MBA – 2nd Semester (DDE) Examination
Marketing Management
Paper – 3.32
Unit – I
Q 1. Define Marketing. Also describe the nature and scope of marketing.
Ans. Marketing is a social and managerial process by which individuals and groups
obtain what they need and want through creating, offering and exchanging products of
value with others.
Marketing has its origins in the fact that humans are creatures of needs and wants. Need
and wants create a state of discomfort, which is resolved through acquiring products that
satisfy these needs and wants. Since many products can satisfy a given need, and
satisfaction. These products are obtainable in several ways: Self-production, coercion,
begging and exchange. Most modern societies work on the principle of exchange, which
means that people specialize in producing particular products and trade them for the
other things they need. They engage in transaction and relationship building. A Market
is a group of people who share a similar needs. Marketing encompasses those activities
involved in working with markets, that is, in trying to actualize potential exchanges.
Marketing management is the conscious effort to achieve desired exchange outcome
with target markets. The marketer’s basis skill lies in influencing the level, timing and
composition of demand for a product, service, organisation, place, person or idea.
Marketing is so basic that it cannot be considered a 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. The marketing concept rests on four main pillars, namely a market focus,
customer orientation, coordinated marketing and profitability.
Market Focus : No company can operate in every market and satisfy every need, Nor
can it even do a good job within one broad market. Companies do best when they
define their target markets carefully. They do best when they prepare a tailored
marketing programme for each target market.
Customer Orientation : A company can define its market carefully but still needs
customer oriented thinking i.e. satisfy customer needs from the customer point of view,
and not from its own point of view. Company’s sales come from two groups: new
customers and repeat customers. It always costs more to attract new customers than to
retain current customers. Therefore, customer retention is more critical than customer
attraction The key to customer retention is customer satisfaction. A satisfied customer:
Buys again
Talks favorably to others about the company
Pays less attention to competing brands
Buys other products from the same company
Thus, a company would be wise to regularly measure customer satisfaction. The
delighted customers are more effective advertisers than the advertisement placed in
media.
Coordinated marketing : Marketing requires the company to carry out internal
marketing as well as external marketing. Internal marketing is the task of successfully
hiring, training and motivating able employees to serve the customers well. Internal
marketing must precede the external marketing. It makes no sense to promise excellent
service before the company’s staff is ready to provide excellent service.
Coordinated marketing means two things, first the various marketing functions –
salesforce, advertising product management, marketing research, and so on-must be
coordinated among themselves. Second, marketing must be well coordinated with the
other company department. Marketing does not work when it is merely a department. It
only works when all employees appreciate the effect they have on customer satisfaction.
Profitability : The purpose of the marketing concept is to help organisations achieve
their goals. In case of private firms, the major goal is profit, in the case of non-profit and
public organisations, it is surviving and attracting enough funds to perform their work.
The key is not to aim for profits as such but to achieve them as a by product of doing the
job well. A company makes money by satisfying customer’s needs better than a
profitable way to satisfy some target group’s wants for personal satisfaction.
Q. 2 How can marketing managers effectively monitor changes in the marketing
environment?
Ans. Marketing mangers can effectively monitor changes in the marketing environment
using marketing intelligence system.
“A marketing intelligence system is a set of procedures and sources used by managers
to obtain their everyday information about pertinent developments in the marketing
environment.”
Managers scan the environment in four ways :
-
Undirected viewing: General exposure to information where the manager
has no specific purpose in mind.
Conditional viewing: Directed exposure, not involving active search, to a
more or less clearly identified area or type of information.
Informed Search: A relatively limited and unstructured effort to obtain
specific information or information for a specific purpose.
Formal Search: A deliberate effort usually following a pre-established
plan, procedure, or methodology – to secure specific information or
information relatively to a specific issue.
Marketing managers carry on marketing intelligence mostly on their own by reading
books, newspapers and trade publications, talking to customers, suppliers, distributors
and other outsiders, and talking with other managers within the company. Well-run
companies take additional steps to improve the quality and quantity of marketing
intelligence. First, they train and motivate the salesforce to spot and report new
developments. Sales representatives are the company’s “eye and ears”. They are in an
excellent position to pickup information missed by other means. Second, the company
motivates distributors, retailers and other middlemen to pass along important
intelligence. Some companies appoint specialists to gather marketing intelligence. They
send out “Ghost shoppers” to monitor the presentations of retail personnel. Much can be
learned about competitors through purchasing their products, attending open houses
and trade shows, reading competitor’s published reports and attending stock holders
meeting; talking to their former employees and present employees, dealers, distributors,
suppliers and freight agents collecting competitors ads.
