: Images related to Place
In a physical market, buyers and sellers can physically meet and interact with each
other whereas in a virtual market buyers and sellers meet through internet.
4) Promotion:
Promotion refers to the various strategies and ideas implemented by the marketers
to make the end - users aware of their brand. Promotion includes various
techniques employed to promote and make a brand popular amongst the masses.
Promotion can be through any of the following ways:
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Fig: Images related to Promotion
a) Advertising:
Print media, Television, radio are effective ways to entice customers and make
them aware of the brand‘s existence. Billboards, hoardings, banners installed
intelligently at strategic locations like heavy traffic areas, crossings, railway
stations, bus stands attract the passing individuals towards a particular brand.
Taglines also increase the recall value of the brand amongst the customers.
b) Word of Mouth:
One satisfied customer brings ten more customers along with him whereas one
dissatisfied customer takes away ten more customers. That‘s the importance of
word of mouth. Positive word of mouth goes a long way in promoting brands
amongst the customers.
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1.4.5. Definitions of Seven P’s of Marketing:
Definitions of seven P‘s of Marketing are as below:-
Fig: Seven P’s of Marketing
1) Product:
Knowing what product to make, how to package it, what brand name to use, and
what image to project. The first thing you need, if you want to start a business, is a
product. Therefore Product is also the first variable in the marketing mix. Product
decisions are the first decisions you need to take before making any marketing plan.
A product can be divided into three parts. Before deciding on the product
component there are some questions which one should need to ask.
a) What product are you selling?
b) What would be the quality of your product?
c) Which features are different from the market?
d) What is the USP of the product?
e) Whether the product will be branded as sub brand or completely new?
f) What are the secondary products which can be sold along with primary?
(Warranty, Services)
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Based on these questions, several product decisions have to be made. These
product decisions will in turn affect the other variables of the marketing mix.
Example:
You launch a car having the highest quality. Thus the pricing, promotions and
placing would have to be altered accordingly. Thus as long as you don‘t know your
product, you cannot decide any other variable of the marketing mix. However, if the
product features are not fitting in the marketing mix, you can alter the product such
that it finds a place for itself in the marketing mix.
2) Place:
Determines how and where a product will be distributed. Place refers to the
distribution channel of a product. If a product is a consumer product, it needs to be
available as far and wide as possible. On the other hand, if the product is a
Premium consumer product, it will be available only in select stores. Similarly, if the
product is a business product, you need a team who interacts with businesses and
makes the product available to them. Thus the place where the product is
distributed depends on the product and pricing decisions, as well as any STP
decisions taken by a firm.
3) Price:
Pricing of a product depends on a lot of different variables and hence it is constantly
updated. Major consideration in pricing is the costing of the product, the advertising
and marketing expenses, any price fluctuations in the market, distribution costs etc.
Many of these factors can change separately. Thus the pricing has to be such that it
can bear the brunt of changes for a certain period of time. However, if all these
variables change, then the pricing of a product has to be increased and decreased
accordingly. Along with the above factors, there are also other things which have to
be taken in consideration when deciding on a pricing strategy. Competition can be
the best example. Similarly, pricing also affects the targeting and positioning of a
product. Pricing is used for sales promotions in the form of trade discounts. Thus
based on these factors there are several pricing strategies, one of which is
implemented for the marketing mix.
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4) Promotion:
Deals with how potential customers will be told about the new product, what the
message will be, when and where it will be delivered, and with what inducements to
buy. Promotions in the marketing mix include the complete integrated marketing
communications which in turn includes ATL and BTL advertising as well as sales
promotions. Promotions are dependent a lot on the product and pricing decision.
5) People:
All people directly or indirectly involved in the consumption of a service are an
important part of the extended marketing mix. Knowledge Workers, Employees,
Management and other Consumers often add significant value to the total product
or service offering.
6) Process:
Procedure, mechanisms and flow of activities by which services are consumed
(customer management processes) are an essential element of the marketing
strategy.
7) Physical Evidence:
The ability and environment in which the service is delivered, both tangible goods
that help to communicate and perform the service and intangible experience of
existing customers and the ability of the business to relay that customer satisfaction
to potential customers.
1.5. New Marketing Realities:
Interactive digital technologies, fragmented micro-media, social mega-nets, mobility and
mass personalization are the new methods for proliferation of customer touch-points
and interactions across an ever more fragmented media environment are redefining
conventional marketing, communications and commerce. Meanwhile, consumer
expectations and access to information are on the rise, while attention, patience and
loyalty are in sharp decline. Marketing‘s control over branding, messaging and
positioning are in unprecedented decline as peer-to-peer, crowd sourced, and affinitybased community interactions gain increasing influence. Against this backdrop, the
required cycle time between developing insights, driving execution and observing
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outcomes (and repeating the cycle) is accelerating at an unprecedented rate. Today‘s
market tempo is already outpacing the rate at which most organizations can collect,
synthesize, analyze, understand and act on information. Too often, the bull‘s eye has
shifted before the aim has settled.
1.5.1. Major Societal Forces:
Today, major, and sometimes interlinking, societal forces have created new marketing
behaviors, opportunities and challenges.
Network
Information
Technology
Globalization
Deregulation
Consumer Buying
Power
Disintermediation
Privatization
Fig: Major Societal Force
Here are some key ones.
1) Network Information Technology:
The digital revolution has created an Information Age that promises to lead to more
accurate levels of production, more targeted communications, and more relevant
pricing.
2) Globalization:
Technological advances in transportation, shipping, and communication have made
it easier for companies to market in, and consumers to buy from, almost any country
in the world. International travel has continued to grow as more people work and
play in other countries.
3) Deregulation:
Many countries have deregulated industries to create greater competition and
growth opportunities. In the United States, laws restricting financial services,
telecommunications, and electric utilities have all been loosened in the spirit of
greater competition.
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4) Privatization:
Many countries have converted public companies to private ownership and
management to increase their efficiency, such as the international airline British
Airways in the United Kingdom.
5) Consumer Buying Power:
In parts, due to disintermediation via the Internet, consumers have substantially
increased their buying power. From the home, office, or mobile phone, they can
compare product prices and features and order goods online from anywhere in the
world 24 hours a day, 7 days a week, bypassing limited local offerings and realizing
significant price savings. Even business buyers can run a reverse auction in which
sellers compete to capture their business. They can readily join others to aggregate
their purchases and achieve deeper volume discounts.
6) Disintermediation:
The amazing success of early dot-coms such as AOL, Amazon.com, Yahoo!, eBay,
and others created disintermediation in the delivery of products and services by
intervening in the traditional flow of goods through distribution channels. These firms
struck terror into the hearts of established manufacturers and retailers. In response,
traditional companies engaged in reinter mediation and became ―brick-and-click‖
retailers, adding online services to their offerings. Some became stronger
contenders than pure-click firms, because they had a larger pool of resources to
work with and established brand names13.
1.5.2. New Consumer Capabilities:
The major new consumer capabilities as per citeman.com are as below:
1) Substantial Increase in Buying Power:
Buyers today are only a click away from comparing competitor prices and product
attributes. They can get answers on the internet in a matter of seconds. They don‘t
need to drive to stores, park, wait on line, and hold discussions with salespeople.
Consumers can even name the price they want to pay for a hotel room, airline ticket,
or mortgage, and see if there are any willing suppliers. Business buyers can run a
reverse auction where sellers compete to capture the buyers business. Buyers can
join with others to aggregate their purchases to achieve deeper volume discounts.
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2) A greater Variety of Available Goods and Services:
Today a person can order almost anything over the Internet - furniture (Ethan Allen),
washing machines (Sears), management consulting, Medical advice (WebMD).
Amazon.com advertises itself as the world‘s largest bookstore, with over 3 million
books; no physical bookstore can match this. Furthermore, buyers can order these
goods from anywhere in the world, which helps people living in countries with very
limited local offerings to achieve great savings.
3) A great Amount of Information about Practically Anything:
People can read almost any newspaper in any language from anywhere in the
world. They can access online encyclopedias, dictionaries, medical information,
movie ratings, consumer reports, and countless other information sources.
4) A Greater Ease in Interacting and Placing and Receiving Orders:
Today‘s buyers can place orders from home, office, or mobile phone 24 hours a
day, 7 days a week, and the orders will be delivered to their home or office quickly.
5) An Ability to Compare Notes on Products and Services:
Today‘s customers can enter a chat room centered on some area of common
interest and exchange information and opinions.
6) Marketplaces, Market Spaces and Meta Markets:
Today we can distinguish between a marketplace and market space. The
marketplace is physical, as when you shop in a store; market space is digital, as
when you shop on the Internet. The concept of a metamarket is a cluster of
complementary products and services that are closely related in the minds of
consumers but are spread across a diverse set of industries. The automobile
metamarket consists of automobile manufacturers, new car and used car dealers,
financing companies, insurance companies, mechanics, spare parts dealers, service
shops, auto magazines, classified auto ads in newspapers, and auto sites on the
internet. In purchasing a car, a buyer will get involved in many parts of this
metamarket, and this has created an opportunity for meta-mediaries to assist buyers
to move seamlessly through these groups, although they are disconnected in
physical space.
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One example is Edmund‘s (www.edmunds.com), a Web site where a car buyer can
find the stated features and prices of different automobiles and easily click to other
sites to search for the lowest price dealer, for financing, for car accessories, and for
used cars at bargain prices. Metamediaries can also serve other metamarket such
as the home ownership market, the parenting and baby care market, and the
wedding market etc13.
1.5.3. New Company Capabilities:
These major societal forces create complex challenges for marketers, but they have
also generated a new set of capabilities to help companies cope and respond which are
as below:
1) Marketers can use the Internet as a powerful information and sales channel. The
Internet augments marketers‘ geographical reach to inform customers and promote
products worldwide. A Web site can list products and services, history, business
philosophy, job opportunities and other information of interest. In 2006, a
Montgomery, Alabama, flea market gained national popularity when owner Sammy
Stephens‘s rap-style advertisement spread virally through the Internet. Created for
$1,500, the advertisement was viewed more than 100,000 times on YouTube and
landed Stephens on The Ellen DeGeneres Show. Stephens now sells T-shirts, ring
tones, and other branded merchandise through his Website, advises retailers about
advertising, and hosts hundreds of visitors from all over the world at his store each
month.
2) Marketers can collect fuller and richer information about markets, customers,
prospects, and competitors. Marketers can conduct fresh marketing research by
using the Internet to arrange focus groups, send out questionnaires, and gather
primary data in several other ways. They can assemble information about individual
customers‘ purchases, preferences, demographics, and profitability.
3) Marketers can tap into social media to amplify their brand message. Marketers can
feed information and updates to consumers via blogs and other postings, support
online communities, and create their own stops on the Internet superhighway. Dell
Corporation‘s @Dell Outlet Twitter account has more than 600,000 followers.
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4) Companies can improve their cost efficiency by skillful use of the Internet. Corporate
buyers can achieve substantial savings by using the Internet to compare sellers‘
prices and purchase materials at auction, or by posting their own terms in reverse
auctions. Companies can improve logistics and operations to reap substantial cost
savings while improving accuracy and service quality.
5) Marketers can facilitate and speed external communication among customers.
Marketers can also create or benefit from online and offline ―buzz‖ through brand
advocates and user communities. Word-of-mouth marketing agency BzzAgent has
assembled a nationwide volunteer army of 600,000 consumers who join promotional
programs for products and services they deem worth talking about.
6) Marketers can send ads, coupons, samples, and information to customers who have
requested them or given the company permission to send them. Micro-target
marketing and two-way communication are easier thanks to the proliferation of
special-interest magazines, TV channels, and Internet newsgroups. Extranets
linking suppliers and distributors let firms send and receive information, place
orders, and make payments more efficiently.
7) Marketers can reach consumers on the move with mobile marketing. Using GPS
technology, marketers can pinpoint consumers‘ exact location and send them
messages at the mall with coupons good only that day, a reminder of an item on
their wish list, and a relevant perk (buy this book today and get a free coffee at the
bookstore‘s coffee shop).
8) Companies can make and sell individually differentiated goods. Thanks to advances
in factory customization, computer technology, and database marketing software,
customers can buy M&M candies, TABASCO jugs, or Maker‘s Mark bottles with
their names on them; Wheaties boxes or Jones soda cans with their picture on the
front; and Heinz ketchup bottles with customized messages.
9) Companies can improve purchasing, recruiting, training, and internal and external
communications. Firms can recruit new employees online, and many have Internet
training products for their employees, dealers, and agents. Retailer Patagonia has
joined Walt Disney, General Motors, and McDonald‘s in embracing corporate
blogging to communicate with the public and employees.
10) Companies can facilitate and speed up internal communication among their
employees by using the Internet as a private intranet. Employees can query one
another, seek advice, and download or upload needed information from and to the
company‘s main computer14.
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1.6. Case Study on Nokia Cellular:
―From Connecting People to Disconnecting Business‖
Introduction:
Nokia which was the market leader in the mobile phone market had a great past track
record with glorious achievements. Nokia was an undisputed leader with its monopoly in
the market. The company did not focus on the existing demand based on customer
needs for new innovative product, but the company kept on delivering only same types
of mobile phones with little modifications.
This was a biggest blunder which Nokia committed by being very much myopic and
self-righteous about its achievements and didn‘t visualize the competition, radical
innovations and high end technology coming its way, which certainly had potential to
unseat it of its place.
Background of the Company:
Few companies go beyond connecting people, they transform the world. Nokia, a brand
born in 1865 in a paper mill in South west Finland is today considered to be one of the
most successful and important Fortune 500 organizations. The name revolutionized the
world of communication and since then has been around in business going full throttle.
Formally known as Nordic Mobile Telephone (NMT), the company built the first
international mobile phone network in 1981. This was the beginning of the mobile era.
Nokia DX200, their first digital telephone switch went into operation a year later. What
began as a simple idea slowly started manifesting into a major mobile revolution.
Nokia launched Mobira talkman portable phone. In 1987 world saw Mobira Cityman, the
first handheld phone.
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In 1991 when the concept of GSM came into existence Nokia equipment was put to use
to make the first GSM call and what followed blew the world. In the year 1992 Nokia
1101, Nokia‘s first GSM handset hit the market. It became an instant hit.
Fig: Nokia Founders
Nokia had employed more than 90,000 people across 120 nations and does business in
more than 150 nations, serving a million happy customers. The success secret lies in
the values of the company. Nokia believes in valuing people in everything done,
preserving the environment, using technology and innovation for better life, and making
change happen as an effort of collaboration. Nokia has touched lives by enabling
technology reach out to the common man that is both user friendly and pocket friendly.
Background of the Case:
Nokia was producing its mobile phones without focusing customer‘s needs and wants
and hence new entrants which have now transformed itself as a reputed and trusted
brand started competing with Nokia. Companies like Samsung and Apple became a
brand in Smartphones segment in which Nokia entered too late. Although, Apple came
with its revolutionary iPhone series, this couldn‘t be considered a major threat when
apple started.
Reason being there was very niche market of smart phone users worldwide. First stone
for the fall was paved by Samsung with its completely new, repositioned mobile phones,
which slowly and steadily started to penetrate the market in which Nokia was enjoying
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the leadership. The strategies formulated by Samsung along with its world class R&D
facility; which helped it to work on its previous weaknesses as found from a market
research made sure that Samsung is here to stay. Samsung came up with mobile
phones to directly compete with Nokia in low end segment in developing economies.
This along with effective well designed marketing communication strategies helped it to
establish itself as direct competitor to Nokia in the segment and thus posing a threat to
legendary symbian enabled mobile phone market.
Fig: Nokia Mobile Phones and Logo
Being established in low end segment, Nokia was unable to identify the opportunities in
smartphones segments and slowly and slowly the gap widened and the new entrants
became the key players in smartphones segment by adopting smart strategies and
looking back at that scenario, Nokia started making efforts to enter smartphones market
by collaborating with Microsoft and launched its smart phones in the market as Nokia
Lumia with different variations. But the train caught by Nokia was too late and
customers did not show any interest in Nokia‘s smartphones and the company started
losing its customers everyday and ended its own journey without doing more home
works to come back again and due to such reasons, the downfall of Nokia started and
story of Nokia was ended with disconnecting itself from the people and the business
and was acquired by Microsoft on 8th July, 2013.
Questions:
Q.1. Which ‗‘P‘‘s of marketing was missing in Nokia‘s marketing strategies due to which
they became myopic? Prepare a marketing strategy to help Nokia and such other
companies who are suffering from this.
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Q.2. Identify the major mistakes of Nokia? How it affected the overall marketing
activities? As a manager, suggest the remedies to overcome such mistakes.
Q.3. Suggest your strategies by doing SWOT analysis on Nokia to help the company in
re-connecting with the people and to do business again.
Q.4. Was it Nokia‘s monopoly the reason for the downfall or really the company was
suffering from marketing myopia. Comment your views.
Q.5. Will ―Nokia acquisition by Microsoft‖ impact the brand identity of Microsoft?
Source:
1) www.successstory.com/companies/nokia
2) www.iveybusinessjournal.com/publication/marketing-myopia-re-visited-whyevery-company-needs-to-learn-from-the-world/
3) www.ukessays.com/essays/marketing/critique-on-marketing-myopia-marketingessay.php#)
4) www.gsmarena.com/the_rise_dominance_and_epic_fall__a_brief_look_at_noki
as_history-blog-13460.php
●●●●●●
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Activity Based Learning
1) Students are advised to visit any nearby market and study the nature of the market.
Observe what is happening in the market. Make a report on it. What are selling and
marketing functions happening there i.e. who is doing selling and who is doing
marketing?
2) Find out marketing offers by different companies from different sectors and do
comparison with all and make a summarized report.
3) Select your favorite companies from various sectors and design marketing mix of it.
4) You have to make a dummy of a new product along with its specifications. Write
how will you use 4 P‘s in promoting your products? Make a PPT along with a report
assuming yourself as :
a) An owner of the company
b) Employee of the company
c) Competitor of the company
5) Select any 10 companies and take interview of Manager/ Partner/ Proprietor/
Entrepreneur / Owner. Find out what are they doing as marketing and what they
think about marketing?
6) Make different groups and do group discussions on the following topics:a) Marketing vs. selling.
b) Core concept of marketing.
c) Concept of marketing.
d) Traditional marketing vs. modern marketing.
●●●●●●
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MODEL MULTIPLE CHOICE QUESTIONS
Q.1.
Good marketing is no accident, but a result of careful planning and ________.
a) Execution.
b) Selling.
c) Strategies.
d) Tactics.
Q.2.
Marketing is both an ―art‖ and a ―science‖ there is constant tension between the
formulated side of marketing and the ________ side.
a) Creative.
b) Selling.
c) Management.
d) Forecasting.
Q.3.
The most formal definition of marketing is ________.
a) Meeting needs profitably.
b) Identifying and meeting human and social needs.
c) The 4Ps (Product, Price, Place, Promotion).
d) An organizational function and a set of processes for creating,
communicating, and delivering, value to customers, and for managing
customer relationships in ways that benefit the organization and its
stake holders.
Q.4.
Marketing management is ________.
a) Managing the marketing process.
b) Monitoring the profitability of the company‘s products and services.
c) Selecting target markets.
d) The art and science of choosing target markets and getting, keeping,
and growing customers through creating, delivering and
communicating superior customer value.
Q.5.
A transaction involves ________.
a) At least two parties.
b) Each party has something that might be of value to the other party.
c) Each party is capable of communication and delivery and is free to accept or
reject the exchange offer.
d) All of the above.
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Q.6.
________ goods constitute the bulk of most countries‘ production and marketing
efforts.
a) Durable.
b) Impulse.
c) Physical.
d) Service.
Q.7.
________ can be produced and marketed as a product.
a) Information.
b) Celebrities.
c) Durable goods.
d) Organizations.
Q.8.
Charles Revson of Revlon observed: ―In the factory, we make cosmetics; in the
store, ________.‖
a) We make profits
b) We challenge competitors
c) We implement ads
d) We sell hope
Q.9.
A ________ is someone seeking a response (attention, a purchase, a vote, a
donation) from another party, called the ________.
a) Salesperson, customer
b) Fund raiser, contributor
c) Politician, voter
d) Marketer, prospect
Q.10. In ________ consumers may share a strong need that cannot be satisfied by an
existing product.
a) Negative demand.
b) Latent demand.
c) Declining demand.
d) Irregular demand.
Q.11. In ________more customers would like to buy the product than can be satisfied.
a) Latent demand.
b) Irregular demand.
c) Overfull demand.
d) Excessive.
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Q.12. Marketers often use the term ________ to cover various groupings of
customers.
a) People.
b) Buying power.
c) Demographic segment.
d) Market.
Q.13. In business markets, advertising can play a role, but a stronger role may be
played by the sales force, ______, and the company‘s reputation for reliability
and quality.
a) Brand image.
b) Distribution.
c) Promotion.
d) Price.
Q.14. Companies selling mass consumer goods and services such as soft drinks,
cosmetics, air travel, and athletic shoes and equipment spend a great deal of
time trying to establish a superior brand image in markets called ________.
a) Business markets.
b) Global markets.
c) Consumer markets.
d) Nonprofit and governmental markets.
Q.15. Global marketers must decide ________.
a) Which countries to enter.
b) How to enter each country (as an exporter, licenser, joint venture partner,
contract manufacturer, or solo manufacturer).
c) How to adapt their product and service features to each country.
d) All of the above.
Q.16. Mohan Sawhney has proposed the concept of ________ to describe a cluster of
complementary products and services that are closely related in the minds of
consumers but are spread across a diverse set of industries.
a) Meta market.
b) Vertical integration.
c) Horizontal integration.
d) Beta market.
Q.17. The ________ promises to lead to more accurate levels of production, more
targeted communications and more relevant pricing.
a) Age of Globalization.
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b) Age of Deregulation.
c) Industrial Age.
d) Information Age.
Q.18. Many countries have ________ industries to create greater competition and
growth opportunities.
a) Open-market.
b) Deregulated.
c) Regulated.
d) Scientifically segmented.
Q.19. Customers are showing greater price sensitivity in their search for ________.
a) The right product
b) The right service.
c) The right store.
d) Value.
Q.20. Rising promotion costs and shrinking profit margins are the result of ________.
a) Changing technology
b) Globalization.
c) Deregulation.
d) Heightened competition.
Q.21. Industry boundaries are blurring at an incredible rate as companies are
recognizing that new opportunities lie at the intersection of two or more
industries this is called ________.
a) Globalization.
b) Customization.
c) Industry convergence.
d) Heightened competition.
Q.22. In response to giant retailers and category killers, entrepreneurial retailers are
building entertainment into stores with coffee bars, lectures, demonstrations,
and performances. They are marketing a (n) ________ rather than a product
assortment experience
a) Customer value.
b) Customer delight.
c) Total service solution.
d) Intangible benefit(s).
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Q.23. In response to threats from such companies as AOL, Amazon, Yahoo, eBay,
E‘TRADE, and dozens of others, established manufacturers and retailers
became ―brick-and-click‖ oriented by adding online services to their existing
offerings. This process became known as ________.
a) Reintermediation.
b) Disintermediation.
c) E-commerce.
d) E-collaboration.
Q.24. Many brick-and-click competitors became stronger contenders in the
marketplace than the pure-click firms because they had a larger pool of
resources to work with and ________.
a) Better prices.
b) Greater value.
c) Well-established brand names.
d) One-on-one communications.
Q.25. The ________ is practiced most aggressively with unsought goods, goods that
buyers normally do not think of buying, such as insurance, encyclopedias, and
funeral plots.
a) Marketing concept.
b) Selling concept.
c) Production concept.
d) Product concept.
Q.26. The ________ concept holds that consumers will favor those products that offer
the most quality, performance, or innovative features.
a) Product.
b) Marketing.
c) Production.
d) Selling.
Q.27. The ________ concept holds that consumers and businesses, if left alone, will
ordinarily not buy enough of the organization‘s products.
a) Production.
b) Selling.
c) Marketing.
d) Product.
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Q.28. Several scholars have found that companies who embrace the marketing
concept achieve superior performance. This was first demonstrated for
companies practicing a ________ understanding and meeting customers‘
expressed needs.
a) Reactive market orientation.
b) Proactive marketing orientation.
c) Total market orientation.
d) Impulsive market orientation.
Q.29. According to Theodore Levitt, who drew a perceptive contrast between the
selling and marketing concepts, ________ is preoccupied with the need to
convert products into cash.
a) Marketing.
b) Selling.
c) Direct marketing.
d) Holistic marketing.
Q.30. In the course of converting to a marketing orientation, a company faces three
hurdles _______.
a) Organized resistance, slow learning and fast forgetting.
b) Management, customer reaction, competitive response.
c) Decreased profits, increased R&D, additional distribution.
d) Forecasted demand, increased sales expense, increased inventory costs.
Q.31. Companies that practice both a reactive and proactive marketing orientation are
implementing a ________ and are likely to be the most successful.
a) Total market orientation.
b) External focus.
c) Customer focus.
d) Competitive, customer focus.
Q.32. Marketers argue for a ________ in which all functions work together to respond
to, serve, and satisfy the customer.
a) Cross-functional team orientation.
b) Collaboration model.
c) Customer orientation.
d) Management-driven organization.
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Q.33. ________ can be seen as the development, design, and implementation of
marketing programs, processes, and activities that recognizes the breadth and
interdependencies of their effects.
a) Niche marketing.
b) Holistic marketing.
c) Relationship marketing.
d) Supply-chain marketing.
Q.34. ________ marketing has the aim of building mutually satisfying long-term
relations with key parties such as customers, suppliers, distributors, and other
marketing partners in order to earn and retain their business.
a) Holistic.
b) Demand-based.
c) Direct.
d) Relationship.
Q.35. Companies who form a ________ collect information on each customer‘s past
transactions, demographics, psychographics and media and distribution
preferences.
a) Sales network.
b) Holistic union.
c) Marketing network.
d) Supply-chain network.
Q.36. The ability of a company to deal with customers one at a time has become
practical as a result of advances in ________, computers, the Internet, and
database marketing software.
a) Improved communication flow.
b) Information technology.
c) Just-in-time manufacturing.
d) Factory customization.
Q.37. One traditional depiction of marketing activities is in terms of the marketing mix
or four Ps. The four Ps are characterized as being ________.
a) Product, positioning, place, and price.
b) Product, production, price, and place.
c) Place, promotion, production, and positioning.
d) Product, price, promotion and place.
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Q.38. The four Ps represent the sellers‘ view of the marketing tools available for
influencing buyers. From a buyer‘s point of view, each marketing tool is
designed to deliver a customer benefit. Robert Lauterborn suggested that the
sellers‘ four Ps correspond to the customers‘ four Cs. The four Cs are
________.
a) Customer focus, cost, convenience, and communication.
b) Customer solution, customer cost, convenience and communication.
c) Convenience, control, competition, and cost.
d) Competition, cost, convenience, and communication.
Q.39. Holistic marketing incorporates ________, ensuring that everyone in the
organization embraces appropriate marketing principles, especially senior
management.
a) Profit objectives.
b) Share of customer.
c) Internal marketing.
d) The marketing mix.
Q.40. Marketing is not a department so much as a ________.
a) Company orientation.
b) Philosophy.
c) Function.
d) Branch of management.
Q.41. Holistic marketing incorporates ________ and understanding broader concerns
and the ethical, environmental, legal and social context of marketing activities
and programs.
a) Safe product design.
b) Cultural marketing.
c) Social responsibility marketing.
d) Cross-functional teams.
Q.42. The ________ holds that the organization‘s task is to determine the needs,
wants, and interests of target markets and to deliver the desired satisfactions
more effectively and efficiently than competitors in a way that preserves or
enhances the consumer‘s and the society‘s well-being.
a) Customer-centered business.
b) Focused business model.
c) Societal marketing concept.
d) Ethically responsible marketing manager.
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Q.43. Companies see ________ as an opportunity to enhance their corporate
reputation, raise brand awareness, increase customer loyalty, build sales and
increase press coverage.
a) cause-related marketing.
b) brand marketing.
c) equity marketing.
d) direct marketing.
Q.44. When a customer has a (n) ________ need he/she wants a car whose operating
cost, not its initial price, is low.
a) Stated.
b) Real.
c) Unstated.
d) Delight.
Q.45. When a customer has a(n) ________ need the customer wants to be seen by
friends as a savvy consumer.
a) Real.
b) Unstated.
c) Delight.
d) Secret.
Q.46. During market segmentation analysis, the marketer identifies which segments
present the greatest opportunity. These segments are called ________.
a) Target markets.
b) Primary markets.
c) Tertiary markets.
d) Demographic markets.
Q.47. For each target market, the firm develops a ________. The offering is positioned
in the minds of the target buyers as delivering some central benefit(s).
a) Value offering
b) Niche offering.
c) Market offering.
d) Segment offering.
Q.48. ________ reflects the perceived tangible and intangible benefits and costs to
customers.
a) Loyalty.
b) Satisfaction.
c) Value.
d) Expectations.
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Q.49. If a marketer decides to use warehouses, transportation companies, banks, and
insurance companies to facilitate transactions with potential buyers, the
marketer is using what is called a ________.
a) Service channel.
b) Distribution channel.
c) Brand channel.
d) Relationship channel.
Q.50. ________ includes all the actual and potential rival offerings and substitutes that
a buyer might consider.
a) Competition.
b) The product offering.
c) A value proposition.
d) The supply chain.
Q.51. The ________ includes the immediate actors involved in producing, distributing,
and promoting the offering. The main actors are the company, suppliers,
distributors, dealers, and the target customers.
a) Operations environment.
b) Management environment.
c) Strategic environment.
d) Task environment.
Q.52. The ________ process consists of analyzing marketing opportunities; selecting
target markets; designing marketing strategies; developing marketing programs;
and managing the marketing effort.
a) Marketing planning.
b) Strategic planning.
c) Market research.
d) Opportunity analysis.
Q.53. David Packard of Hewlett-Packard once said, ―Marketing is far too important to
leave to ________.‖
a) The advertising boys.
b) Uninformed managers.
c) The CEO.
d) The marketing department.
Q.54. Some companies are now switching from being solely product-centered (with
product managers and product divisions to manage them) to being more
________ centered.
a) Competency.
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b) Strategy.
c) Marketing.
d) Customer-segment.
Q.55. Companies are recognizing that much of their market value comes from
________, particularly their brands, customer base, employees, distributor and
supplier relations, and intellectual capital.
a) Variable assets.
b) The value proposition.
c) Intangible assets.
d) Tangible assets.
Q.56. ________ can increasingly be conducted electronically, with buyer and seller
seeing each other on their computer screens in real time.
a) Public relations.
b) E-commerce.
c) Advertising.
d) Personal selling.
Q.57. Top management is going beyond sales revenue alone to examine the
marketing scorecard to interpret what is happening to ________.
a) Market share.
b) Customer loss rate and customer satisfaction.
c) Product quality.
d) All of the above.
Q.58. At the heart of any marketing program is the ________—the firm‘s tangible
offering to the market.
a) Service offer.
b) Product.
c) Sales support team.
d) Packaging.
Q.59. ________ activities are the means by which firms attempt to inform, persuade,
and remind consumers directly or indirectly about the brands they sell.
a) Consumer behavior.
b) Market segmentation.
c) Marketing research.
d) Marketing communication.
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Q.60. Marketing evaluation and ________ processes are necessary to understand the
efficiency and effectiveness of marketing activities and how both could be
improved.
a) Control.
b) Analysis.
c) Measurement.
d) Feedback.
