1. (A) Differentiate ‘Marketing’ from ‘Marketing Management’.
Ans:
Definitions
Marketing is a process by which an organization obtains what it needs and wants through creating
and exchanging products and value with its customers. In simple words it is the delivery of
customer satisfaction at a profit. It satisfies the needs of customers better than the competition. It
focuses on the use of all the controllable influences to satisfy the customer.
Marketing management is a business discipline which focuses on the practical application of
marketing techniques and the management of an organization’s marketing resources and activities.
Philip Kotler defines marketing as ‘Marketing management is the analysis, planning,
implementation and control of programmes designed to bring about the desired exchanges with
target audiences for the purpose of personal and mutual gain. It relies heavily on adoption and
coordination of the product, price, promotion and place for achieving response’.
The American Marketing Association defines marketing management as ‘Marketing
(management) is the process of planning and executing the conception, pricing, promotion, and
distribution of ideas, goods, and services to create exchanges that satisfy individual and
organizational goals’.
Functions:
Functions of marketing
● Promotion.
● Selling.
● Product/service management.
● Marketing information management.
● Pricing.
● Financing.
● Distribution.
Functions of Marketing Management
● Selling
● Buying and Assembling
● Transportation
● Storage
● Standardization and Grading
● Financing
● Risk Taking
● Market Information
1. B) What are the differences among marketing concept, production concept, product
concept, and selling concept? Which concepts are easier to adopt in the short-run?
Ans:
Production concept – It is one of the oldest concepts which guides sellers. The production
concept holds that customers favour those products that are widely available and low in
cost. Production oriented organizations concentrate on achieving high production
efficiency and wide distribution coverage. This concept holds in at least two types of
situations. The first is where the demand for a product exceeds supply. Here consumers are
more interested in obtaining the product than in its fine points. The suppliers will
concentrate on finding ways to increase production. The second situation is where the
product’s cost is high and has to be brought down through increased productivity to expand
the market.
● Product concept – This concept holds that customers favour those products that offer
quality or performance. Product oriented organizations focus their energy on making good
products and improving them over time. In this concept it is assumed that buyers admire
well made product and can appraise product quality and performance. These organizations
are caught up in an appreciation of their product and fail to appreciate that the market may
be less ‘turned on’ and may be even moving in different direction. The product concept
leads to ‘marketing myopia’, an undue concentration on the product rather than the need.
● Selling concept – This concept assumes that customers, if left alone, will not buy enough
of the organization’s products. The organization must therefore carry out an aggressive
selling and promotion effort. The concept assumes that customers show buying inertia or
resistance and have to be coaxed into buying more, and that the organization has available
a whole battery of effective selling and promotion tools to stimulate more buying. The
selling concept is practiced most aggressively with ‘sought products’, those products that
buyers normally do not think of buying. Under this concept organization perfects various
sales techniques to locate prospective customers and hard sell them on the benefits of their
product. Most organizations practice the selling concept when they have overcapacity.
Their aim is to sell what they make rather than make what they can sell. Thus selling, to be
effective, must be preceded by several marketing activities such as needs assessment,
marketing research, product development, pricing, and distribution. If the organization
does a good job of identifying customer needs, developing appropriate products, and
pricing, distributing, and promoting them effectively, these products will sell very easily.
Indeed, marketing based on hard selling carries high risks. It assumes that customers who
are coaxed into buying the product will like it; and if they don’t, they won’t bad-mouth it
to friends or complain to other customers and they will possibly forget their disappointment
and buy it again. These are indefensible assumptions to make about buyers. One study
showed that disappointed customers bad mouth the product to eleven acquaintances, while
satisfied customers may good mouth the product to only three.
● Marketing concept – This concept holds that the key for the achievement of the
organizational goals. It consists in determining the needs and wants of target markets and
delivering the desired satisfactions more effectively and efficiently than competitors.
Selling focuses on the needs of the seller while marketing focuses on the needs of the
customer. Selling is preoccupied with the seller’s need to convert his product into cash
●
while marketing believes with the idea of satisfying the needs of the customer by means of
the product and the whole cluster of things associated with creating, delivering and finally
consuming it. Hence market focus is important. No organization can operate in every
market and satisfy every need. Nor can it even do a good job within one broad market. An
organization can do best when it defines its target markets carefully. It can do best when it
prepares a tailored marketing program for each target market.
Short run Marketing
Among all the six concepts of marketing the easier concept to adopt in short run is the selling
concept.