Third, the company purchases information from outside suppliers such as NRS
(National Readership Survey Report_) etc. These research firms can gather store and
consumer- panel data at much less cost than it each company carried out its own panel
operations.
UNIT - II
Q.3. What are stages of the consumer decision- making process? Do consumers
ever-skip some of these stages?
Ans. Consumer passes through five stages: Problem recognition, information search,
evaluation of alternatives, purchase decision and post purchase behaviour, while
deciding the purchase of products/services.
Problem Recognition: The buying process starts when the buyer recognises a problem
or need. The buyer senses a difference between his or her actual state and a desired
state. The need can be triggered by internal or external; stimuli. In the former case, one
person’s normal needs – hunger, thirst – rises to be threshold level and becomes a
drive. From previous experience, the person has learned how to cope with this drive and
its motivated towards a class of objects that will satisfy the drive. Or a need can be
aroused by an external stimulus. A person passes a bakery and sees freshly baked
bread that stimulates her hunger, she admires a neighbourer’s new car, or she watches
a television commercial advertisement a Jamaican vacation. All these stimuli can trigger
a problem or need.
Information Search: An aroused consumer will be inclined to search for more
information. This search can be at two levels:
a) The milder Search State called heightened attention. Here the consumer simply
becomes more receptive to information about products in which he/she is interested.
He/she pays attention to products ads, similar products purchased by friends, and
conversation about the product.
b) Or consumer may go into active information search where consumer looks for
reading material, and engages in other search activities to learn about product in
which he/she is interested. How many search consumers undertakes depends upon
the strength of his/her drive; the amount of information he/she initially has, the ease
of obtaining additional information etc. Consumer information sources fall into four
groups :
Personal sources : Family, friends, neighbours, acquaintances
Commercial sources : Advertising , salesperson, dealers, displays etc.
Public sources : Mass media, consumer rating organisation
Experiential sources: handling, examining, using the product.
The relative amount and influence of these information sources varies with the product
category and the buyer’s characteristics. Generally speaking, the consumer receives
sources, that is, marketer dominated sources. On the other hand, the most effective
exposures come from personal sources. Each information source performs a somewhat
different function in influencing the buying decision. Commercial information normally
performs and informing function and personal sources performs a legitimizing and/or
evaluation function. For example, physicians often learn of new drugs from commercial
sources but turn to other doctors for evaluation information.
Evaluation of Alternatives: Consumer form product judgements regarding the brand
choices largely on a conscious and rational basis.
Consumer is trying to satisfying some need and is looking for certain benefits from the
product solution. The consumer sees each product as bundle of attributes with varying
capabilities of delivering the sought benefits and satisfying this need.
Consumers will differ as to which product attributes are seen as relevant or salient. They
will pay the most attention to the ones that will deliver the sought benefits. The consumer
is likely to develop a set of brand beliefs about where each brand stands on each
attribute. The brand beliefs make up the brand image. The consumer’s brand belief will
vary with his/her experiences and the effect of selective retention. The consumer is
assumed to have a utility function for each attribute. The consumer arrives at attributes
(judgement, preferences) towards the brand alternatives through evaluation procedure.
Purchase Decision : In the evaluation stages the consumer forms preferences among
the brands. The consumer may also forms a purchase intention to buy the most
preferred brand. But actual purchase decision is influenced by a) Attitudes of other and
b) unanticipated situational factors.
The extend to which another person’s attitude reduces one’s preferred alternative
depends upon two things I) the intensity of the other person’s negative attitude towards
the consumer’s preferred alternative and ii) the consumer’s motivation to comply with
the other person’s wishes.
Purchase intention is also influenced by unanticipated situational factors. A consumer’s
decision to modify, postpone or avoid a purchase decision is heavily influenced by
perceived risk varies with the amount of money at stake, the amount of attribute
uncertainty and the amount of consumer self confidence.