Q.61. Which of the following is not one of McCarthy's Four P's?
a) Product.
b) Profit.
c) Place.
d) Price.
Q.62. Good marketing is no accident, but a result of careful planning and ________.
a) Execution.
b) Research.
c) Selling.
d) Strategies.
Q.63. Marketing is both an ―art‖ and a ―science‖ there is constant tension between the
formulated side of marketing and the ________ side.
a) Creative.
b) Selling.
c) Management.
d) Behavior.
Q.64. A further 3Ps are incorporated into the marketing mix:
a) Physical evidence, process and people.
b) Process people and promotion.
c) Physical evidence, people and production.
d) Physical evidence, process and price.
Q.65. The term 'marketing mix' describes:
a) A composite analysis of all environmental factors inside and outside the firm.
b) A series of business decisions that aid in selling a product.
c) The relationship between a firm's marketing strengths and its business
weaknesses.
d) A blending of strategic elements to satisfy specific target markets.
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Q.66. The most formal definition of marketing is
a) Meeting needs profitably.
b) Identifying and meeting human and social needs.
c) The 4Ps (Product, Price, Place, Promotion).
d) An organizational function and a set of processes for creating,
communicating, and delivering, value to customers and for managing
customer relationships in ways that benefit the organization and its
stake holders.
Q.67. Marketing management is ________.
a) Managing the marketing process.
b) Monitoring the profitability of the companies products and services.
c) The art and science of choosing target markets and getting, keeping,
and growing customers through creating, delivering, and
communicating superior customer value.
d) Developing marketing strategies to move the company forward.
Q.68. ________ can be seen as the development, design, and implementation of
marketing programs, processes, and activities that recognizes the breadth and
interdependencies of their effects.
a) Niche marketing.
b) Holistic marketing.
c) Relationship marketing.
d) Demand-centered marketing.
Q.69. In ________ consumers may share a strong need that cannot be satisfied by an
existing product.
a) Negative demand.
b) Declining demand.
c) Latent demand.
d) Non-existent demand.
Q.70. In ________more customers would like to buy the product than can be satisfied.
a) Overfull demand
b) Irregular demand.
c) Declining demand.
d) Negative demand.
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Q.71. Companies selling mass consumer goods and services such as soft drinks,
cosmetics, air travel, and athletic shoes and equipment spend a great deal of
time trying to establish a superior brand image in markets called_________.
a) Business market.
b) Consumer market.
c) Global market.
d) Nonprofit and governmental markets.
Q.72. Which is not the element of extended 3 P's of Marketing Mix
a) Public.
b) People.
c) Process.
d) Physical Evidence.
Q.73. Key customer markets are consumer, business, global, and ________.
a) Market place.
b) Nonprofit & govt. market.
c) Market Space.
d) Meta market.
Q.74. _____________ is a cluster of complementary products and services that are
closely related in the mind of the customers, but spread across diverse set of
industries
a) Market place.
b) Business market.
c) Market Space.
d) Meta market.
Q.75. According to Theodore Levitt, who drew a perceptive contrast between the
selling and marketing concepts, ________ is preoccupied with the need to
convert products into cash.
a) Marketing.
b) Selling.
c) Direct Marketing.
d) Holistic Marketing.
Q.76. In which key customer Market Company selling mass consumer goods and
services, and spend a great deal of time trying to establish superior brand
image.
a) Business market.
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b) Nonprofit & govt. market.
c) Consumer market.
d) Global market.
Q.77. _________ is a collection of sellers and __________ is a collection of buyers
a) Industry, market
b) Market, industry.
c) retailer, wholesaler.
d) Wholesaler, retailer.
Q.78. Flipkart .com is an example of _________
a) Market space
b) Market place.
c) Meta market.
d) None of these.
Q.79. ____________, a set of benefit that companies offer to consumers to satisfy
their needs
a) USP.
b) Value proposition.
c) Brand.
d) Offerings.
Q.80. The customer wants friends to see him as a savvy customer is a kind of______
a) Secret need.
b) Real need.
c) Stated need.
d) Delight need.
Q.81. The ability of a company to deal with customers one at a time has become
practical as a result of advances in ________, computers, the Internet, and
database marketing software.
a) Improved communication flow.
b) Information technology.
c) Customer-centered strategies.
d) Factory customization.
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Q.82. The four Ps represent the sellers‘ view of the marketing tools available for
influencing buyers. From a buyer‘s point of view, each marketing tool is
designed to deliver a customer benefit. Robert Lauterborn suggested that the
sellers‘ four Ps correspond to the customers‘ four Cs. The four Cs are
________.
a) Customer focus, cost, convenience, and communication.
b) Convenience, control, competition, and cost.
c) Customer solution, customer cost, convenience and communication.
d) Category control, cost, concept development, and competition.
Q.83. Customer value triad is combination of:
a) Quality, service, and price.
b) Brand, quality and price.
c) Quality, quantity and price.
d) Quantity, brand and quality.
Q.84. Understanding and meeting customers' expressed need is :
a) Reactive marketing orientation.
b) Proactive marketing orientation.
c) Total market orientation.
d) None of the above.
Q.85. During market segmentation analysis, the marketer identifies which segments
present the greatest opportunity. These segments are called ________.
a) Primary markets.
b) Target markets.
c) Demographic markets.
d) Focused markets.
Q.86. For each target market, the firm develops a ________. The offering is positioned
in the minds of the target buyers as delivering some central benefit(s).
a) Value offering.
b) niche offering.
c) Market offering.
d) Segment offering.
Q.87. ________ reflects the perceived tangible and intangible benefits and costs to
customers.
a) Loyalty.
b) Satisfaction.
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c) Expectations.
d) Value.
Q.88. ________ includes all the actual and potential rival offerings and substitutes that
a buyer might consider.
a) Competition.
b) The product offering.
c) Tangible assets.
d) Intangible assets.
Q.89. Companies who form a ________ collect information on each customer‘s past
transactions, demographics, psychographics and media and distribution
preferences.
a) Sales network.
b) Supply-chain network.
c) Marketing network.
d) Integrated network.
Q.90. _____________refers to cutting out the middlemen in e-commerce transactions
a) Supply-chain network.
b) Disintermediation.
c) Marketing network.
d) Reintermediation.
Q.91. _____refers to using the Internet to reassemble buyers, sellers and other
partners in a traditional supply chain in new ways.
a) Disintermediation.
b) Marketing network.
c) Supply-chain network.
d) Reintermediation.
Q.92. The marketing planning process consist of :
a) Analyzing marketing opportunity and selecting target market.
b) Designing marketing strategies and developing marketing program.
c) Managing the marketing effort.
d) All of the above.
Q.93. The _________________ is a physical such as store you shop in;
_______________ as when you shop on internet.
a) Marketplace, marketspace.
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b) Marketplace, metamarket.
c) Metamarket, marketspace.
d) None of the above.
Q.94. One of the oldest concepts which hold that consumers will prefer products those
are widely available and inexpensive
a) The production concept.
b) The product concept.
c) The selling concept.
d) The marketing concept.
Q.95. Which concept proposes that consumer favor products that offer most quality,
performance, or innovative features?
a) The production concept.
b) The product concept.
c) The selling concept.
d) The marketing concept.
Q.96. Which concept holds that consumer and business, if left alone won't buy enough
of the organization‘s products and organization must therefore, undertake
aggressive selling and promotion effort?
a) The production concept.
b) The product concept.
c) The selling concept.
d) The marketing concept.
Q.97. From Buyers point of view the four dimensions SIVA stands for
a) Solution, interest, value, access.
b) Solution, information, value, affordability.
c) Solution, information, value, access.
d) Stuaion, information, value, access.
Q.98. Companies that practice both a reactive and a proactive marketing orientation
are implementing a ____________________ and are likely to be the most
successful.
a) Total marketing orientation.
b) Production orientation.
c) Relationship marketing.
d) Product orientation.
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Q.99. Which marketing concepts hold that the key to achieving organizational goals is
being more effective than competitors in creating, delivering, and communicating
superior value to your chosen target market?
a) The production concept.
b) The product concept.
c) The selling concept.
d) The marketing concept.
Q.100. A ____________________ consists of the company stakeholders - customers,
employees, suppliers, distributors, retailers, ad agencies, university scientist and
others - with whom it has mutually profitable business relationship.
a) Marketing network.
b) Sales network.
c) Supply-chain network.
d) None of the above.
Q.101. __________________ incorporates performance marketing and understanding
returns to the business from marketing activities and programs, as well as
addressing broader concerns and their legal ethical, social and environmental
effects.
a) Consumer marketing.
b) Holistic marketing.
c) Relationship marketing.
d) Holistic marketing.
Q.102. Which marketing must take place at two levels? At one level the various
marketing must work together. At the second level, other department must
embrace marketing?
a) External Marketing.
b) Interactive Marketing.
c) Relationship marketing.
d) Internal Marketing.
Q.103. Customer solution, one of the elements of 4Cs is corresponding to which
element of 4Ps of marketing mix______
a) Product.
b) Price.
c) Place.
d) Promotion.
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Q.104. Customer cost, one of the elements of 4Cs is corresponding to which element of
4Ps of marketing mix_____
a) Product.
b) Price.
c) Place.
d) Promotion.
Q.105. Communication, one of the elements of 4Cs is corresponding to which element
of 4Ps of marketing mix_________
a) Product.
b) Price.
c) Place.
d) Promotion.
Q.106. Convenience, one of the elements of 4Cs is corresponding to which element of
4Ps of marketing mix_____
a) Product.
b) Price.
c) Place.
d) Promotion.
Q.107. Customer value________
a) Is greater if benefits exceed costs.
b) Become less important as competition increases.
c) Is the same thing as low price.
d) None of these.
Q.108. The Term Marketing Myopia was introduced by_______
a) Bob Lauterborn.
b) Neil Borden.
c) E. Jerome McCarthy.
d) Theodore Levitt.
Q.109. The scope of a ________ generally includes supporting elements such as
branding, packaging, warranties, guarantees, and support.
a) Product.
b) Price.
c) Place.
d) Promotion.
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Q.110. Which of the following statements about nonprofits is FALSE?
a) Marketing is being more widely accepted by nonprofit organizations.
b) The marketing concept is as important for nonprofit organizations as it is for
business firms.
c) In business firms and in nonprofit organizations, support comes from
satisfied customers.
d) The marketing concept provides focus in both business firms and
nonprofit organizations.
Q.111. The difference between "production orientation" and "marketing orientation" is
best explained as follows:
a) There are no separate functional departments in a marketing-oriented firm.
b) In a marketing-oriented firm, every department's activities are guided
by what customers need and what the firm delivers at a profit.
c) Production-oriented firms usually do not have a marketing manager.
d) In a marketing-oriented firm, the total system's effort is guided by what
individual departments would like to do.
Q.112. When backed by buying power, wants become ________.
a) Products.
b) Demands.
c) Purchases.
d) Needs.
Q.113. Economists use the term ________ to refer to a collection of buyers and sellers
who transact in a particular product class
a) Market.
b) Exchange.
c) Experience.
d) Customer.
Q.114. Demarketing implies
a) Reintroducing the product
b) Stopping a product.
c) Bifurcating a product.
d) None of the above.
Q.115. What is 'marketing myopia'?
a) Customer value.
b) Total Quality Management.
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c) Value, satisfaction & quality.
d) A short-range view that focuses on current wants and loses sight of
underlying customer needs.
Q.116. _________ is defined as a social and managerial process by which individuals
and groups obtain what they need and want through creating and exchanging
products and value with others.
a) Promotion.
b) Sales.
c) Marketing.
d) Advertising.
Q.117. When marketers try to reduce demand for a product temporarily, they are
engaging in__________
a) Demarketing.
b) Customer management.
c) Environmental Management.
d) Satisfying demands.
Q.118. The ________ concept calls on marketers to balance company interests,
customer wants and society's interests.
a) Selling.
b) Production.
c) Societal.
d) Marketing.
Q.119. Which is not true about New Consumer Capability?
a) Disintermediation.
b) A substantial increase in buying power.
c) A greater variety of available good and services.
d) Great ease in interacting and placing and receiving orders.
Q.120. ________ is individuals and households who buy goods and services for
personal consumption.
a) The target market.
b) A market segment.
c) The consumer market.
d) The ethnographic market.
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Q.121. According to Maslow‘s Hierarchy of Needs, the lowest orders of needs are
called:
a) Self-actualization needs.
b) Social needs.
c) Safety needs.
d) Physiological needs.
Q.122. The ―in‖ suppliers are most likely to get nervous and feel pressure to put their
best foot forward in which of the following types of buying situations?*
a) Modified rebuy.
b) New task buying.
c) Straight rebuy.
d) Indirect rebuy.
Q.123. When a firm buys a product or service for the first time, it is face specifications,
prices, terms, or suppliers.*
a) Modified rebuy
b) New task buying.
c) Straight rebuy.
d) Indirect rebuy.
Q.124. In a _______________, the buyer reorders something without any modifications.
a) Modified rebuy.
b) New task buying.
c) Straight rebuy.
d) Indirect rebuy.
Q.125. Customers are______________
a) People who buy the product.
b) People who buy & use the product.
c) People who use the product.
d) None of the above.
Q.126. All of the following are ways that marketing plays a key role in the company's
strategic planning except:
a) Marketing provides a guiding philosophy.
b) Marketing is the only discipline that can provide a formal structure for
the planning effort.
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c) Marketing provides inputs to strategic planners by helping to identify
attractive market opportunities.
d) Within individual business units, marketing designs strategies for reaching
the unit's objectives.
Q.127. Consumerism is the process of__________
a) Making products available in bulk.
b) Giving exclusive products to consumers.
c) Organized efforts to protect consumers.
d) None of the above.
Q.128. In an example discussed in your text, Johnson & Johnson's recall of their
Tylenol product following the discovery that several bottles of Tylenol had been
laced with cyanide is consistent with which business philosophy?
a) The marketing concept.
b) The product concept.
c) The selling concept.
d) The societal marketing concept.
Q.129. A (n) _______________________ is a retail store that carries a narrow product
line with a deep assortment within that line.
a) Shopping goods store.
b) Convenience store.
c) Specialty store.
d) Departmental store.
Q.130. Consumer goods with unique characteristics or brand identification often
requiring a special purchase effort are called:
a) Shopping goods store.
b) Convenience store.
c) Specialty store.
d) Departmental store.
Q.131. If a firm were to bid to do a "turnkey" operation where they would choose a
building site, designing a cement factory to build the plant, hire construction
crews, assemble materials and equipment to run the new factory, and turn over
the finished factory ready to operate to the owners, the firm would be using
which of the following?
a) Core process products selling.
b) Design products selling.
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c) Reciprocal selling.
d) Systems selling.
Q.132. Consumers are____________
a) People who buy & use the product
b) People who use the product.
c) People who buy the product.
d) None of the above.
Q.133. According to the price/quality strategy matrix, when a company overprices its
product in relation to its quality it is considered to be using which type of
strategy?
a) Good-value strategy.
b) Premium strategy.
c) Overcharging strategy.
d) Snob strategy.
Q.134. When an importing country sets limits on the amount of goods it will accept in
certain product categories it is called a(n):
a) Quota.
b) Barrier.
c) Tariff.
d) Embargo.
Q.135. In evaluating messages for advertising, telling how the product is better than the
competing brands aims at making the ad:
a) Meaningful.
b) Distinctive.
c) Believable.
d) Remember.
Q.136. Which of the following is foreign owned (even though it is traditionally thought of
U.S.) company?
a) IBM.
b) Xerox.
c) Kodak.
d) Universal Studios.
Q.137. Reasons for Demarketing may be_________
a) Too much competition.
b) Profit margin under pressure.
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c) Manufacture wants to concentrate on product / market.
d) All of the above.
Q.138. A ________________ is a promotion strategy that calls for using the sales force
and trade promotion to move the product through channels.
a) Push strategy.
b) Pull strategy.
c) Blocking strategy.
d) Integrated strategy.
Q.139. If your company were to make a product such as a suit of clothes and sold that
product to a retailer, your company would have sold to the ___________
market.
a) Reseller.
b) Business.
c) Government.
d) Service.
Q.140. Given recent information about growth trends and growth potential of ethnic
populations within the U.S. market, which of the following ethnic groups would
be a best bet to double during the next half century and become one of the U.S.
market's most viable segments?
a) Hispanics and Asians.
b) African Americans.
c) Western Europeans.
d) Middle Eastern.
Q.141. The American Marketing Association suggests a list of code of ethics. All of the
following are ethics suggested in the area of distribution except:
a) Not manipulating the availability of a product for purpose of exploitation.
b) Not using coercion in the marketing channel.
c) Using gray marketers whenever possible to save the consumer money.
d) Not exerting undue influence over the reseller's choice to handle a product.
Q.142. A ____________________ is the way consumers perceive an actual or potential
product.
a) Product idea.
b) Product image.
c) Product concept.
d) Product feature.
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Q.143. A company faces several major decisions in international marketing. The first of
these decisions is often:
a) Deciding whether to go international.
b) Looking at the global marketing environment.
c) Deciding which markets to enter.
d) Deciding how to enter markets.
Q.144. Catalog marketing is big business in the United States. The average household
receives ______________ catalogs per year.
a) 25
b) 50
c) 75
d) 100
Q.145. . _________________ is the concept under which a company carefully
integrates and coordinates its many communications channels to deliver a clear,
consistent, and compelling message about the organization and its products.
a) The promotion mix.
b) Integrated international affairs.
c) Integrated marketing communications.
d) Integrated demand characteristics.
Q.146. The fact that services cannot be stored for later use or sale is evidence of their:
a) Intangibility.
b) Inseparability.
c) Variability.
d) Perishability.
Q.147. _______________ is a strategy of using a successful brand name to launch a
new or modified product in a new category.
a) Duo branding.
b) Line extension.
c) Brand extension.
d) Multibranding.
Q.148. A company is practicing ________________ if it focuses on sub segments with
distinctive traits that may seek a special combination of benefits.
a) Micromarketing.
b) Niche marketing.
c) Mass marketing.
d) Segment marketing.
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Q.149. ________________ is a philosophy holding that a company's marketing should
support the best long-run performance of the marketing system.
a) Enlightened marketing.
b) Myopic marketing.
c) Fundamental marketing.
d) Conceptual marketing.
Q.150. The primary reason that many companies work to become the "low-cost
producers" in their industry is because:
a) They can generate more advertising.
b) They can please top management.
c) They can gain tax advantages.
d) They can set lower prices that result in greater sales and profits.
●●●●●●
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Unit 2
Unit Preview:
2.1. Consumer Behavior:
Meaning, Definitions & Importance of Consumer Behavior, Buying
Characteristics Influencing Consumer Buying Behavior, Factors
Influencing Buyer Behavior, Characteristics of Organizational market
and Consumer market & Comparison between Organizational Buying
behavior and Consumer Buying behavior, Buying Roles and Buying
Centers.
2.2. Buyer Decision:
Five Steps Buyer Decision Process, Pictorial Examples Based on Five
Steps Buyer Decision Process ,Types of Buying Behavior, Buyer
Decision Process for New Products.
Activity Based Learning
2.1. Consumer Behaviour:
It's true that buyer behaviour has changed forever. That means the time has come for
companies everywhere to either get on board or get out of the way because there's no
going back to the old way of doing business. To truly understand this new shift in buyer
behaviour, one need to take a look at how and why it has came about. The whole
behaviour of a person while making purchases may be termed as consumer behaviour.
It is the attempt and prediction of human actions in the buying role.
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2.1.1. Meaning of Consumer Behavior:
As a consumer, we all are unique in buying behavior. The taste and preferences vary
from one to another. The study of consumer helps firms and organizations in improving
their marketing strategies by understanding the following major issues:
a) The psychology of how consumer thinks, feels, react, reason and select between
different alternatives.
Example: Brand and Product.
b) The psychology of how consumer is influenced by his/her environment.
Example: Culture, Family, Sign, Media.
c) The behavior of consumers while shopping or making other marketing decisions.
d) How to influence the consumer marketing decisions.
e) Which marketing campaigns and marketing strategies should be adapted to more
effectively reach the consumer?
Behavior occurs either for the individuals, or in the context of a group.
Example:
Friends influence what kind of clothes a person wears or a group in company on job
makes decisions as to which products the firm should use. Hence by studying the
behavior of consumer in a group or individual, a marketer can design its marketing
campaigns and marketing strategies to reach the targeted one very effectively.
2.1.2. Definitions of Consumer Behavior:
Following are the definitions of consumer behavior given by various authors:
1) American Marketing Association:
“The dynamic interaction of affect and cognition, behavior, and the environment by
which human beings conduct the exchange aspects of their lives.”
2) Kotler and Keller (2011):
“The study of the ways of buying and disposing of goods, services, ideas or
experiences by the individuals, groups and organizations in order to satisfy their
needs and wants.”
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3) Walter and Paul:
“Consumer behavior is a process whereby individuals decide what, when, where,
how and from whom to purchase goods and services.”
4) Belch and Belch:
“Buyer behaviour is the process and activities of people engage in when searching,
selecting, purchasing, using, evaluating and disposing of products and services so
as to satisfy their needs and desires.”
5) Frederick F. Webster:
”Consumer behaviour is all psychological, social and physical behaviour of potential
customers as they become aware of evaluate, purchase, consume and tell other
people about products and services.”
6) Ostrow and Smith:
“Consumer behaviour is actions of consumers in the market place and the
underlying motives for those actions.”
7) The authors (Dr Sandeep Pachpande, Dr S. B Mathur and Prof Prakash Singh):
“Consumer behavior is a way to study the consumer’s actions and decision process
in the marketplace when purchasing goods or services for consumption.”
8) “Consumer behavior is the sum total of a consumer’s attitudes, preferences,
intentions, and decisions regarding the consumer’s behavior in the marketplace
when purchasing a product or service.”
9)
“All psychological, social & physical behaviour of potential customers as they
become aware of, evaluate, purchase, consume, & tell others about product &
services.”
10) “Consumer behaviour is the study of when, why, how and where people do or do not
buy a product. It blends elements from psychology, sociology, social anthropology
and economics.”
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2.1.3. Examples on Consumer Behavior:
We can explain the concept of consumer behavior with the help of following examples:
1) In Baghban movie, ICICI bank is featured and Amitabh Bachchan acted as an
employee of ICICI bank in-film placement which added advantage as Amitabh
Bachchan is already its brand ambassador.
In this way, the film is promoting the awareness about the bank which is beneficial
for both film and bank too. The consumer would connect themselves to ICICI Bank
as the brand ambassador is acting in the film too for the same bank which has a
great impact on consumer behavior.
2) Director SS Rajamouli thought of making a large scale historical movie. The movie
started at 2013 and the shooting went on for two years.
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Baahubali: The Beginning is a 2015 Indian bilingual epic historical fiction film
directed by S. S. Rajamouli. Produced by Shobu Yarlagadda and Prasad Devineni,
it is the first of two cinematic parts. The film was simultaneously made in Telugu and
Tamil and dubbed into Hindi, Malayalam and French languages. A fictional story of
two warring brothers fighting for control of an ancient Indian kingdom, it stars
Prabhas, Rana Daggubati, Tamannaah and Anushka Shetty in lead roles. The film
made on a budget of Rs. 120 crore (US$18 million) released worldwide on 10 July
2015 to positive reviews from critics, and became the highest grossing Indian film
within India and third highest grossing Indian film globally. It became the first south
Indian film to gross over Rs 600 crore (US$90 million) worldwide and the first nonHindi film to gross over Rs 100 crore (US$15 million) in dubbed Hindi version in
India. It is also the highest grossing Telugu film of all time.
The audience-the consumer of the movie enjoyed this movie as the story, visuals,
acting, background music connected itself to the consumer and now the audiences
are eagerly waiting for the next part.
WHY KATAPPA KILLED BAHUBALI???
Everyone wants to know the reply of this above question and it is acting as a
magnetic force of attraction for the audiences for watching this upcoming movie
Bahubali 2 in 2016.
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Director SS Rajamouli has positioned the story in the mind of consumers by
identifying the need for “NEW STORY” by every consumer and focused on it and
the result was awesome and memorable. The marketing line of the film was
“India’s Biggest Motion Picture.” This created awareness among consumer
towards this movie. In the words of Walter and Paul, audiences have already
decided to watch Bahubali 2, in 2016, by visiting theatres, anyhow they have to
watch this movie and for them this movie is the first priority among all movies
release during that period1&2.
2.1.4. Importance of Consumer Behavior:
The study of consumer behaviour for any product is very important to marketers in
shaping the fortunes of their organizations. Consumer behaviour is important for the
marketers to understand the buyer behaviour due to the following reasons:
1) Important to Determining the Production Policies:
Consumer behaviour discovers the habits, tastes and preferences of consumers
and such discovery enables an enterprise to plan and develop its products
according to these specifications.
2) Important to Determine Price Policies:
Pricing is a big-gun which should never be mishandled. A businessman must study
the behaviour of his consumers very well before fixing the price of his product
because the consumer behaviour affects price policies of the enterprise to a great
extent.
3) Promotion Policies:
Promotional mix hovers round three important areas namely, personal selling,
advertising and sales promotion. The study of consumer behaviour helps the
enterprise in knowing the buying motives of consumers. The decisions of the form,
colour, packing and labeling etc, of the products are directly affected by the motives
for which the consumers buy the product.
4) Important for Reducing Consumption and Best Utilizing the Resources:
It is significant for regulating consumption of goods and thereby maintaining
economic stability. It is useful in developing ways for the more efficient utilization of
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resources of marketing. It also helps in solving marketing management problems in
more effective manner.
5) Important to Know Consumer’s Demands:
Today consumers give more importance on environment friendly products. They are
concerned about health, hygiene and fitness. They prefer natural products. Hence
detailed study on upcoming groups of consumers is essential for any firm. The
growth of consumer protection movement has created an urgent need to
understand how consumers make their consumption and buying decision.
Consumers’ tastes and preferences are ever changing. Study of consumer
behaviour gives information regarding colour, design, size etc.
6) Market Differences:
Several differences exist in the modem markets. Therefore, uniform marketing
programme cannot fulfill the needs of these markets. This is because every market
has separate buyers and their necessities are also different to each other.
Consumer behavior and buying motives in each and every market is quite different,
there-fore, adequate marketing strategies cannot be determined without their study.
Thus, study of consumer behaviour becomes a necessity.
7) Determining the Channels of Distribution:
The goods and services which are sold and purchased solely on the basis of low
price must have cheap and economical distribution channels. In case of those
articles which require after sales services (for example, cars, scooter, motorcycle,
generator sets etc.) must have different channels of distribution. Thus, decision
regarding channels of distribution is taken on the basis of consumer behaviour.
8) Meeting the Competition:
In a competitive market, every manufacturer wants to sell his products. This has
resulted into acute competition. In such a situation manufacturer sometimes sells his
product on the price less than the cost of production. Such a strategy depends upon
the behaviour of the consumers.
9) Rapid Technological Advancement:
Rapid introduction of new products with technological advancement has made the
job of studying consumer behaviour more imperative.
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Example: The information technologies are changing very fast, so far as
communication industry is concerned the 'pagers’ were kicked out of the market by
mobile phones. The PC 486 has been declared dead and even PC-Pentium got four
more up gradations.
2.1.5. Buying Characteristics Influencing Consumer Buying Behavior:
In any buying situation for consumer goods or service, there are four elements which
can influence buying process and they are shown below in the diagram.
Buyer
Characteristics
Product
Characteristics
Seller
Characteristics
Situational
Characteristics
Fig: Buying Characteristics Influencing Consumer Buying Behavior
1) Buyer Characteristics:
It is important to know for any marketing company and its sales staff, the basic
characteristics of the buyers or the target audience to whom products will be sold.
The needs and the wants of a particular consumer group will depend on their
personal, cultural, social and physiological factors which influence consumer
behavior.
2) Product Characteristics:
The product as offered by the companies to the consumers will be of utmost
important to the consumer in deciding to buy a particular brand or a particular
product.
3) Seller Characteristics:
The identity of sellers will influence buying decisions as the quality of the product is
related to the manufacturer or manufacturing company if the seller’s reputation is
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high. Reliability of the product and after sales service would be better. Products like
Nokia Cellular, Maruti car, Hero Motors etc. enjoy very high reputation and reliability
with the customers.
4) Situational Characteristics:
Products which are generally purchased during festival time, marriage and religious
occasions will only be sold in this circumstance and situation. Some products are
seasonal in nature and they are sold either in summer, winter or rainy season.
Raincoats, Rainy shoes, Umbrellas, Waterproofing materials will generally be sold
during rainy season and not in other seasons.
All the four buying characteristics result sometimes in buying and sometimes in no
buying decision.3
2.1.6. Factors Influencing Buyer Behavior:
Buying Behavior is the decision processes and acts of people involved in buying and
using products. A consumer buying behaviour is influenced by cultural, social, personal
and psychological factors.
Factors Influencing Buyer Behaviour
Culture
Social
Personal
Psychological
Culture
Reference
Group
Age & life
cycle stage
Motivation
Sub
Culture
Family
Occupation
Perception
Social
Culture
Roles and
Status
Economic
Situation
Learning
Life Style
Beliefs and
Attitudes
Personality &
Self Concept
Fig: Factors Influencing Buyer Behavior
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A) Cultural Factors:
It is defined as a complex sum total of knowledge, belief, traditions, customs, art,
moral law or any other habit acquired by people as members of society.
1) Culture:
It is the most basic cause of a person’s wants and behavior. Our consumer
behavior that is the things a person buy is influenced by our background or
culture.
2) Sub-cultural Influences:
Within a culture, there are many groups or segments of people with distinct
customs, traditions and behavior. In the Indian culture itself, we have many
subcultures, the culture of the South, the North, East and the West.
3) Social Class Influence:
By social class refer to the group of people who share equal positions in a
society. Social class is defined by parameters like income, education,
occupation, etc. Within a social class, people share the same values and beliefs
and tend to purchase similar kinds of products.
B) Social Factors:
A group is a collection of individuals who share some consumer relationship,
attitudes and have the same interest. Such groups are prevalent in societies. These
groups could be primary where interaction takes place frequently and consists of
family groups.
1) Reference Groups:
Many small groups influence a consumer’s behavior. Groups that have a direct
(face to face) or indirect reference in forming a consumer’s behavior is known as
reference groups.
2) Family:
The family is the most important of the primary group and is the strongest
source of influence on consumer behavior. Children learn the family tradition
and customs, and they imbibe many behavioral patterns from their family
members, both consciously and unconsciously.
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3) Roles and Status:
A person belongs to many groups like club, relatives and company and his/her
position in each group can be defined in terms of both role (consists of the
activities people are expected to perform accordingly to the persons around
them) and status (each roles carries a status reflecting the general esteem given
to it by society).People usually select products appropriate to their roles and
status.
C) Personal Factors:
Each individual processes the information received in different ways and evaluates
the products in his own personal way. This is irrespective of the influence of the
family, social class, cultural heritage, etc. a person’s own personality ultimately
influences his decision.
1) Age and Life-cycle Stage:
People change the goods and services they buy over their lifetimes. Tastes in
food, clothes, furniture, and recreation are often age related. Buyer is also
shaped by the stage of the traditional family life cycle stage (young singles and
married couples with children) and nontraditional stages (unmarried couples,
singles marrying later in life, childless couples, same-sex couples, single
parents, extended parents and transgender.
2) Occupation:
A person’s occupation affects the goods and services bought. Blue-collar
workers tend to buy more rugged work clothes, whereas executives buy more
business suits.