The selling concept is practiced most aggressively with unsought goods, goods that buyers do not
think of buying, such as insurance, funeral plots etc. These industries have practiced various sales
techniques to locate prospects and hard sell them on their products benefits.
Most organization practice selling concept when they have overcapacity. Their aim is to sell what
they make rather than make what the market wants. In most modern industrial economics,
productivity capacity has been built up to a point where the most markets are buyer markets (the
buyers are dominant) and sellers have to scramble for customer.
The selling concept does not consider what the customer wants, what is the quality of the product.
They believe in push selling. They believe customer will buy the product if they always pushed to
buy it.
Marketing based on hard selling or selling through pushing customer carries high risks. It assumes
in selling concept that customer who are coaxed into buying a product will like it; and that if they
do not, the y will not bad-mouth it or complain to consumer organizations and will forget their
disappointment and buy it again. These are indefensible assumptions. Study showed that
dissatisfied customers may bad-mouth the product to ten or more acquaintances; and today bad
news travels faster and further with the internet.
So these are the reason for why selling concept for short term. It will be so tough to push sell a
product for a long period in the time of communications super highway.
1. C) Pick the consumer product ‘Wrist-Watch’. Design your marketing strategy,
describing the steps in the marketing process starting with defining the ‘market
segment’, then explaining the designing of the ‘Four Ps’ in Marketing and ending
with the ultimate objectives of marketing.
Ans: In this first case we deal with a relatively simple mode of segmentation analysis. The most
productive way of analyzing the market for watches turns out to be segmentation by value. This
approach discloses three distinct segments, each representing a different value attributed to
watches by each of three different groups of consumers:
1. People who want to pay the lowest possible price for any watch that works reasonably well. If
the watch fails after six months or a year, they will throw it out and replace it.
2. People who value watches for their long life, good workmanship, good material, and good
styling. They are willing to pay for these product qualities.
3. People who look not only for useful product features but also for meaningful emotional
qualities. The most important consideration in this segment is that the watch should suitably
symbolize an important occasion. Consequently, fine styling, a well-known brand name, the
recommendation of the jeweler, and a gold or diamond case are highly valued.
In 1962, my research shows, the watch market divided quantitatively as follows:
●
●
●
Approximately 23% of the buyers bought for lowest price (value segment #1).
Another 46% bought for durability and general product quality (value segment #2).
And 31% bought watches as symbols of some important occasion (value segment #3).
Defining and quantifying such segments is helpful in marketing planning—especially if a watch
company’s product happens to appeal mostly to one segment or if the line straddles the three
segments, failing to appeal effectively to any. Without such an understanding, the demographic
characteristics of the market are most confusing. It turns out, for example, that the most expensive
watches are being bought by people with both the highest and the lowest incomes. On the other
hand, some upper income consumers are no longer buying costly watches, but are buying cheap,
well-styled watches to throw away when they require servicing. Other upper income consumers,
however, continue to buy fine, expensive watches for suitable occasions.
Timex’s Timely Tactics. The planning implications in value segmentation are very broad for the
industry. For one thing, many of the better watch companies in the years between 1957 and 1962
were inadvertently focusing exclusively on the third segment described—the 31% of the market
that bought a watch only as a gift on important occasions—thus leaving the bulk of the market
open to attack and exploitation.
The U.S. Time Company took advantage of this opening and established a very strong position
among the more than two-thirds of America’s watch buyers in the first two segments. Its new lowprice watch, the Timex, had obvious appeal for the first segment, and it catered to the second
segment as well. At that time, higher-price watches were making the disastrous mistake in their
advertising of equating product quality with water-proof and shock-resistant features. The Timex
also offered these low-cost features, at lower prices, thus striking at a vulnerable area which the
competition itself created. When Timex pressed its attack, it was able within a few years to claim
that “Timex sells more watches than any other watch company in the world.”
Even the timing of Timex’s watch advertising was involved. Much of the third segment was
buying watches only during the Christmas season, and so most of Timex’s competitors
concentrated their advertising in November and December. But since buying by the other two
segments went on all the time, Timex advertised all year-round, getting exclusive attention ten
months of the year.
Thus, nondemographic segmentation in the watch industry has directly affected almost every phase
of marketing, including the composition of the product line. Major watch companies know that
they must plan product line, pricing, advertising, and distribution within the framework of the three
basic value segments of this market.
2. (a) What are the primary differences between products and services? Give illustrations
of marketing offers that highlight these differences.
Ans:
Product marketing
Service marketing
Meaning
Product marketing refers to the process
in which the marketing activities are
aligned to promote and sell a specific
product for a particular segment.