A consumer who decides to execute a purchase intention will be making up to five
purchase sub decisions ; a) brand decision b) vendor decision (dealer) c) quality
decision d) timing decision and e) payment method decision.
Post purchase behavior : The buyer;s satisfaction is a function of the closeness
between the buyer’s product expectations and the product’s perceived performance. If
the product’s performance falls short of customer expectation the customer is
disappointed; if it exceeds expectations, the customer is delighted. The feelings make a
difference in whether the customer buys the product again and talks favorably or
unfavorably about the product to others.
Q.4. Discuss the four major bases for segmenting consumer market. Provide an
example of each.
Ans. Market segmentation is the process of dividing a market into subsets of consumers
with common needs or characteristics .
The bases for segmenting the market can be a) Geographic segmentation b)
Demographic segmentation c) phychographic segmentation and d) behavioral
segmentation.
Geographic Segmentation : Geographic Segmentation calls for dividing the market intoi
different geographical units such as nations, states, regions, cities, etc. The company
can decide to operate in one or a few geographic areas or operate in all but pay
attention to local variations in geographic needs and preferences eg. Wagh Bakri tea
brand has 60% market share in state of Gujrat (90% in Ahmedabad).
Demographic segmentation : Demographic segmentation consists of dividing the market
into groups on the basis of demographic variables such as age, sex, family size, family
life cycle, income occupation, education, religion, race and nationality demographic
variables are tge most popular bases for distinguishing customer groups. One reason is
that consumer wants preferences and usage rates are often associated
with
demographic variables. Another is that demographic variables are easier to measure
than most other type of variable. Even when the target market is described in nondemographic terms, the link back to demographic characterstics is necessary in order to
know the size of the target market and how to reach it efficiently eg. Sex segmentation is
applied in clothing , cosmetics and magazines. Income segmentation is used in products
like automobile etc.
Psychographic Segmentation : In psychographic segmentation, buyers are divided into
different groups on the basis of social class, lifestyle, and/or personality characterstics.
People within the same demographic group can exhibit very different psychographic
profiles.
Social class has a strong influence on the person’s preference in cars, clothing, home
furnishings, reading habits and so on.
Behavioural Segmentation : In behavioural segmentations buyers are divided into
groups on the basis of occasions benefits, loyalty states, attitude towards products etc.
A powerful form of segmentation is the classification of buyers according to the different
benefits they seek form the product. Benefit segmentation calls for identifying the major
benefits that people look for in the product class, the kinds of people who look for each
benefit and the major brands the deliver each benefit. Benefit segmentation usually
implies that a company should focus on satisfying one benefit group. Thus ‘Anchor’
tothpaste offered the benefit of “anticavity protection” which became its unique selling
proposition.
UNIT – III
Q.5. How do you define new product? How would you go about generating new
product ideas for printing company ?
Ans. New product is defined as original products, improved products, modified products
and new brands that the firm develop through its own R&D efforts. Six categories of new
products in terms of their newness to the company and to the market place can be
included :
a)
b)
c)
d)
e)
f)
New-to-the World products : new products that create an entirely new market.
New-product Lines : New products that allow a company to enter an established
market for the first time.
Additions to existing product lines : New products that supplement a company’s
established product lines.
Improvement in Revisions to Existing products : New products that provide
improved performance or greater perceived value and replace existing products.
Repositioning : Existing products that are targeted to new markets or market
segments.
Cost Reduction : New products that provide similar performance at low costs.
The new product development process starts with the search for ideas. Following steps
can be taken in order to generate new product ideas for printing company.
a) Sources of New Product Idea (Printing Company) New idea for a printing company
can come from many sources - customer using the services of printing company
competitors, employees and top management.
The marketing concept holds that customer’s needs and wants are the logical place to
start in the search for new product idea for printing company. Customers’ focused group
discussion etc. Many of the best ideas come from asking customers to describe their
problems with current products/services.
New idea for printing company can also come from scientists, engineers, designers and
other employees. New idea can also be generated by examining the competitor’s
printing companies, the likes and dislikes of customers vis-a0vis competitor’s printing
companies.
Company’s sales representatives and middlemen are particularly good source of new
product ideas. They first hand information of customer’s needs and complaints . They
often learn first of competitive development.