3) Economic Situation:
A person’s economic situation will affect product choice. Marketers of incomesensitive goods watch trends in personal income, savings, and interest rates. If
economic indicators point to a recession, marketers can take steps to redesign,
reposition, and reprice their products closely. Some marketers target consumers
who have lots of money and resources, charging prices to match.
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4) Lifestyle:
People coming from the same subculture, social class and occupation may have
different lifestyles.
5) Personality and Self-concept:
Distinct Personality influences buying behavior of each person as they have
different traits such as self-confidence, dominance, sociability, autonomy,
defensiveness, adaptability, and aggressiveness. Personality can be useful in
analyzing consumer behavior for certain product or brand choices as it is a
unique psychological characteristic that lead to relatively consistent and lasting
responses to owns environment.
D) Psychological Factors:
A person’s buying choices are further influenced by four major psychological factors
as mentioned below:
1) Motivation:
A person has many needs at any given time. Some are biological, arising from
states of tension such as hunger, thirst, or discomfort. Others are psychological,
arising from the need for recognition, esteem, or belonging. A need becomes a
motive when it is aroused to a sufficient level of intensity. A motive (or drive) is a
need that is sufficiently pressing to direct the person to seek satisfaction.
2) Perception:
The processes by which people select, organize, and interpret information to
form a meaningful picture of the world.
3) Learning:
Changes in an individual’s behavior arising from experience.
4) Beliefs and Attitudes:
A belief is a descriptive thought that a person holds about something. Attitude
describes a person’s consistently favorable or unfavorable evaluations, feelings,
and tendencies toward an object or idea.
E) Buyer Factors:
When the buying decisions are affected by an extremely difficult combination of
external and internal influences., they are buying factors.4
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2.1.7. Characteristics of Organizational Market and Consumer Market:
The characteristics of organizational market and consumer market are listed below:
A) Characteristics of Organizational Market:
The characteristics of organizational market are as follows:
1) Greater sales volume.
2) Smaller number of buyers.
3) Large volume of purchases i.e. in bulk quantity.
4) Inelastic demand.
5) Direct buying.
6) Contract buying by specifications, standardizations etc.
7) Negotiation system (Sourcing/Dual Sourcing), buying abroad.
8) Make or buy or lease decisions.
B) Characteristics of Consumer Market:
The characteristics of consumer market are as follows:
1) Every purchase in the consumer market is promoted by a motive or combination
of motives. Hence it is very necessary for the salesman to know, what motive of
the purchaser prompts the buyer in the consumer market to buy.
2) In the consumer market, the behavior of every human being is different because
of differences in heredity, education, environment, training and experience.
3) In the consumer market, all customers are not one and the same. There are
different types of customers and each and every customer has different needs.
4) In the consumer market, intensity of human beings always changes.
5) In the consumer market, buying motive is not one and the same for all buyers.
6) Large size of the consumer market acts as a major attraction to large and small
manufacturers for entering into this market. This led to high competition in the
consumer market.
7) The profit margin in the consumer market is low mainly due to high competition
exists in the market.3&4
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2.1.8. Comparison between Organizational
Consumer Buying Behavior:
Buying
Behavior
and
The difference between organizational buying behavior and consumer buying behavior
is explained with images given below:
Following are the major points of comparison between Organizational buying behaviour
and Consumer buying behaviour:
1) Organization purchases goods to use in their ongoing operation and to resell to
consumer, while consumer purchases goods for their personal use.
2) Organizations generally purchase in bulk, whereas consumer typically do not.
3) Organization purchases are
driven by customer
demand and need for
manufacturing materials whereas consumers purchase are driven by need and
want.
4) Organizational buyers are more rational during purchase while consumer buying
process is more spontaneous.
5) Organization purchases are more formal while consumer purchases are informal.
6) More people are involved in any organizational buying while the degree of people
participation is very less in consumer buying process.
7) Organizational buying process focuses on long term where they build long lasting
relationships with suppliers whereas Consumer buying is generally short term
focused where they conclude the relationship with seller when the transaction is
completed.
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8) The demand for goods in organizational buying is derived from the summation of the
demand for goods in the consumer market whereas in a consumer market,
consumers demand for goods when they recognize their needs. As a result the
demand for a good created in large scale.
9) Demand for goods in organizational buying are not affected by the price changes in
short run where it can be concluded that demand for goods in business market is
price inelastic whereas demand for goods in consumer markets is heavily affected
by the changes in the prices where it can be concluded that consumer market
demand is price elastic.
10) The purchasing behaviour in organizational buying carries a lot of professional
behaviour where everyone would behave in a standardized manner whereas the
purchasing behaviour in the consumer market is highly personal and varies from
person to person.
11) Organizational buyers face complicated buying process where they have to adhere
to purchasing standards and involve approval of many people whereas buying
decisions of a consumer market is simple where it purely depends on the wish of
consumer.
12) Organizational buyers usually buy goods straight away from the manufacturer
whereas consumers buy goods from retailers.3,4,5&6
2.1.9. Models of Buyer Behaviour:
The traditional way to understand the consumers by the marketers is tracing daily
experience of selling to consumers. But, with the development and growth in the size of
markets/business, many marketers found it difficult to have direct contact with their
customers and therefore, marketing decisions of marketer now turn to consumer
research. Marketers spend huge than ever before to study consumers in order to learn
more about behaviour of consumers which help in getting answers for certain important
questions encountered by Marketers.
Such questions include: Who buys? How do they buy? When do they buy? Where do
they buy? Why do they buy? The most important question for marketers is related with
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consumer response to marketers efforts, i.e. how do consumers respond to various
marketing stimuli that the company might use? Only those companies have a great
advantage over its competitors that really understands how consumers will respond to
different product features, prices and advertising appeals. Attempts to understand why
a consumer behaves he way he does, have always been a continuous activity. Three
major models are as follows:
A) Nicosia Model:
Nicosia model explains the consumer behaviour on the basis of four fields in which
the output of field one becomes the input to next field. Four Fields of Nicosia Model:
1) Field One:
In order to explain consumer behaviour this model starts with field one which is
concerned with attributes of firm and attributes of consumer and exposure with
message. So mainly it includes two subfield (a) Firms Attributes (b) Consumer
attributes.
a) Firms Attributes:
It includes the characteristics of firm and its products. Generally, the firm
name, firm characteristics, its products etc. will be considered by consumers
for making a purchase decision. Consumers confront various stimulus i.e.,
products, packages, brand names, advertisements and commercials etc.
Such exposure to messages of companies will have effect on consumer
attributes and their choice.
b) Consumer Attributes:
It includes the consumer predisposition and his own characteristics and
attributes. Predisposition means person is preoccupied with own thinking
before he perceived something and it based on his background, value
orientation, prejudices, belief, attitudes, personality etc.
This consumer predisposition and attributes are affected by his exposure to
messages of various firms and this in turn is responsible for building of
attitude of the consumer.
2) Field Two:
It is a pre-action field, i.e. consumer takes action before purchasing. In this
consumer do the research i.e. collect further information from various sources
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and evaluate it through various means and various criteria which help him in
relating the alternative with his requirement.
3) Field Three:
Field three is act of purchase or the decision making to buy the product. The
consumer buys the product and uses it.
4) Field Four:
Field four is concerned with post purchase behaviour i.e. how the product is
used (purpose) by consumer, the storage and preservation of product, the
consumption behaviour of consumer for product i.e. whether after consumption
whether consumer gets satisfaction or dissatisfaction. All such information about
consumer use, storage, and preservation and consumption behaviour will be
collected by a firm as such feedback is used to make changes in the firms'
product attributes. At the same time this feedback in the form of product use
experience will be responsible for changing the predisposition of the consumer
and it will also determine later attitude of consumer towards product.
B) Howard-sheth Model:
In the literature of consumer behaviour, one of the major contributions was the
theory of buyer behaviour by "John A. Howard" and "Jagdish N. Sheth" in 1969.
They take some years and model of consumer behaviour was appeared in 1974.
"John Howard" has revised the "Howard-Sheth" model further in their volume
published in 1977, entitled "consumer behaviour: Application of Theory".
This model is slightly complicated and consumer behaviour is a complex process.
Model has incorporated that the learning, perception and attitudes influence the
consumer behaviour.
In this model four sets of variables are as follows:
Four Sets of Variables:
1) Input:
This model starts with inputs i.e. information consumer has acquired for making
decisions. This model is totally information based & it focuses more information
which consumer uses to make a purchase decision.
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2) Perceptual and Learning Constructs:
These constructs have been classified as the perceptual constructs and the
learning constructs. These constructs are Psychological variables, e.g. motives,
attitudes, perception & its influence on buyer behaviour. The Perceptual
constructs deal with the way the individual perceives and responds to the
information from the input variables. All the information that is received may not
attract the attention as it is subject to perceived uncertainty and lack of
meaningfulness of information received. In this two type of search consumer
make i. e. Overt and Latent. Overt search which is reflected in the direct
behaviour of consumer, such behaviour openly manifests itself that what actually
consumer is searching. Latent search which is hidden research and it does not
reflect itself. Hidden research for searching the root cause of information
searching behaviour of consumer. Through search behaviour consumer
receives the stimuli and try to interpret it.
3) Output:
Output means the purchase decision- person intention will make him to
purchase the brand. After purchase an individual may have satisfaction or
dissatisfaction, where satisfaction leads to Positive attitude and person brand
comprehension increases. With dissatisfaction person will have a negative
attitude about product.
4) Exogenous or External Variables:
The model also includes some exogenous variables which are not defined but
are taken as constant. The external factors which are not shown in model but
they indirectly influence the buyer's choice. These external variables vary from
individual to individual.8
2.1.10. Buying Roles:
Many consumer purchases are individual. When purchasing a chocolate bar a person
may make an impulse purchase upon seeing an array of confectionery at a shop’s
counter. However, decision-making can also be made by a buying centre, such as a
household. In this situation a number of individuals may interact to influence the
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purchase decision. Each person may assume a role in the decision-making process.
Blackwell, Miniard and Engel describe five roles. Each may be taken by husband, wife,
children or other members of the household:
1) Initiator:
The person who begins the process of considering a purchase. Information may be
gathered by this person to help the decision. We can also say that Initiator is a
person who first suggests the idea of buying the particular goods or services.
2) Influencer:
The person who attempts to persuade others in the group concerning the outcome
of the decision. Influencers typically gather information and attempt to impose their
choice criteria on the decision. We can also say that Influencer is a person whose
view or advice influences the decision.
3) Decider:
The individual with the power and/or financial authority to make the ultimate choice
regarding which product to buy. We can also say that Decider is a person who
decides on any component of a buying decision like
a) Whether to buy,
b) What to buy,
c) Why to buy,
d) When to buy and
e) How to buy
4) Buyer:
The person who conducts the transaction: who calls the supplier, visits the store,
makes the payment and effects delivery. We can also say that buyer is a person
who makes the actual purchase.
5) User:
The actual consumer or user of the product.
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2.1.11. Buying Centers:
All the individuals and units that play a role in purchase decision-making process. The
decision-making unit of a buying organization is called its buying center. In routine
purchases, one person (Purchase agent) may assume all the buying center roles and
serve as the only person involved in the buying decision. For more complex purchases,
the buying center may include 20 or 30 people from different levels and departments in
the organization.
The buying center includes all members of the organization who play any five roles in
the purchase decision process:
1) Users:
The users will be the ones to use the product, initiate the purchase process,
generate purchase specs, and evaluate product performance after the purchase.
2) Influencers:
The influencers are the tech personnel who help, develop specs and evaluate
alternate products. They are important when products involve new and advanced
technology.
3) Deciders:
Deciders choose the product.
4) Buyers:
Buyers select suppliers and negotiate the terms of purchase.
5) Gatekeepers:
Gatekeepers are typically secretaries and tech personnel. They control the flow of
information to and among others within the buying center. Buyers who deal directly
with a vendor are gatekeepers.4&6
2.1.12. Major Types of Buying Situations:
There are various types of buying situation:
1) Straight Rebuy:
The buyer reorders something without any modifications. It is usually handled on a
routine basis by the purchasing department. Based on past buying satisfaction, the
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buyer simply chooses from the various suppliers on its list.”In” suppliers try to
maintain product and service quality. They often propose automatic reordering
systems so that the purchasing agent will save reordering time. ”Out” suppliers try to
find new ways to add value or exploit dissatisfaction so that the buyer will consider
them. The buyer makes fewest decisions.
2) Modified Rebuy:
The buyer wants to modify product specifications, prices, terms, or suppliers. The
modified rebuy usually involves more decision participants than does the straight
rebuy. The “In” suppliers may become nervous and feel pressured to put their best
foot forward to protect an account. ”Out” suppliers may see the modified rebuy
situation as an opportunity to make a better offer and gain a new business.
3) New-task Situation:
A company buying a product or service for the first time faces a new-task situation.
In such cases, the greater the cost or risk, the larger the number of decision
participants and greater their efforts to collect information. The New-task situation is
the marketer’s greatest opportunity and challenge. The marketer not only tries to
reach as many key buying influences as possible but also provides help and
information. The buyer makes most decisions in this.
4) System Selling (or Solution Selling):
Buying a packaged solution to a problem from a single seller instead of buying
separate products and services from several suppliers and putting them together.
The sale often goes to the firm that provides the most complete system for meeting
the customer’s need and solving its problems. Such systems selling (or solution
selling) are often a key business marketing strategy for winning and holding
accounts.4
2.2. Buyer Decision Process:
The Buyer decision process is the decision-making process used by consumers
regarding market transactions before, during and after the purchase of a good or
service. More generally, decision-making is the cognitive process of selecting a course
of action from multiple alternatives. Common examples include shopping and deciding
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what to eat. Decision-making is a psychological construct. This means that although a
decision cannot be "seen", we can infer from observable behaviour that a decision has
been made. Therefore we conclude that a psychological "decision-making" event has
occurred. It is a construction that imputes commitment to action. That is, based on
observable actions, we assume that people have made a commitment to effect the
action.
2.2.1. Five Steps Buyer Decision Process:
Following are the five steps of buyer decision process:
Need
Identification
Information
Search
Evaluation of
Alternatives
Purchase
Decision
Post
purchase
Behaviour
Fig: Five Steps Buyer Decision Process
1) Identification:
Consumer buying decision process starts with need recognition. The marketer must
recognize the needs of the consumer as well as how these needs can be satisfied.
For example if a person is hungry then food is desired or if it is a matter of thirst than
water is desirable.
2) Information Search:
In consumer buying decision process information search comes at second number.
In this stage consumer searches the information about the product either from
family, friends, neighborhood, advertisements, whole seller, retailers, dealers or by
examining or using the product.
3) Evaluation of Alternatives:
After getting the required knowledge about the product the consumer evaluate the
various alternatives on the basis of its want satisfying power, quality and its
features.
4) Purchase Decision:
After evaluating the alternatives the buyer buys the suitable product. But there are
also the chances to postpone the purchase decision due to some reasons.
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5) Post purchase Behaviour:
After buying the product consumer will either be satisfied or dissatisfied. If the
consumer is not satisfied in that case he will be disappointed otherwise If he is
satisfied than he will be delighted. It is usually said that a satisfy consumer tell about
the product to 3 people and a dissatisfy consumer tell about the product to 11
people. Therefore it is the duty of the marketer to satisfy the consumer4.
2.2.2. Pictorial Examples Based on Five Steps Buyer Decision Process:
There are two examples which are based on five steps buyer decision process:
A) Two wheeler Purchase Story of Mr. Singham Based on 5 Steps Buying Decision
Process.
1) In this two wheeler purchase story, Mr. Singham wanted to gift his servant a two
wheeler. He thought about which model to buy, of which company and price of
two-wheeler. The identified need was purchase of two-wheeler. (First Step)
2) Mr. Singham searched information about models and companies and found 3
bikes:
a) Bajaj Pulsar.
b) TVS Sports.
c) Hero Splendor (Second Step).
Fig: Pictorial Example of Buyer Decision Process
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3) He evaluated these 3 bikes on the following parameters:
Parameters
Least Price
Better Millage
Good Look
Model &
Company

Bajaj Pulsar
TVS Sports
Hero Splendor





On the basis of evaluation, he selected Hero Splendor. (Third Step)
4) Mr. Singham purchased Hero Splendor by visiting Hero showroom and gifted
the bike to his servant. (Fourth Step)
5) Hero Motor offered free accessories, 5 free Servicing and 5 years Engine
guarantee. The Servant was very happy with the millage (65kmpl), look and
overall performance of the bike. When he visited the service center for 1st free
servicing, he was greeted properly by service center’s staffs and got best
service. He referred all his friends and relatives to buy this bike and also shared
his experience with Singham. Mr. Singham was very happy with his right
purchase decision and he also referred to his friends and relatives to buy this.
(Fifth Step)
B) Mobile Phone Purchase Story of Mr. Sher Khan Based on 5 Steps Buying Decision
Process.
1) In this mobile phone purchase story, Mr. Sher Khan wanted to gift mobile to his
friend Pathan. He thought about which model to buy, of which company, from
offline or online and price of mobile phone. The identified need was purchase of
mobile phone. (First Step)
2) Mr. Sher Khan searched information using internet about different models &
companies and found 3 mobile phones:
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a) Microsoft Lumia 635.
b) Samsung Galaxy.
c) Apple i Phone 6 (Second Step).
Fig: Pictorial Example of Buyer Decision Process
3) He evaluated these 3 mobile phones on the following parameters:
Parameters
Status
Innovative
Features
Quality
Stylish Look
Model &
Company
Microsoft Lumia
635
Samsung
Galaxy
Apple i Phone 6









On the basis of evaluation, he selected Apple i Phone 6. (Third Step).
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4) Mr. Sher Khan purchased Apple i Phone 6 visiting Flipkart and gifted the mobile
phone to his friend Pathan. (Fourth Step)
5) Apple Company offered free accessories and 1 watch as a gift, 1 year warranty
and unlimited free apps downloading. Pathan was very happy with the features
of the phone and shared his experience with Sher Khan. Mr. Sher Khan was
very happy with his right purchase decision. He referred all his Punjabi friends to
buy this phone. (Fifth Step).
2.2.3. Types of Buying Behavior:
There are four types of Buying Behavior as shown in the below diagram.
Types of Buying
Behavior
Habitual Buying
Behavior
Complex Buying
Behavior
Variety Seeking
Buying Behavior
Dissonance Reducing
Buying Behavior
Fig: Types of Buying Behavior
1) Complex Buying Behavior:
When the customers are highly involved in the purchase and these are significant
differences among brand, they show this type of behavior. Consumers are highly
involved because product is expensive, brought infrequently, risky and highly self
expressive. The customer does not know much about the product and wants to
gather a lot of information because of the significant differences among brands.
2) Dissonance Reducing Buying Behavior:
The customer is highly involved because the product is expensive and risky. There
are very little differences among brands and due to this customer is confused and
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wants to collect a lot of information. After the purchase, the customer might develop
dissonance because of dissatisfying features of the purchased products. So while
purchasing the customer he/she wants to satisfy himself/herself by collecting prepurchase information.
3) Variety Seeking Buying Behavior:
In this type, the customer shows low involvement because the product is
inexpensive, purchased frequently. The customer has some belief, chooses a brand
without much evaluation and also evaluates it during consumption.
4) Habitual Buying Behavior:
It is shown when the customer has low involvement and absence of significant
brand differences. Marketers of low involvement products will few brand differences
find it effective to use price and sales promotions as an incentive to product trial,
since buyers are not highly committed to any brand.
2.2.4. Buyer Decision Process for New Products:
A new product is a good, service or idea that is perceived by some potential customers
as new. Before adopting a new product, a consumer goes through the following five
stages of adoption process:
Awareness
Interest
Evaluation
Trial
Adoption
Fig: Buyer Decision Process for New Products
1) Awareness: The consumer becomes aware of the new product, but lacks
information about it.
2) Interest: The consumer seeks information about the new product.
3) Evaluation: The consumer considers whether trying the new product make sense.
4) Trial: The consumer tries the new product on a small scale to improve his or her
estimate of its value.
5) Adoption: The consumer decides to make full and regular use of the new product4.
●●●●
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Activity Based Learning
1) Students are requested to list down the differences between the following by visiting
any nearby market when they are buying any product:
a) Individual buying vs. any organizational buying.
b) Personal buying vs. family buying.
2) Consider yourself that you are going to purchase any product from the following:a) mobile phones
b) T.V
c) washing machines
d) 2 wheeler
e) 4 wheeler
f) fridges
g) house
h) oven
Then write any one/one by one from the above on the basis of following
parameters:a) Find out the reasons why you need that product? ……….. (Need Identification).
b) Search information from where you will get and which brand & product, on what
price……… (Information Search).
c) Evaluate the alternatives…if more than one alternatives, select one on the basis
of some parameters like which is better product from good brand on affordable
price.(Evaluation of Alternatives).
d) Purchase it……(Purchase Decision)
e) If any problem visits the customer care office if no problem then write your
feedback about the product. (Post Purchase Behaviour)
You have to follow the above 5 steps of Buying Decision Process.
3) Students are requested to follow the instructions below to solve the problems:A) When you are visiting to buy any products (mobile, 2w, 4w, t.v, etc.), try to
identify the different buying roles like…
a) Who suggest you to buy?
b) On whose advice /influence you will buy the product?
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c) Who will decide to buy?
d) Who will go to buy?
e) Who will use?
Make a chart by making 6 columns and by writing the product name, fill the
details of above 5 buying roles.
B) Find out that who is/are affecting your buying process for any products due to
which you may buy or may not buy.
C) Also write the 5 steps of buying decision process.
Hint 1:- cultural/social/personal/psychological/you yourself
Hint 2:- For exampleI want mobile phone.i search information and found these brands
Samsung/Apple/Nokia/Micromax/Sony.
I decide to buy Micromax mobile.
But my wife Jassi told me that Micromax is not good, buy Samsung
and i changed my decision and bought Samsung mobile
I am happy with the phone
In the above example, factor which influences my buying decision is social factor
as family is the part of this factor.
Step 1: Need Identification- Mobile phone
Step 2: Information Search- Samsung/Apple/Nokia/Micromax/Sony
Step 3: Evaluation of Alternatives-Samsung/Micromax
Step 4: Purchase Decision-Samsung
Step 5: Post Purchase Behavior-Happy with the product
●●●●●●
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MODEL MULTIPLE CHOICE QUESTIONS
Q.1.
Which one is not the component of broad environment?
a) Demographic Environment.
b) Target Customer.
c) Technological Environment.
d) Political & Legal Environment.
Q.2.
___________ refers to the buying behavior of final consumers.
a) Consumer buyer behavior.
b) Target market buying.
c) Market segment buying.
d) Business buying behavior.
Q.3.
Which of the following would be the best illustration of a subculture?
a) A religion.
b) A group of close friends.
c) Your university.
d) A fraternity or sorority.
Q.4.
The relatively homogeneous and enduring divisions in a society, which are
hierarchically ordered and whose members share similar values, interests, and
behavior constitute ________.
a) A culture.
b) A subculture.
c) Social class.
d) A family.
Q.5.
A person's ________ consist(s) of all the groups that have a direct (face-to-face)
or indirect influence on his/her attitudes or behavior.
a) Subculture.
b) Family.
c) Social class.
d) Reference groups.
Q.6.
Social classes differ in media preferences, with upper-class consumers often
preferring ________ and lower-class consumers often preferring television.
a) Movies.
b) Radio.
c) Video or computer games.
d) Magazines and books.
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Q.7.
The family in a buyer’s life consisting of parents and siblings is the ________.
a) Family of procreation.
b) Family of influence.
c) Family of efficiency.
d) Family of orientation.
Q.8.
Consumer purchases are influenced strongly by cultural, social, personal, and:
a) Psychographic characteristics.
b) Psychological characteristics.
c) Psychometric characteristics.
d) Supply and demand characteristics.
Q.9.
A child is normally exposed to all of the following values except:
a) Achievement and success.
b) Activity and involvement.
c) Material comfort.
d) Collectivism.
Q.10. Marketers are always trying to spot __________ in order to discover new
products that might be wanted.
a) Opinion groups.
b) Dissonant groups.
c) Cultural shifts.
d) Benchmarks.
Q.11. A _____________ is a group of people with shared value systems based on
a) Culture.
b) Subculture.
c) Lifestyle composite.
d) Social class.
Q.12. Relatively permanent and ordered divisions in a society whose members share
similar values, interests, and behaviors are called___________
a) Culture.
b) Subculture.
c) Lifestyle composite.
d) Social classes.
Q.13. Groups which have a direct influence and to which a person belongs are called:
a) Membership groups.
b) Facilitative groups.
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c) Bonding groups.
d) Social groups.
Q.14. Purchasing family when Gary was a high school student, he enjoyed rock music
and regularly purchased hip clothing sported by his favorite rock band. However,
five years later, when Gary became an accountant, his preference shifted
toward formal clothing. Which of the following personal characteristics is likely to
have had the most influence on Gary's preferences during his high school days?
a) Education.
b) Age.
c) Income.
d) Gender.
Q.15. The __________________ is a person within a reference group who, because
of
special skills, knowledge, personality, or other characteristics, exerts
influence.
a) Facilitator.
b) Referent actor.
c) Opinion leader.
d) Social role player.
Q.16. Marriage, childbirth, and divorce constitute the ________ that shapes the
consumption pattern of individuals.
a) Psychological life cycle.
b) Product life cycle.
c) Social status.
d) Critical life events.
Q.17. Identify an economic circumstance that can greatly affect any product or brand
choice.
a) Retirement.
b) Values.
c) Lifestyle.
d) Borrowing power
Q.18. ________ is individual and household who buy goods and services for personal
consumption.
a) The target market.
b) A market Segment.
c) The consumer market.
d) The ethnographic market.
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Q.19. ________ refers to a set of distinguishing human psychological traits that lead to
relatively consistent and enduring responses to environmental stimuli.
a) Image.
b) Personality.
c) Psychological transformation.
d) Lifestyle.
Q.20. Consumers often choose and use brands that have a brand personality
consistent
with how they see themselves, also known as the ________
a) Actual self-concept.
b) Ideal self-concept.
c) Others' self-concept.
d) Prohibitive self-concept.
Q.21. ________ portrays the "whole person" interacting with his or her environment.
a) Attitude.
b) Personality.
c) Lifestyle.
d) Self-concept.
Q.22.
A (n) ________________ consists of the activities people are expected to
perform according to the persons around description of what is called the:
a) Behaviour.
b) Attitude.
c) Role.
d) Status.
Q.23. The stages through which families might pass as they mature over time is a
activities, interests, and opinions.
a) Adoption process.
b) Lifestyle cycle.
c) Values and Lifestyle (VALS) topology.
d) Family life cycle.
Q.24. Which of the following also includes a situation-specific component?
a) Personality.
b) Self-concept.
c) Involvement.
d) Demographics.
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Q.25. Which of the following is a situation in which consumer behavior occurs?
a) Communications situation.
b) Purchase situation.
c) Usage situation.
d) All of the above.
Q.26. Which of the following is NOT a situation in which consumer behavior occurs?
a) Communications situation.
b) Purchase situation.
c) Usage situation.
d) All of the above are situations in which consumer behavior occurs.
Q.27. A ______________ is a person’s pattern of living as expressed by him or her.
a) Role.
b) Status.
c) Position.
d) Lifestyle.
Q.28. All those factors particular to a time and place that do not follow from knowledge
of the stable attributes of the consumer and the stimulus and that have an effect
on current behavior are known as _____.
a) Situational influence.
b) Motivators.
c) Consumption triggers.
d) Consumption influencers.
Q.29. A _____________ is a need that is sufficiently pressing to direct the person to
seek satisfaction of the need.
a) Motive.
b) Want.
c) Demand.
d) Requirement.
Q.30. That business markets have more buyers involved in the purchase decision is
evidence of which of the following characteristic differences between business
and consumer markets?
a) Market structure and demand.
b) The nature of the buying unit.
c) Types of decisions made.
d) Type of decision process itself.
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Q.31. When demand comes (as it does in the business market) from the demand for
consumer goods, this form of demand is called:
a) Kinked demand.
b) Inelastic demand.
c) Cyclical demand.
d) Derived demand.
Q.32. The ____________ is the mental process through which an individual passes
from first hearing about an innovation to final adoption.
a) Adoption process.
b) Consumption process.
c) Innovation process.
d) New product development process.
Q.33. Cognitive dissonance occurs in which stage of the buyer decision process
model?
a) Need recognition.
b) Information search.
c) Evaluation of alternatives.
d) Post purchase behavior (or conflict).
Q.34. Which of the following is NOT one of the five stages of the buyer decision
process?
a) Need recognition
b) Brand identification
c) Information search
d) Purchase decision
Q.35. The buying process can be triggered by a(n)_____ when one of the person’s
normal needs hunger, thirst, sex-rises to a level high enough to became a drive.
a) Awareness
b) External stimuli
c) Internal stimuli
d) Experiential motivation
Q.36. Which of the following is an internal influence on organizational buyer behavior?
a) Motives
b) Firmographics
c) Culture
d) Reference groups
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Q.37. Which of the following is NOT an internal influence on organizational buyer
behavior?
a) Firmographics
b) Organizational values
c) Perception
d) Motives
Q.38. In terms of consumer behavior; culture, social class, and reference group
influences have been related to purchase and ______
a) Economic situations
b) Situational influences
c) Consumption decisions
d) Physiological influences
Q.39. ________ are factors that have been shown to affect consumer behavior
a) Brand name, quality , newness, and complexity
b) Advertising, marketing , product, and price
c) Outlets, strategies , concept , and brand name
d) Quality , advertising, product positioning, and strategy
Q.40. Marketing strategies are often designed to influence _____ and lead to profitable
exchanges
a) Consumer decision making
b) Sales strategies
c) Advertising strategies
d) Export strategies
Q.41. The place in the business buying behavior model where interpersonal and
individual influences might interact is called the:
a) Environment
b) Response
c) Stimuli
d) Buying centre
Q.42. __________ is one of the most basic influences on an individual’s needs, wants,
and behavior.
a) Brand.
b) Culture.
c) Product.
d) Price.
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Q.43. .___________ develops on the basis of wealth, skills and power.
a) Economical classes.
b) Purchasing communities.
c) Competitors.
d) Social classes.
Q.44. _________ (is) are transmitted through three basic organizations: the family,
religious organizations, and educational institutions; and in today’s
society, educational institutions are playing an increasingly greater role in this
regard.
a) Consumer feedback.
b) Marketing information systems.
c) Market share estimates.
d) Cultural values.
Q.45. In large nations, the population is bound to lose a lot of its homogeneity and thus
___________ arise.
a) Multilingual needs.
b) Cultures.
c) Subcultures.
d) Product adaptation requirements.
Q.46. __________ are based on such things as geographic areas, religions,
nationalities, ethnic groups, and age.
a) Multilingual needs.
b) Cultures.
c) Subcultures.
d) Product adaptation requirements.
Q.47. Marketing managers should adapt the marketing mix to ____________and
constantly monitor value changes and differences in both domestic and global
markets.
a) Sales strategies
b) Marketing concepts.
c) Cultural values.
d) Brand images.
Q.48. _____________ has become increasingly important for developing a marketing
strategy in recent years.
a) Change in consumers’ attitudes.
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b) Inflation of the dollar.
c) The concept and the brand.
d) Age groups, such as the teen market, baby boomers, and the mature
market.