Marketing
mix
4 P’s: Product, Price, Place, Promotion
Sells
Value
Relationship
Who comes to
whom?
Products come to customers
Customers come to service
Transfer
It can be owned and resold to another
party.
It is neither owned nor transferred to
another party.
Returnability
Products can be returned.
Services cannot be returned after they are
rendered.
They are tangible, so customer can see
and touch it, before coming to the
Tangibility
buying decision.
Product and the company producing it,
Separability
are separable.
Products cannot be customised as per
Customization
requirements.
Service marketing implies the marketing
of economic activities, offered by the
business to its clients for adequate
consideration.
7 P’s: 4 P’s + People, Process, Physical
evidence
They are intangible, so it is difficult to
promote services.
Service cannot be separated from its
provider.
Services vary from person to person, they
can be customised.
Imagery
They are imagery and hence, receive
quick response from customers.
They are non-imagery and do not receive
quick response from customers.
Quality
comparison
Quality of a product can be easily
measured.
Quality of service is not measurable.
2. (b) Discuss the elements of marketing mix in service marketing.
Ans:
What is Service Marketing Mix?
The service marketing mix is a combination of the different elements of services marketing that
companies use to communicate their organizational and brand message to customers. The mix
consists of the seven P’s i.e. Product, Pricing, Place, Promotion, People, Process and Physical
Evidence. The service marketing mix, also known as the extended marketing mix, treats the service
that the business offers just as it would treat a product. While the first four P’s are involved in
product marketing too, the remaining three P’s focus mainly on service delivery and enhancing
customer satisfaction.
Elements of Service Marketing Mix
1. Product – Unlike a product, a service is intangible and cannot be measured in terms of
look, feel and other qualities present in a commodity. However, it can be customized to
suit the user requirements and give a personal touch. However, the service product is
heterogeneous and perishable in nature just like a normal product and needs to be designed
with the utmost care to increase customer satisfaction.
2. Pricing – The pricing strategy for services is difficult to achieve unlike in products,
wherein the final price depends on the raw materials, cost of production and distribution
etc. However, in service pricing, you cannot measure the cost of the services you offer that
easily. For example, in the education industry, how would you set the price of the quality
of education imparted? Or if you are in the food and hospitality industry, how would you
charge the customers for the care shown by the host or hostess, the ambience in the
restaurant or the fine taste of your delicacies? Therefore, pricing plays a crucial role in the
services marketing mix for your business.
3. Place – The place where you choose to conduct your service business can make or break
your organizational growth. You need to understand how visible your setup would be to
potential customers and how frequently it would be visited by consumers. For example,
would you set up a fast-food centre near a college or office hub, where students and
professionals can quickly grab a bite or next to a big restaurant in a classy neighbourhood?
4. Promotion – The service industry usually has stiff competition across different verticals
and your business would need a lot of promotions to pass on the right message to potential
customers. While advertising, online and direct marketing are the best ways to promote
your service you need to have a good mix of communication channels to address a larger
audience.
5. People – Your business is not just built on your goals, company vision and principles but
also depends heavily on your employees. It is the people who work for you who are
responsible in creating happy and returning customers. People in your organization are the
epicentre of the quality of your services and need to have the best of talents to gain
customer loyalty and trust.
6. Process – How efficiently your services are delivered to the customer is an important
aspect of your service blueprint and you need to emphasize on setting up a process for
doing so. You need to ask yourself “Do I want to have a process in place that is quick,
reliable and easy to monitor or one that is sluggish but necessarily passes through several
layers of hierarchy?” In today’s competitive world, companies are always in the race to
deliver services quickly, efficiently and with the highest quality.
7. Physical Evidence – While offering your services, you can either do it without adding a
personal touch or by differentiating your offerings by adding an element of delight to the
customer. For example, would you prefer to visit a bookstore that only has a stack of books
with a cashier nearby or one that also has a place to sit, where you can browse through the
book you are interested in and enjoy the light music in the backdrop while you make a
choice? The ambience of a bookstore or restaurant, the music, the friendly face of your
travel host etc. are all part of the physical evidence of a service and they are an important
element of the service marketing mix.
The services sector has various kinds of businesses catering to the needs of individual consumers
or bigger enterprises and larger businesses. Whatever industry domain you conduct your business
in ensure to create the right service marketing mix for better customer satisfaction.
2. C) Explain the implication of service characteristics in designing a marketing strategy.
Ans:
Services have four major characteristics that greatly affect the design of marketing
programs:
●
●
●
●
●
Intangibility.
Variability.
Inseparability.
Resulting Marketing Implications.
Perishability.