New ideas can also be generated through brainstorming. Brainstorming sessions are
held when company needs to generate ideas related to a need or object. The usual
group consists of six to ten people. The concept is to generate as many ideas as
possible. The ideas start flowing, one idea sparks another. For the brainstorming
session to be most effective :
-
Criticism is ruled out : Negative comments on ideas must be withheld
until later.
Freewheeling is welcomed : The wilder the idea, the better. It is easier to
came down than to think up
Quality is encouraged :The greater the number of ideas the more the
likelihood of useful ideas.
Combining and Improving ideas : Participants should suggest how ideas
of others can be joined into still newer ideas.
Q.6. Define branding ? What are the major considerations in selecting a brand ?
Ans. Branding : is giving a name, term, sign, symbol or design or a combination of them,
intended to identify the goods or services of one seller and to differentiate them from
those of competitors.
Brand Name : The part of a brand which can be vocalised eg. Honda,
Avon etc.
Brand Mark : The part of a brand which can be recognized but is not
utterable such as symbol, design, or distinctive colouring or lettering eg.
MCDonald;s
Trade mark : A brand or part of a brand that is given legal protection
because it is capable of exclusive rights to use the brand name and/or
brand mark.
Copy right : The exclusive legal right to reproduce, publish and sell matter
and from of a literary, musical or artistic work.
Branding gives several advantages to the seller First, the seller’s brand name and
trademark provide legal protection to unique product features, which would otherwise be
copied by competitors.
Second, branding gives the seller the opportunity to attract a loyal and profitable set of
customers. Brand loyalty given sellers some protection from competition and greater
control in planning their marketing mix.
Third, good brands help build the corporate image. By carrying the company’s name, the
help advertise the quality and size of the company.
In deciding to brand a product, the manufacturer has several options with respect to
brand sponsorship. The product may be launched as manufacturer brand (sometimes
called brand name) or it may be launched as a licensed name brand. Or the
manufacturer may supply the product to middleman who put on a distributor brand ((also
called retailer, store or private brand).
Manufacturers who brand their products face further choices. Three brandname
strategies can be distinguished :
a)
Individual Brand Names : This policy is followed by Hindustan Levers Ltd. (HLL)
Surf, Wheel etc.
b)
A Blanket family name for all products – this policy is followed by Philips audio
system.
c)
Company trade name combined with individual product name : This policy is
followed by Maruti Udyog Ltd. (Maruti 800, Maruti Wagon-R, Maruti Esteem etc.)
An increasing number of department stores, middlemen etc. are launching store names.
Retailshelf space is scarce and many manufacturers, especially the newer and smaller
ones, cannot introduce products into distribution under their own brand name.
Middlemen take special care to maintain the quality of their brands, their building
consumers’ confidence. Store brands are often priced
lower than comparable
manufacturer’s brands thus appealing to budget- conscious shoppers especially in times
of inflation, middleman give more prominent display to their own brands and make sure
they are better stocked.
Among the desirable qualities for a brand name are :
1) It should be easy to pronounced
2) It should be easy to remember.
3) It should form positive image about the product.
Unit – IV
Q.7. What are the differences between publicity and advertising ? What can firm
do when confronted wit negative publicity ?
Ans. Advertising is any paid form of non-personal presentation and promotion of ideas,
goods or services by an identified sponsor.
Advertising is a highly public mode of communication. Its public nature confers a kind of
legitimacy on the products and also suggests a standardised offering . Because many
their motives for purchasing the product will be publicly understood.
Advertising is a pervasive medium that permits the seller to repeat a message many
times. It also allows the buyer to receive and compare the message of various
competitors. Large scale advertising by a seller says something positive about seller’s
size, popularity and success.
Advertising cannot be as compelling as a company sales representatives. The audience
does not feel obliged to pay attention or respond. Advertising is able to carry on only a
monologue, not a dialogue with the audience.
Advertising is an efficient way to reach numerous geographically dispersed buyers at a
low cost per exposure. Advertising has an effect on sales simply through its presence.
Consumer might believe that heavily advertised brand must offer “good value”.
Publicity is the old name for public relation, which was seen as the task of security
editorial space-as opposed to paid space – in print and broadcast media to promote or
“hype”a product place, or person.
The appeal of publicity is based on its three distinctive qualities :
High credibility : news stories and features seem more authentic and
credible to readers than ads do.