Q.49. Which of the following is an example of a social influence on consumer
behavior?
a) The fashion editor of Seventeen magazines writes that any teen who
wants to be well-dressed for the first day of school must wear a shirt
that shows her bellybutton.
b) The manufacturer of a line of aromatherapy candles markets them at very
exclusive stores.
c) When Arne went to the store to buy a new dress for Easter, she decided not
to buy anything because of the crowded conditions of the store.
d) Billie purchased a pair of Honey brand clogs instead of the Birkenstocks she
wanted because the Birkenstocks were too expensive.
Q.50. Many sub cultural barriers are decreasing because of mass communication,
mass transit, and _______
a) The rising unemployment situation.
b) An influence of political power.
c) The use of new technology.
d) A decline in the influence of religious values.
Q.51. Different social classes tend to have different attitudinal configurations and
_______ that influence the behavior of individual members.
a) Personalities.
b) Values.
c) Finances.
d) Decision makers.
Q.52. __________ is the single factor that best indicates social class.
a) Time.
b) Money.
c) Occupation.
d) Fashion.
Q.53. 14% of the population that is differentiated mainly by having high incomes is
classified as_______
a) The working class.
b) The middle class.
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c) Upper Americans.
d) Lower middle class.
Q.54. In terms of consumption decisions, middle class consumers prefer to _________
a) Buy at a market that sells at a whole sale rates.
b) Buy what is popular.
c) Buy only the brands which sell at affordable prices.
d) Analyze the market and select the best at the lowest prices.
Q.55. What is the middle class concerned about?
a) European travel and club memberships for tennis, golf, and swimming.
b) Prestigious schooling facility for their children.
c) Fashion and buying what experts in the media recommend.
d) Buying only “value for money” products.
Q.56. .____________ is the definition of reference groups.
a) Groups that an individual looks to when forming attitudes and
opinions.
b) Groups of people who have been referred to by someone they know.
c) Groups of office colleagues.
d) Chat groups on the internet.
Q.57. __________ are factors that have been shown to affect consumer behavior.
a) Brand name, quality, newness, and complexity.
b) Advertising, marketing, product, and price.
c) Outlets, strategies, concept, and brand name.
d) Quality, advertising, product positioning, and strategy.
Q.58. The reason that higher prices may not affect consumer buying is
_______________.
a) Most consumers prefer brand names which have higher prices.
b) 70% of the total population looks for quality services and is willing to pay
higher prices.
c) Consumers believe that higher prices indicate higher quality or
prestige.
d) Most consumers feel that the price is actually affordable.
Q.59. ___________ are the groups that individuals look to when forming attitudes and
opinions.
a) Reference groups.
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b) Teenage groups.
c) Religious groups.
d) Adult groups.
Q.60. Secondary reference groups include ________________.
a) Family and close friends
b) Sports groups
c) Ethnic and religious groups
d) Fraternal organizations and professional associations
Q.61. When preparing Thanksgiving dinner last year, Marissa worried that her parents
would hate the fact that she served bought pumpkin pies rather than making
her
own. In terms
of social influences on her behavior, Marissa was
most concerned with__________.
a) A primary reference group.
b) A subculture influence.
c) A secondary reference group.
d) Cultural values.
Q.62. Marketing strategies are often designed to influence ___________ and lead to
profitable exchanges.
a) Consumer decision making.
b) Sales strategies.
c) Advertising strategies.
d) Export strategies.
Q.63. __________ refers to the information a consumer has stored in their memory
about a product or service.
a) Cognitive dissonance.
b) Product knowledge.
c) Product research.
d) Marketing research.
Q.64. One of the key tasks of marketers is ____________ and to create consumer
perceptions that the product is worth purchasing.
a) To make products easily visible and available.
b) To promote sales of products.
c) To differentiate their products from those of competitors.
d) To do marketing surveys.
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Q.65. Terence doesn't really like grapefruit but when all of his friends ordered
grapefruit martinis, he felt that to be part of the gang he needed to buy one for
himself. Which situational influence explains Terence's purchase of a grapefruit
martini?
a) Its marketing mix.
b) Task features.
c) Current conditions.
d) Social features.
Q.66. The price of products and services often influence whether _______________,
and, if so, which competitive offering is selected.
a) Consumers will purchase them at all.
b) Consumers see a need to buy.
c) Consumers will decide to buy immediately.
d) People would recommend the product.
Q.67. A __________ is a group of people with shared value systems based on
common life, experiences and situations.
a) Culture.
b) Subculture.
c) Lifestyle composite.
d) Social class.
Q.68. Even though buying roles in the family change constantly, the ___________ has
traditionally been the main purchasing agent for the family.
a) Wife.
b) Husband.
c) Teenage children.
d) Grandparent.
Q.69. The energizing force that activates behavior and provides purpose and direction
to that behavior is known as _________.
a) Motivation
b) Personality.
c) Emotion.
d) Perception.
Q.70. Which of the following reflects the relatively stable behavioral tendencies that
individuals display across a variety of situations?
a) Motivation.
b) Personality.
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c) Emotion.
d) Perception.
Q.71. A major reason for the changing traditional purchasing roles for families is that:
a) The economic conditions are forcing more teens to work.
b) More women than ever hold jobs outside the home.
c) Children are spending more time on the Web.
d) Men and women now shop together or “shop until you drop” for
entertainment purposes.
Q.72. The stages through which families might pass as they mature over time are a
descriptions of what is called the:
a) Adoption process.
b) Lifestyle cycle.
c) Values and Lifestyle (VALS) topology.
d) None of the above.
Q.73. A _____________ is a need that is sufficiently pressing to direct the person to
seek satisfaction of the need.
a) Motive.
b) Want.
c) Demand.
d) Requirement.
Q.74. A good synonym for motive is a(n) _____________.
a) Omen.
b) Need.
c) Drive.
d) Cue.
Q.75. ____________ describes changes in an individual’s behavior arising from
experience.
a) Modeling.
b) Motivation.
c) Perception.
d) Learning.
Q.76. Maslow's hierarchy of needs includes all EXCEPT which of the following?
a) Cognition.
b) Physiological.
c) Safety.
d) Belongingness.
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Q.77. In Maslow's hierarchy of needs, food, water, sleep, and to an extent, sex, are
considered _____ motives.
a) Safety.
b) Self-actualization.
c) Physiological.
d) Belongingness.
Q.78. Smoke detectors, preventive medicines, insurance, retirement investments, seat
belts, burglar alarms, and sunscreen are all examples of products to satisfy
consumers' _____ needs.
a) Safety.
b) Self-actualization.
c) Physiological.
d) Belongingness.
Q.79. Which need in Maslow's hierarchy reflects a desire for love, friendship, affiliation,
and group acceptance?
a) Safety.
b) Self-actualization.
c) Physiological.
d) Belongingness.
Q.80. Which of Maslow's needs reflects individuals' desires for status, superiority, self
respect, & prestige?
a) Safety.
b) Self-actualization.
c) Physiological.
d) Esteem.
Q.81. Which of Maslow's needs involves the desire for self-fulfillment, to become all
that
one is capable of becoming?
a) Safety.
b) Self-actualization.
c) Physiological.
d) Belongingness.
Q.82. Primary reference groups include ________________
a) College students.
b) Office colleague.
c) Family and close friends.
d) Sports groups.
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Q.83. ____________ refers to the buying behavior of final consumers.
a) Consumer buyer behavior.
b) Target market buying.
c) Market segment business.
d) Business buying behavior.
Q.84. _________ is individuals and households who buy goods and services for
personal consumption.
a) The target market.
b) A market segment.
c) The consumer market.
d) The ethnographic market.
Q.85. ___________ develops on the basis of wealth, skills and power.
a) Economical classes.
b) Purchasing communities.
c) Competitors.
d) Social classes.
Q.86. _________are based on such things as geographic areas, religions,
nationalities, ethnic groups, and age.
a) Multilingual needs.
b) Cultures.
c) Subcultures.
d) Product adaptation requirements.
Q.87. ___________has become increasingly important for developing a marketing
strategy in recent years.
a) Change in consumers’ attitudes.
b) Inflation of the dollar.
c) The concept and the brand.
d) Age groups, such as the teen market, baby boomers, and the mature
market.
Q.88. Which of the following is the most valuable piece of information for determining
the social class of your best friend's parents?
a) The number of years schooling that they had.
b) Their ethnic backgrounds.
c) Their combined annual income.
d) Their occupations.
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Q.89. __________ is the single factor that best indicates social class.
a) Time.
b) Money.
c) Occupation.
d) Fashion.
Q.90. According to the stimulus-response model of buyer behavior, the place where
consumers process marketing stimuli prior to making a purchase decision is
called_____
a) Consumer’s value chain.
b) Consumer’s cognitive schema.
c) Consumer’s black box.
d) Consumer’s thoughts-emotions network.
Q.91. ___________ (is) are transmitted through three basic organizations: the family,
religious organizations, and educational institutions; and in today’s society,
educational institutions are playing an increasingly greater role in this regard.
a) Consumer feedback.
b) Marketing information systems.
c) Market share estimates.
d) Cultural values.
Q.92. Even though buying roles in the family change constantly, the ________ has
traditionally been the main purchasing agent for the family
a) Wife.
b) Husband.
c) Teenage children.
d) Grandparent.
Q.93. A(n) ________________ consists of the activities people are expected to
perform according to the persons around description of what is called them
a) Behavior.
b) Attitude.
c) Role.
d) Status.
Q.94. In large nations, the population is bound to lose a lot of its homogeneity, and
thus ______arise.
a) Multilingual needs.
b) Cultures.
c) Subcultures.
d) Product adaptation requirements.
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Q.95. Marketing managers should adapt the marketing mix to __________ and
constantly monitor value changes and differences in both domestic and global
markets.
a) Sales strategies.
b) Marketing concepts.
c) Cultural values.
d) Brand images.
Q.96. The starting point in understanding how consumers respond to various
marketing efforts the company might use is the:
a) Lipinski model of buying behavior.
b) Stimulus-response model of buyer behavior.
c) Freudian model of buying behavior.
d) Maslow’s model of life-cycle changes.
Q.97. ___________ is the definition of reference groups.
a) Groups that an individual looks to when forming attitudes and
opinions.
b) Groups of people who have been referred to by someone they know.
c) Groups of office colleagues.
d) Chat groups on the internet.
Q.98. __________ refers to the buying behavior of final consumers.
a) Consumer buyer behavior.
b) Target market buying.
c) Market segment buying.
d) Business buying behavior.
Q.99. Consumer purchases are influenced strongly by cultural, social, personal, and:
a) Psychographic characteristics.
b) Psychological characteristics.
c) Psychometric characteristics.
d) Supply and demand characteristics.
Q.100. The __________ is a person within a reference group who, because of special
skills, knowledge, personality, or other characteristics, exerts influence on
a) Facilitator.
b) Referent actor.
c) Opinion leader.
d) Social role player.
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Q.101. A child is normally exposed to all of the following values except:
a) Achievement and success.
b) Activity and involvement.
c) Material comfort.
d) Collectivism.
Q.102. A _____________ is a group of people with shared value systems based on
a) Culture.
b) Subculture.
c) Social classes.
d) Social factors.
Q.103. Relatively permanent and ordered divisions in a society whose members share
similar values, interests, and behaviors are called
a) Cultures.
b) Subcultures.
c) Social classes.
d) Social factors.
Q.104. Groups which have a direct influence and to which a person belongs are called:
a) Membership groups.
b) Facilitative groups.
c) Bonding groups.
d) Social groups.
Q.105. A____________ is the most basic cause of a person’s wants and behaviors
a) Culture.
b) Social class.
c) Personality.
d) Lifestyle.
Q.106. Which of the following is NOT part of group influence?
a) Social Class.
b) Social Group.
c) Reference Group.
d) Personality.
Q.107. ____________ is one of the most basic influences on an individual’s needs,
wants, and behavior.
a) Brand.
b) Culture.
c) Product.
d) Price.
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Q.108. The stages through which families might pass as they mature over time is a
activities, interests, and opinions.
a) Adoption process.
b) Lifestyle cycle.
c) Values and Lifestyle (VALS) topology.
d) Family life cycle.
Q.109. A ______________ is a person’s pattern of living as expressed in his or her
a) Role.
b) Status.
c) Position.
d) Lifestyle.
Q.110. A _____________ is a need that is sufficiently pressing to direct the person to
seek satisfaction of the need.
a) Motive.
b) Want.
c) Demand.
d) Requirement.
Q.111. The “in” suppliers are most likely to get nervous and feel pressure to put their
best foot forward in which of the following types of buying situations__________
a) Modified rebuy.
b) New task buying.
c) Straight rebuy.
d) Indirect rebuy.
Q.112. In a _______________, the buyer reorders something without any modifications.
a) Modified rebuy.
b) New task buying.
c) Straight rebuy.
d) Indirect rebuy.
Q.113. When a firm buys a product or service for the first time, it is facing specifications,
prices, terms, or suppliers, then it is _____
a) Habitual rebuy.
b) New task situation.
c) Straight rebuy.
d) Modified rebuy.
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Q.114. The _________________ is the mental process through which an individual
passes
from first hearing about an innovation to final adoption.
a) Adoption process.
b) Consumption process.
c) Innovation process.
d) New product development process.
Q.115. Cognitive dissonance occurs in which stage of the buyer decision process
model?
a) Need recognition.
b) Information search.
c) Evaluation of alternatives.
d) Post purchase conflict.
Q.116. It is necessary to study consumer behavior because_____
a) Consumers are demanding & different from each other.
b) Consumers do not know about the product.
c) Consumers will complain.
d) None of the above.
Q.117. Consumer behavior gets influenced by
a) The 4 P's of marketing.
b) Marketing environment
c) Consumer characteristics.
d) All of the above.
Q.118. The most important P for consumer behavior is
a) Product.
b) Price.
c) Promotion & Place.
d) All of the above.
Q.119. We cannot standardize marketing because_____
a) Cultural styles are different.
b) Habits are different
c) Tastes are different.
d) All of the above.
Q.120. The marketing environment in consumer behavior influence consists of
a) Economic.
b) Technological & Political.
c) Cultural.
d) All of the above.
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Q.121. Buying roles includes_________
a) Initiator & influencer
b) Decider & buyer
c) User.
d) All of the above.
Q.122. Buying center includes____
a) User and buyers.
b) Influencers.
c) Deciders and Gatekeepers
d) All of the above.
Q.123. Which one is not a part of buying roles ________?
a) Initiator & influencer.
b) Decider & buyer.
c) User.
d) Gatekeepers.
Q.124. Which one is not a part of buying center _________?
a) User and buyers.
b) Initiators.
c) Deciders and Gatekeepers
d) None of these.
Q.125. The decision making unit of a buying organization is called_____
a) Process.
b) Buying behavior
c) Buying center.
d) None of the above.
Q.126. The buying center in a complex purchases, normally may include _______
people from different levels and departments in the organization.
a) 2 or 5
b) 20 or 30
c) 1
d) 10 or 15
Q.127. Business market contains _____ but _____ buyers.
a) More, smaller.
b) No, larger.
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c) Fewer, larger.
d) Larger, fewer.
Q.128. Business buyer demand is derived from _________ demand.
a) Seller.
b) Supplier.
c) Buyer.
d) Final consumer.
Q.129. The business buying process is ______formalized.
a) Less.
b) More.
c) Not.
d) Under.
Q.130. Problem recognition is the___________.
a) Third step of buyer decision process.
b) Last step of buyer decision process.
c) First step of buyer decision process.
d) None of the above.
Q.131. Post purchase behavior is_________.
a) Second step of buyers decision process.
b) Last step of buyer decision process.
c) First step of buyers decision process.
d) None of the above.
Q.132. The buyer decision does not include the following choice_________.
a) Product choice & brand choice.
b) Dealer choice.
c) Day of the week.
d) Purchase time & amount.
Q.133. Buyer decision process includes____________.
a) Four steps
b) Two steps.
c) No steps.
d) Five steps.
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Q.134. Current consumer research is likely to include attention to the “dark side" of CB.
This growing emphasis refers to the fact that
a) It is difficult to measure the contribution of the “art “of CB research to the
corporate bottom line
b) Not all CB or marketing activity is necessarily beneficial to society
c) Not all marketers make money for their companies
d) None of the above
Q.135. Excessive repetitive shopping used as an antidote to tension, anxiety,
depression, or even boredom, is called
a) A spending spree.
b) Compulsive consumption.
c) Impulsive buying.
d) Negative reinforcement.
Q.136. In studying CB, it is often useful to categorize people on the basis of similarities.
Description such as age, gender, income are called
a) Demographics.
b) Psychographics.
c) Personal Profiles.
d) Personality.
Q.137. By studying and understanding consumers, organizations can establish and
maintain a competitive advantage in the:
a) Stock market.
b) Academic universe.
c) Marketplace.
d) Medical industry.
Q.138. When consumers are making buying decisions, some observers have said that
their behavior resembles acting in a play, complete with lines, props, even
costumes. They may alter their consumption decisions depending upon the part
they are playing at the time. This view of consumer behavior is often called
a) Consumer activism.
b) Consumption play theory.
c) Role Theory.
d) Dramatism.
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Q.139. ______________ is more than just repeat purchase behavior. It also includes a
preference for a particular brand and a positive emotional response to the brand.
a) Attitude.
b) Individualism.
c) Purchase behavior.
d) Brand loyalty.
Q.140. Marketing strategies are often designed to influence _____ and lead to profitable
exchanges
a) Consumer decision making.
b) Sales strategies.
c) Advertising strategies.
d) Export strategies.
Q.141. Group, marketing and ______ determine the initial level of product knowledge
as well as change in it
a) Consumer feedback.
b) Situational influences.
c) Information available.
d) Consumer’s perceptions.
Q.142. The place in the business buying behavior model where interpersonal and
individual influences might interact is called the:
a) Environment.
b) Response.
c) Stimuli.
d) Buying centre.
Q.143. .____is the most common type or consumer decision process and the way
consumers purchase most packaged goods.
a) Limited decision making.
b) Extended decision making.
c) Routine decision making.
d) Alternative search.
Q.144. The occurrence of post decision anxiety is related to the concept of _________
a) Extensive decision making.
b) Cognitive dissonance.
c) Limited decision making.
d) Marketing strategy.
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Q.145. When shopping in a group consumers are likely to _____
a) Make more unplanned purchases.
b) Buy more.
c) Cover more areas of the store.
d) All of the above.
Q.146. Which of the following is a potential social influencer of consumers?
a) Family & Friends.
b) Ethnic groups.
c) Political parties.
d) All of the above.
Q.147. Which of the following is not one of the components of a person’s attitude?
a) Cognition.
b) Behaviour.
c) Personality.
d) Affect.
Q.148. Consumers form attitudes about persons, objects or issues for which of the
following reasons?
a) To help them understand their world.
b) To provide cues for behavior.
c) As part of their personality.
d) To simplify decision making.
Q.149. The expanded view of the exchange which includes the issues that influence the
consumer before, during and after purchase is called________
a) The marketing mix.
b) The consumption process.
c) The strategic focus.
d) None of the above.
Q.150. Which of the following is the best example of external stimuli in consumer
behavior?
a) Feeling cold and turning up the thermostat.
b) Having a backache and realizing you need some pain reliever.
c) Seeing a dominos pizza box and ordering a pizza.
d) Feeling sad and wanting to have a good cry.
●●●●●●
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Unit 3
Unit Preview
3.1. Marketing Environment:
Concept of Environment: Macro and Micro, Need for analyzing the
Marketing Environment
3.2. Macro Environment:
Analyzing the Economic, Socio-cultural, Demographic, Political –
Legal - Regulatory, Technical, Environmental Environments
3.3. Linkage of Marketing Function with function in organization
3.4. Concept of Market Potential & Market Share
Activity Based Learning
3.1. Marketing Environment:
Marketing environment represents a mix between the internal and external forces which
surround an organization and have an impact upon it, especially their ability to build and
maintain successful relationships with target customers. The forces that directly and
indirectly influence an organization‘s capability to undertake its business. The trading
forces operating in a market place over which a business has no direct control ,but
which shape the manner in which the business function and is able to satisfy its
customers is known as Marketing environment.
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Fig: The Marketing Environments
3.1.1. Meaning:
Marketing environment consists of all those internal and external forces which affect the
marketing strategies. Modem marketers realize that environmental scanning would
provide them with continuous interaction between the customers and the business they
are in. Based on interaction the marketing managers can evolve marketing strategies to
ensure effective and efficient goal achievement. It means the success of marketing
management totally depends on the study of marketing environment. This study is very
important when we take marketing as a system.1
3.1.2. Definitions:
Following are the definitions of the marketing environment:
1) Philip Kotler:
“A marketing environment consists of the factors and forces external to the
marketing management function of the firm that impinges on the marketing
management‟s ability to develop and maintain successful transactions with its target
customers.”2
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2) Barry M. Richman and Melvgn Copen:
“Environment consists of factors that are largely if not totally, external and beyond
the control of individual industrial enterprise and their managements. These are
essentially the „givers‟ within which firms and their management must operate in a
specific country and they vary, often greatly, from country to country.”3
3) William F. Gluck:
"Marketing environment as the process by which strategists monitor the economic,
governmental, market, supplier, technological, geographic, and social settings to
determine opportunities and threats to their firms".4
4) Skinner:
"Marketing environment consists of all the forces outside an organisation that
directly or indirectly influence its marketing activities, includes competition,
regulation, politics, society, economic conditions, and technology".5
3.1.3. Nature of Marketing Environment:
The marketing environment of a business firm may be static or dynamic. When the
environment forces do not show a significant change, it is termed as stable or static
environment. And when significant changes are seen in the environment forces it is
termed as dynamic environment. The environment of the modern business world is
dynamic because of frequent changes. But the nature and degree of change is not
predictable.
For example: (i) New inventions in the techniques of production; (ii) Changes in the
Industrial policy, Licensing policy, Export policy, Import policy; (iii) Change in the rate of
subsidies, Custom duty and Excise duty; (iv) Revision of borrowing and lending rates by
the Reserve Bank of India; (v) Change in the government or a Minister in the
government; (vi) Foreign collaborations and so on. Such factors create dynamic
environment for the marketers. There are some other forces in the environment which
have considerable influences on the marketing strategies of a firm are listed below:
1) Increased Competition:
For example: (i) Formation of cartel by some competitors; (ii) Heavy advertisement
by competitors; (iii) Introduction of new product by competitors; (iv) Sudden price cut
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by competitors; (v) Employment at high perquisites to our key personnel by
competitor.
2) Labor Unrest:
It leads to industrial conflicts, demand for high wages and more economic benefits.
3) Social Changes:
For example, demand for reservation in jobs, increase in number of working women,
more leisure time, etc.
4) Technological Changes:
Automatic, computerized, remote operated high-tech production techniques.
5) Change in Fashion:
Tastes and preferences of the consumers. 1
3.1.4. The Composition of the Marketing Environment:
The introductory definition of the marketing environment stated that it is the sum total of
the factors or variables and players that influences the ability of marketing management
to develop successfully strategies for its target market. in order to scrutinizes the
multiplicity of environmental variables that influence marketing management, it is
necessary to conduct a meaningful classification of the marketing environment to
identify certain trends for further analysis in each group or sub-environment.
1) The Micro-environment
The first component of the total environment is the micro-environment, or the
internal environment, which comprises the business organisation itself. Although this
refers to those variables which are largely controlled by the business itself, such as
its mission and objectives, its management structure, its resources and culture, one
should remember that these variables are not solely under the control of marketing
management.
As already mentioned, marketing management does have a significant influence on
these variables, and marketing provides the central input in developing overall
strategies. Nevertheless, it should be clear that, whilst top management controls
certain micro-variables, marketing management can also control some variables in
the micro-environment.
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2) The Market Environment:
The second component of the marketing environment is the market environment,
which is found just outside the business organisation. In this environment, all the
variables are relevant to virtually every business, because they determine the nature
and strength of the competition in any industry. The key variables in this
environment are the following:
a) Consumers with a particular buying power and behavior and who determine the
number of entrants to the market.
b) Competitors who are established in the market and wish to maintain or improve
their position, including existing, new and potential competitors.
c) Intermediaries who compete against each other to handle the business's
products, or wish to handle only those of competitors.
d) Suppliers who provide (or do not wish to provide) products, raw materials,
services and even financing to the business.
All these variables create particular opportunities and threats. Although marketing
management can influence certain variables by adjusting its strategy, it has no
control over these variables.
The market environment has a strong influence on the success or failure of the
business. A case in point is a strong competitor who possesses the necessary
ability to enter into a price war or launch a new substitute product. The principal task
of marketing management in this environment is, therefore, to identify, evaluate and
utilize opportunities that arise in the market and then to develop its strategies in
order to meet competition. For these reasons, the market environment is also called
the task environment. The market environment is also influenced by developments
in the macro-environment, which ultimately reach the market environment.
3) The Macro-environment:
Apart from the market environment, which has a direct effect on the fortunes of a
business, a wider macro-environment exists, containing variables that directly or
indirectly exert an influence on the business and its market environment.
These variables constitute those uncontrollable forces in the environment that are
sometimes referred to as megatrends.
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The contemporary literature on management divides the macro-environment into six
variables, namely technological, economic, social, physical, institutional or political
and international variables (or sub environments). The technological environment is
responsible for the rate of innovation and change. The economic environment
involves factors such as inflation, recessions and exchange rates, and the monetary
and fiscal policies that influence the welfare of the business and its community. The
social environment concerns the individual's way of life, and customs and standards
formed by his or her culture, and these also make certain demands on the business.
The physical environment comprises natural resources,
as well as the
improvements made by people, for example roads and bridges, mineral wealth, and
flora and fauna. The institutional environment embraces the government, with its
political involvement and legislation as the main components. Finally, the
international environment concerns foreign political trends and events that influence
organizations and the market environment. 6
3.1.5. Components of Marketing Environment:
It has two components which are as below:
A) Internal Environment:
The internal environment refers to the forces and actions that are within the
organisation and affects its ability to serve its customers. It includes Owners, Board
of Directors, all Employees (like Marketing managers, Sales representatives),
marketing budget, marketing plans, procedures, inventory, logistics, culture and
anything within organisation which affects marketing decisions and its relationship
with its customers. Internal factors like men, machine, money, material, etc., on
which marketing decision depends consists internal marketing environment. This
refers to factors existing within a marketing firm. They are also called as
Controllable factors, because the company has control over these factors. These
are as mentioned below:
1) Top Management:
The
organizational
structure,
Board
of
Director,
professionalization
of
management...etc...Factors like the amount of support the top management
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enjoys from different levels of employees, shareholders and Board of Directors
have important influence on the marketing decisions and their implementation.
2) Finance and Accounting:
Accounting refers to measure of revenue and costs to help the marketing and to
know how well it is achieving its objectives. Finance refers to funding and using
funds to carry out the marketing plan. Financial factors are financial policies,
financial position and capital structure.
3) Research and Development:
Research and Development refers to designing the product safe and attractive.
They are technological capabilities, determine a company ability to innovate and
compete.
4) Manufacturing:
It is responsible for producing the desired quality and quantity of products.
Factors which influence the competitiveness of a firm are production capacity
technology and efficiency of the productive apparatus, distribution logistics etc.
5) Purchasing:
Purchasing refers to procurement of goods and services from some external
agencies. It is the strategic activity of the business.
6) Company Image and Brand Equity:
The image of the company refers in raising finance, forming joint ventures or
other alliances soliciting marketing intermediaries, entering purchase or sales
contract, launching new products etc.7
B) External Environment:
It consists of the actors and forces outside marketing that affect marketing
management‘s ability to develop and maintain successful relationships with its target
customers. Various factors affecting marketing function. External factors are beyond
the control of a firm; its success depends to a large extent on its adaptability to the
environment. The external marketing environment consists of two types Micro
environment, and Macro environment.
1) Micro Environment:
The environmental factors that are in its proximity. The factors influence the
company‘s non-capacity to produce and serve the market.
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Fig: Micro Marketing Environment
The Micro external factors are:
a) The Company:
In designing marketing plans, marketing management takes other company
groups into account Finance, Research and Development, Purchasing,
Manufacturing, Accounting, Top Management etc. Marketing manager must
also work closely with other company departments. Finance in concerned
with funds and using funds to carry out the marketing plans. The R&D
Department focuses on designing safe and attractive product. Purchasing
Department is concerned with supplies of materials whereas manufacturing
is responsible for producing the desired quality and quantity of products.
b) Company’s Suppliers:
Suppliers provide the resources needed by the company to product its goods
and services. They are important links in the company‘s overall customer
―value delivery system‖. Supplier developments can seriously affect
marketing. Marketing managers must watch supply availability – supply
shortages or delays, labour strikes and other events can cost sales in the
short run and damage customer satisfaction in the long run. Marketing
Managers also monitor the price trends of their key inputs. Rising supply
costs may force price increases that can harm the company‘s sales volume.
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c) Marketing Intermediaries:
Intermediaries or distribution channel members often provide a valuable link
between an organisation and its customers. Large-scale manufacturing firms
usually find it difficult to deal with each one of their final customers
individually in the target markets. So they chose intermediaries to sell their
products. Marketing intermediaries include resellers, physical distribution
firms, marketing service agencies, and financial intermediaries. They help
the company to promote, sell, and distribute its goods to final buyers.
Resellers are distribution channel firms that help the company to find
customers for goods. These include whole-sellers and retailers who buy and
resell merchandise. Selecting and working with resellers is not easy.
d) Physical Distribution:
Firms help the company to stock and move goods from their points of origin
to their destinations. Working with warehouse and transportation firms, a
company must determine the best ways to store and ship goods, and safety
marketing services agencies are the marketing research firms, advertising
agencies, media firms, and marketing consulting firms that help the company
target and promote its products to the right markets.
e) Customers:
A Consumer market consists of individuals and households that they buy
goods and services for personal consumption. Business markets buy goods
and services for further processing or for use in their production process,
whereas reseller markets buy goods and services to resell at a profit.
Government markets are made up of government agencies that buy goods
and services to produce public services or transfer the goods and services to
others who need them. Finally, international markets consist of the buyers in
other countries, including consumers, producers, resellers and governments.
Each market type has special characteristics that call for careful study by the
seller.
f) Competitors:
No single competitive marketing strategy is best for all companies. The
company‘s marketing system is surrounded and affected by a host of
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competitors. Each firm should consider its own size and industry position
compared to those of its competitors. Industry and competition constitute a
major component of the micro-environment. Large firms with dominant
positions in an industry can use certain strategies that smaller firms cannot
afford. But being large is not enough. There are winning strategies for large
firms, but there are also losing ones. And small firms can develop strategies
that give them better rate of return than large firms enjoy.
g) Public:
General public do take interest in the business undertaking. The company
has a duty to satisfy the people at large along with competitors and the
consumers. A public is defined as ―any group that has an actual or potential
interest in or impact on a company‘s ability to achieve its objectives.
Various types of Publics are as mentioned below:
1) Financial Publics:
Example: Banks, stock-brokers, financial institutions.
2) Media Publics:
Example: Newspapers, blogs, magazines (print and digital), radio
(broadcast and internet) and television outlets (broadcast and digital.
3) Government Publics:
Example: Government officials and departments, their lawyers and
sometimes lobbyists.
4) Citizen Publics:
Example: Consumer Organizations; environment groups.
5) Local Publics:
Example: Neighborhood residents, Community groups.
6) General Publics:
Example: General Public, Public opinions.
7) Internal Publics:
Example: Workers, officers, Board of Directors.8, 9, 10 &11
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2) Macro Environment:
These factors act external to the company and are quite uncontrollable. These
factors do not affect the marketing ability of the concern directly but indirectly the
influence marketing decisions of the company. The macro-environment consists
of broader forces that not only affect the company and the industry, but also
other factors in the micro-environment.
The components of a macro-environment are:
Demographic Environment.
Economic Environment.
Physical Environment.
Technological Environment.
Political Environment.
Legal Environment.
Social and Cultural Environment.
a) Demographic Environment:
Demography is the study of population characteristics that are used to
describe consumers. Demographics tell marketers who are the current and
potential customers, where are they, how many are likely to buy and what
the market is selling. Demography is the study of human populations in
terms of size, density, location, age, sex, race, occupation and other
statistics. Marketers are keenly interested in studying the demography ethnic
mix, educational level and standard of living of different cities, regions and
nations because changes in demographic characteristics have a bearing on
the way people live, spend their money and consume. For example, one of
the demographic characteristic is the size of family. With the number of small
families increasing in India, the demand for smaller houses and household
items has increased significantly. Similarly, the number of children in a family
has reduced significantly over the years. So, per child spending in a family
has
increased
significantly.
The
demographic
variables
which
traditionally used by marketers, to segment the markets are as below:
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Basic of Marketing
1) Income:
Income determines purchasing power and status. Higher the income,
higher is the purchasing power. Though education and occupation
shapes one‘s tastes and preferences, income provides the means to
acquire that.
2) Life-style:
It is the pattern of living expressed through their activities, interests and
opinion. Life-style is affected by other factors of demography as well.
Life-style affects a lot on the purchase decision and brand preferences.
3) Sex:
Gender has always remained a very important factor for distinction.
There are many companies which produce products and services
separately for male and female.
4) Education:
Education implies the status. Education also determines the income and
occupation. With increase in education, the information is wider with the
customers and hence their purchase decision process is also different.
So the marketers group people on the basis of education.
5) Social Class:
It is defined as the hierarchical division of the society into relatively
distinct and homogeneous groups whose members have similar
attitudes, values and lifestyle.
6) Occupation:
This is very strongly associated with income and education. The type of
work one does and the tastes of individuals influence one‘s values, lifestyle etc. Media preferences, hobbies and shopping patterns are also
influenced by occupational class.
7) Age:
Demographic variables help in distinguishing buyers, that is, people
having homogenous needs according to their specific wants, preferences
and usages. For instance, teenagers usually have similar needs.
Therefore, marketers develop products to target specific age groups.
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b) Economic Environment:
Economic environment is the most significant component of the marketing
environment. It affects the success of a business organisation as well as its
survival. The economic policy of the Government, needless to say, has a
very great impact on business. Some categories of business are favorably
affected by the Government policy, some adversely affected while some
others remain unaffected. The economic system is a very important
determinant of the scope of private business and is therefore a very
important external constraint on business.
c) Physical Environment:
The physical environment or natural environment involves the natural
resources that are needed as inputs by marketers or those that are affected
by marketing activities. Environmental concerns have grown steadily in
recent years. Marketers should be aware of trends like shortages of raw
materials, increased pollution, and increased governmental intervention in
natural resources management.
Companies will have to understand their environmental responsibility and
commit themselves to the ‗green movement‘. Potential shortages of certain
raw materials, for examples, oil, coal, minerals, unstable cost of energy,
increased levels of pollution; changing role of Government in environment
protection are a few of the dangers the world is facing on physical
environment forces.
d) Technological Environment:
The technological environment is the most dramatic force now facing our
destiny. Technological discoveries and developments create opportunities
and threats in the market. The marketer should watch the trends in
technology. The biggest impact that the society has been undergoing in the
last few years is the technological advancement, product changes and its
effects on consumers. Technology has brought innumerable changes in
human lives, be it in the field of science, medicine, entertainment,
communication, and travel or office equipment. Name any field, and one can
see changes in product or efficiency and faster services.
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e) Political Environment:
The political environment consists of factors related to the management of
public affairs and their impact on the business of an organisation. Political
environment has a close relationship with the economic system and the
economic policy. Some Governments specify certain standards for the
products including packaging. Some other Governments prohibit the
marketing of certain products. In most nations, promotional activities are
subject to various types of controls. India is a democratic country having a
stable political system where the Government plays an active role as a
planner, promoter and regulator of economic activity.
f) Legal Environment:
Marketing decisions are strongly affected by laws pertaining to competition,
price-setting, distribution arrangement, advertising etc. It is necessary for a
marketer to understand the legal environment of the country and the
jurisdiction of its courts.
g) Social and Cultural Environment:
Socio-cultural forces refer to the attitudes, beliefs, norms, values, lifestyles of
individuals in a society. These forces can change the market dynamics and
marketers can face both opportunities and threats from them. Some of the
important factors and influences operating in the social environment are the
buying and consumption habits of people, their languages, beliefs and
values, customs and traditions, tastes and preferences, education and all
factors that affect the business.
Culture influences every aspect of marketing. Marketing decisions are based
on recognition of needs and wants of the customer, a function of customer
perceptions. These help in understanding of lifestyles and behavior patterns
as they have grown in the society‘s culture in which the individual has been
groomed. Thus a person‘s perspective is generated, groomed and
conditioned by culture.10
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3.1.6. Need for Analyzing the Marketing Environment:
Environmental analysis attempts to give an extensive insight as to the current market
conditions as well as of impact of external factors that are uncontrollable by the
marketers. These variables play an important role in convincing potential customers
regarding changes in market trends, market conditions etc.
Facilitating the corporation‘s strategic response to the changes taking place in
environmental factors is the ultimate purpose of environment analysis. The firm has to
come up with alternative programme and strategies in line with environmental realities.
This is possible only with proper environment analysis. It helps strategic response by
highlighting opportunities, the pursuit of which will help the firm to attain its objectives. It
helps to assess the attractiveness and probability position of these opportunities, and
helps to prepare a shortlist of those which are relevant to the firm and which can be
pursued by it. Spotting the opportunities and threats is the central purpose here.
It is in the environment that the firm finds its opportunities; it is in the environment that it
finds the treats it has to encounter and, it is by tapping the opportunities present and
countering the threats embedded therein that the firm achieves its growth objective. The
starting point is thus to spot the opportunities and threats.
The following are the benefits of environment analysis:
1) It helps in marketing analysis.
2) It can assess the impact of opportunities and threats on the business.
3) It facilitates the company to increase general awareness of environmental changes.
4) It is possible to develop effective marketing strategies on the basis of analysis.
5) It helps to capitalize the opportunities rather than losing out to competitors.
6) It facilitates to understand the elements of the environment.
7) It helps to develop best strategies, in the light of analyzing ―what is going around the
company‖10.
3.2. Macro Environment:
For one to plan, design and implement a good marketing strategy, he must first begin
by making a careful scrutiny of his macro environment. He has to analyze the different
environmental factors that may be detrimental to his marketing action. The term,
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"macro‖, refers to a bigger milieu that is characteristically broader in perspective,
external to the company and largely if not totally beyond his control. Externally these
macro forces may indirectly and directly affect the very existence of the firm.
3.2.1. Analyzing Economic Environment:
Analyzing economic environment are as follows:
1) Terms used to describe economic circumstances for measuring business potential:
a) Income distribution & discretionary income.
b) Productivity: unit labor costs and labor compensation costs compared.
2) Relates to how much it costs in various regions for your competitors to manufacture
stuff, or how much it costs you for labor to have products.
a) Made major international debtors.
3) Relates to the financial burden on government to tax citizens (trade surplus, trade
deficit, bond debt).
a) Inflation, interest rates, availability of credit.
b) Age distribution.
4) Effects lifestyle things such as transportation, food consumption, entertainment,
living accommodations.
a)
b)
c)
d)
Birth rate.
Education and literacy rates.
Population density.
Rural- urban population shifts.
3.2.2. Analyzing Socio-cultural Environment:
Socio-cultural environment consists of models of individual and group behaviour which
reflect attitudes, values and habits. Some authors had completed socio-cultural
environment with demographic factors, ethnic and other factors which reflect changes in
the geographical population distribution, migration from rural to urban areas or toward
an economic developed areas. The most important social and cultural factors which
have a significant influence on business environment and company development are:
life style, value system and people‘s attitude regarding business, work, government,
administration, social security, ethnic problems, and the attitude towards saving money.
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3.2.3. Analyzing Demographic Environment:
Demographic variables help marketers analyze the market, because changes in
demographic characteristics have a bearing on the way people live, spend their money
and consume. Marketers can also divide customers in various groups on the basis of
demographics such as infants, children, young adults, adults, women, senior citizens,
singles, location, occupation and literacy and cultural diversity.12
3.2.4. Analyzing Political-Legal-Regulatory Environment:
Political and Legal includes the following:
1) Taxation policy.
2) Monopoly Control measures.
3) Environmental protection measures.
4) Employment laws.
5) Foreign Trade agreements.
6) Government Stability.
Regulatory environment includes the following:
1) Government legal forces.
2) Business can be governed at different levels such as:
a) Federal Level.
b) State Level.
c) Local Level.
d) Self-regulation.13
3.2.5. Analyzing Technical Environment:
Technology greatly influences a business as it changes every minute and therefore
companies need to stay connected along the way and integrate as and when needed.
Also, these factors are analyzed to understand how the consumers react to
technological trends and how they utilize them for their benefit.14
3.2.6. Analyzing Environmental Environments:
The location of countries influence on the trades that businesses do. Adding to that,
many climatic changes alter the trade of industries and the way consumers react
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Basic of Marketing
towards a certain offering that is launched in the market. The environmental factors
include geographical location, the climate, weather and other such factors that are not
just limited to climatic conditions. These in particular affect the agri-businesses, farming
sectors etc.14
3.3. Linkage of Marketing Function with Function in Organization:
The marketing function within any organization does not exist in isolation. Therefore it's
important to see how marketing connects with and permeates other functions within the
organization.
1) Research and Development:
R&D is the engine within an organization which generates new ideas, innovations
and creative new products and services.
Example:
Cell phone/mobile phone manufacturers are in an industry that is ever changing and
developing, and in order to survive manufacturers need to continually research and
develop new software and hardware to compete in a very busy marketplace.
Research and development should be driven by the marketing concept. The needs
of consumers or potential consumers should be central to any new research and
development in order to deliver products that satisfy customer needs (or service of
course).
2) Production:
As with research and development, the operations, production and logistics
functions within business need to work in cooperation with the marketing
department. Operations include many other activities such as warehousing,
packaging and distribution. To an extent, operations also include production and
manufacturing, as well as logistics.
3) Human Resources:
Human Resource Management (HRM) is the function within organization which
overlooks recruitment and selection, training, and the professional development of
employees. Other related functional responsibilities include well-being, employee
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Basic of Marketing
motivation, health and safety, performance management, and of course the function
holds knowledge regarding the legal aspects of human resources.
4) Finance:
Financing and risk-bearing are two important facilitating functions. The owner of
goods at any marketing stage must sacrifice the opportunity to use the working
capital needed to buy the goods elsewhere. Or the owner may borrow that capital.
In either case, capital must be provided by the trader or by some lending source.
Regardless, cost is involved. Other facilitating functions enable producers to
respond to consumer needs and thus provide goods in the locations, quantity and
form desired.
5) Customer Service:
Customer service provision is very much integrated into marketing. As with earlier
lessons on what is marketing? The exchange process, customer satisfaction and
the marketing concept, customer service takes the needs of the customer as the
central driver. So customer service function should revolve around a series of
activities which are designed to facilitate the exchange process by making sure that
customers are satisfied. Customer service is supported by IT to make the process of
customer support more efficient and effective, and to capture and process data on
particular activities. So the marketer needs to make sure that he or she is working
with the customer service provision since it is a vital customer interface. The
customer service provision may also provide speedy and timely information about
new or developing customer needs.
6) IT/Administration:
Marketers are concerned with how technology is used to treat information i.e. how
information is gained, how it is processed, how the information is stored, and then
how is it disseminated by voice, image or graphics. Obviously this is a huge field but
for we need to recognize the importance of websites, intranets and extranets to the
marketer. Information Technology underpins and supports the basis of Customer
Relationship Management (CRM).
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3.4. Concept of Market Potential & Market Share:
The concept of market potential & market share are as follows:
3.4.1. Market Potential:
The upper limit of Market Demand is called Market Potential. It involves some basic
terms:
a) Total Market Demand.
b) Primary Demand.
c) Selective Demand.
Market potential is a data analysis exercise which involves profiling of existing
customers or markets and matching against other sources, to help to define the
commercial universe or market. To help to define the commercial universe or market.
This exercise is usually completed at a product or proposition level and will help shape
business decisions. The estimated maximum total sales revenue of all suppliers of a
product in a market during a certain period.
A) Benefits of Market Potential Analysis:
1) Understand market potential for a single store, network of stores or a new
market.
2) Deploy resources effectively by ranking markets in priority order.
3) Forecast total opportunity in terms of number of customers and revenue
potential.
4) Estimate market share.
B) Estimating Market Potential Check-List:
Following are the estimating market potential check-list is as follows:
1) What type of customer will buy the product or service?
2) Where are these customers located?
3) How many potential customers (N) are there?
4) How often do they consume or use it?
5) What is the Competition?
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6) What are people paying?
7) What is the Potential for the Market to Develop?
8) What is my share of the Market?
3.4.2. Market Share:
Market share is the percentage of a market (defined in terms of either units or revenue)
accounted for by a specific entity. Market share is a key indicator of market
competitiveness that is, how well a firm is doing against its competitors. The percentage
of a market accounted for by a specific entity. The percentage of an industry or market's
total sales that is earned by a particular company over a specified time period.
Market share = Company's sales over the period /total sales of the industry over the
same period
Market share is used to:
1) Give a general idea of the size of a company to its market and its competitors.
2) Market share increases can allow a company to achieve greater scale in its
operations and improve profitability.
3) To determine company‘s competitive strength in a sector as compared to other
companies in the same sector.15
●●●●●●
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Activity Based Learning
1) Students are requested to select any 5 companies and make a chart of its marketing
environment in the following manner:
a) Details of the company and its business along with goods and services offered.
b) Write down who are affecting the company directly (micro marketing
environment) internally.
c) Write down who are affecting the company indirectly(macro marketing
environment).
2) A) Write the micro analysis of the following by selecting company of your choice:
a) Any insurance company.
b) Any bank.
c) Any tourism company.
d) Any telecom company.
B) Write the macro analysis of the following by selecting company of your choice:
a) Any cold drinks company.
b) Any pharma company.
c) Any fast food chains.
d) Any automobile companies.
3) A) Select any 5 Indian and 5 international companies which are in same product
category make a chart on their market potential and market share.
B) Make a ppt showing graphs on market potential and market share for the above
companies taking the help of internet.
4) A) Write down the internal controllable factors for the following companies.
B) Write down the external controllable factors for the following companies.
5) Prepare the DPESTELCUP analysis chart for the following companies:
Hint-(dpestelcupdemographical, economical, social, technological environmental,
legal, cultural and physical) analysis of the following companies.
●●●●●●
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MODEL MULTIPLE CHOICE QUESTIONS
Q.1.
The marketing environment consists of which of the following?
a) Micro Environment and Macro Environment
b) Micro Environment and Mini Environment
c) Macro Environment and Mini Environment
d) Mini Environment and Major Environment
Q.2.
The elements of the micro-environment consist of______
a) Political, competitive pressures, Social and physical forces
b) Suppliers, competitors, customers and distributors
c) Technology, legal legislation, supply chain and competitors
d) Economic, Customers, Social and Political forces
Q.3.
Recyclable and non-wasteful packaging is a(n)______
a) Economic force
b) Technological force
d) Physical force
c) Political force
Q.4.
Which of the environmental forces is most likely to impact on how well-off
consumers feel?
a) Economic forces
b) Technological forces
c) Political forces
d) Physical forces
Q.5.
Demographic forces affect which of the following?
b) Changes in population
a) Changes in price
c) Changes in technology
d) Changes in the marketplace
Q.6.
Which brand is perceived as the most ethical in the UK?
a) Adidas
b) Tesco
d) Co-op
c) Philips
Q.7.
What does NAFTA stand for?
a) Northern Agreement For Trade in America
b) National Association of Free Teachers Agreement
c) North American Free Trade Agreement
d) National Association of Football Teaching Authority
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Basic of Marketing
Q.8.
The combination of values, beliefs and attitudes that is possessed by a national
group or sub-group is called________
a) Religion
b) Norms
c) Culture
d) Society
Q.9.
The process of monitoring and analysing the marketing environment of a
company is called______
a) Situational Analysis
b) Market Analysis
d) Environmental Scanning
c) Market Scanning
Q.10. Which of the following is not part of the external marketing environment?
a) Political
b) Legal
c) Product
d) Socio-cultural
Q.11. Tobacco advertising is now virtually banned in all marketing communication
forms in many countries around the world. This can be explained as an influence
of_________
b) legal environment.
a) technological environment.
c) economic environment.
d) ecological environment.
Q.12. _____________ is an important analytical tool as it draws attention to the cash
flow and investment characteristics of each of a firm's offerings and indicates
how financial resources can be manoeuvred to attain optimal strategic
performance over the long term.
a) SWOT analysis
b) Political analysis
c) Portfolio analysis
d) Competitive analysis
Q.13. Marketing decision makers in a firm must constantly monitor competitors'
activities - their products, prices, distribution and promotional efforts –
because______
a) The competitors may be violating the law and can be reported to the
authorities.
b) The actions of competitors may threaten the monopoly position of the firm in
its industry.
c) The actions of competitors may create an oligopoly within an industry.
d) New product offerings by a competitor with the resulting competitive
variations may require adjustments to one or more components of the
firm's marketing mix.
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Q.14. Robert is a marketer for a global consumer products company. He is working on
the promotional campaign designed to reach a target audience in a new
international market. Robert is working hard to make sure that the promotional
campaign is clearly understood by the nation's consumers and doesn't offend
anyone. Which of the factors in the external environment is he being influenced
by?
a) Socio-cultural environment.
b) Competitive environment.
c) Economic environment.
d) Legal environment.
Q.15. The process of collecting information about the external marketing environment
is____
b) environmental scanning.
a) environmental management.
c) marketing management.
d) marketing research.
Q.16. The six dimensions usually considered to constitute the external marketing
environment include all of the following except_______
b) global factors.
a) political considerations.
c) socio-cultural aspects.
d) economics issues.
Q.17. The phenomenon that customers are happy to work with companies and
organisations to solve problems is referred as_______
a) crowd-sourcing.
b) communication-sourcing.
c) customer co-creation.
d) mass-sourcing.
Q.18. New technology results in new goods and services and it can also_____
a) lower the quality of existing products.
b) lower the available level of customer service.
c) reduce prices through new production and distribution methods.
d) bring back products that were considered obsolete.
Q.19. Toyota's Prius and Honda's hybrid Civic are examples of technological products
inspired by_____
a) style considerations in the Japanese automobile industry.
b) social pressure to develop more fuel-efficient vehicles with fewer
dangerous emissions.
c) the desire of many engineers to simply make interesting products.
d) the realization that Japanese people didn't need large, high-speed cars.
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Q.20. _____ is the collection and interpretation of information about forces, events and
relationships that may affect the organisation.
a) Environmental scanning
b) Stakeholder analysis
c) Market sampling
d) Opportunity analysis
Q.21. To make sense of the external environment, the well-known acronym, PESTLE
is used. PESTLE stands for _____________
a) The Political, Economics, Substitute, Technological, Legal and Ecological
environments.
b) The Political, Economic, Social, Technological, Legal and Ecological
environments.
c) The Political, Economic, Social, Treat, Legal and Ecological environments.
d) The Purchasing, Economics, Social, Technological, Legal and Ecological
environments.
Q.22. Marketing managers cannot control _____________ but they can at times
influence it.
a) where advertising is placed
b) how products or services are delivered
c) the external environment
d) how products are priced
Q.23. As technology continues to offer more different methods for shopping online,
manufacturers and traditional retailers are finding themselves in direct
competition with each other. In this case, unless marketing managers
understand ________, retailers cannot intelligently plan for the future.
a) their competitors' strategies
b) the economic conditions which influence the growth of technology
c) changing social attitudes towards technology
d) their competitors' strategies, the economic conditions which influence
the growth of technology and changing social attitudes towards it
Q.24. The external environment_________
a) Can be controlled in much the same manner as the internal marketing mix.
b) Does not change over time.
c) Does not have an impact on Fortune 500 companies.
d) Must be continually monitored by marketing managers.
Q.25. The differentiation of a firm's products or services to promote environmental
responsibility is referred to as______
b) Eco-branding.
a) Social branding.
c) me-too branding.
d) Brand personality.
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Q.26. Which of the following elements is not part of Porter's Five Forces model for
industry competitiveness?
a) Threat of substitutes.
b) Threat of suppliers.
d) Threat from government.
c) Power of buyers.
Q.27. To evaluate an organisation's Strategic Business Units (SBU), the Boston
Consulting Group developed a portfolio performance framework that
characterizes some of the SBUs as________
a) question marks.
b) quick winners.
c) charging bulls.
d) cash outs.
Q.28. The quadrant of the Boston Consulting Group (BCG) matrix that represents both
a high market share and a high rate of market growth includes the_______
a) cash cows.
b) question marks.
c) stars.
d) dogs.
Q.29. All of the following would be considered to be in a company‘s micro-environment
except_________
b) political forces.
a) marketing channel firms.
c) publics.
d) customer markets.
Q.30. Which of the following characteristics would usually make a market less
competitive?
a) High barriers to entry.
b) Lots of potential substitutes exist.
c) Strong bargaining power among buyers.
d) Strong bargaining power among suppliers.
Q.31.
―________ fever‖ results from the convergence of a wide range of forces in the
marketing environment from technological, economic and demographic forces to
cultural, social and political ones.
a) Marketing
b) Cultural
d) Millennial
c) Technographic
Q.32. The ______________________ consists of the actors and forces outside
marketing that affect marketing management‘s ability to develop and maintain
successful relationships with its target customers.
a) marketing organisation
b) marketing system
d) marketing environment
c) marketing network
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Q.33. Which of the following terms best describes the environment that includes the
forces close to the company that affect its ability to serve its customers the
company, suppliers, marketing channel firms, customer markets, competitors
and publics?
a) micro-environment
b) macroenvironment
c) global environment
d) networked environment
Q.34. Which of the following best describes the environment that contains the larger
societal forces that affect the company-level environment—demographic,
economic, natural, technological, political and cultural forces?
b) macro-environment
a) micro-environment
c) global environment
d) networked environment
Q.35. All of the following would be considered to be a part of a company‘s macro
environment except_________
b) marketing channel forces.
a) demographic forces.
c) technological forces.
d) natural forces.
Q.36. Finance, research and development, purchasing and manufacturing are all
activities that are a part of which element of the micro-environment?
a) the
company’s
internal b) the suppliers.
environment
c) the marketing channel firms
d) the publics
Q.37. __________ management sets the company‘s mission, objectives, broad
strategies and policies.
a) Top
b) Mid-level
c) Marketing
d) Tactical
Q.38. ________________ are an important link in the company‘s overall ―value
delivery system‖ since they provide the resources needed by the company to
produce its goods and services.
a) Marketing intermediaries
b) Competitor networks
c) Suppliers
d) Service representatives
Q.39. _________________ help the company to promote, sell and distribute its goods
to final buyers.
a) Marketing intermediaries
b) Competitor networks
c) Suppliers
d) Service representatives
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Basic of Marketing
Q.40. _____________ include resellers, physical distribution firms, marketing services
agencies and financial intermediaries.
a) Marketing intermediaries
b) Competitor networks
c) Suppliers
d) Service representatives
Q.41. Firms that help the company to stock and move goods from their points of origin
to their destinations are called________
b) physical distribution firms.
a) financial intermediaries.
c) suppliers.
d) marketing services agencies.
Q.42. Which of the following would be an example of a marketing services agency?
a) a warehouse
b) a transportation firm
d) an advertising agency
c) an insurance agency
Q.43. All of the following are considered to be a type of customer market except a:
b) competitor market.
a) business market.
c) government market.
d) reseller market.
Q.44. Which of the following would be considered a customer market?
a) a business market
b) a competitor market
c) a geographic market
d) a gender market
Q.45. The type of customer market that buys goods and services for further
processing is called a_______
a) business market.
b) consumer market.
c) government market.
d) reseller market.
Q.46. If your company were to make a product, such as a suit of clothes and sell that
product to a retailer, your company would have sold to the ___________
market.
a) reseller
b) business
c) government
d) service
Q.47. If your company were to make light bulbs to be used in photocopiers, you would
most likely be selling to a ________________ market.
b) business
a) reseller
c) government
d) service
Q.48. A ______________ is any group that has an actual or potential interest in or
impact on an organisation‘s ability to achieve its objectives.
a) competitive set
b) marketing intermediary
d) public
c) supplier
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Q.49. All of the following are significant publics that affect an organisation‘s ability to
achieve its objectives except________
a) charitable publics.
b) financial publics.
c) media publics.
d) citizen action publics.
Q.50. _____________ publics include workers, managers, volunteers and the board of
directors of an organisation.
a) General
b) Financial
c) Internal
d) Local
Q.51. All of the following are among the major forces considered to be in a company‘s
macroenvironment except__________:
a) demographic forces.
b) natural forces.
d) competitor forces.
c) technological forces.
Q.52. The study of human populations in terms of size, density, location, age, gender,
race, occupation and other statistics is called________
b) demography.
a) geothermic.
c) ethnography.
d) hemos-popography.
Q.53. All of the following are areas that marketers in the United States track within the
demographic context except___________
a) package design changes.
b) changing age structures.
c) geographic population shifts.
d) the changing American family
Q.54. Markets in which market offerings are bought from sellers for reselling purpose
are known as_____
b) reseller markets
a) business markets
c) government markets
d) international markets
Q.55. In macro environment, 'pressure groups' and 'government agencies' are part
of______
a) cultural environment
b) demographic environment
d) political environment
c) economic environment
Q.56. Company's micro-environment does not include______
a) The company
b) The marketing intermediaries
c) Demographic forces
d) The organisation's suppliers
●●●●●●
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Unit 4
Unit Review
4.1. Marketing as Value Delivery Process:
Traditional & Modern Approaches.
4.2. Segmentation:
Definition, Need for segmentation, Benefits of Segmentation to
marketers, Bases for market segmentation of consumer goods &
industrial goods, Criteria for effective segmentation.
4.3. Levels of Market Segmentation:
Segment
Marketing,
Niche
Marketing,
Local
Marketing,
Mass
Marketing.
4.4. Target Market:
Concept of Target Market and criteria for selection of Target market.
4.5. Positioning:
Differentiation and Concept of Differentiation &Positioning, Introduction
to the Concepts of Value Proposition & USP.
Activity Based Learning
4.1. Marketing as Value Delivery Process:
The exchange of tangible goods, services, ideas, time, information and may be other
intangibles between buyers and sellers are Values for a customer through whom he/she
may be satisfied or dissatisfied. Hence creation of customer value and its delivery is the
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need of today‘s business world and this task is the major function of marketing which is
the process of Value Exchange. In fact, the key to a successful exchange is that each
party has some value desired by the other. This has got an impact on the entire
Marketing Concepts' philosophy design and implementation. Building and enhancing
strong Buyer-Seller Business Relationships is a key part of the Value Delivery Process.
Practically, the Value Delivery Process is a planned Marketing approach that
differentiates a customer-oriented organization from the traditional brand making and
selling. The Value Delivery Process brakes into three distinct phases:
1) Choose the Value:
Choosing the value where Marketing Management does its own ―homework
marketing‖ before any product exists (e.g. market segmentation, targeting and
positioning as the essence of the first phase of strategic marketing.
2) Provide the Value:
Providing the value where Marketing Management decide the marketing mix criteria
(For example, Marketing tactics) that will provide a strong competitive and thus a
differential advantage (see previous posts).
3) Communicate the Value:
Communicating the value where Marketing Management decides on the actual
implementation process - utilization of the Sales Force, Sales Promotion,
Advertising and other integrated communication tools.
4.1.1. Approaches of Value Delivery Process:
Lanning states the existence of at least two views of the value delivery process. These
are traditional and modern approach:
1) Traditional Approach:
The traditional view is that the firm makes something and then sells it to the
customers. The process of value delivery comprises of two steps i.e. making the
product and selling the same. The marketing activity consists of pricing, selling,
product promotion, distribution and after sales services. The company knows what
to make and the market will buy enough units to produce profits.
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Companies that subscribe to this view have the best chance of succeeding in
economies marked by goods shortages where consumers are not fussy about the
quality, features, or style, for example, with basic staple goods in developing
markets. The customer figures at the receiving end of the process of value delivery.
However the present situation provides the customers with abundant choices. The
mass markets are actually fragmenting into numerous micro markets and the
customers demand the products customized to their needs at the lowest possible
price. The smart competitor must design and deliver offerings for well-defined target
markets. This belief is at the core of the new view of business processes, which
places marketing at the beginning of planning. This action can be seen at local mall.
A firm going by this somewhat parochial view of value delivery is likely to be
outsmarted by a competitor who is more customers oriented. In the struggle to grow,
retail chains are creating spin offs that appeal to ever smaller micro markets.
2) Modern Approach:
The modem view of value delivery process starts from the customer wherein the
companies have to create value first before they undertake operations to deliver the
same. The process of value delivery is divided into three components namely
choosing the value, providing the value and then communicating the value.
Choosing the value is a set of activities undertaken before the product (offering) is
developed. It starts from customer segmentation for a focused selection of the
markets and then developing value positioning. The component of providing the
value undertakes product development on the basis of chosen value. This includes
operations of manufacturing, sourcing and distribution of the value offering
(product). Pricing precedes operations to act as benchmark or the control limit of
product cost for the operations. The price must fall within the range that provides
maximum perceived customer value. The operations cost and profits lie within this
benchmark. The activities of sales promotion and advertisement communicate the
value to the customers. In the present situation where the customers look for
information before purchase and the spatial convenience of the information is as
important as the spatial convenience of the product.
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4.2. Segmentation:
The market for any artifact is usually made up of numerous segments. A 'market' after
all is the aggregate of consumers of a given product. And, consumer (the end user),
who makes a market, are of varying characteristics and buying behavior. There are
different factors contributing for varying mind set of consumers. It is thus natural that
many differing segments occur within a market.
4.2.1. Meaning:
A marketing segment is a meaningful buyer group having similar wants. Segmentation
is a customer oriented marketing strategy. Segmentation implies bending of supply to
the will of demand as far as feasible and desirable. Market segmentation is a method
for achieving maximum market response from limited marketing resources by
recognizing differences in the response characteristics of various parts of the market. In
a sense, market segmentation is a strategy of ‗divide and conquer‘ i.e. dividing markets
in order to conquer them.
4.2.2. Definitions:
Following are the various definitions of the market segmentation:
1) Philip Kotler:
"Market Segmentation is the sub-dividing of a market into homogeneous subsets
customers, where any subsets may conceivably be selected on a market target to
be reached with a distinct marketing mix.”
2) William J. Stanton:
“Market Segmentation consists of taking the total heterogeneous market for a
product and dividing it into several sub-markets or segments, each of which tends to
be homogeneous in all significant steps.”
3) Harper and Massy:
“Market segmentation is a process by which a firm partitions its prospective
customers into sub-groups or sub - markets. The objective of segmentation is to
group individual prospects so that their response to marketing inputs will be similar,
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that is, the sensitivities to these inputs should vary greatly among segments but little
within segments.”
4) Eric R. Redenbacher and Robert E. Pitts:
“Market segmentation is the recognition that a market is composed of different
buyers who have different responses to market offerings. No single approach to the
market will satisfy all buyers. Each segment represents a somewhat different
opportunity for the organization. In its most fundamental form, market segmentation
recognizes that a company or its products / service offering cannot be same, all
times, to everyone.”