Off guards : Publicity can reach many prospects who might avoid
salespeople and advertisements. The message gets to the buyers as
news rather than as sales – directed communication.
Dramatization : Publicity like advertising as potential for dramatising a
company or product.
A firm can counter the effect of negative publicity through counter publicity.
Company can improve public goodwill by contributing money and time to good causes.
The executives of the company can support community affairs where their offices and
plants are located. In other instances company will offer or donate a certain amount of
money to a specific cause out of consumer purchase.
Publicity can place counter stories in the media to bring attention to virtues of its product,
services, person or organisation. It can add credibility by communicating the message in
as editorial context.
Companies can draw attention and thus counter negative publicity by arranging special
events. These include news conferences, sports and cultural sponsorships that will
reach the target public.
Creative advertising can further help to counter negative publicity. The use of influential
people in Testimonial advertising.
Q.8. Write short notes on any two of the following :
I.
Green Marketing
II.
Web Marketing
III.
Entry Strategies in International Marketing
Ans. 1) Entry Strategies in International Marketing
Once a company decides to target a particular country it has to determine entry
strategies in International Marketing. Its broad choices are indirect exporting, direct
exporting, licensing, joint ventures and direct investment.
Indirect Exporting : The normal way to get involved in a foreign market is through
export. Occasional exporting is a passive level of involvement in which the company
exports from time to time either on its own initiative or in response to unsolicited orders
from abroad. Active exporting takes place when the company makes a commitment to
expand into a particular market. In either case, the company produces its good in the
home country and might or might not adopt them to the foreign market.
Companies typically start with indirect exporting. They work through independent
intermediaries. Domestic based export merchants buy the manufacturer’s product and
then sell than abroad. Domestic based export agents seek and negotiate foreign
purchases and are paid a commission. Coopertaive organisations carry on exporting
activities on behalf of several producers and are partly under their administrative control.
Export management companies agree to manage a company’s export activities for a fee.
Indirect export has two advantages. First, it involves less investment; the firm does not
have to develop our export department; an overseas sales force, or a set of foreign
contacts. Second, it involves less risk; because intentional marketing intermediaries
bring know-how and services to the relationship, the seller will normally make fewer
mistakes.
Direct Export : A company can carry on direct exporting in several ways :
a) Domestic based export department or division : Might evolve into a self-contained
export department operating as a profit centre.
b) Overseas sales branch or subsidiary : The sales branch handles sales and
distribution and might handle warehousing and promotion as well. It often serves as
a display and customer service centre.
c) Traveling export sales representative : Home based sales representative are sent
abroad to find business.
d) Foreign-based distributors or agent : These distributors and agents might be given
exclusive rights to represent the company in that country or only limited rights.
Licensing : Licensing is a simple way to become involved in international marketing. The
licensor licenses a foreign company to use a manufacturing process, trademark, patent,
trade secret or other item of value for a fee or loyalty. The licensor gains entry at little
risk, the licensee gains production expertise or a well known product or brand name.
Joint Venture : Foreign investors may join with local investors to create a joint venture
company in which they share ownership and control. A joint venture may be necessary
or desirable for economic or political reasons. He foreign firm might lack the financial,
physical or managerial resources to undertake the venture alone, or the foreign
government might require Joint ownership as a condition for entry.
Direct Investment : The ultimate form of foreign involvement is direct ownership of
foreign-based assembly or manufacturing facilities. The foreign company can buy part
or full interest in a local company or build its own facilities.
II
Web Marketing : Web Marketing describes the use of electronic means and
platform to conduct a company’s business. The advent of internet has greatly increased
the ability of a company to conduct their business faster, more accurately, over a wider
range of time and space at a reduced cost, countless companies have set up web sites
to inform and promote their products and services.
E-commerce is more specific than e-business, it means that in addition to providing
information to visitors about the company, its history, policies, products and services and
job opportunities, the company or site offers to online. E-commerce has given rise to epurchasing and e-marketing. E-purchasing means companies decide to purchase goods,
services and information from various online suppliers. E-marketing describes company
efforts to inform, communicate, promote and sell its products and services.
E-business and e-commerce take place over four major Internet domains : B2C
(Business to Consumer) ; B2B(Business to business); C2C (Consumer to consumer)
and C2B (Consumer to Business).