5) The authors (Dr Sandeep Pachpande, Dr S. B Mathur and Prof Prakash Singh):
“Techniques of prospecting the identical individual groups of buyer by breaking the
large group to target the market through market offerings.”
6) Kotler and Armstrong:
"Dividing a market into distinct groups of buyers who have distinct needs,
characteristics, or behaviour and who might require separate products or marketing
mixes."
Example:
Readymade garments companies are segmenting their markets mainly on the basis of
age and gender.
Fig: Showing Different Types of Segments
As shown in this image, there are five such segments identified by the company like
Mens wear, Girls wear, Boy wears and Women wear. Hence companies have identified
different segments for one product category.
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The process of defining and subdividing a large homogenous market into clearly
identifiable segments having similar needs, wants or demand characteristics. Its
objective is to design a marketing mix that precisely matches the expectations of
customers in the targeted segment. Few companies are big enough to supply the needs
of an entire market; most must breakdown the total demand into segments and choose
those that the company is best equipped to handle.
Four basic factors that affect market segmentation are:
1) Clear identification of the segment.
2) Measurability of its effective size.
3) Its accessibility through promotional efforts and
4) Its appropriateness to the policies and resources of the company.1
The four basic market segmentation-strategies are based on:
1) Behavioral,
2) Demographic,
3) Psychographic, and
4) Geographical differences.
Fig: Showing different types of market segmentation
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Behavioral segmentation can be done on the basis of special occasions, loyalty,
benefit sought and usage rate. Demographic segmentation can be done on the basis
of sex, age, population, education, religion and income.
Fig: Showing different types of market segmentation
Geographic segmentation can be done on the basis of regional, climate, population
density and city size and Psychographic segmentation can be done on the basis of
Life style, cultural influences and social class.2
4.2.3. Need for Segmentation:
There is a need for market segmentation because according to the marketing concept
by Philip Kotler, understanding customers and satisfying their needs better than the
competitors is the priority of an organization. But different customers have different
needs, and it is rarely possible to satisfy all customers by treating them alike.
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Thus there is a need for Market Segmentation.
1) Need for Devise Appropriate Marketing Strategies and Promotional Schemes:
Market Segmentation helps the marketers to devise appropriate marketing
strategies and promotional schemes according to the tastes of the individuals of a
particular market segment. A male model would look out of place in an
advertisement promoting female products. The marketers must be able to relate
their products to the target segments.
2) Need for Understand the Needs of the Target Audience:
Market segmentation helps the marketers to understand the needs of the target
audience and adopt specific marketing plans accordingly. Organizations can adopt
a more focused approach as a result of market segmentation.
3) Need to Customers:
Market segmentation also gives the customers a clear view of what to buy and what
not to buy. A Rado or Omega watch would have no takers amongst the lower
income group as they cater to the premium segment. College students seldom go to
a Zodiac or Van Heusen store as the merchandise offered by these stores are
meant mostly for the professionals. Individuals from the lower income group never
use a Blackberry. In a simpler word, the segmentation process goes a long way in
influencing the buying decision of the consumers. An individual with low income
would obviously prefer a Nano or Alto instead of Mercedes or BMW.
4) Need for Target Right Product to Right Customer:
Market segmentation helps the organizations to target the right product to the right
customers at the right time. Geographical segmentation classifies consumers
according to their locations. A grocery store in colder states of the country would
stock coffee all through the year as compared to places which have defined winter
and summer seasons.
5) Need for know the Customers:
Segmentation helps the organizations to know and understand their customers
better. Organizations can now reach a wider audience and promote their products
more effectively. It helps the organizations to concentrate their hard work on the
target audience and get suitable results.3&4
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4.2.4. Benefits of Segmentation to Marketers:
The benefits of segmentation to marketers are as follows:
1) Improved Branding:
a) By positioning oneself with a specific benefit, a unique selling proposition point is
created, that sends a message to a target audience looking for that benefit.
Characteristics that help create a brand can include price, status, affordability,
speed or quality of customer service or the professional certification or
experience of the business owner or staff.
b) Segmenting the marketplace with a second product or service line using a
different name can help protect main brand. For example, if you own a high-end
furniture store, don‘t add resale items to your mix or you might turn off
discriminating customers. Open a second location under a different name, and
sell used items there to protect your main store.
2) Increased Sales:
If catered to a specific audience, one might lose sales among potential customers
outside the targeted audience circle but it may increase overall sales by attracting
more customers in a target demographic.
3) Better Distribution:
a) If a marketer has a specific market segment which he is trying to reach, he can
decrease the distribution channels, targeting those outlets that have the highest
amount of traffic from his desired customers.
b) Once marketer learns where his main target customer shops, he can focus on
sales and promotions budgets in those outlets.
4) Better Advertising:
a) By limiting audience, marketer can choose magazines, websites, radio and TV
stations and events that his customers are more likely to hear, see, visit or
attend.
b) By advertising in a newspaper or on TV or radio with run-of-schedule ads, or ads
that appear in no specific location or during no specific show, one can reach
men, women, children of all ages.
c) Segmenting the market lets marketer pick the sections or shows a specific target
customer, such as older men, read, listen to or watch.
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4.2.5. Bases for Market Segmentation of Consumer Goods:
Market segmentation divides the whole market of a product into several different
groups. Segmentation is the process of partitioning a large heterogeneous market into
smaller groups of people or businesses which show similar needs and/or characteristics
thus resulting into similar purchase behaviour. Major categories of consumer popular
bases of market segmentation are described as follows:
1) Geographic Segmentation:
Geographic variables divide the markets by locations. Geographic variables
consider the following factors:
Region, City size Population density & Climatic
conditions. The concept is that people living in the same area will have similar
needs and wants and that these want differ from people living in other areas. The
factors given above can affect product choice in certain categories like clothing (type
of clothing related to the climate), food (predominance of a regional taste), and
transportation (population density and infrastructure). In the below image, McD
geographical segmentations have been presented.
Fig: McD Market Segmentation
Food is one product category where geographic variables have a very dominant
effect. Geographic variables are important for media selection because geographic
segments can be reached through local media like newspapers, radio, outdoor and
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regional editions of magazines. There are strong regional and language preferences
in terms of what people read or watch on television.5
2) Demographic Segmentation:
Demography refers to the vital and measurable statistics of the population and help
to locate a target market. Demographic information is most popularly used as it is
accessible, measurable and cost-effective. Demographic trends can reveal
opportunities such as shifts in age, gender and income distribution.
Fig: Showing Different Types of Demographic Segmentation
The demographic variables most commonly used are:
a) Gender:
It is very frequently used as a segmentation variable; women have traditionally
been buyers or users of groceries, hair color and cosmetics; men have been
main users of shaving preparations and buyers of automobiles.
b) Marital Status:
Marketers have discovered the benefits of targeting specific marital status
groupings such as singles living away from home, divorced individuals, single
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parents, and dual-income no kids (DINK‘S) households, as the numbers of such
households is on the rise.
c) Income, Education and Occupation:
For long, income has been the key variable for distinguishing between market
segments, because it is a strong indicator of the ability or inability to pay for a
product. However income when combined with education and occupation gives
a more accurate picture of the ―buying power‖ of a market segment. Purchasing
Power (buying power) is a function of income, education and occupation.
Education and occupation determine the stability of present earnings as well as
future growth potential in earnings. Purchasing power is also closely co-related
with the level of aspirations, level of materialism, optimism about life, job,
economy etc. and age. Buying power is an important variable for determining
market potential for discretionary product categories like entertainment, gizmos
like digital cameras and high end mobile phones, holidays, purchase of second
homes amongst others.
3) Psychographic Segmentation:
This form of market segmentation, commonly referred to as ‗lifestyle segmentation‘,
has identified promising market segments responsive to specific marketing
messages. The psychographic profile of the consumer reveals how consumers
allocate their time, energy and money to activities and their interests and opinions
about various issues.
Fig: Showing different Types of Psychographic Segmentation
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4) Behavioral Segmentation:
Behavioral segmentation divides a population based on their behavior, the way the
population respond to, use or know of a product. Consumer behavior is a subject
studied in depth over time in marketing management. This is mainly because there
are several factors which a consumer takes into consideration before taking a
decision. Thus consumer decision making is affected by his behavior and that is
exactly how the behavioral segments are targeted.
Fig: Showing different types of Behavioral segmentation
Forms of Behavioral Segmentation:
The forms of behaviour segmentation are explained below:
a) Buying on Occasions:
Buying on occasions like Diwali, Eid, Christmas, Holi is the first form of
behavioral segmentation. Products such as chocolates and premium foods will
sell on festivals. Similarly, confectioneries will sell when there is a party. Thus
these products are generally targeted by behavioral segmentation. The best
example of targeting buying on occasions is Hallmark cards greeting cards for
all occasions. The primary targeting of hallmark was that be it any occasion, you
will find the right kind of card for you. Thus you have the perfect option to
express yourself.
b) Benefits Sought:
Several products are targeted towards the benefits sought by the customer.
Recently, there has been a war between Colgate and Sensodyne to target the
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people who have sensitive teeth. Similarly, there are other toothpastes which
are targeted towards whitening of teeth. Hair shampoos are targeted towards
split ends, anti dandruff or others. The above examples have explained the role
of benefits in behavioral segmentation to attract the customer on the basis of
their behavior. Thus a marketer can divide a population based on the benefits
they seek within a product.
c) Loyalty:
There are two ways to grow a business. First is to acquire new customers and
second is to retain your existing customers. The more loyal your customer is to
you, the more your customer base will increase. That‘s one more kind of
behavior which marketers target. The strategy for brand loyal customers is very
different from that used for acquiring new customers. The best example of
behavioral segmentation by loyalty is observed in the hospitality segment
wherein airlines, hotels, restaurants and others give their best to provide the
best service possible such that they can retain their customer. The hospitality
sector is the one with the best loyalty programs ever. Thus the loyalty of the
customer can also be used for behavioral segmentation.
d) Usage rate:
In residential or commercial segment, the usage can be demonstrated in the
form of heavy usage, moderate usage or lesser usage. Example of beauty
parlors or personal care. There are some customers who use a lot of personal
care products whereas others do not use personal care products much. Thus
depending on their usage the customers can be targeted. Another example of
usage rate segmentations can be seen in the electronics as well as the FMCG
industry in industrial buying. FMCG and electronics works on the basis of a
channel with dealers and distributors. In these segments, the maximum discount
goes to the one who buys the maximum whereas others get lesser profits as
they also get lesser discounts. Any product which is not targeted towards the
masses generally used behavioral segmentation. It is also an excellent form of
segmentation for products which are niche in nature and are targeted towards
the wants and demands of customers.
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4.2.6. Bases for Market Segmentation of Industrial Goods and Services:
The bases for market segmentation of industrial goods and services are as follows:
1) Measurability:
The first barrier is often necessitates field research, which is expensive and timeconsuming. Second, it is impossible to get accurate strategic data on a large
number of customers. Third, if gathered, the analysis of the data can be daunting
task. These barriers lead most companies to use more qualitative and intuitive
methods in measuring customer data, and more persuasive methods while selling,
hoping to compensate for the gap of accurate data measurement.
2) Substantiality:
The challenge here is finding the right size or balance. If the group gets too large,
there is a risk of diluting effectiveness; and if the group becomes too small, the
company will lose the benefits of economies of scale. Also, as Webster rightly
states, there are often very large customers that provide a large portion of a
suppliers business. These single customers are sometimes distinctive enough to
justify constituting a segment on their own.
Example:
Aircraft manufacturing, automotive, turbines, printing machines and paper
machines.
3) Operational Relevance to Marketing Strategy:
Segmentation should enable a company to offer the suitable operational offering to
the chosen segment, e.g. faster delivery service, credit-card payment facility, 24hour technical service, etc. This can only be applied by companies with sufficient
operational resources.
Example:
Just-in-time delivery requires highly efficient and sizeable logistics operations,
whereas supply-on-demand would need large inventories, tying down the supplier‘s
capital. Combining the two within the same company - e.g. for two different
segments - would stretch the company‘s resources.
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4.2.7. Criteria for Effective Segmentation:
A decision to use a market segmentation strategy should rest on consideration of four
important criteria that affect its profitability. An ideal market segment meets all of the
following criteria:
a) It is possible to measure.
b) It must be large enough to earn profit.
c) It must be stable enough that it does not vanish after some time.
d) It is possible to reach potential customers via the organization's promotion and
distribution channel.
e) It is internally homogeneous (potential customers in the same segment prefer the
same product qualities).
f) It is externally heterogeneous, that is, potential customers from different segments
have different quality preferences.
g) It responds consistently to a given market stimulus.
h) It can be reached by market intervention in a cost-effective manner.
i)
It is useful in deciding on the marketing mix.
Further, in order for segmenting to be viable; the market must be:
a) Identifiable and Measurable
b) Accessible
c) Substantial and
d) Responsive
Now these points will discuss in detail:
1) Identifiable and Measurable:
Segments must be identifiable so that the marketer can determine which consumers
belong to a segment and which do not. For example, if the marketer discovered that
consumers who perspire profusely favored a particular brand, very little could be
done with this information since such a group would be difficult to measure and
identify for segmentation purposes.
2) Accessible:
This criterion refers to the ease of effectively and economically reaching chosen
segments with marketing efforts. Some desired segments may be inaccessible
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because of legal reasons; for example, liquor manufacturers are unable to market
directly to young teenagers, In fact, there is a vigorous debate dealing with the
constitutionality of segmenting and targeting certain groups. Cigarette companies
that aimed recent new brands at 18 – 24 year old black women with a high school
education or less have been criticized, and legislation to protect these targeted
groups from such advertising has been proposed. The Association of National
Advertisers defends the practice and claims such proposals amount to censorship
and a violation of First Amendment rights.
It is more likely, however, that segments may be inaccessible because the marketer
is unable to reach them at a reasonable cost and with minimum waste via existing
promotional media and retail outlets.
3) Substantial:
This collection refers to the degree to which a chosen segment is large enough to
support profitably a separate marketing program. As was noted preciously a
strategy of market segmentation is costly. Thus, one must carefully consider not
only the number of customers available in a segment but also the amount of their
purchasing power.
4) Responsive:
There is little to justify the development of a separate and unique marketing program
for a target segment unless it responds uniquely to these efforts. Therefore, the
problem is to identify market segments that will respond favorably to marketing
programs designed specifically for them. If the four criteria above are fulfilled
segmentation will be an attractive marketing strategy.
4.3. Levels of Market Segmentation:
Segment Marketing, Niche Marketing, Local Marketing, Mass Marketing.
1) Segment Marketing Strategy:
A company might also increase sales by first identifying market segments within a
broader target market, each of which consists of potential customers whose unique
wants and needs can be satisfied by a particular product. Each segment and
product differentiation strategy is unique in terms of customer needs or preferences.
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Common criteria used to segment potential customers include age, gender, location
and income. For example, a company might produce one clothing line that satisfies
the needs of female teens and another to appeal to senior women.
2) Niche Marketing Strategy:
The needs and requirements of potential customers might not be completely met by
the goods and services currently delivered to a market segment. In this case, a
company might create a niche market and develop highly specialized products or
services to meet the customers‘ needs that aren't being met by other offerings. For
example, a set of potential customers in a particular market segment may be unable
to purchase highly specialized mountain bikes from the companies that market bikes
in a particular geographical area. In turn, a company located in this geographical
area may lack the resources to market all the mountain bikes, road and triathlon
bikes and hybrid bikes to this market segment that are offered by other companies
that sell to the market segment.
3) Mass Marketing Strategy:
A small business relies on a mass-marketing strategy to direct a single marketing
message to all potential customers in a target market regardless of the buyer's
specific needs or preferences, which might otherwise serve to segment the market.
Fig: Mass Marketing advertisement by Nestle’s Maggi
Nestle has adopted Mass Marketing Strategy to inform the consumers about the
return of Maggi in the market stating as ―Welcome Back Maggi” and through this
the company is communicating to all the consumers.
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To use a mass-marketing strategy, a company designs a product to appeal to all
members of the target market, rather than a subset of customers the market
segment most likely to purchase the product. For example, a business purchases
commercial time on a network to broadcast its advertisement to potential customers.
In turn, the set of potential customers who receive the mass-marketing message is
determined by the media markets to which a network broadcasts a program, rather
than the company's intentional selection of particular customers for inclusion in a
market segment.
Future Group’s Big Bazaar has adopted Mass Marketing Strategy to inform the
consumers about Wednesday Bazaar as Hapte Ka Sabse Sasta Din! and by
communicating this message through electronic and print media, the company is
attracting the consumers for shopping on every Wednesday of every month.
Fig: Mass Marketing advertisements by Big Bazaar
Future Group’s Big Bazaar has also initiated Public Holiday Sale by suggesting
consumers to take the advantage of holiday i.e. CHUTTI KA FAYDA UTHAO.
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The BIG BILLION DAYS by Flipkart is also a great example of mass marketing
strategy to attract, inform and persuade consumers about various offers of the
company for a limited period of time.
Fig: Mass Marketing advertisement by Flipkart
4) Local Marketing:
Local marketing is a comprehensive plan that works to drive local traffic to brick and
mortar businesses. The local market is made up of customers that are located within
the region that the service or product is offered. It is also known as target marketing;
it leads to marketing programs tailored to the needs & wants of local customer
groups.
Examples on Local Marketing:
Fig: Local Marketing advertisement by Asmi Tele Shoppee
Asmi Tele Shoppee of Pune has launched scheme of free Sim card with one
mobile phone purchase.
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Shoe Paradise of Pune has launched seasonal offer of 25% discount on all types
of footwear. Example: Advertisement by Shoe Paradise.
Fig: Local Marketing advertisement by Shoe Paradise
Ranka Jewelers had posted an advertisement to attract the local customers of Pune
regions to visit their showrooms for purchasing ornaments.
Example: Advertisement by Ranka Jewelers in Pune.
Fig: Local Marketing advertisement by Ranka Jewelers
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In the below advertisement posted by Kumar Builders in Pune, the objective was to
attract local customers for their various ongoing projects in Pune. This
advertisement is the best example of local marketing as target customers are the
local residents.
Fig: Local Marketing advertisement by Kumar Builders
Below images are showing different hoardings in the different areas of a city to
create awareness about different market offerings.
Fig: Local Marketing Advertisement by Various Marketers
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4.4. Target Market:
Not all products and services are meant for all types of consumers. In fact, companies
may tweak certain aspects of a product, such as the amount of sugar in a soft drink, so
that it is more likely to be purchased by consumers with varying tastes. Creating the
target market may require the use of limited product roll-outs and focus groups, allowing
product managers to get a feel for which aspects of the product are the strongest.
4.4.1. Concept of Target Market:
A target market is a broader group of potential customers defined by ranges. For
example, for a business, a target market might be ages 18 to 34, or a certain income
bracket. This is the group that's most likely to purchase the product that the business
has to offer. The target market may need to be broken down to a specific target
customer should one decide to customize their marketing efforts. A target market is a
group of customers that the business has decided to aim its marketing efforts and
ultimately its merchandise towards. A well-defined target market is the first element to a
marketing strategy. The marketing mix variables of product, place (distribution),
promotion and price are the four elements of a marketing mix strategy that determine
the success of a product in the marketplace. Target Marketing involves breaking a
market into segments and then concentrating marketing efforts on one or a few key
segments. It can be the key to a small business's success. The beauty of target
marketing is that it makes the promotion, pricing and distribution of the products and/or
services easier and more cost-effective. Target marketing provides a focus to all of the
marketing activities. A principal concept in target marketing is that those who are
targeted show a strong affinity or brand loyalty to that particular brand.
4.4.2. Criteria for Selection of Target Market:
Target markets are groups of individuals that are separated by distinguishable and
noticeable aspects. Target markets can be separated by the following aspects:
1) Geographic segmentations, addresses (their location climate region).
2) Demographic/socioeconomic segmentation (gender, age, income, occupation,
education, household size and stage in the family life cycle).
4. 23
Basic of Marketing
3) Psychographic segmentation (similar attitudes, values, and lifestyles).
4) Behavioral segmentation (occasions, degree of loyalty).
5) Product-related segmentation (relationship to a product).
4.4.3. Strategies for Reaching Target Markets:
Mass marketing is a market coverage strategy in which a firm decides to ignore market
segment differences and go after the whole market with one offer. It is the type of
marketing (or attempting to sell through persuasion) of a product to a wide audience.
The idea is to broadcast a message that will reach the largest number of people
possible. Traditionally mass marketing has focused on radio, television and newspapers
as the medium used to reach this broad audience. A differentiated marketing strategy is
one where the company decides to provide separate offerings to each different market
segment that it targets. It is also called multi-segment marketing and as is clearly seen
that it tries to appeal to multiple segments in the market.
Each segment is targeted uniquely as the company provides unique benefits to different
segments. It increases the total sales but at the expense of increase in the cost of
investing in the business. Concentrated marketing is a strategy which targets very
defined and specific segments of the consumer population. It is particularly effective for
small companies with limited resources as it does not believe in the use of mass
production, mass distribution and mass advertising. There is no increase in the total
Profits of the sales as it targets just one segment of the market. For sales teams, one
way to reach out to target markets is through direct marketing.
This is done by buying consumer database based on the segmentation profiles you
have defined. These databases usually come with consumer contacts (e.g. email,
mobile no., home no., etc.). Caution is recommended when undertaking direct
marketing efforts check the targeted country's direct marketing laws.
4. 24
Basic of Marketing
4.5. Differentiation & Positioning:
A marketing strategy that aims to make a brand occupy a distinct position, relative to
competing brands, in the mind of the customer. Companies apply this strategy either by
emphasizing the distinguishing features of their brand (what it is, what it does and how,
etc.) or they may try to create a suitable image (inexpensive or premium, utilitarian or
luxurious, entry-level or high-end, etc.) through advertising. Once a brand is positioned,
it is very difficult to reposition it without destroying its credibility (called Product
positioning).
4.5.1. Product Positioning Process:
Generally, the product positioning process involves:
1) Defining the market in which the product or brand will compete (who the relevant
buyers are).
2) Identifying the attributes (also called dimensions) that define the product 'space'.
3) Collecting information from a sample of customers about their perceptions of each
product on the relevant attributes.
4) Determine each product's share of mind.
5) Determine each product's current location in the product space.
6) Determine the target market's preferred combination of attributes (referred to as an
ideal vector).
7) Examine the fit between the product and the market.
4.5.2. Differentiation & Positioning:
Differentiation and positioning are related but distinct concepts:
Differentiation is essentially an extension of the firm‘s strategy and basis for
competitive advantage. Differentiation can be defined as ‗the set of meaningful
differences that define and set apart a PSF from its competitors who are recognized
and valued by their target markets. This definition highlights a few key issues when it
comes to deciding a differentiation strategy. The differences that a firm chooses should
be valued and meaningful to the market place and allow it stand out from competitors.
4. 25
Basic of Marketing
Moreover, these differences should be recognized by clients and not easily imitated by
other firms or they cease to provide a competitive advantage. In other words,
differentiation is strongly related to how clients buy and the attributes they value from
providers. For example, firms such as KPMG have differentiated themselves by offering
a variety of services on a worldwide basis through a global network that provides them
unmatched access to local knowledge and expertise that few firms could hope to
achieve. Differentiation is a more complex issue than positioning in that it may involve a
number of organizational processes and systems that cannot all be communicated
effectively to clients and potential clients through the traditional communication
channels that firms use.
Positioning can be defined as ‗the set of meaningful differences that a PSF chooses to
communicate to internal and external parties that to a large extent decide the image of
the firm in the market place. There are at least two ways in which a position can be
determined. The first is a perception of the market needs; however that perception is
arrived at. The second is to choose market opportunity. The first is a careful analysis of
what the market wants and needs, and that can be supplied. The second sees an
opportunity that may not have existed before. Either way, the position must be
reinforced in a proper marketing campaign. Working with available skills, or developing
new skills before the positioning program begins is mandatory.
4.5.3. Introduction to the Concept of Value Proposition & USP:
A value proposition is a promise of value to be delivered and a belief from the customer
that value will be experienced. A value proposition can apply to an entire organization,
or parts thereof, or customer accounts, or products or services. Organizations can use
value propositions to position value to a range of constituents such as:
a) Customers:
To explain why a customer should buy from a supplier.
b) Partners:
To persuade them to forge a strategic alliance or joint venture.
4. 26
Basic of Marketing
c) Internal departments:
To influence the outcome of business decisions.
d) Employees:
To "sell" the company when recruiting new people, or for retaining and motivating
existing employees. This is sometimes called the HR or employee value proposition.
e) Suppliers:
To explain why a supplier should want to be a supplier to an organization or
customer.
What the Value Proposition Consists of:
The value proposition is usually a block of text (a headline, sub-headline and one
paragraph of text) with a visual (photo, hero shot, graphics).There is no one right way to
go about it, but to suggest we can start with the following formula:
a) Headline: What is the end-benefit you‘re offering, in one short sentence? Can
mention the product and/or the customer. Attention grabber.
b) Sub-headline or a 2-3 sentence paragraph. A specific explanation of what you
do/offer, for whom and why is it useful.
c) 3 Bullet points: List the key benefits or features.
d) Visual: Images communicate much faster than words. Show the product, the hero
shot or an image reinforcing your main message.
Unique Selling Proposition (USP):
The unique selling proposition (USP) or unique selling point, is a marketing concept first
proposed as a theory to explain a pattern in successful advertising campaigns of the
early 1940s. The USP states that such campaigns made unique propositions to the
customer that convinced them to switch brands. The term was developed by television
advertising pioneer Rosser Reeves of Ted Bates & Company. Theodore Levitt, a
professor at Harvard Business School, suggested that, "Differentiation is one of the
most important strategic and tactical activities in which companies must constantly
engage."
4. 27
Basic of Marketing
A USP must have the following characteristics:
a) The USP must be something that is important to the purpose of the product or
service and that is important to the consumer.
b) The USP must be communicated in a message that is memorable and easy to
understand.
Examples:
BRANDS
USP
Reliable, fully featured and good
products
Durability
iOS and Apple Store
One of the oldest and trusted
brand with extensive distribution
and strong market penetration
Global top-of-the-mind premium
automobile brand
Fig: Example of USP
Hence, USP is the need for creating a unique image in the market to attract the
customers towards different offerings and all the companies are focusing on developing
its own unique identity for differentiation in the crowded marketplace.
●●●●●●
4. 28
Basic of Marketing
Activity Based Learning
1) You have to prepare a market segmentation chart of your city, state and country
assuming yourself as a Marketing Manager who is going to launch a new product in
the market.
2) Considering yourself as(Marketing Manager /Entrepreneur / Competitor) who is
going to launch a new product in the market ,write down the following:
a) What are the segments of the city/state/country as per you and why?
b) On which criteria, you will segment the market?
c) Who are the target customers for your product and why?
d) How will you position your product in the market? Write few positioning
strategies.
3) (a.) Prepare a chart of unique selling proposition(USP) of the following productsa) Sugar free tea
b) Samsung mobile phones
c) Hero 2wheelers
d) Complan
e) McD burger
f) Delhi metro
g) PMPL bus service
h) Domino‘s pizza
i)
Coke and Pepsi
(b.) Prepare a chart of unique selling proposition (USP) of the following
organization:
a)
b)
c)
d)
e)
f)
g)
h)
Indian railway.
Indian post.
Tata motors.
Big Bazaar.
Google.
Apple.
Facebook and Whats app.
Indian army.
●●●●●●
4. 29
Basic of Marketing
MODEL MULTIPLE CHOICE QUESTIONS
Q.1.
All of the following would be among the chief factors to consider when choosing
a market-coverage strategy except______
a) Organisational culture.
b) Product variability.
c) Product‘s life-cycle.
d) Market variability.
Q.2.
The way the product is defined by consumers on important attributes is called
________________.
a) Market segmentation.
b) Image psychology
c) Product position.
d) Market targeting
Q.3.
Gaining competitive advantage through speedy or careful delivery is an example
of which type of differentiation?
b) Services
a) Product
c) Personnel
d) Image
Q.4.
The strategy of choosing one attribute to excel at to create competitive
advantage is known as the__________
a) Unique selling proposition.
b) Under positioning.
c) Over positioning.
d) Confused positioning.
Q.5.
The key to winning and keeping customers is to understand their needs and
buying processes better than competitors do and_____
a) Advertise constantly to let customers know about changes in products and
services.
b) Hire the best sales people.
c) Have an updated Web presence.
d) To deliver more value.
Q.6.
The positioning task consists of three steps. Which of the following does not
belong?
a) Identifying a set of possible competitive advantages upon which to build a
position.
b) Choosing the right competitive advantages.
c) Comparing the position with ethical and legal guidelines established by
the trade.
d) Selecting an overall positioning strategy.
4. 30
Basic of Marketing
Q.7.
Product differentiation can be along all of the following lines except_____
a) Consistency
b) Durability
d) Competitive parity
c) Reliability
Q.8.
In general, a company needs to avoid three major positioning errors. Which of
the following is NOT one of those errors?
b) Repositioning.
a) Under positioning
c) Over positioning.
d) Confused positioning.
Q.9.
In determining which differences to promote, focusing on a difference that
delivers a highly valued benefit to target buyers would mean selecting the
difference that is most_______
a) Important
b) Distinctive
c) Superior
d) Communicable
Q.10. Choosing a product difference that competitors cannot easily copy would be
which kind of differentiation criterion?
a) Important
b) Distinctive
d) Preemptive
c) Superior
Q.11. A brand‘s _____________ is the full positioning of the brand—the full mix of
benefits upon which it is positioned.
a) Distinctive proposition
b) Preemptive proposition
c) Value proposition
d) Superior proposition
Q.12. The text describes a series of value propositions out of these propositions,
Southwest Airlines has chosen to adopt the__________
b) Less
for
much
less
a) More for less proposition
proposition
c) Same for less proposition
d) More for more proposition
Q.13. During which step of the marketing segmentation, targeting and positioning
process does the firm ―develop a marketing mix for each segment?‖
a) Market segmentation
b) Market targeting
c) Market positioning
d) The firm does not go through the ―development‖ during any of the above
steps.
Q.14. Segmentation on basis of values and attitudes and behavioural patterns is an
example of_____
b) Cultural factors
a) Geographic location
c) Economic factors
d) Political and legal factors
4. 31
Basic of Marketing
Q.15. Targeting affluent customers with luxurious goods is an example of______
b) Income segmentation
a) Geographic segmentation
c) Psychographic segmentation
d) Behavioural segmentation
Q.16. Segmentation of international markets on basis of monetary regulations is an
example of_______
a) Geographic location
b) Cultural factors
d) Political and legal factors
c) Economic factors
Q.17. Segmentation of international markets on basis of common languages, religions
and customs is example of______
b) Cultural factors
a) Geographic location
c) Economic factors
d) Political and legal factors
Q.18. Customer market division done on basis of 'compulsive, ambitious and outgoing
customers' classified as_______
a) Geographic segmentation
b) Income segmentation
c) Psychographic segmentation
d) Behavioural segmentation
Q.19. In effective target market, marketers should focus on_____
a) Market segmentation
b) Market Targeting
d) All of the above
c) Market positioning
Q.20. A flexible market offering consists of_________
a) A naked solution
b) Discretionary options
c) Both a and b
d) None of the above.
Q.21. A naked solution in flexible market consists of those services and products
elements that__________
a) All segment members value
b) Some segment members value
c) No one values
d) None of the above.
Q.22. Discretionary options in flexible market offering consists of services and
products elements that________
b) Some segment members
a) All segment members value
value
c) No one values
d) None of the above.
4. 32
Basic of Marketing
Q.23. _____________ exists when all consumers have almost the same preferences
and the market reflects no natural segments.
a) Clustered preferences
b) Diffused preferences
c) Homogenous preferences
d) None of the above.
Q.24. Consumers in ____________ vary greatly in their preferences. If several brands
are there in the market they are likely to position themselves throughout the
space and show real differences to match differences in consumer groups.
b) Diffused preferences
a) Clustered preferences
c) Homogenous preferences
d) None of the above.
Q.25. ____________ result when natural market segments surface from groups of
customers with shared preferences.
a) Clustered preferences
b) Diffused preferences
c) Homogenous preferences
d) None of the above.
Q.26. Crack, an famous ointment from Paras Pharmaceuticals is an example of
_______
a) Mass marketing
b) Local marketing
c) Niche marketing
d) None of the above.
Q.27. . ________________ is the process of dividing a market into smaller groups of
buyers with distinct needs, characteristics or behaviours who might require
separate products or marketing mixes.
b) Market segmentation
a) Mass marketing
c) Target marketing
d) Market positioning
Q.28. ______________ is the process of evaluating each market segment‘s
attractiveness and selecting one or more segments to enter.
a) Mass marketing
b) Market segmentation
c) Market targeting
d) Market positioning
Q.29. Setting the competitive positioning for the product and creating a detailed
marketing mix is called______
a) Mass marketing
b) Target marketing.
d) Market positioning
c) Market segmentation.
Q.30. During one of the steps in the marketing segmentation, targeting and positioning
process, the marketer develops measures of segment attractiveness. This
procedure belongs in the category of________
a) Market segmentation
b) Market targeting
c) Market massing.
d) Market positioning
4. 33
Basic of Marketing
Q.31. When companies divide large, heterogeneous markets into smaller segments
that can be reached more efficiently with products and services that match their
unique needs, they are conducting a ___________________ process.
a) Marketing aggregation
b) Marketing positioning
d) Marketing segmentation
c) Marketing target
Q.32. Market segmentation can be carried out at several different levels. Which of the
following would not be among these levels?
a) Micromarketing
b) Segment marketing
c) Competition marketing
d) Niche marketing
Q.33. Another word for complete segmentation is_____
b) Micromarketing
a) Macromarketing.
c) Niche marketing
d) Mass marketing.
Q.34. Segment marketing offers several benefits over mass marketing. All of the
following would be among those benefits except________
a) The company can market more efficiently and target its programs toward
only those consumers that it can serve best.
b) The company can fine-tune its programs to meet the needs of carefully
defined segments.
c) The company can reduce costs because of the ability to sell to
customers one-on-one.
d) The company may face fewer competitors if fewer competitors are focusing
on the company‘s chosen market segment.
Q.35. All of the following are considered to be major variables for segmenting markets
except________
b) Trait variables.
a) Geographic variables.
c) Demographic variables.
d) Psycho-graphic variables.
Q.36. Geographic segmentation is about_______
a) Dividing consumer groups based on lifestyles.
b) Dividing markets based on location.
c) Understanding the benefit the product has to offer.
d) Dividing consumer groups based on social status.
Q.37. Process of determining profitability of each segment is classified as______
a) Segment profitability.
b) Segment positioning.
c) Acid test segments
d) Marketing mix
4. 34
Basic of Marketing
Q.38. Lifestyle segmentation is about______
a) Understanding how people live and developing products/services that
match that way of life.
b) Dividing the market into distinct groups of buyers.
c) Understanding what consumers like or dislike about their life.
d) Developing stylish products for that segment.
Q.39. The three step process within marketing segmentation includes______
a) Segmentation, differentiation and positioning.
b) Targeting, Segmentation and Positioning.
c) Segmentation, Targeting and Positioning.
d) Positioning, Mass Marketing and Segmentation.
Q.40. Product positioning is about________
a) Developing a product.
b) Developing a perception of the product/service.
c) Product quality decisions.
d) The perception of the product from the view of the competitors.
Q.41. Process of determining distinct segments profitability on basis of lifestyles and
demographics is classified as_________
a) Segment identification
b) Segment attractiveness
c) Solution based segmentation
d) Need based segmentation
Q.42. Marketing strategy in which firm sells to different segments and offer different
product for each is classified as_____
b) Differentiated marketing.
a) Individual marketing.
c) Mass marketing
d) Niche marketing
Q.43. Step of creating storyboard for each segments to test profitability of each
segments is classified as_________
a) Acid test.
b) Profitability test
c) Product positioning strategy
d) Segment attractiveness
Q.44. Process of creating 'value proposition' is considered as___________
b) Segment positioning
a) Segment profitability
c) Acid test segments
d) Marketing mix
4. 35
Basic of Marketing
Q.45. Potential and attractive target market are classified as___________
a) Traditionalist
b) Savvy shoppers
c) Overwhelmed
d) Non-enthusiast
Q.46. When firm concentrates on serving needs of any specific customer group, it is
considered as_________
b) Market specialization
a) Product specialisation
c) Single product concentration
d) Mass customisation
Q.47. When any firm sell its market offering to many different market segments, it is
classified as_____
a) Product specialization
b) Market specialization
c) Single product concentration
d) Mass customisation
Q.48. Process of determining overall profitability of each segment on basis of market
growth and access is classified as_________
a) Solution based segmentation
b) Need based segmentation
d) Segment attractiveness
c) Segment identification
Q.49. Individual marketing is also called__________
a) Segments of one
b) Customized marketing
d) All of above
c) One to one marketing
Q.50. Grouping of customers on basis of similar needs in solving specific problem is
considered as_________
b) Need based segmentation
a) Solution based segmentation
c) Segment identification
d) Segment attractiveness
Q.51. Effective segmentation criteria does not include________
a) Measureable
b) Accessible and substantial
d) Loyalty
and
switching
c) Actionable and differential
patterns
Q.52. During which step of the marketing segmentation, targeting and positioning
process does the firm ―develop a marketing mix for each segment?‖
a) Market segmentation
b) Market targeting
c) Market positioning
d) The firm does not go through the ―development‖ during any of the above
steps.
4. 36
Basic of Marketing
Q.53. ________ is the process of dividing a market into smaller groups of buyers with
distinct needs, characteristics or behaviours who might require separate
products or marketing mixes.
b) Market segmentation
a) Mass marketing
c) Target marketing
d) Market positioning
Q.54. _________ is the process of evaluating each market segment‘s attractiveness
and selecting one or more segments to enter.
a) Mass marketing
b) Market segmentation
c) Target marketing
d) Market positioning
Q.55. Setting the competitive positioning for the product and creating a detailed
marketing mix is called_______
a) Mass marketing
b) Market segmentation
d) Market positioning
c) Target marketing
Q.56. During one of the steps in the marketing segmentation, targeting and positioning
process, the marketer develops measures of segment attractiveness. This
procedure belongs in the category of_______
b) Market targeting.
a) Market segmentation.
c) Market massing.
d) Market positioning.
Q.57. Isolating broad segments that make up a market and adapting the marketing to
match the needs of one or more segments is called _________________.
a) Niche marketing.
b) Mass marketing
c) Segment marketing
d) Micromarketing
Q.58. All of the following would be ways to segment within the category of behavioural
variable segmentation except___________
a) Occasions
b) User status
d) Lifestyle.
c) Loyalty status.
●●●●●●
4. 37
Unit 5
Unit Preview:
5.1. Product-The First Element of Marketing Mix:
Meaning of product, Goods & Services Continuum, Classification of
Consumer Products-Convenience, Shopping, Specialty, Unsought,
Classification of Industrial Products-Material & Parts, Capital Items,
Supplies and Services
5.2. Product Levels:
The Customer Value Hierarchy.
5.3. Product Mix:
Width, Depth, Consistency & Product line.
Activity Based Learning
5.1. Product:
In marketing, a product is anything that can be offered to a market that might satisfy a
want or need. In retailing, products are called merchandise. In manufacturing, products
are bought as raw materials and sold as finished goods. Commodities are usually raw
materials such as metals and agricultural products, but a commodity can also be
anything widely available in the open market. Markets & products are the foundations
on which the whole study of marketing is based. The transfer of ownership cannot take
place, unless there are both-a market & a product.
5. 1
Basics of Marketing
5.2.1 Meaning of Product:
A product is any good, service, or idea that can be offered to a market to satisfy a want
or need. Product refers to anything that can be offered to a marketer for attention,
acquisition, use or consumption that might satisfy a want or need. A product is a set of
tangible and intangible attributes, which may include packaging, colour, price, quality,
brand and seller's service. Products are the most tangible outcome of an enterprise
engaged in manufacturing.
5.2.2 Definitions:
The following are the definitions of product:
1) W. Anderson :
"A product is a set of tangible and intangible attributes including packaging, colour,
price, quality and brand plus the services and reputation of the seller. A product may
be a tangible goods, service, place, person or idea". "A product should be
considered as a bundle of utilities consisting of various product features and
accompanying services".
2) Philip Kotler :
"A product is anything that can be offered to a market for attention, acquisition, use
or consumption that might satisfy a want or need. It includes physical objectives,
services, person, places, organisation and ideas".
3) “A product is the item offered for sale. A product can be a service or an item. It can
be physical or in virtual or cyber form. Every product is made at a cost and each is
sold at a price. The price that can be charged depends on the market, the quality,
the marketing and the segment that is targeted. Each product has a useful life after
which it needs replacement and a life cycle after which it has to be re-invented”.
Description:
A product needs to be relevant: the users must have an immediate use for it. A
product needs to be functionally able to do what it is supposed to, and do it with a
good quality. A product needs to be communicated:
5. 2
Basics of Marketing
Users and potential users must know why they need to use it, what benefits they
can derive from it, and what it does difference it does to their lives. Advertising and
'brand building' best do this.
A product needs a name: a name that people remember and relate to. A product
with a name becomes a brand. It helps it stand out from the clutter of products and
names. A product should be adaptable: with trends, time and change in segments,
the product should lend itself to adaptation to make it more relevant and maintain its
revenue stream.
Product Specification is a detailed list of the characteristics that identify an
individual sampled product. Its purpose is to ensure that a consistent price is
collected from period to period relating to a consistent product with the same terms
of sale in each period. Hence, the characteristics listed cover both the product
(name, serial number, description, etc.) and the transaction (class of customer, size
of shipment, discounts, payment terms, delivery details, etc.).
Source: www.economictimes.indiatimes.com
5.2.3 Example:
Micromax Canvas HD A116 Smartphone (Launched in February 2013):
This is a product of Micromax Company. The Product Specifications are as below:
1) The phone comes with a 5.00-inch touch screen display with a resolution of 720
pixels by 1280 pixels at a PPI of 294 pixels per inch.
2) The Micromax Canvas HD is powered by 1.2GHz quad-core MT6589 processor and
it comes with 1GB of RAM.
3) The phone packs 4GB of internal storage that can be expanded up to 32GB via a
micro SD card.
4) The Micromax Canvas HD packs an 8-megapixel primary camera on the rear and a
2-megapixel front shooter for selfies.
5) The Micromax Canvas HD runs Android 4.1.
6) It is powered by a 2000mAh removable battery.
7) It measures 144.00 x 74.00 x 10.70 (height x width x thickness) and weighs 156.00
grams.
5. 3
Basics of Marketing
One can purchase this product by visiting the retailers or using internet from different
online retailers.
Fig: Image of a Product
In the above example of Micromax Canvas HD A116 Smartphone, the benefit is
convenience i.e. the ease of calling by which one can make call from anywhere he like,
when he want to. Other core benefits are its 1.2 GHz. Fastest CPU and 1 GB RAMS
which boost the speed of the phone and make the consumer happy. The product is
tangible, physical product which has different color, style, quality, fashion and brand of
Micromax.
Colour
Fashion
Style
Fig: Product Variations
5. 4
Branding
Basics of Marketing
Along with Micromax Canvas HD A116 Smartphone, 1 year warranty, customer service
support for any after-sales service has been offered by the Micromax Company.
Products are classified into two types- Consumer goods and Industrial goods.
5.2.4 Types of Product:
The following are the types of product:
Types of Product
Industrial Goods/ Product
Consumer Goods / Product
Raw Metarial
Fabricating parts and
material Installation
Accessory equipment
Operating supplies
Convencies goods
Shopping goods
Speciality goods
Unsought goods
Fig: Types of Product
5. 5
Basics of Marketing
A) Examples of Consumer Goods:
Fig: Images related to Consumer Goods
5. 6
Basics of Marketing
B) Examples of Industrial Goods:
Fig: Images related to Industrial Goods
5. 7
Basics of Marketing
5.2.5 Goods-Services Continuum:
Goods and Services Continuum enables marketers to see the relative goods/services
composition of total products. A product’s position on the continuum, in turn, enables
marketers to spot opportunities.
Fig: Example related to Goods-Service Continuum
Fig: Example related to Goods-Service Continuum
Sugar
Restaurant
Pure Tangible
Goods
Education
Pure Services
Fig: Example related to Goods-Service Continuum
At the pure goods end of the continuum, goods that have no related services are
positioned. At the pure services end are services that are not associated with physical
products. Products that are a combination of goods and services fall between the two
ends.
5. 8
Basics of Marketing
Example: Vaishali Restaurant of Pune provides a physical goods (prepared food),
but also provides services in the form of ambience, the setting and clearing of the
table, etc.
Fig: Example of Vaishali Restaurant of Pune
Although some utilities, such as electricity and communications service providers,
exclusively provide services, other utilities deliver physical goods, such as water
utilities.
A) A Few Observations of the Goods Service Continuum Model are as below:
a) The offerings of a firm range from pure goods to pure services.
b) Those that are mostly goods are tangible and are very easy to evaluate by the
consumer (like fabrics, jewellery, a house etc.). A consumer finds it very difficult
to evaluate those offers which are mostly services because of their intangibility
(like legal and counselling advice, medical diagnosis etc).
c) The range of offers has different qualities in themselves and the customer looks
for or seeks these qualities.
d) Those that are mostly goods show search qualities. Customers know exactly
what they want and look for those features in the offer.
Thus a marketer can put the search quality features on prominent display and
make it easier for customers to get details or access.
If the customers do not find these features in their search they may become
anxious and may not buy or they may go for rival products where there is easier
access to information.
5. 9
Basics of Marketing
B) Classification of Goods-Service Continuum:
In Goods-Service Continuum, services can be classified in three ways, under the
range or degree of tangibility highly tangible to highly intangible. They are:1) Highly Tangible Services:
They have high degree of tangibility. This is mainly because the services are
rendered over certain goods.
Example: Car rentals. It is a service based entirely on cars. If a place had no
cars, such a service would end to exist. For the marketer, it is both a boon and a
curse. As mentioned, car rentals exist only because cars exist. It’s easy for the
service marketer to be convincing and “tangibles” the offer.
Examples of car rental companies in India are Zoom car, Carzonrent, Justride
etc.
2) Service Linked to Tangible Goods:
Here the service is linked to goods, either independently, or as part of the
marketer’s offer. If it is the latter, the service becomes a part of the total product
concept.
Example: When any company includes repair as part of its marketing mix. Even
if it is not included, repair is a service that is forever linked to goods.
3) Highly Intangible Services:
In this classification under the continuum model, service is highly intangible. The
services cannot be touched, felt or seen.
Example: Counselling, Consultancy, Psychotherapy, Physiotherapy, a guest
lecture, etc.
5.2.6 Classification of Consumer Goods:
The following are the classification of consumer products
1) Convenience Goods:
Convenience goods are inexpensive frequent purchases, there is little effort needed
to purchase them. Examples include fast food, toiletries and confectionery products.
Convenience products are split into staples, such as milk, eggs and emergency
products which are purchased when the need arises.
Example: Umbrellas.
5. 10
Basics of Marketing
Fig: Example of Convenience goods
2) Shopping Goods:
They are products that consumers do not buy as frequently as convenience goods.
They usually cost more than convenience goods and consumers expect to have
them for longer, so they will do some research prior to purchase. The research will
include comparing product features and price.
Examples: Shopping goods include white goods (such as fridge/freezers and
washing machines), clothing and furniture.
Fig: Example of Shopping goods
3) Specialty Goods:
These are products with unique features or branding. Consumers do not compare
them with other products as the goods have features unique to them.
5. 11
Basics of Marketing
Instead they will spend time searching for the place selling the product they want.
Consumers are often prepared to travel to purchase their product and pay a
premium. Specialty goods include designer clothes, luxury cars, and antiques.
Professional services provided by a person known for the effectiveness and quality
of their work can also come under this category.
Fig: Example of Specialty goods
4) Unsought Goods:
A category of goods or services that consumers either do not know about, or know
about but would rather not think about. For example, life insurances are generally
considered an unsought good.
Fig: Example of Unsought goods
5. 12
Basics of Marketing
5.2.7 Classification of Industrial Goods:
Industrial goods can be classified in terms of how they enter the production process and
their relative costliness.
Industrial
Product
Capital
Items
Material &
Parts
Raw
Material
Farm
Product
Manufactured
Materials
Natural
Product
Component
Parts
Installation
Equipment
Componen
t Materials
Supply &
Services
Maintenance
and Repair
Opening
Supplies
Fig: Industrial Goods Classification
Industrial Goods are classified into three parts:
1) Materials and Parts.
2) Supplies & Services.
3) Capital Items.
A) Material & Parts:
Material & Parts are goods that enter the manufacturer and product completely. It
can be further classified into Raw materials and Manufactured Material and Parts.
1) Raw Materials:
Raw Material is classified two parts into:
5. 13
Basics of Marketing
a) Farm Products:
Marketing intermediaries, transportation, assembly, grading, and storage. It
should have little advertising and promotional activity with exceptions. There
may be a case wherein the commodity groups might do campaigning.
Example: Wheat, Cotton, Fruits etc.
b) Natural Products:
These are limited in supply and are kind of hard on the end of producer to
move a great bulk and low unit resource to the user. Here in the user
depends upon the long term supply, materials. Also, price and delivery
reliability are the major factors influencing the selection of the supplier.
Example: Fish, Iron ore, Timber, Coal etc.
2) Manufactured Materials Parts:
Manufactured Materials Parts are also classified into two parts:
a) Component Materials:
This can be further fabricated into quick form. Price and Supplier reliability
are the two important purchase factors. Component parts enter into finished
products and go through no further changes.
Example: Iron, Steel, Yarn, Cement etc.
b) Component Parts:
Component parts enter the product completely with no further change in
farm as when small motors are put into vacuum cleaners.
Example: Small motor, steel castings etc.
B) Supplies and Services:
Supplies and Services are short lasting goods and services that facilitate developing
and /or managing the finished product.
a) Supplies are of Two Kinds:
1) Operating Supplies:
Example-Lubricants, Coal, Writing paper, Pens etc.
2) Maintenance and Repair Items:
Example-Paint, Nails, Brooms etc.
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Basics of Marketing
They are purchased with minimum effort on a strait survey basis; they are
usually marketed through the intermediaries because of their low unit value and
geographic destination of customers.
b) Services include the following:
1) Maintenance and Repair Services:
Example-Window cleaning, Carpet cleaning, and Computer repair etc.
2) Business Advisory Services:
Example-Legal, Management consulting, Advertising etc.
These services are usually supplied on contract and by small producers who
goes by service and reputation.
C) Capital Items:
They are the long lasting goods which facilitate developing and managing the
finished product. They include two items that is Installations and Equipment which
are as below:
1) Installations: Advertising is Little, Design for post sale and are usually bought
directly from the Producer. Example: Building, Heavy Equipment
2) Equipment: Factory Equipment and tools. They sell Direct more often there are
rarely any intermediaries, market is geographically dispersed, buyers are
numerous and orders are small. Quality, Feature and service are the main
consideration. Example: Hand tools, Fork lift, Trucks, Personal computers,
Desktops etc.1&2
5.2. The Customer Value Hierarchy:
Customer value hierarchy is a system of worth that businesses across the country, both
large and small, have turned to as a means of determining customer satisfaction.
Businesses have shifted focus to a customer satisfaction model as a means of winning
repeat sales and a measure of loyalty in a market that provides consumers with many
purchasing options. Customer value hierarchy provides a rubric for companies to
achieve that goal. Theodore Levitt proposes that in planning its market offering, the
marketer needs to think through 5 levels of the product. Each level adds more customer
value and taken together forms Customer Value Hierarchy.
5. 15
Basics of Marketing
Core Benifit of the
product
Generic product
Expected product
Augunented
product
Potential product
Fig: Five-Product-Levels-Kotler
1) Core Benefit or Product:
This is the most fundamental level. This includes the fundamental service or benefit
that the customer is really buying. For example, a hotel customer is actually buying
the concept of “rest and sleep.”
2) Basic or Generic Product:
The marketer at this level has to turn the core benefit to a basic product. The basic
product for hotel may include bed, toilet, and towels.
3) Expected Product:
At this level, the marketer prepares an expected product by incorporating a set of
attributes and conditions, which buyers normally expect they purchase this product.
For instance, hotel customers expect clean bed, fresh towel and a degree of
quietness.
4) Augmented Product:
At this level, the marketer prepares an augmented product that exceeds customer
expectations.
Example: The hotel can include remote-control TV, fresh, flower room service and
prompt check-in and checkout. Today’s competition essentially takes place at the
product-augmentation level. Product augmentation leads the marketer to look at the
5. 16
Basics of Marketing
user’s total consumption system i.e. the way the user performs the tasks of getting,
using fixing and disposing of the product.
Theodore Levitt pointed out that the real competition is not what the companies
have manufactured in the factories, but between what they add to their factory
output in the form of packaging, services, advertising, customer advice, financing,
delivery arrangements, warehousing and other things that people value.
Some things should be considered in case of product-augmentation strategy which
are as below:
a) Each augmentation adds cost. The extra benefits available in hotels add cost.
b) Augmented benefits soon become expected benefits. The unexpected additions
like flower, remote-controlled TV soon become very much expected by the
customers from the hotel.
c) As companies raise the price of their augmented product, some companies may
offer a stripped- down” i.e. no-augmented product version at much lower price.
There are always a set of low- cost hotel are available among the 5-star hotels.
5) Potential Product: This level takes into care of all the possible augmentations and
transformations the product might undergo in the future. This level prompts the
companies to search for new ways to satisfy the customers and distinguish their
offer. Successful companies add benefits to their offering that not only satisfy
customers, but also surprise and delight them. Delighting is a matter of exceeding
expectations.
Example of Warm Coat:
1) Core Product: A warm coat will protect us from the cold and the rain.
2) Generic Product: For a warm coat this is about fit, material, rain repellent
ability, high-quality fasteners, etc.
3) Expected Product:That coat should be really warm and protect from the
weather and the wind and be comfortable when riding a bicycle.
4) Augmented Product:Service, Warranty and good value for money play a major
role in this.
5) Potential Product: A warm coat that is made of a fabric that is as thin as paper
and therefore light as a feather that allows rain to automatically slide down.
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Basics of Marketing
5.2.1 Level of Product Hierarchy:
Each product is related to certain other products. The product hierarchy stretches from
basic needs to particular items that satisfy those needs.
There are 7 levels of the product hierarchy:
1) Need Family:
The core need that underlines the existence of a product family.
2) Product Family:
All the product classes that can satisfy a core need with reasonable effectiveness.
Example: All of the products like computer, calculator or abacus can do
computation.
3) Product Class:
A group of products within the product family recognized as having a certain
functional coherence.
Example: Personal Computer (PC) is one product class.
4) Product Line:
A group of products within a product class that are closely related because they
perform a similar function, are sold to the same customer groups, are marketed
through the same channels or fall within given price range. For instance, portable
wire-less PC is one product line.
5) Product Type:
A group of items within a product line that share one of several possible forms of the
product. For instance, palm top is one product type.
6) Brand:
The name associated with one or more items in the product line that is used to
identify the source or character of the items.
Example: Palm Pilot is one brand of palmtop.
7) Item/Stock-keeping Unit/Product Variant:
A distinct unit within a brand or product line distinguishable by size, price,
appearance or some other attributes. For instance, LCD, CD- ROM drive and
joystick are various items under palm top product type3.
5. 18
Basics of Marketing
5.3. Product Mix
Product mix, also known as product assortment, refers to the total number of product
lines that a company offers to its customers. For example, a small company may sell
multiple lines of products. Sometimes, these product lines are fairly similar, such as dish
washing liquid and bar soap, which are used for cleaning and use similar technologies.
Other times, the product lines are vastly different, such as diapers and razors.
The four dimensions to a company's product mix include width, length, depth and
consistency.
1) Product Mix Width:
The width of a company's product mix pertains to the number of product lines that a
company sells.
2) Product Mix Depth:
Depth of a product mix pertains to the total number of variations for each product.
Variations can include size, flavor and any other distinguishing characteristic.
5. 19
Basics of Marketing
3) Consistency:
Product mix consistency pertains to how closely related product lines are to one
another in terms of use, production and distribution. A company's product mix may
be consistent in distribution but vastly different in use. A small company may sell its
health bars and health magazine in retail stores. However, one product is edible and
the other is not. The production consistency of these products would vary as well.
4) Product Line:
Firms may decide to split their product mix into groups known as product lines. A
product line is a number of products grouped together based on similar
characteristics. Product lines help firms manage their products as product strategy
can be designed around product lines. This is useful if the firm has a large product
mix as there is less need to concentrate on individual product type strategy.4&5
Table: Summarized Chart of Product Mix
Product Mix
Definition
A set of all
products
and items
offers for
sale by
company in
to market.
Ex. TATA
Oil,
Cosmetics,
Transports,
Tea,
Textiles
Width
A product
mix refers
to how
many
different
products
line the
company
carries.
Ex. P&G’s
products
hair care
products,
health care
products
etc.
Length
A product
mix refers
to total of
items in the
mix.
Depth
A product
mix refers
to how
many
variants are
offered of
each
product in
the line.
Fig: Product Mix
Image Source (google.com)
5. 20
Consistency
A product
mix refers
to how
closely
relates in
various
product
line.
Basics of Marketing
Example: Product Mix of AMUL Company
Fig: AMUL
About AMUL Company:
 AMUL is the acronym of Anand Milk Union Limited.
 A brand name managed by Gujarat Co-operative Milk Marketing.
Federation(GCMMF)
 Jointly owned by 2.6 million milk producer in Gujarat.
 Spurred the white revolution of India, which has made India the largest producer
of milk and milk product in the world.
 Overseas market Mauritius, UAE, USA, Bangladesh, Australia.
 Dr. Varghese Kurien former chairman of GCMMF the man behind the success of
Amul.6
Cheese
•Amul pasteurized
processed cheese
•Amul cheese
spreads
•Amul emmentel
cheese
•Amul pizza
mozzarella cheese
•Gouda cheese
Cooking
•Amul pure ghee
•Amul cooking
butter
•Amul malaipaneer
•Utterly delicious
pizza
•Mastidahi
Desert
•Amul ice cream
•Amul shrikhand
•Amul
mithaigulabjamun
•Amul chocolates
•Amul lassi
•Amul basundi
Fig: AMUL Product Mix
Image Source (Scribd.com)
5. 21
Health Drink
•Nutramul
•Amul shakti
health food
drink
Basics of Marketing
Bread Spread
•Margarine Amul
butter
•Amul lite
•Delicious table
Milk Drinks
Powder Milk
•Amul
koolmilkshake
•Nutramul
energy drink
•Amul
koolflavouredbot
tled milk
•Amul
mastispiced
buttermilk
•Amul
koolthandai.
Amul spray infant
milk food
•Amul instant full
cream powder
•Sagar skimmed
milk powderr
•Sagar tea coffe
whitener
•Amul dairy
whitener
Fig: AMUL Product Mix
Image Source (Scribd.com)
●●●●●●
5. 22
Fresh Milk
•Amul fresh milk
•Amul gold milk
•Taza double
toned milk
•Amul liteslim
and trim milk
•Amul fresh
cream
•Amul shakti
toned milk
•Amul
calciplus
Basics of Marketing
Activity Based Learning
1) Visit any nearby retail store, Google it and prepare a product mix of the following
products selecting any 3 companies who are dealing in the following product
categories:
a) Tour Packages.
b) Mobile Phones.
c) 2 Wheelers.
d) 4 Wheelers.
e) Washing Machines.
f) Microwave Oven.
g) Insurance Plans.
2) Design marketing mix of the following companies:
a) Idea Cellular.
b) Hero Motors.
c) Tata Motors.
d) Samsung.
e) Apple.
f) DHL.
g) Flipkart.
h) Big bazaar.
i)
Your University in which you are studying
j)
Your Institutes in which you are studying
k) Yash Raj Productions.
l)
Facebook.
m) Google.
3) Draw a product classification of any 5 companies from different sectors.
4) Find out some products from the market which falls under goods-service continuum.
●●●●●●
5. 23
Basics of Marketing
MODEL MULTIPLE CHOICE QUESTIONS
Q.1.
Example of products includes_________
a) experiences and events
c) properties and organisations
b) information and ideas
d) all of above
Q.2.
The ________ concept holds that consumers and businesses, if left alone, will
ordinarily not buy enough of the organisation’s products.
b) selling
a) production
c) marketing
d) holistic marketing
Q.3.
The buying process starts when the buyer recognises a _________.
a) Product
b) an advertisement for the product
c) a salesperson from a previous visit
d) problem or need
Q.4.
Bread and milk are which kind of products?
b) Convenience products
a) Specialty Products
c) Shopping products
d) Unsought products
Q.5.
Adding new features to a product is advocated by which of the approaches?
a) Product Approach
b) Production Approach
c) Marketing Approach
d) Selling Approach
Q.6.
One of the key tasks of marketers is ____________ and to create consumer
perceptions that the product is worth purchasing.
a) To make products easily visible and available
b) To promote sales of products
c) To differentiate their products from those of competitors
d) To do marketing surveys
Q.7.
In marketing theory, every contribution from the supply chain adds ________ to
the product.
a) value
b) costs
c) convenience
d) ingredients
5. 24
Basics of Marketing
Q.8.
The act of trading a desired product or service to receive something of value in
return is known as which key concept in marketing?
b) exchange
a) product
c) production
d) customer
Q.9.
The most basic level of a product is called the:
a) core product.
b) central product.
c) fundamental product.
d) augmented product
Q.10. Anything that can be offered to a market for attention, acquisition, use or
consumption that might satisfy a want or need is called an______
a) idea.
b) demand.
c) product.
d) service
Q.11. Anything that can be offered by any manufacturers in market to satisfy demands
is classified as_______
a) product
b) service
c) core benefit
d) potential product
Q.12. A good can be categorised as tangible or____________
a) raw materials
b) commodities
c) intangible
d) services
Q.13. Marketing of services, as opposite to physical products is_________
a) services marketing
b) marketing mix
c) advertising
d) right-time marketing
Q.14. Step which is not related to product life cycle is_____
b) cash cow stage
a) growth stage
c) maturity stage
d) introduction stage
Q.15. Types of consumer products are________
a) two types
b) three types
c) four types
d) five types
Q.16. Classic examples of desirable products are____________
a) nutritious high fiber cereals
b) insurance products
c) ineffective medicines
d) junk food and cigarettes
5. 25
Basics of Marketing
Q.17. Considering types of retail stores, one which sells merchandise with low margins
at lower price and in high volumes is called___________
a) discount store
b) selective store
c) extensive store
d) exclusive store
Q.18. In marketing, potential customers familiarity with advertising creates_________
a) brand familiarity
b) brand conviction
c) both a and b
d) none of above
Q.19. Considering types of retail stores, one in which combines concept of
supercenters and discount stores is classified as__________
a) inclusive store
b) exclusive store
c) superstore
d) extensive store
Q.20. An idea for a possible product that company will offer is classified as____
a) product idea
b) product image
c) customer management
d) none of above
Q.21. Major sources of ideas for product development comes from________
a) internal sources
b) external sources
d) both a and b
c) product lines extension
Q.22. Products such as "VHS tapes" are examples of_________
b) product forms
a) product classes
c) branding
d) product perception
Q.23. In new product development process, after analysis of business next step to be
taken is
a) test marketing
b) one channel marketing
c) penetration marketing
d) individual marketing
Q.24. When new developed product concept is tested, next immediate step is to____
a) develop market strategy
b) develop a testing technique
c) develop intermediaries
d) develop logistic network
Q.25. Which is the following is the preliminary stage of production planning?
a) Capacity planning
b) Material requirements planning
c) Scheduling
d) Product development and design
5. 26
Basics of Marketing
Q.26.
Which is the following is the source(s) for developing new or improved product?
a) Research and Development department of the enterprise
b) Consumer suggestions and Complaints
c) Other competitive products in the market
d) All of the above
Q.27. Product cost can be reduced by considering the following aspect(s) at the
design stage_______
a) Minimum number of operations
b) Unnecessary tight tolerance should not be provided
c) Design should consist of standard parts
d) All of the above
Q.28. The ultimate objective of the product is_____
a) To provide a new look
b) Utilising existing manpower
c) To monopolise the market
d) All of the above
Q.29. Based on their field of application, manufactured goods can be classified as___
a) Primary, Secondary and Tertiary
b) Consumer, Capital and Defense
c) Essential, Market and Standard
d) Primary, Luxury and Consumer
Q.30. The following aspect of product is concerned with the ease and efficiency of the
product performance____
a) Functional aspect
b) Operational aspect
c) Durability aspect
d) Aesthetic aspect
Q.31. The “simplicity to operate and easy to understand” of product is concerned with
its following aspect________
a) Functional aspect
b) Operational aspect
c) Durability aspect
d) Aesthetic aspect
Q.32. ______ helps in establishing the interchangeability of products
a) Standardization
b) Simplification
c) Diversification
d) Specialization
5. 27
Basics of Marketing
Q.33. In which of the following type the manufacturing cost may go up_____
a) Standardization
b) Simplification
c) Diversification
d) All of the above
Q.34. Product ______ is the ultimate objective of variety reduction
a) Simplification
b) Standardization
c) Specialization
d) All of the above
Q.35.
The following eases the process of stock control________
a) Standardization
b) Simplification
c) Both ‘A’ and ‘B’
d) None of the above
Q.36. In the product hierarchy, the basic need that underlies the survival of a product
family is ____
a) Need family
b) Product class
c) Product type
d) None of the above
Q.37. In a product hierarchy, all the product classes that can meet a core need with
justified effectiveness is___________
a) Need family
b) Product line
d) Product family
c) Product type
Q.38. In a product hierarchy, a group of products in a product family that have certain
functional coherence is______
a) Product class
b) Product line
c) Product type
d) Product family
Q.39. The following is the Durability aspects of a product______
a) Efficiency of the product
b) Easy to understand
c) Ease with which a product can be maintained
d) All of the above
Q.40. In a product hierarchy, a group of products in a product class that is closely
associated as they perform a specific function and sold to same customer
groups_______
b) Product line
a) Need family
c) Product type
d) Product family
5. 28
Basics of Marketing
Q.41. In a product hierarchy, a group of items within a product line that share one of
several possible forms of the product are_________
a) Need family
b) Product line
c) Product type
d) Product family
Q.42. A distinct unit within a product line or brand differentiated by the appearance,
price, size or some other attribute_______
a) Item
b) Product
c) Good
d) None of the above
Q.43. __________is a group of diverse but associated items that work n a compatible
manner.
a) Product system
b) Product mix
c) Product assortment
d) None of the above
Q.44. _________is the set of all items and products a particular seller offer for sale.
b) Product mix
a) Product system
c) Product line
d) None of the above
Q.45. A product mix consists of various______
a) Product lines
c) Product family
b) Product system
d) None of the above
Q.46. The ___________ of a product mix implies to how many different product lines
the company carriers.
a) Length
b) Depth
c) Width
d) Consistency
Q.47. The _______of a product mix implies to the total number of items in the product
mix.
a) Length
b) Depth
c) Width
d) Consistency
Q.48. The ________ of a product mix implies to how many types of variants are
offered of each product in the line.
b) Depth
a) Length
c) Width
d) Consistency
5. 29
Basics of Marketing
Q.49. The ___________ of the product mix implies to how closely associate the
several product lines are in distribution channels, production requirements or
some other way.
a) Length
b) Depth
d) Consistency
c) Width
Q.50. Detailed stated version of shortlisted new ideas in meaningful consumer terms is
best classified as__________
a) product concept
b) production phase
c) production screening
d) raw-material screening
●●●●●●
5. 30
Basic of Marketing
Model Question Bank
Unit 1
Q.1. Marketing is much broader concept than selling‟. Analyze the statement in context of
concept of Marketing.
Q.2. Describe the evolution and importance of marketing.
Q.3. Describe the various functions of marketing. Also explain the 7 P‟s as effective
marketing tool.
Q.4. Explain the various functional approaches to marketing. Also describe the core
concept of marketing with examples.
Q.5. “Marketing orientation goes beyond selling”. Examine the statement and highlights
the major differences between marketing orientation and selling orientation?
Q.6. The evidence that the product concept was alive and well in ford motor company.
Founder of the ford motor company Henry ford‟s famous reaction to consumer
requests for more color an option was “you can have any color car you want as long
as it is black.” Analyze the statement in context of concept of Marketing.
Q.7. What is marketing? State its characteristics and need. Also distinguish between
marketing and selling.
Q.8. What is marketing concept? State its features. Explain the importance of
marketing concept.
Q.9. Define „Marketing‟. State the features of market. What are the important objectives
of Marketing?
Q.10.Write Short Notes on:
a) Goods Service Continuum.
b) Types of Needs and Demands.
c) Marketing Myopia.
d) Macro and Micro Marketing.
e) Customer Satisfaction and Customer Delight.
University Questions
October 2014
Q.1. ‘Marketing is much broader concept than selling‟. Analyse the statement in context
of concept of marketing.
Q.2. "Because the purpose of business is to create a customer, the business enterprise
has two-and only two basic functions: marketing and innovation. Marketing and
innovation produce results; all the rest are costs. Marketing is the distinguishing,
unique function of the business." Comment and Define Marketing. Explain the
core concept of marketing.
5. 31
Basic of Marketing
April 2015
Q.1. The evidence that the product concept was alive and well in ford motor company.
Founder of the ford motor company Henry Ford's famous reaction to consumer
requests for more color options was "you can have any color car you want as long
as it is black." Analyse the statement in context of concept of marketing.
Q.2. "Because the purpose of business is to create a customer, the business enterprise
has two-and only two-basic functions: marketing and innovation. Marketing and
innovation produce results all the rest are costs. Marketing is the distinguishing,
unique function of the business." Comment and define marketing. Explain the core
concept of marketing.
October 2015
Q.1. “If our product is good, we do not require any marketing; customer will come on
their own and buy it" says one business owner. Do you agree? With reference to
above explain the term „Marketing Myopia‟ and differentiate between sales and
marketing orientations in the context of a wrist watch company.
Q.2. "The power of marketing and the way it can manipulate a person‟s view of a
company or brand is something which has fascinated for several years” comment.
Define marketing and explain the core concepts of marketing.
April 2016
Q.1. "If our product is good, we do not require any marketing; customer will come on
their own and buy it” says one business owner. Do you agree? With reference to
above explain the term Marketing Myopia and differentiate between Sales and
Marketing orientations in the context of a four wheeler company.
Q.2. "Marketing appeals to businessmen as it is arguably the most important
department of any business” comment. Define marketing and explain the core
concepts of marketing.
Model Question Bank
Unit 2
Q.1. Consumer wants to purchase laptop. Explain the v a r i o u s factors, which would
affect the consumer b u y i n g behavior.
Q.2. Explain buying roles with suitable examples.
Q.3. Consumer wants to purchase ‘A 2BHK Flats’. Explain the various factors which
would affect the consumer buying behavior.
Q.4. What is a Consumer Behavior? Explain the importance of studying Consumer
Behavior. Also describes the factors affecting consumer behavior.
Q.5. Company ‘Jazz International’ wants to launch flavored drinking water. As a
marketing manager which factors you would consider that affect the consumer
5. 32
Basic of Marketing
Q.6.
Q.7.
Q.8.
Q.9.
buying behavior.
What type of decision process would you expect most consumers to follow in their
purchase of two-wheeler?
Analyze the steps involved in buying decision process of the following :
1) Touch Screen Mobile Handset.
2) Two wheeler.
3) Four Wheeler.
4) Refrigerator.
Consumer wants to purchase „A micro-wave oven‟. Explain the various factors,
which would affect the consumer buying behavior.
Write the major differences between organizational and consumer market with
suitable examples of each.
Q.10.Write Short Notes on:
a) Characteristics of Consumer Market.
b) Consumer Psychology.
c) Characteristics of Organizational Market.
d) Types of Buying Behavior.
University Questions
October 2014
Q.1. Consumer wants to purchase 'A Micro-wave Oven'. Explain the various factors,
which would affect the consumer buying behaviour.
Q.2. What type of decision process would you expect most consumers to follow in their
purchase of 'Four Wheeler'?
Q.3. Analyse the steps involved in buying decision process for 'Touch Screen Mobile
Handset'.
Q.4. Company 'Saiganga' wants to launch flavored drinking water, as a marketing
manager which factors you would consider that affect the consumer buying
behaviour.
April 2015
Q.1. Consumer wants to purchase laptop. Explain the various factors, which would
affect the consumer buying behaviour.
Q.2. What type of decision process would you expect most consumers to follow in their
purchase of two-wheeler?
Q.3. Analyse the steps involved in buying decision process for refrigerator.
Q.4. Company 'Jal' wants to launch flavored drinking water, as a marketing manager
which factors you would consider that affect the consumer buying behaviour.
Q.5.
5. 33
Basic of Marketing
October 2015
Q.1. "If you are able to know why and how consumers buy, what they buy, you can be
successful marketer” Comment and explain the various factors, which affect the
consumer buying behaviour.
Q.2. Analyze the steps involved in the buying decision process for the product „Green
tea'.
Q.3. Consumer wants to purchase Tractor. Explain the various factors, which would
affect the consumer buying behaviour.
Q.4. Enlist and analyze the steps involved in the buying decision process for „Mobile
Handset‟.
April 2016
Q.1. Consumer wants to purchase Life Insurance. Explain the various factors, which
would affect the consumer buying behaviour.
Q.2. What type of decision process would you expect most consumers to follow in
their purchase of car perfume?
Q.3. "If you are able to know why and how consumers buy, what they buy, you can be
successful marketer" comment and explain the various factors, which affect the
consumer buying behaviour.
Q.4. Enlist and analyze the steps involved in the buying decision process for the
product „iPod‟.
Model Question Bank
Unit 3
Q.1. Explain various elements of micro and macro environment and how do they affect
business organization with the help of suitable example.
Q.2. “Marketing managers have to constantly take and revise their marketing decisions
considering the changes in micro and macro environmental forces” comment.
Explain various types of environmental forces and factors influencing marketing
decisions.
Q.3. Define market segmentation? Discuss the bases or criteria for market
segmentation of consumer goods and industrial goods?
Q.4. Undertake the Macro environmental analysis for any two of the following markets.
1) Mobile services provider.
2) Pesticide.
3) Insurance.
Q.5. What do you mean by marketing environment? Describe both micro and macro
analysis.
Q.6. Explain social and cultural marketing environment.
Q.7. Define market potential and market share.
5. 34
Basic of Marketing
Q.8. Explain PESTEL analysis.
Q.9. Undertake the environmental analysis for any two of the following markets.
1) Family Holiday Package.
2) LED TV.
3) Rat Killer.
Q.10. Write Short Notes on:
a) Uncontrollable Factors affecting Marketing Environment.
b) Controllable Factors affecting Marketing Environment.
c) Political and Legal Marketing Environment.
d) Market Share.
e) Market Potential.
University Questions
October 2014
Q.1. "Marketing manager has to constantly take and revise their marketing decisions
considering the changes in micro and macro environmental force" Comments.
Explain various types of environmental force and factors influencing marketing
decision.
Q.2. Undertake the macro environment analysis for any two of the following:
Q.1.
Mobile Service Provider.
Q.2.
Pesticide.
Q.3.
Insurance.
April 2015
Q.1. Explain the various elements of micro and macro environment and how do they
affects business organisation with the help of suitable example.
Q.2. Undertake the macro environment analysis for any two of the following:
Family Holiday Package
LED TV
Rat Killer
October 2015
Q.1. "Marketing managers have to take and revise their marketing decisions
considering the change in macro environmental forces" comment. Explain various
types of environmental forces and factors influencing marketing decisions.
Q.2. Undertake the environmental analysis for any two of the following markets.
Medical shop.
Beauty parlor.
Telecom.
5. 35
Basic of Marketing
April 2016
Q.1. Undertake the macro environmental analysis for any two of the following markets:
Mobile repairing.
Saloon.
Ice-cream parlor.
Q.2. "Marketing managers have to take and revise their marketing decisions
considering the change in macro environmental forces" comment. Explain various
types of environmental forces and factors influencing marketing decisions.
Model Question Bank
Unit 4
Q.1. Name and describe the bases for segmentation that might be used in segmenting
consumer markets. Which segmenting variable(s) do you think the following
companies are using:
a) „Godrej‟ is using for „ H a i r Dyes‟?
b) Pepsi is using for „Cold Drinks”?
c) „Dell‟ is using for Personal Computer?
Q.2. Thomson Baby soap has taken early lead in terms of creating positioning in
consumer mind. Company launches various variances like Thomson soap for
delicate skin and Thomson soap for men. Analyze various bases of segmentation
used by the company.
Q.3. Explain the concept of Value Proposition & USP.
Q.4. Mahindra & Mahindra Launching new product called e - 20 (electric car). It is
contemplating on the basis of on its marketing strategy on common life style.
Using VALS approach, evolve marketing strategy that will help e - 20 succeed in
Indian market?
Q.5. Define Segmentation, Target marketing and positioning.
Q.6. Explain the advantages and disadvantages of market segmentation.
Q.7. Suggest market segmentation for the following along with justifications and
suggestions:
a) Tractors.
b) Laptop & Computers.
c) New Brand of Bathing Soap.
Q.8. Explain the market segmentation procedure along with an example.
Q.9. Describe the various factors which are affecting market segmentation.
Q.10.Write Short Notes on:
a) Niche Marketing.
b) Level of Market Segmentation.
c) Effective Segmentation Criteria.
d) Product Positioning.
5. 36
Basic of Marketing
University Questions
October 2014
Q.1. Name and describe the bases for segmentation that might be used in segmenting
consumer markets. Which segmenting variable(s) do you think 'Dell' is using for
personal computer?
Q.2. Thomson Baby soup has taken early lead in term of creating positioning in
customer mind. Company launches various variances like Thomson soap for
delicate skin and Thomson soap for men. Analyse various bases of segmentation
used by the company.
April 2015
Q.1. Name and describe the bases for segmentation that might be used in segmenting
consumer markets. Which segmenting variable(s) do you think 'Godrej' is using for
„Hair Dyes‟?
Q.2. Denta tooth pest has taken early lead in term of creating positioning in customer
mind. Company launches various variances like denta white, Denta plus, Denta
herbal. Analyse various bases of segmentation used by the company.
October 2015
Q.1. As a marketing manager of an organisation develop „market segment, targeting
and positioning‟ for marketing plan for following:
i) Organic agriculture product
ii) Washing Machine
Q.2. Pruthvi Private Ltd. manufactures variety of woolen garments. As a marketing
manager of a company how would you segments the market for such products to
be sold all over India? Analyse various segmentation bases used by marketing
manager of company.
April 2016
Q.1. Shivansh private Ltd. manufactures variety of woolen garments. As a marketing
manager of a company how would you segments the market for such products to
be sold all over India'? Analyse various segmentation bases used by marketing
manager of company.
Q.2. As a marketing manager of an organisation develop „market segment, targeting
and positioning‟ for marketing plan for following:
i) Sugar Bee tablets.
ii) 350 cc Bike.
5. 37
Basic of Marketing
Model Question Bank
Unit 5
Q.1. What is „Goods-service continuum‟? Explain with a diagram and appropriate
example.
Q.2. What do you mean by a product? Classify consumer products and industrial
products in detail.
Q.3. Product can be classified into broad categories based on who will use them & how
they will use‟. Analyze the statement in context of classification of products.
Q.4. Which is the first element of marketing mix? Explain various types of goods.
Q.5. What is a product mix? Prepare the product mix of Samsung or Micromax or
Nokia.
Q.6. Elaborate the classification of product along with suitable examples.
Q.7. Explain the customer value hierarchy along with suitable examples.
Q.8. What do you mean by consumer goods? Explain it with suitable examples.
Q.9. What is a marketing mix? Prepare a marketing mix of any company.
Q.10.Write Short Notes on:
a) Product Line.
b) Product Width.
c) Industrial Goods.
d) Core Product.
University Questions
October 2014
Q.1. What is goods-service continuum? Explain with a diagram and appropriate
example.
Q.2. Product can be classified in to broad categories based on who will use them and
how they will use. Analyse the statement in context of classification of product.
April 2015
Q.1. What is goods-service continuum? Explain with a diagram and appropriate
example.
Q.2. What do you mean by product? Classify consumer products and industrial
products in detail.
October 2015
Q.1. Define product. Explain the product mix with respect to a FMCG company. Make
necessary assumptions.
Q.2. What do you mean by a product? Classify consumer Products and industrial
products in detail.
5. 38
Basic of Marketing
April 2016
Q.1. What do you mean by a product? Classify consumer products and industrial
products in detail.
Q.2. The basic purpose of having any motorbike is to commute between two locations;
for which two wheelers are used. However, still we find that every motorbike
manufacturer has a range of product. E.g. Bajaj Auto has a range from Platina,
Discover, Pulsar and Avenger etc. What do you think is the rational of having such
long product line in same category of the product?
Q.3. What is „Goods-service continuum‟? Explain with diagram and appropriate
examples.
●●●●●●
5. 39
Basic of Marketing

University Question Papers

M. B. A.
Basic of Marketing
(2013 Pattern) (Semester - I)
October 2014
Time: 2 1 2 Hours
Q.1.
a)
Max. Marks: 50
‘Marketing is much broader concept than selling‟. Analyse the statement in
context of concept of marketing.
OR
b)
Q.2.
a)
"Because the purpose of business is to create a customer, the business
enterprise has two-and only two basic functions: marketing and innovation.
Marketing and innovation produce results; all the rest are costs. Marketing is the
distinguishing, unique function of the business." Comment and Define
Marketing. Explain the core concept of marketing.
i)
Consumer wants to purchase 'A Micro-wave Oven'. Explain the various
factors, which would affect the consumer buying behaviour.
ii) What type of decision process would you expect most consumers to follow
in their purchase of 'Four Wheeler'?
OR
b)
i) Analyse the steps involved in buying decision process for 'Touch Screen
Mobile Handset'.
ii) Company 'Saiganga' wants to launch flavored drinking water, as a marketing
manager which factors you would consider that affect the consumer buying
behaviour.
5. 40
Basic of Marketing
Q.3.
a)
"Marketing manager has to constantly take and revise their marketing decisions
considering the changes in micro and macro environmental force" Comments.
Explain various types of environmental force and factors influencing marketing
decision.
OR
b)
Undertake the macro environment analysis for any two of the following:
Mobile Service Provider.
Pesticide.
Insurance.
Q.4.
a)
Name and describe the bases for segmentation that might be used in
segmenting consumer markets. Which segmenting variable(s) do you think 'Dell'
is using for personal computer?
OR
b)
Thomson Baby soup has taken early lead in term of creating positioning in
customer mind. Company launches various variances like Thomson soap for
delicate skin and Thomson soap for men. Analyse various bases of
segmentation used by the company.
Q.5.
a)
What is goods-service continuum? Explain with a diagram and appropriate
example.
b)
Product can be classified in to broad categories based on who will use them and
how they will use. Analyse the statement in context of classification of product.
5. 41
Basic of Marketing
April 2015
Time: 2 1 2 Hours
Max. Marks: 50
Q.1.
a)
The evidence that the product concept was alive and well in ford motor
company. Founder of the ford motor company Henry Ford's famous reaction to
consumer requests for more color options was "you can have any color car you
want as long as it is black." Analyse the statement in context of concept of
marketing.
OR
b)
"Because the purpose of business is to create a customer, the business
enterprise has two-and only two-basic functions: marketing and innovation.
Marketing and innovation produce results all the rest are costs. Marketing is the
distinguishing, unique function of the business." Comment and define marketing.
Explain the core concept of marketing.
Q.2.
a)
i) Consumer wants to purchase laptop. Explain the various factors, which would
affect the consumer buying behaviour.
ii) What type of decision process would you expect most consumers to follow in
their purchase of two-wheeler?
OR
b)
i) Analyse the steps involved in buying decision process for refrigerator.
ii) Company 'Jal' wants to launch flavored drinking water, as a marketing
manager which factors you would consider that affect the consumer buying
behaviour.
Q.3.
a)
Explain the various elements of micro and macro environment and how do they
affects business organisation with the help of suitable example.
OR
5. 42
Basic of Marketing
b)
Undertake the macro environment analysis for any two of the following:
Family Holiday Package
LED TV
Rat Killer
Q.4.
a)
Name and describe the bases for segmentation that might be used in
segmenting consumer markets. Which segmenting variable(s) do you think
'Godrej' is using for „Hair Dyes‟?
OR
b)
Denta tooth pest has taken early lead in term of creating positioning in customer
mind. Company launches various variances like denta white, Denta plus, Denta
herbal. Analyse various bases of segmentation used by the company.
.
Q.5.
a)
What is goods-service continuum? Explain with a diagram and appropriate
example.
OR
b)
What do you mean by product? Classify consumer products and industrial
products in detail.
5. 43
Basic of Marketing
October 2015
Time: 2 1 2 Hours
Max. Marks: 50
Q.1.
a)
“If our product is good, we do not require any marketing; customer will come on
their own and buy it" says one business owner. Do you agree? With reference to
above explain the term „Marketing Myopia‟ and differentiate between sales and
marketing orientations in the context of a wrist watch company.
OR
b)
"The power of marketing and the way it can manipulate a person‟s view of a
company or brand is something which has fascinated for several years”
comment. Define marketing and explain the core concepts of marketing.
Q.2.
a)
i) "If you are able to know why and how consumers buy, what they buy, you can
be successful marketer” Comment and explain the various factors, which affect
the consumer buying behaviour.
ii) Analyze the steps involved in the buying decision process for the product
„Green tea'.
OR
b)
i) Consumer wants to purchase Tractor. Explain the various factors, which would
affect the consumer buying behaviour.
ii) Enlist and analyze the steps involved in the buying decision process for
„Mobile Handset‟.
5. 44
Basic of Marketing
Q.3.
a)
"Marketing managers have to take and revise their marketing decisions
considering the change in macro environmental forces" comment. Explain
various types of environmental forces and factors influencing marketing
decisions.
OR
b)
Undertake the environmental analysis for any two of the following markets.
i) Medical shop.
ii) Beauty parlor.
iii) Telecom.
Q.4.
a)
As a marketing manager of an organisation develop „market segment, targeting
and positioning‟ for marketing plan for following:
i) Organic agriculture product
ii) Washing Machine
OR
b)
Pruthvi Private Ltd. manufactures variety of woolen garments. As a marketing
manager of a company how would you segments the market for such products
to be sold all over India? Analyse various segmentation bases used by
marketing manager of company.
Q.5.
a)
Define product. Explain the product mix with respect to a FMCG company. Make
necessary assumptions.
OR
b)
What do you mean by a product? Classify consumer Products and industrial
products in detail.
5. 45
Basic of Marketing
April 2016
Time: 2 1 2 Hours
Max. Marks: 50
Q.1.
a)
"If our product is good, we do not require any marketing; customer will come on
their own and buy it” says one business owner. Do you agree? With reference to
above explain the term Marketing Myopia and differentiate between Sales and
Marketing orientations in the context of a four wheeler company.
OR
b)
"Marketing appeals to businessmen as it is arguably the most important
department of any business” comment. Define marketing and explain the core
concepts of marketing.
Q.2.
a)
i) Consumer wants to purchase Life Insurance. Explain the various factors,
which would affect the consumer buying behaviour.
ii) What type of decision process would you expect most consumers to follow in
their purchase of car perfume?
OR
b)
i) "If you are able to know why and how consumers buy, what they buy, you can
be successful marketer" comment and explain the various factors, which affect
the consumer buying behaviour.
ii) Enlist and analyze the steps involved in the buying decision process for the
product „iPod‟.
5. 46
Basic of Marketing
Q.3.
a)
Undertake the macro environmental analysis for any two of the following
markets:
i) Mobile repairing.
ii) Saloon.
iii) Ice-cream parlor.
OR
b)
"Marketing managers have to take and revise their marketing decisions
considering the change in macro environmental forces" comment. Explain
various types of environmental forces and factors influencing marketing
decisions.
Q.4.
a)
Shivansh private Ltd. manufactures variety of woolen garments. As a marketing
manager of a company how would you segments the market for such products
to be sold all over India'? Analyse various segmentation bases used by
marketing manager of company.
OR
b)
Q.5.
a)
b)
As a marketing manager of an organisation develop „market segment, targeting
and positioning‟ for marketing plan for following:
i)Sugar Bee tablets.
ii) 350 cc Bike.
What do you mean by a product? Classify consumer products and industrial
products in detail.
OR
i) The basic purpose of having any motorbike is to commute between two
locations; for which two wheelers are used. However, still we find that every
motorbike manufacturer has a range of product. E.g. Bajaj Auto has a range
from Platina, Discover, Pulsar and Avenger etc. What do you think is the rational
of having such long product line in same category of the product?
ii) What is „Goods-service continuum‟? Explain with diagram and appropriate
examples.
●●●●●●
5. 47
Basics of Marketing
References
Unit 1:
1. Based on information found at www.gktoday.in
2. Adapted from www.mbaskool.com
3. Information accessed at www.marketing91.com/types-of-demand-2/
4. See www.quora.com/What-are-the-different-types-of-demand-with-a-fewexamples-of-each
5. Accessed online at www.wiziq.com/tutorial/664840-Marketing-Nature-and-Scope
6. Information from www.yourarticlelibrary.com/marketing/marketingmanagement/5-objectives-of-marketing-management/27961/
7. Marketing environment**
8. Based on information found at
www.searchcrm.techtarget.com/definition/transactional-marketing
9. See
www.smallbusiness.chron.com/transactional-vs-relational-marketing20763.html
10. Principle of Marketing by Philip Kotler-13th Editions (Pearson Publications)
11. Information from www.mbaskool.com
12. See www.citeman.com/1242-new-consumer-capabilities.html#ixzz3vPeOTPSe
13. Accessed online at www.agoalbook.wordpress.com/2013/03/03/new-companycapabilities/
14. Information from www.successstory.com/companies/nokia
15. Accessed online at www.iveybusinessjournal.com/publication/marketing-myopiare-visited-why-every-company-needs-to-learn-from-the-world/
16. Based on information found at www.ukessays.com/essays/marketing/critique-onmarketing-myopia-marketing-essay.php#)
17. Information
from
www.gsmarena.com/the_rise_dominance_and_epic_fall__a_brief_look
_at_nokias_history-blog-13460.php
Unit 2:
1. Accessed online at www.thetsmblogger.blogspot.in/2015/07/baahubali-beginning
marketing-strategies.html
2. Information
accessed
from
http://www.hindustantimes.com/moviereviews/baahubali-review-spectacular-visuals-amazing-special-effects/storyeEMtljTMTnJYW0i41qgrVJ.html
3. Basics of Marketing by Dr. E. B. Khedkar, 2nd Edition (Nirali Prakashan)
4. Principle of Marketing by Philip Kotler, 13th Edition (Pearson Publications)
5. See
www.managementduniya.wordpress.com/2013/09/05/difference-betweenconsumer -and-organizational-buying-behaviour/
6. Information
from
www.smallbusiness.chron.com/differences-betweenorganizational-consumer-markets-641.html
7. Based on information from www.boundless.com/marketing/textbooks/boundlessmarketing-textbook/business-to-business-marketing-5/the-business-buyingdecision-process-47/buying-centers-234-6412/
8. Reference book of Marketing Management by Prin. Dr. B. R. Sangale, Success
Publication.
5. 48
Basics of Marketing
Unit 3:
1. Principles of Marketing by Ashok Jain
2. Information from www.yourarticlelibrary.com/marketing/marketing-environmentstudy-notes/50811/
3. Based on information found atwww.shahucollegepune.org /Portals /0/Users
/Gkmadhe / Marketing%20Environment.pdf
4. See www.shahucollegepune.org /Portals/0/Users/Gkmadhe /Marketing %20
Environment.pdf
5. Information found at www.shahucollegepune.org /Portals/0/Users/ Gkmadhe
/Marketing %20Environment.pdf
6. Business Management: A Contemporary Approach By Cecile Nieuwenhuizen,
Hannie Badenhorst-Weiss, Dirk Rossouw, Tersia Brevis, Mike Cant
7. Accessed online at www.oxlearn.com/arg_Marketing-Resources-Marketing
Environment _11_28
8. See www.smallbusiness.chron.com/microenvironment-marketing-22920.html
9. Based on information found at www.yourarticlelibrary.com/business/microenvironment-of-business-6-factors-of-micro-environment-of-business/23370/
10. Information from www.yourarticlelibrary.com/marketing/marketing-environmentstudy-notes/50811/
11. Principle of Marketing by Philip Kotler-13th Editions (Pearson Publications)
12. Adapted
from
www.icmrindia.org/courseware/Marketing%20Management
/Marketing% 20Environment.htm
13. See www.udel.edu/alex/chapt3.html
14. Adapted from www.pestleanalysis.com/pestle-analysis-business-environmentalanalysis/
15. Information accessed at www.study.com/academy/lesson/market-potential-of-aproduct-definition-analysis-example-quiz.html
Unit 4:
1. Information
accessed
at
www.businessdictionary.com/definition/marketsegmentation .html
2. Accessed
online
at
www.biggerplate.com/mindmaps/PpgJIcsK/marketsegmentation-types
3. Based on information found at www.managementstudyguide.com/need-formarket-segmentation.htm
4. See www.marketing91.com/need-for-market-segmentation/
5. Information from www.culinarycafe.in/hegemony-or-harmony-a-quest-for-stabilityin-an-era-of-free-market-capitalism/
Unit 5:
1. Information accessed at www.themarketingmojo.blogspot.in/2011/08/industrialgoods-classification.html
2. Accessed online at www.yourarticlelibrary.com/industries/industrial-product-3groups-of-industrial-goods-and-services/22521/
3. Based on information found at www.economictimes.indiatimes.com
4. See www.marketing91.com/product-mix-product-line/
5. Information from www.learnmarketing.net/productobjectives.htm
6. Information accessed at www.scribd.com/doc/28134383/Product-Mix-Amul
5. 49